14.08.2018
Symrise AG DE000SYM9999
DGAP-News: Symrise AG: Strong organic growth of 9.0 % in the first half of 2018
DGAP-News: Symrise AG / Key word(s): Half Year Results
Symrise AG: Strong organic growth of 9.0 % in the first half of 2018 (news
with additional features)
14.08.2018 / 07:30
The issuer is solely responsible for the content of this announcement.
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Interim Group Report for the First Half of 2018
* Accelerated growth of 10.6 % in the second quarter
* Profitability at good level with an EBITDA margin of 20.1 %
* Outlook 2018: Annual sales increase above 7 %
Following a dynamic start to the year, Symrise AG accelerated its organic
growth course in the second quarter. All segments and regions contributed to
this positive development. Group sales rose significantly by 9.0 % in the
first half of 2018. Taking into account portfolio and exchange rate effects,
sales grew by 4.0 % to EUR 1,575.5 million (H1 2017: EUR 1,515.3 million).
Earnings before interest, taxes, depreciation and amortization (EBITDA)
amounted to EUR 317.1 million (H1 2017: EUR 322.9 million). The EBITDA
margin remained at a good level of 20.1 %. Against the background of this
positive business performance, Symrise is refining its outlook for 2018: The
Group now expects an increase in annual sales above the medium-term target
corridor of 5 to 7 %, thereby growing significantly faster than the market.
"Symrise took advantage of the momentum in the second quarter and
significantly expanded business in all segments. Our comprehensive backward
integration is proving to be a great asset. Also with a shortage of certain
key raw materials for fragrance compositions, we were able to supply our
customers reliably," said Dr. Heinz-Jürgen Bertram, CEO of Symrise AG. "We
are moving into the second half of the year from a strong position. Targeted
investments in research and development, sales strength and capacity
expansions are driving our growth. Therefore, we are raising our sales
forecast for the current fiscal year: We expect organic growth above our
medium-term target corridor of 5 to 7 % and will therefore significantly
exceed market growth."
High demand in all segments and regions
In the first six months, Symrise AG increased its organic sales by a strong
9.0 %. The second quarter was particularly dynamic with double-digit sales
of 10.6 %. Symrise is therefore once again one of the fastest-growing
companies in the industry. All segments and regions contributed to this
positive business performance. Considering portfolio effects, such as the
contribution from the recently acquired companies Cobell and Citratus, and
exchange rate effects, sales grew by 4.0 % to EUR 1,575.5 million (H1 2017:
EUR 1,515.3 million). As in the previous quarter, sales trend in reporting
currency was impacted by unfavorable exchange rates, in particular by the
appreciation of the euro against the US dollar.
As before, Latin America was the key growth driver at the regional level.
During the reporting period, the region recorded organic sales growth of
16.1 %. In the second quarter, growth reached even 20.2 %. The Asia/Pacific
region sales grew by 12.3 % in the first half of the year, followed by EAME
and North America with growth rates of 7.4 % and 5.2 %, respectively. In
Emerging Markets, Symrise increased sales by 12.8 %. These markets, which
are characterized by dynamic growth, contributed 43 % to total sales.
Profitability remains strong within challenging environment
In the first half of 2018, Symrise generated earnings before interest,
taxes, depreciation and amortization (EBITDA) of EUR 317.1 million (H1 2017:
EUR 322.9 million). In addition to higher raw material costs and unfavorable
exchange rate effects, this slight decline also reflects increased
investments in strategic growth projects. With these expenses too, Symrise
maintained a very good profitability. The EBITDA margin was with 20.1 % at a
good level (H1 2017: 21.3 %). Net income for the period grew to EUR 142.3
million (H1 2017: EUR 141.8 million). Earnings per share rose slightly to
EUR 1.10 (H1 2017: EUR 1.09).
Solid capital resources
Cash flow from operating activities for the first half of 2018 of EUR 151.3
million was EUR 23.7 million lower than in the previous year (EUR 175.0
million). The reason for the decline is an increase in working capital due
to the high growth dynamics and the associated increase in inventories
alongside higher raw material costs.
Net debt amounted to EUR 1,514 million (31 December 2017: EUR 1,398
million). The ratio of net debt to EBITDA amounted to 2.4 (31 December 2017:
2.2). With an equity ratio of 37.0 %, Symrise has a solid capital base to
continue driving the future business development forward in a sustained
manner.
Scent & Care segment
In a challenging environment, the Scent & Care segment achieved strong
organic growth of 10.1 % in the first half of the year. In this continuing
tense situation of the raw material markets, especially with the supply of
important aromatic substances, the segment sustained the dynamic development
from the previous quarter and grew by 13.6 % between April and June. Taking
into account negative exchange rate effects and the portfolio effect from
the acquisition of Citratus, the segment increased sales by 3.4 % to EUR
660.1 million (H1 2017: EUR 638.2 million).
Growth was driven by the Cosmetic Ingredients and Aroma Molecules divisions.
Each posted organic double-digit sales growth rates. The Fragrance business
also developed positively and achieved a good single-digit growth rate.
The second quarter was also marked by failure to deliver raw materials of
some suppliers and an overall rise in price level. Scent & Care again
benefited from its comprehensive backward integration in fragrances -
recently strengthened by the acquisition of Pinova in 2016 - and its mostly
own broad raw material base. As in the previous quarter, Symrise was
therefore fully capable of delivering to its clients. To compensate for the
increased raw material costs, the company is in close dialogue with its
customers to actively implement price increases.
