Demand for fragrance ingredients “adversely affected by customer destocking” – Symrise HY2023

By Kirsty Doolan

- Last updated on GMT

The effects of inflation, fires and anti-trust raids have contributed to disappointing figures for Symrise
The effects of inflation, fires and anti-trust raids have contributed to disappointing figures for Symrise

Related tags firmenich Symrise Cosmetics Fragrance Perfume Givaudan Iff financial results

Symrise saw sales of €2.4bn for the first half of 2023, up by 6.8%. However, core profit was down and Scent & Care suffered due to a mix of inflation and unexpected events.

In its half-year 2023 financial results, German chemicals company Symrise revealed that its Scent & Care portfolio had been hit by various challenging circumstances from inflation and decreased volume sales, to a fire at a manufacturing facility and being implicated in anti-trust allegations. 

Scent & Care sales for this period reached to €886m, which was 2.7% higher than the same period of the previous year, but the business' core profit was down. 

But it wasn't all bad news. Broken down, the Fragrance division increased its sales organically by a single-digit percentage in the first half of 2023.

Fine Fragrances once again achieved double-digit organic growth following a strong previous year and sales were particularly strong in the EMEA and Latin American regions.

Consumer Fragrance achieved single-digit percentage growth, and as with Fine Fragrances, the EMEA and Latin American regions recorded strong growth.

While sales in the Oral Care business unit matched the previous year’s level.

In the Cosmetic Ingredients division, sales continued to develop well in the period, with double-digit organic growth and the EMEA, Asia/Pacific and Latin American regions increased sales significantly.

The company shared that sun protection and micro protection products recorded the strongest growth.

It also stated that the acquisitions of Groupe Néroli and Romani contributed around €15m to sales figures.

Inflation, fires and anti-trust raids

However, the first half of 2023, sales growth in the Aroma Molecules division was especially impacted by a mix of decreased volume sales and a fire at its Colonel Island fragrance manufacturing facility, which caused a production shutdown.

According to the company, this incident, plus reorganisation, and costs associated with an anti-trust case it has been involved in were said to have caused one-off losses of €29m.

Symrise, along with Firmenich, Givaudan and IFF, has been on the radar for competition authorities since March when its headquarters were raided by antitrust regulators. Last month the company contested the raid with the Court of Justice of the European Union

Along with noting these issues, the company also mentioned that “demand for fragrance ingredients and menthol was adversely affected by customer destocking.”

Discussing the results, Dr Heinz-Jürgen Bertram, Chief Executive Officer of Symrise AG said: “Persistently high inflation has resulted in cost increases. The company has been able to partially offset until now through strict cost management and price increases. Nevertheless, we are starting the second half of the year with confidence.”

However, Bertram also mentioned that Symrise had recently inaugurated a new creation hub for Fine Fragrances in Shanghai and a centre of expertise in Paris for Cosmetic Ingredients and was looking to the future. “These measures reflect our ambition to enhance our competitiveness in a sustainable way,”​ he stated.

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