EANS-News: Symrise AG Continues to Focus on Earnings Power and Achieves EBITDA Margin of 20.1 %
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quarterly report/Nine-months report 2011
Subtitle: Group sales rose by about 2 % at local currency
Business with global customers increases sales by 5 %
Portfolio pruning and cost discipline secure profitability
Targeted EBITDA margin of 20 % confirmed for the full year
Holzminden, November 9, 2011 (euro adhoc) - Symrise remains on course with an
EBITDA margin of 20.1 % for the first nine months of 2011. The Group achieved
its targeted margin despite a further economic slowdown in the third quarter and
sustained high raw material prices. In certain regions Symrise discontinued
selective activities with low margins and continued strict cost discipline
throughout the Group. Group sales increased about 2 % compared to the strong
prior-year figures which were characterized by catch-up effects. The flavor
business as well as activities with global customers significantly contri-buted
to this growth. The Emerging Markets also continued to provide positive impetus
for growth.
Dr. Heinz-Jürgen Bertram, CEO of Symrise AG, said: "The market dynamics have
continued to slow in the third quarter due to weaker economic prospects and
continuing tension on the raw material and foreign exchange markets. We made
notable gains in our business with global customers. At the same time, however,
we saw customers returning to more careful order patterns in certain regions and
sectors. To secure our profitability on a long-term basis we continued to focus
our business on profitable activities during the third quarter. We aim to
growing, however, not at the cost of our earnings power."
Dr. Bertram continued: "We do not expect volatility to decline in our markets
until the end of the year. Accordingly, securing our strong profitability takes
first priority. From today´s point of view and despite the current macroeconomic
challenges we continue to be confident that we will achieve an EBITDA margin of
20 % for the full year of 2011. After using this year to consequently focus on
optimizing our earnings, we are well prepared for various economic scenarios
that may occur in the coming year."
Emerging Markets Account for 46 % of Total Sales
In the first three quarters of 2011, Symrise generated Group sales of EUR
1,206.3 million (previous year: EUR 1,207.7 million). This corresponds to an
increase of about 2 % at local currency. The Group continued to grow in the
Emerging Markets, though not at the exceptional pace of the previous year.
Symrise rose sales in Emerging Markets by about 2 % and generated 46 % of its
total sales in those markets.
In the EAME region, Symrise posted sales gains of 2 % (2 % at local currency).
At the same time, sales growth in the Asia/Pacific region was moderate at 2 % (2
% at local currency) mainly due to portfolio optimizations. In Latin America,
sales development remained behind the above-average growth rates seen last year
with a gain of 1 % (3 % at local currency). Sales in this region also reflect
the conscious decision to discontinue less profitable activities. In North
America, sales decreased 8% compared to the strong prior-year-figures, which is
mainly due to negative exchange rate effects, as well as reserved consumer
sentiment in the region. At local currency, the decline in sales amounted to a
moderate 1 %.
Successful Expansion of Business with Global Customers in Both Divi-sions
Both divisions took advantage of their strong position as core suppliers to
inter-national food and consumer goods manufacturers and further expanded their
business with those key customers. Scent & Care increased sales in this
cus-tomer segment by 4 % while Flavor & Nutrition posted sales gains of 7 %.
In total Symrise increased sales with global customers by 5 %. The segment
accounted for 31 % of Group sales.
Excellent Profitability despite Burdens from High Raw Material Costs
Symrise´s earnings situation was negatively affected by sustained high raw
ma-terial costs and volatile exchange rates in the first nine months of 2011. To
counteract these burdens, Symrise focused on strict cost management throughout
the entire Group and on a conscious discontinuation from activities with weak
margins. These steps significantly contributed towards securing prof-itability
and achieving an EBITDA margin of 20.1 % (previous year: 22.2 %). Earnings
before interest, taxes, depreciation, and amortization (EBITDA) amounted to EUR
242.6 million during the reporting period compared to EUR 267.7 million during
the same period last year. Net income for the first nine month to-taled EUR
117.4 million (previous year: EUR 127.3 million). This corresponds to earn-ings
per share of EUR 0.99 (previous year: EUR 1.08).
Inventory Reduction Allows Decrease in Working Capital
After a temporary build-up of important raw material inventories in the first
half of the year, Symrise has reduced its working capital by EUR 35.3 million in
the third quarter. Cash flow from operating activities amounted to EUR 130.1
million in the first nine months of 2011 (previous year: EUR 155.6 million).
Net debt (incl. pension provisions) amounted to EUR 743.2 million as of
September 30, 2011 (December 31, 2010: EUR 733.7 million). The ratio of net debt
(incl. pension provisions) to EBITDA amounted to 2.4 at the end of the reporting
pe-riod (December 31, 2010: 2.2) and therefore remained within the targeted
range of 2 to 2.5.
Scent & Care
Compared to the prior year period, which was characterized by catch-up
effects, sales in the Scent & Care division declined to EUR 609.7 million in the
reporting period (previous year: EUR 621.8 million). At local currency, the
figure is nearly unchanged. The sales development reflects the discontinuation
of less profitable orders.
