Symrise AG

EANS-News: Symrise achieves EBITDA margin of 20 %


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6-month report

Subtitle: •	Group sales rise by about 3 % at local currency
•	Business with top 10 customers and Emerging Markets supports growth
•	Currency effects and high raw material prices affect earnings 
•	Outlook for 2011: Target EBITDA margin of 20 %



Holzminden, August 10, 2011 (euro adhoc) - Symrise AG increased sales and
maintained profitability at a high level in the first half of 2011. The Group
increased sales by about 3 % at local currency despite the strong comparables
from the previous year; it benefited from business with major customers and
Emerging Markets. However, the market environment turned gloomy in certain
segments and regions in the second quarter. Earnings were affected by high raw
material costs and negative currency effects. Nonetheless Symrise achieved an
EBITDA margin of 20 %. The primary contributors were persistent cost management
and the conscious divestment of less profitable businesses.

Dr. Heinz-Jürgen Bertram, Chief Executive Officer of Symrise AG, said:
"Following the enormous catch-up effect during the previous year and a good
first quarter, market growth slowed in the recent months. Whereas the flavor
business continued to grow, the demand for fragrances declined. Nonetheless,
Symrise continued to grow throughout the first half of the year. We achieved the
targeted EBITDA margin of 20 %. We consider this to be a respectable achievement
in view of the continually high raw material prices and unfavorable exchange
rate effects."

Bertram added: "Our statement from the first quarter that consumer spending is
being affected by uncertainties on global markets still holds true. Despite the
somewhat subdued outlook we are striving to achieve sales growth of around 3 %
and an EBITDA margin of 20 % for the full year 2011. The fundamental drivers of
our business will remain intact in the mid-term. We are therefore continuing to
pursue our strategy of focusing on innovation, Emerging Markets and major
customers."

Continued above-average growth in Emerging Markets

In the first six months of the current financial year Symrise posted an increase
in Group revenues of approximately 2 % to EUR 811.8 million (previous year: EUR
797.5 million). The sales increase was 2.6 % at local currency. The Asia/Pacific
region exhibited the strongest growth followed by Latin America and EAME.
Emerging Markets did not continue their extraordinarily high growth rate of the
previous year, but continued to grow above average in H1. Sales generated in
Emerging Markets as a whole rose 4 % and accounted for 46 % of Group sales.

The Asia/Pacific region reported 5 % sales plus (4 % at local currency). Both
divisions benefited from continuous high demand. Latin America, which grew quite
strongly during the prior year period, continued to grow but at a more moderate
rate. This region achieved a 4 % sales increase (4 % at local currency). Sales
in EAME rose 3 % (3 % at local currency), whereby business in Western Europe
made a strong contribution. North American sales declined 7 % over the strong
results of the previous year, primarily due to the slower economy and
significant currency effects. At local currency, revenues declined by 2 %. 

Both divisions grew business with major customers 

The strategic focus on business with internationally active food and consumer
goods companies in the first half of the year paid off again. Both divisions
benefited from their good core list positions; and grew business with top ten
customers above average: Flavor & Nutrition realized top 10 customer sales
growth of 6.5 % and Scent & Care of 3.4 %. In the first six months 2011 Symrise
generated about 30 % of Group sales from business with its major customers.

Strong profitability despite pressure from raw material costs and currency
effects 

In the first half of the year Symrise´s earnings picture was primarily affected
by high raw material costs and currency effects. Initial price increases helped
to compensate for these negative factors and Symrise nonetheless met its EBITDA
margin target of 20 % (previous year: 22.3 %). Persistent cost management and
focus on business with attractive margins significantly contributed to keep
profitability at a high level. In absolute terms, earnings before interest, tax,
depreciation and amortization (EBITDA) declined by 8.6 % to EUR 162.5 million
(previous year: EUR 177.7 million). 

Net income for the period amounted to EUR 77.4 million (previous year: EUR 88.8
million). This corresponds to earnings per share of EUR 0.65 (previous year: EUR
0.75).

Strategic raw material inventory give more planning security

In the first half of 2011 Symrise temporarily built up inventory of raw
materials in a move to cushion price increases and shortages of certain raw
materials. The Group believes that increased inventory levels will give
significantly more planning security in the second half of the year. Despite
increased working capital requirements Symrise generated a positive cash flow
from operating activities of EUR 34 million (previous year: EUR 74.7 million).

The Group´s net debt (incl. pension provisions) as of June 30, 2011 was EUR
798.8 million (December 31, 2010: EUR 733.7 million). The ratio of net debt
(incl. pension provisions) to EBITDA amounted to 2.5 at the end of the reporting
period (December 31, 2010: 2.2).

Scent & Care

Scent & Care generated sales of EUR 409.5 million in the first half of the year
(previous year: EUR 411.9 million). The division´s sales remained largely stable
even in comparison to the strong catch-up effect that characterized the previous
year and despite the divestment of less profitable businesses. At local currency
sales slightly rose by 0.3 %. 

The application segments Life Essentials and Aroma Molecules continued their
positive development, especially in the area of fragrance ingredients. The
menthol business of Scent & Care enjoyed double-digit growth. The Group has made
significant investments and is currently expanding production capacity here. In
the application area Fine Fragrances demand developed positively in Emerging
Markets. 

