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Holzminden (euro adhoc) - Target EBITDA margin reached despite steep rise in
cost of raw materials
Sales up by 2 % to EUR 1.584 billion
Sales increase by 7 % in business with global customers
Earnings per share up 10 % to EUR 1.24
Proposed dividend increase to EUR 0.62
Symrise AG upheld its industry-leading profitability and achieved its targeted
EBITDA margin of 20 % in Fiscal Year 2011. Despite the economic slowdown over
the course of the year and the burden of increased raw material prices, the
Group again demonstrated its earnings power. At an increase of 2 %, sales growth
was moderate compared to the previous year which was characterized by catch-up
effects. Sales amounted to EUR 1.58 billion at local currency and reflect both,
the more cautious market environment and selective portfolio streamlining by
discontinuing less profitable business. Symrise saw above-average growth in
business with global customers, where sales rose by 7 %. Activities in Emerging
Markets contributed 46 % of sales in 2011.
Dr. Heinz-Jürgen Bertram, Chief Executive Officer of Symrise AG, said: "We held
our ground well in 2011 and proved that we can also achieve our ambitious
earnings targets in a weaker economic environment. Given the widespread
turbulence in many regions of the world and high volatility on commodities and
capital markets, maintaining profitability was the top priority for Symrise. We
therefore consequently discontinued businesses which were not making a
sustainable earnings contribution. And we continued our backward integration for
strategic raw materials. Our industry-leading EBITDA margin of 20 % is thus the
result of selective portfolio streamlining, intelligent raw material sourcing
and restrictive cost management throughout the Group."
Dr. Bertram added: "At the same time we successfully grasped market
opportunities in 2011 and expanded our business with global customers, growing
sales by above-average 7 %. In addition, we continued to drive expansion in
Emerging Markets. In 2006, just 37 % of our sales came from Emerging Markets,
whereas by 2011 the figure has risen to 46 %. Bottom line our net income
increased by 10 % compared to the prior year. In view of our solid overall
performance, the Executive Board and Supervisory Board will propose a dividend
increase to EUR 0.62 to the Annual General Meeting."
Sales Increase to EUR 1,583.6 Million
In 2011 Symrise reported sales of EUR 1,583.6 million. This was even higher than
the previous year, which was characterized by catch-up effects (2010:
EUR 1,571.9 million). The increase of 1 % (2 % at local currency) was
compara-tively modest. This is due to the more subdued business cycle and the
consequent discontinuation of low-margin activities.
Latin America was the fastest-growing region with a sales increase of 3 % (5 %
at local currency). Symrise particularly benefited from strong demand for
beverage applications, savory products and cosmetic applications. Sales growth
in the Asia/Pacific region was comparatively modest at 2 % (at local currency
2 %). This is largely due to portfolio streamlining and a weaker performance in
beverage applications. Sales in the EAME region went up by 1 % (2 % at local
currency), mainly reflecting the political unrest in the Middle East and North
Africa as well as weaker demand in the application areas Fine Fragrances and
Household. North America was not able to continue its strong prior-year growth
rates due to ongoing weak consumer demand. Sales declined by 4 %, rising
slightly by 1 % at local currency. The region saw strong increases in vanilla
and menthol, among others.
Targeted EBITDA-Margin of 20 % Achieved - EPS up 10 %
In Fiscal Year 2011, Symrise generated earnings before interest, taxes,
depreciation and amortization (EBITDA) of EUR 315.9 million (2010: EUR 331.2
million). The result reflects the modest sales performance, as well as the
higher cost base caused by the sharp rise in raw materials prices. The backward
integration nonetheless secured Symrise´s access to sufficient quantities of
high-quality strategic raw materials. Despite the challenges on the cost side,
the Group succeeded in keeping profitability at its target level, achieving an
EBITDA margin of 20.0 % (2010: 21.1 %).
Net income rose by around 10 % to EUR 146.5 million (2010: EUR 133.5 million).
Symrise benefited from the positive effects of the refinancing completed in 2010
and the corresponding reduction in financing expenses. Earnings per share went
up from EUR 1.13 in the previous year to EUR 1.24. In view of the solid overall
performance in Fiscal Year 2011, the Executive Board and Supervisory Board
propose a dividend increase of EUR 0.62 (2010: EUR 0.60) at the Annual General
Meeting to be held on May 15, 2012.