Additionally, lower demand in consumer-related areas, such as luxury perfumes,
were noticeable in the results. However, Scent & Care continued its positive
growth trends in the Life Essentials, Aroma Molecules, and Oral Care application
areas. In the menthol business, Symrise achieved double-digit growth. The
application area Cosmetic Ingredients posted considerable growth, particularly
in the Emerging Markets.
In Latin America, sales developed at a more moderate pace after experiencing
very dynamic growth in the previous years. Scent & Care increased sales in the
region by 3 % at local currency. In Asia/Pacific, the division managed a slight
gain of 1 % (at local currency). The comparably lower growth rate is mainly due
to portfolio pruning and exiting low-margin business activities. After the
strong growth realized last year sales in the EAME region decreased by 2 %
during the reporting period. Sales in North America remained stable.
EBITDA for the division totaled EUR 117.3 million (2010: EUR 131.2 million). The
EBITDA margin was 19.2 % (previous year: 21.1 %).
Flavor & Nutrition
Flavor & Nutrition grew sales by about 2 % to EUR 596.6 million (previous year:
EUR 586.0 million) during the first nine months of 2011. At local currency, this
corresponds to an increase of 3 %.
The strongest region in terms of growth was EAME, with solid demand in all of
the important country markets and a jump in sales of 6 % (at local currency).
Beverage applications and Consumer Health developed particularly well in this
region. In comparison to the strong performances seen in the previous year
Asia/Pacific and Latin America generated more moderate growth with each region
posting a growth of 2 % at local currency. Selective Portfolio optimizations had
an effect on both regions. In Latin America Symrise benefitted particularly from
solid demand for savory applications and citrus products. The ongoing
reserved consumer sentiment in North America led to a sales decline of 4 % at
local currency.
EBITDA amounted to EUR 125.3 million (previous year: 136.5 million) while the
EBITDA margin came in at 21.0 % (previous year: 23.3 %).
Outlook: Targeted EBITDA Margin of 20 % Confirmed for the Full Year
Symrise remains confident to largely achieve its targets for fiscal year 2011.
Based on the results of the first nine months, the Management Board reaffirms
the goal of achieving an EBITDA margin of 20 % for the full year. Considering
the overall high raw materials prices and the softening economic development,
Symrise´s industry-leading EBITDA margin represents a considerable achieve-ment.
For the current fiscal year Symrise aims at increasing Group sales by around
2-3% at local currency. In view of the short-term volatility seen in important
sales markets, the Management Board has placed the focus on profitable growth.
Thus, Symrise consciously declined business in certain cases to avoid diluting
its earnings power.
Thanks to its global footprint, innovative power, and focus on global customers
Symrise is well-positioned to benefit from the medium-term intact growth trends
in its core markets. Should the global economy improve in the coming year,
Symrise will use its strengths to accelerate its profitable sales growth. Should
the economic environment continue to deteriorate, Symrise will be
well-positioned to assert its profitability.
Key Figures for the First Nine Months of 2011
EUR million 9M 2010 9M 2011 Change in% Change in% LC
Sales 1,207.7 1,206.3 0 2
EBITDA 267.7 242.6 -9 -8
EBITDA margin in % 22.2 20.1 - -
EBIT 202.1 182.1 -10 -9
EBIT margin in % 16.7 15.1 - -
Net income f.t. period 127.3 117.4 -8
Earnings per share (EUR) 1.08 0.99 -8
Cash flow from
operating activities 155.6 130.1
DIVISIONS
Scent & Care
Sales 621.8 609.7 -2 -0.2
EBITDA 131.2 117.3 -11
EBITDA margin in % 21.1 19.2 - -
Flavor & Nutrition
Sales 586.0 596.6 2 3
EBITDA 136.5 125.3 -8
EBITDA margin in % 23.3 21.0 - -
31.12.10 30.09.11
Balance sheet total 2,059.0 2,068.2
Equity ratio 40.9 41.8
Net debt (incl. pension
provisions)/EBITDA
ratio 2.2 2.4
Employees / FTE¹ 5,288 5,466
¹ Not including trainees and apprentices, FTE = Full Time Equivalent
LC= At local currency
About Symrise
Symrise is a global supplier of fragrances and flavorings as well as cosmetic
base materials and substances for the perfume, cosmetic, and food industries.
Its sales of EUR 1.57 billion in 2010 place Symrise among the top four companies
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 South America.
Our innovative products are used by perfume, cosmetic, and food manufacturers
and are an indispensable part of daily life. We combine our insights on 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
www.symrise.com
Further inquiry note:
Media Contact
Bernhard Kott
Phone +49 (0)5531 90-1721
bernhard.kott@symrise.com
Investor Contact
Tobias Erfurth
Phone +49 (0)5531 90-1879
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
Original-Content von: Symrise AG, übermittelt durch news aktuell