Also in view of significantly higher raw material prices, which led to cost
increases, the segment's EBITDA of EUR 127.9 million was on prior-year level
(H1 2017: EUR 128.4 million). Crucial when comparing with the reference
period is that it included a one-off gain of EUR 4.7 million from the
purchase price adjustment related to the sale of the Pinova industrial
activities. The EBITDA margin of the segment was 19.4 % (H1 2017: 20.1 %).
Adjusted for the one-off effect, the EBITDA margin for the same period in
the prior year was 19.4 %.
Flavor segment
Flavor achieved strong organic sales growth of 10.9 % in the reporting
period. All regions and application areas significantly expanded their
sales. The segment also benefited from new business with vanilla and the
high price level of vanilla applications. Considering exchange rate effects
and the Cobell acquisition, the segment's sales grew by 9.0 % to EUR 604.7
million (H1 2017: EUR 554.8 million).
In the EAME region, the Flavor segment achieved double-digit organic growth
rates. Significant growth impetus came mainly from applications for Sweets
and for Savory in Western Europe and Russia.
The Asia/Pacific region recorded high single-digit, and for some areas even
double-digit, growth rates across all application areas. The markets of
China, India, South Korea and Singapore developed particularly well.
Latin America also showed a very good development with organic growth rates
in the upper single-digit range. Sweets and Savory performed especially
well, achieving double-digit growth in Argentina, Brazil and Mexico.
The North America region achieved double-digit organic sales growth rates as
well and therefore also showed a very positive development. The first half
of the year was particularly dynamic in the Beverages application area.
EBITDA in the Flavor segment increased in the first half of 2018 by 3.3 % to
EUR 127.0 million (H1 2017: EUR 123.0 million). At 21.0 %, the EBITDA margin
remained at a very good level (H1 2017: 22.2 %).
Nutrition segment
Nutrition generated organic growth of 3.6 % in the first six months. This
figure reflects the temporarily destocking of one major customer of Probi.
Adjusted for this effect, growth in the segment amounted to 7.6 %. Taking
into account negative exchange rate effects, sales amounted to EUR 310.6
million (H1 2017: EUR 322.2 million). Order intake at Probi is expected to
normalize in the second half of the year.
The Food and Pet Food application areas each recorded solid single-digit
organic growth rates, with particularly high growth rates in EAME, North and
Latin America. Aqua benefited from numerous business wins in the EAME and
Asia/Pacific regions and achieved a double-digit organic growth rate.
Nutrition generated an EBITDA of EUR 62.2 million in the first half of 2018
(H1 2017: EUR 71.6 million). The temporary decline mainly reflects the lower
sales contribution from Probi and ramp-up costs for the new Diana site in
the USA. With all these special effects, the EBITDA margin was at stable
20.0 % (H1 2017: 22.2 %).
Symrise raises outlook for sales growth in 2018
Based on the strong growth momentum of the first six months, Symrise is
refining its sales guidance for the current fiscal year: For 2018, the Group
expects to significantly exceed market growth, which is expected to range
between 3 to 4 %. Symrise now expects sales growth of more than 7 %, and
thus above the medium-term target corridor of 5 to 7 %.
In addition to good demand, the Group's organic growth will accelerate
primarily as a result of numerous investment projects to expand capacity. In
August, for example, the capacity expansion for cosmetic ingredients will be
successfully completed in South Carolina. Moreover, the new Diana Food
Ingredients site in Georgia will start production in the fourth quarter.
Symrise also expects for the second half of the year that the continuing
shortage of key raw materials for perfume compositions will not lead to any
shortfalls in its supply. Nevertheless, as in the first half-year, higher
purchase costs for raw materials are likely. Overall, the Company considers
itself well positioned to compensate for market shortages on the basis of
its own backward integration.
Symrise therefore intends to remain one of the most profitable companies in
the industry in 2018 with an EBITDA margin of around 20 %.
The medium-term targets through to the end of the fiscal year 2020 remain in
effect, including a compound annual growth rate (CAGR) in the 5-7 % range
and an EBITDA margin between 19-22 %.
About Symrise:
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, food and beverages,
the pharmaceutical industry and producers of nutritional supplements and pet
food.
Its sales of approximately EUR 3 billion in the 2017 fiscal year make
Symrise a leading global provider in the flavors and fragrances market.
Headquartered in Holzminden, Germany, the Group is represented with over 90
sites in Europe, Africa, the Middle East, 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.
Economic success and corporate responsibility are inextricably linked as
part of this process. Symrise - always inspiring more .
www.symrise.com
Media Contact: Investor Contact:
Bernhard Kott Tobias Erfurth
Phone +49 (0)5531 90-1721 Phone +49 (0)5531 90-1879
Email: Email:
[1][email protected] 1. [1][email protected] 1.
mailto:[email protected] mailto:[email protected]
Social Media:
twitter.com/symriseag
linkedin.com/company/symrise
youtube.com/agsymrise
xing.com/companies/symrise
Financial Calendar 2018
7 November
Interim Group Report January - September 2018
Further financial information can be found at the end of this Group
Quarterly Statement via a link in a separate PDF file.
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Additional features:
Document: http://n.eqs.com/c/fncls.ssp?u=XALLMQFYCJ
Document title: Symrise Factsheet H1 2018
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14.08.2018 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
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Language: English
Company: Symrise AG
Mühlenfeldstraße 1
37603 Holzminden
Germany
Phone: +49 (0)5531 90 0
E-mail: [email protected]
Internet: www.symrise.com
ISIN: DE000SYM9999, DE000SYM7787, DE000SYM7704
WKN: SYM999
Indices: MDAX
Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Hanover,
Munich, Stuttgart, Tradegate Exchange
End of News DGAP News Service
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