Debt Ratio of 2.2 at the Lower End of the Targeted Range
Cash flow from operating activities amounted to EUR 200.9 million (2010: EUR
235.1 million). The change is due to the slightly lower earnings and the cash
outflow for tax payments for which provisions were made in prior years. The
ratio of net debt including pension provisions to EBITDA amounted to 2.2 (2010:
2.2) and was at the lower end of the targeted range of 2 to 2.5.
Market Presence Strengthened in Emerging Markets
In the past fiscal year, Symrise consistently pursued its expansion in
fast-growing Emerging Markets. In 2011, the Group started operations at the
plant in Moscow from where it supplies the entire Russian market as well as the
CIS states. At the site in Singapore, which serves the emerging Asian markets,
the third phase of a S$ 40 million investment program was completed.
Symrise generated 46 % of its total sales for 2011 in Emerging Markets. The
year-on-year sales increase in these countries was modest, up just 3 % at local
currency. This is primarily due to portfolio streamlining.
Dynamic Growth in Business with Global Customers
Sales from activities with multinational food and consumer goods companies grew
faster than average in 2011. Intensive key account management and a stronger
position on core lists paid off yet again. It enabled Symrise to boost its sales
with this customer group by 7 % at local currency, significantly outperforming
sales growth for the Group as a whole. At 31 % (2010: 30 %) the share of
business with global customers was slightly up on the previous year.
Both business divisions increased their sales from global customer activities by
above average, with Scent & Care reporting a sales increase at local currency of
6 % and Flavor & Nutrition saw sales with major customers climb by 8 %.
Scent & Care Division
Scent & Care reported sales of EUR 801.4 million (2010: EUR 804.5 million).
Compared to the previous year´s strong figures, this represents a slight
decrease of 0.4 %. At local currency, Scent & Care achieved a slight sales
increase of 1 %.
In all regions, the division benefited particularly strong from demand for
menthol and was able to increase sales in this application area at a
double-digit rate. The strong performance confirms the decision taken in 2010 to
double production capacities in this area. Symrise plans to put the new menthol
plant in Holzminden into operation over the course of the year. Within the
division, the Life Essentials business unit and the Oral Care application area
both developed particularly well. This was offset by a decline in sales due to
the discontinuation of low-margin business in the Household application area. In
addition, the economic slowdown caused sales to fall at Fine Fragrances, where
demand is more dependent on consumer sentiment.
Latin America was the fastest growing region for Scent & Care, with sales rising
by 6 % at local currency. Demand for menthol and for cosmetic ingredients was
particularly good. The second strongest region, with sales growth at local
currency of 3 % was North America. Strong increases in Fine Aroma Chemicals,
Oral and Personal Care were the main drivers. In the Asia/Pacific region, the
division generated growth of 2 % at local currency and benefited from healthy
demand for cosmetic applications, UV Protection and Fine Aroma Chemicals. This
was offset by portfolio adjustments. Sales in EAME fell by 2 % at local currency
as business was adversely impacted by the political unrest in the Middle East
and North Africa.
EBITDA for the division totaled EUR 157.6 million, compared to EUR 160.8 million
in 2010. The EBITDA margin of 19.7 % was slightly below of the previous year´s
figure of 20.0 %.
Flavor & Nutrition Division
Flavor & Nutrition saw sales increase by 2 % to EUR 782.2 million (2010: EUR
767.4 million). Adjusted for exchange rate effects, this corresponds to growth
of 3 %. The division benefitted above all from its business expansion and its
strong position with global customers.
The fastest growth rate came from Flavor & Nutrition in EAME, with a sales
increase at local currency of 5 %. The division generated new business both in
developed Western European economies and in Emerging Markets. In Latin America
the sales increase at local currency amounted to 2 % and reflects strong
comparables, as well as the discontinuation of unprofitable businesses, and
non-core activities in Mexico. Compared to the strong development in 2010, sales
growth at local currency in Asia/Pacific was also comparatively modest at 2 %.
This was due to slower economic growth as the year progressed, especially in
beverage applications. Whereas business in North America benefited from catch-up
effects in the previous year, it was marked by the difficult market environment
and delays in receiving customer orders in 2011. Sales in the region fell by 2 %
at local currency.
