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Symrise Q1 show sales up but profits threatened by rising costs

By Simon Pitman , 10-May-2012
Last updated on 10-May-2012 at 11:46 GMT

Symrise reports above market average group sales growth, but the results in the scent and care division are weaker and costs hold back stronger profit growth.

Group sales, which also include the Germany-based company’s flavour and nutrition business, grew by 4 percent to €432.6m, compared to €416.8m in the corresponding quarter last year, a figure that was driven by the performance in the Americas as well as larger global players.

The EBITDA margin was 21 per cent for the quarter, while net income rose slightly, up from  €41.1m to €42.5m, a figure that the company said was impacted by rising raw material costs.

Acquisitions and innovation drive results

“Our business with global customers has grown especially rapid. In addition, we maintained our profitability at our targeted margin level of 20% despite high raw material costs, “ said Dr. Heinz-Jürgen Bertram, Symrise CEO.

“We also expanded our market presence with targeted acquisitions and strengthened our focus on innovation in fast growing market segments.“

In the scent and care division sales rose to €225m, which represented a rise of 3 per cent in reported terms and 1 per cent in local currency, when compared to sales of €218m in the corresponding period last year.

Oral care and Latin America rocket

Highlights for the division included double-digit sales growth for the oral care business, driven by new business in the Americas, while the company also said further benefits were achieved by an expansion of its product portfolio.

Overall sales in the Latin America region grew by 15 per cent for the scent and care business, particularly driven by oral care, together with the acquisition of the Belmay’s Brazilian business. Likewise, North America achieved sales growth of 7 per cent.

Sales outlook strong, butraw material prices remain volatile 

In view of the overall improvements in the company’s group results and its more subdued forecasts for the 2012 financial year made last year, Bertram indicated that the sales outlook for the rest of the year would be increased to between 3 and 5 per cent if the current trends hold out.

However, the company did also concede that it had concerns over the European debt crisis, and indicated that this is likely to see raw materials prices remaining volatile throughout fiscal 2012, although it predicts that EBITDA margins will remain at around the 20 per cent level.

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