Latin America remained the fastest-growing region for Scent & Care with a sales
increase of 5 % at local currency. In Asia/Pacific and North America sales rose
1 % at local currency. Sales in the EAME region declined 2 % at local currency
over the extraordinarily strong previous year. 

The division reported an EBITDA of EUR 76.9 million (2010: EUR 85.5 million) for
the first half of the year. The EBITDA margin was 18.8 % (previous year: 
20.7 %). 

Flavor & Nutrition

Flavor & Nutrition continued its growth path in the first half of 2011 with a 4
% sales increase to EUR 402.3 million (previous year: EUR 385.6 million). This
corresponds to 5 % at local currency.

Flavor & Nutrition posted the largest sales increase of 8 % (at local currency)
in the EAME region. Here Symrise benefited from the high demand in all national
markets. Beverage applications in particular developed positively as did the new
application segment Consumer Health. Asia/Pacific was the second strongest
region with sales growing by 7 % at local currency. In Latin America Flavor &
Nutrition increased sales by 3 % at local currency despite the strong previous
year figures. In North America the slow economic environment and customer
procurement delays led to a sales decline of 6 % at local currency.

The EBITDA amounted to EUR 85.6 million (previous year: EUR 92.2 million). The
profitability of the division remained at a high level with an EBITDA margin of
21.3 % (previous year: 23.9 %). 


Outlook: Symrise continues to target an EBITDA margin of around 20 %

Following the more restrained business development in the second quarter,
Symrise anticipates that the business in the coming months will continue to be
influenced by macroeconomic uncertainties such as the debt crises in Europe and
the USA, inflationary tendencies and growing interest rates in Emerging Markets.
This could lead to greater volatility with respect to demand. 

Nonetheless, Symrise is targeting sales growth of around 3 % for the current
year. Stable growth in the Flavor & Nutrition division is expected to be a
primary contributor here, while the Scent & Care division is not expected to
experience any noteworthy growth in 2011 for reasons which include the conscious
divestment of less profitable businesses.

Symrise wants to remain amongst the most profitable companies in the sector and
therefore targets an EBITDA margin of around 20 % for the current financial
year. Symrise anticipates that raw material prices will remain at a high level
and that exchange rates will continue to be volatile in the second half of the
year. Approved price increases and persistent cost discipline should support
Symrise in achieving its objectives for fiscal year 2011. 



in EUR millions                   H1 2010      H1 2011  Change in% Change in% LC
Sales                               797.5       811.8         1.8     2.6
EBITDA                              177.7       162.5         -9      -8
EBITDA margin in%                    22.3        20.0         -       -
EBIT                                133.7       120.7        -10      -9
EBIT margin in%                      16.8        14.9         -       -
Net income for period                88.8        77.4        -13     
Earnings per share in EUR            0.75        0.65        -13     
Cash flow from 
operating activities                 74.7        34.0              
                                
DIVISIONS                               
Scent & Care                            
Sales                               411.9       409.5        -0.6    0.3
EBITDA                               85.5        76.9            
EBITDA margin in%                    20.7        18.8         -       -
                                
Flavor & Nutrition                              
Sales                               385.6       402.3        4.3     5.1
EBITDA                               92.2        85.6            
EBITDA margin in%                    23.9        21.3         -       -
                   

             
                                  31.12.10       30.06.11                
Balance sheet total                2,059.0        2,044.5         
Equity ratio                          40.9           40.1            
Ratio of net debt 
(incl. pension provisions)/EBITDA      2.2            2.5             
Employees / FTE¹                     5,288          5,474     
      
¹ Excluding apprentices and trainees, FTE = Full Time Equivalent (full-time
employees)

LC= at local currencies

About Symrise

Symrise is a global supplier of fragrances, flavorings and raw materials as well
as active ingredients for the perfume, cosmetics and food industry.
Its sales of EUR 1.57 billion in 2010 place the Company among the top four in
the international flavor and fragrance market. Headquartered in Holzminden,
Germany, Symrise is represented in more than 35 countries in Europe, Asia, the
United States and South America.Used by manufacturers of perfumes, cosmetics and
foods, our innovative products are an inseparable part of daily life. At Symrise
we combine an awareness of consumer trends with cutting-edge technologies,
focusing on developing innovative fashion and lifestyle products that have
additional practical value for the consumer. Symrise - always inspiring more… 
www.symrise.com


Further inquiry note:
Contact Press:	                Contact Investors: 
Bernhard Kott	                Tobias Erfurth
phone +49 (0)5531 90-1721	       phone +49 (0)5531 90-1879
bernhard.kott@symrise.com	    tobias.erfurth@symrise.com

end of announcement                               euro adhoc 
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company:     Symrise AG
             Mühlenfeldstraße 1
             D-37603 Holzminden
phone:       +49 (0) 5531/90-0
FAX:         +49 (0) 5531/90-1649 
mail:     ir@symrise.com
WWW:      http://www.symrise.com
sector:      Chemicals
ISIN:        DE000SYM9999
indexes:     MDAX
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Berlin,
             Hamburg, Stuttgart, Düsseldorf, Hannover, München 
language:   English
 

 

 



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