In the course of adding innovative solutions for rapidly growing segments to the
portfolio, Flavor & Nutrition developed new product solutions and expanded
existing platforms in the Consumer Health business. The unit launched the new
umbrella brand Actiplants®, under which all functional botanical extracts are
brought together. In addition, Flavor & Nutrition expanded its research in the
area of functional food and intends to add further expertise in 2012 as part of
the expanded partnership with the Swedish company Indevex Biotech.
Flavor & Nutrition generated EBITDA of EUR 158.3 million (2010: EUR 170.4
million). Despite modest sales growth and the higher cost of raw materials, the
EBITDA margin was maintained at 20.2 % (2010: 22.2 %).
Outlook for 2012
For Fiscal Year 2012 Symrise is anticipating the following economic conditions:
Consumer confidence is expected to remain stable compared to last year. The
uncertainty caused by the sovereign debt crisis will persist, especially in
Europe. Prices for raw materials will continue to be volatile and will remain on
a high level overall.
The Group expects that after a modest start into the year, the global economy
will pick up in the second half of 2012. Particularly positive momentum is again
expected to come from Emerging Markets.
In the current year, Symrise will put the new production plant for synthetic
menthol into operations in Holzminden. In connection with this substantial
increase in capacity, Symrise is expecting ramp-up costs in the first half of
the year, which will be neutralized over the remainder of the year. The
additional capacity will strengthen Symrise´s position as the leading global
producer of menthol and enable the Group to meet the high demand for menthol
In 2012, Symrise will continue to concentrate on generating profitable growth.
At this point in time the Group expects to increase sales by between 2 and 4 %.
Furthermore, Symrise remains committed to maintaining its industry-leading
profitability with an EBITDA margin of around 20 % for the full year.
Key Figures of the Group
|In EUR m | 2010 | 2011 | Change| Change|
| | | | in %| in %|
| | | | | at LC|
|Sales | 1,571.9| 1,583.6| 0.7| 2.0|
| | | | | |
|EBITDA | 331.2| 315.9| -5| -4|
|EBITDA margin in % | 21.1| 20.0| | |
|EBIT | 244.4| 234.4| -4| -3|
|EBIT margin in % | 15.5| 14.8| | |
|Net income | 133.5| 146.5| 10| |
|Earnings per share in EUR | 1.13| 1.24| 10| |
|Dividend in EUR*2 | 0.60| 0.62| 3| |
|Balance sheet total | 2,059.0| 2,098.2| 2| |
|(as of Dec 31) | | | | |
|Capital ratio (as of Dec 31) in % | 40.9| 43.5| | |
|Investments | 70.5| 67.3| | |
|Net debt (incl. pension | | | | |
|provisions / EBITDA) | | | | |
(as of Dec 31) Ratio | 2.2| 2.2| | |
|Operating Cash Flow | 235.1| 200.9| -15| |
|Employess (as of Dec 31) / FTE*1 | 5,288| 5,434| 3| |
| | | | | |
|Scent & Care | | | | |
|Sales | 804.5| 801.4| -0.4| 1.0|
|EBITDA | 160.8| 157.6| -2| -1|
|EBITDA-Marge in % | 20.0| 19.7| | |
| | | | | |
|Flavor & Nutrition | | | | |
|Sales | 767.4| 782.2| 1.9| 3.1|
|EBITDA | 170.4| 158.3| -7| -6|
|EBITDA margin in % | 22.2| 20.2| | |
*1 Not including trainees and apprentices, FTE = Full Time Equivalent
Symrise is a global supplier of fragrances, flavorings, cosmetic active
ingredients and raw materials as well as functional ingredients. Its clients
include manufacturers of perfumes, cosmetics and foods, the pharmaceutical
industry and producers of nutritional supplements.
Its sales of EUR 1.58 billion in 2011 place Symrise among the top four in the
global flavors and fragrances market. Headquartered in Holzminden, Germany, the
Company is represented in over 35 countries in Europe, Asia, the United States
and Latin America.
Symrise works with its clients to develop new ideas and market-ready concepts
for products that form an indispensable part of everyday life. In doing so,
Symrise combines its insights into consumer trends with cutting-edge
technologies, focusing on innovative trend and lifestyle products that have
additional practical value for the consumer. Symrise - always inspiring more
Further inquiry note:
end of announcement euro adhoc
company: Symrise AG
phone: +49 (0) 5531/90-0
FAX: +49 (0) 5531/90-1649
stockmarkets: free trade: Hannover, Berlin, München, Hamburg, Düsseldorf,
Stuttgart, regulated dealing/prime standard: Frankfurt