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EANS-News: Symrise AG
Symrise enters second half 2010 backed by strong
earnings and profitability growth
Â• Group sales up 16.4 % Â• 46 % of sales generated in emerging markets Â• EBITDA up 50 % Â– EBITDA margin rises to 22.3 % Â• Net income for the period more than doubles to Â€ 88.8 million Â• FY 2010 forecast specified: on local currency terms sales growth of at least 8 % expected
-------------------------------------------------------------------------------- Corporate news transmitted by euro adhoc. The issuer/originator is solely responsible for the content of this announcement. --------------------------------------------------------------------------------
Subtitle: Â• Group sales up 16.4 % Â• 46 % of sales generated in emerging markets Â• EBITDA up 50 % Â– EBITDA margin rises to 22.3 % Â• Net income for the period more than doubles to Â€ 88.8 million Â• FY 2010 forecast specified: on local currency terms sales growth of at least 8 % expected
Holzminden August 10, 2010 (euro adhoc) - Symrise AG looks back on a successful first half with significantly higher sales and profitability. In the first six months of the Fiscal Year 2010, Group sales rose 16.4 %, or 13.9 % at local currency. Symrise benefited in particular from the global economic recovery, an increase in new orders, the innovative products in the portfolio as well as the dynamic growth of the business in the emerging markets. Group EBITDA rose 50 % to EUR 177.7 million. This was matched by a robust EBITDA margin of 22.3 %, up sharply on the 17.3 % reported in the previous year. The increased net sales, ongoing cost discipline and the high capacity utilization of its production facilities significantly supported the rise in profitability. Based on its development in the first six months, Symrise specifies its forecast for the full year and expects 2010 sales growth of at least 8 % at local currency. In addition, Symrise continues to aim for an EBITDA margin of more than 20 %.
Dr. Heinz-JĂĽrgen Bertram, Chief Executive of Symrise AG, said "We successfully capitalized on the economic recovery and enjoyed above-average growth in the first half of 2010. Our customersÂ´ order patterns have normalized again compared to 2009 and we were in particular able to expand our business with our key customers. Our regional diversification and our special focus on emerging markets are also paying off: weÂ´ve seen considerable growth in all regions and are meanwhile generating 46 % of sales in emerging markets alone."
"The encouraging developments of the first six months have given us cause for optimism for the second half of 2010. At the same time, we continue to keep an eye on market developments. We aim to grow faster than the market as a whole and are currently forecasting at least 8 % sales growth at local currency."
"We will also continue to vigorously implement our core strategic goals: We will further sharpen our profile, while particularly focusing on the two application areas Life Essentials and Consumer Health."
In the second quarter, Symrise took another major strategic step to realize further growth in the menthol business: its menthol production capacities will almost double by 2012.
Double digit growth in every region In the first half of 2010, Symrise increased Group sales by 16.4 % (13.9 % at local currency) to EUR 797.5 million (EUR 685.1 million). Once again, the benefits of the companyÂ´s emerging market strategy became apparent: over the reporting period, the regionÂ´s contribution to Group sales increased further to 46 % from 44 % for the same period last year.
On a regional basis, Asia/Pacific was the most dynamic region with 21 % sales growth (14 % at local currency), closely followed by Latin America which - despite strong reference values - reported a 20 % rise in sales (15 % at local currency). The EAME region, which was hardest hit by the economic crisis in 2009, benefited considerably from the global recovery over the first six months of 2010, reporting a 15 % rise in sales (14 % at local currency). Sales in North America also benefited from the improved market environment, achieving 14 % growth (13 % at local currency).
Sales with key customers up 15 % Symrise has successfully increased business with strategically important key customers: over the first six months, sales with its top 10 customers rose by 15 % at local currency and accounted for 30 % of total sales.
In the Flavor & Nutrition division, sales with the top 10 customers grew by 16.7 % (at local currency), thereby achieving growth rates above those of the overall Group. In addition, the business division was able to secure two further core listings in the second quarter. Scent & Care also continued to expand its business with its key customers, increasing sales by 12.8 % at local currency.
EBITDA increases to EUR 177.7 million - EBITDA margin of 22.3 % up significantly YoY The growth in Group earnings in the first half of 2010 was considerably supported by the disproportionately high increase in sales as well as the high utilization levels. In addition, the ongoing cost discipline throughout the Group and the effects of the restructuring program, which was ratified in 2009 and implemented successively were also clearly beneficial to Group earnings. Furthermore, the company was able to benefit from moderate raw material prices in certain areas as they were negotiated and secured at an early stage. In the first six months, earnings before interest, tax, depreciation and amortization (EBITDA) rose 50 % to EUR 177.7 million (EUR 118.6 million). At 22.3 %, the EBITDA margin significantly exceeded its previous yearÂ´s level of 17.3 %. The net income for the period more than doubled from EUR 41.0 million in the first half of 2009 to EUR 88.8 million for the same period 2010. Earnings per share rose accordingly from EUR 0.35 to EUR 0.75.
Gearing ratio further reduced Operating cash flow in the first half amounted to EUR 74.7 million (EUR 89.9 million) and reflects the increase in working capital at the start of the financial year. The Group reduced its net debt including pension provisions to EBITDA ratio from 3.1 at the end of 2009 to 2.7 as of June 30, 2010 and is thus in a financially sound position. With liabilities due in 2011 and in the view of the current, relatively favorable capital market conditions, Symrise will assess various options for premature refinancing in the second half of the year.
Scent & Care sales rise 20 % The developments in the Scent & Care division were particularly impacted by the economic recovery, which was most evident in the application areas of Fine Fragrances and Personal Care. In addition, similar trends were noticeable in Special Fragrance & Flavor Ingredients, Household and Cosmetic Ingredients. Scent & Care also benefited from new product launches in Cosmetics including e.g. the clinically tested revitalizer SymMollientÂ® and the aroma molecule AmbrocenideÂ®.
Scent & Care reported double digit sales growth in EAME, North America and Asia/Pacific. The largest increase in sales was achieved by the EAME region with 21 % at local currency. Last yearÂ´s particularly strong reference values resulted in a somewhat more moderate 9 % improvement in sales in Latinamerica.
The business divisionÂ´s year on year sales rose by almost a fifth to EUR 411.9 million (EUR 343.6 million) and an increase of 16.5 % at local currency. EBITDA rose by 69 % to EUR 85.5 million (H12009: EUR 50.6 million). The EBITDA margin went up from 14.7 % in the previous year to 20.7 % in the reporting period.
Flavor & Nutrition - impressive EBITDA margin of 23.9 % The Flavor & Nutrition division also benefited significantly from improvements in the global economy and reported above-average growth particularly in the application areas Beverages and Sweet. The division additionally launched new products and expanded existing ranges such as the citrus oil line NATURALLY CITRUS!Â® used primarily in soft drink manufacturing.
On a regional basis, Flavor & Nutrition achieved strongest growth rates in Latin America: The 21 % rise in sales at local currency was mainly driven by the robust demand from local and global customers in the application areas Beverages and Sweet. The second strongest region of this segment, Asia/Pacific, reported a 14 % rise in sales and mainly profited from the advantageous developments in the Beverages application area. The region North America also reported strong sales growth of 13 %, benefiting especially from its focus on key customers. EAME reported an 8 % rise in sales which was supported by both, the established markets in Western Europe as well as the emerging markets in Eastern Europe and Africa.
In the first half of 2010, sales rose by 12.9 % (11.4 % at local currency) to EUR 385.6 million (EUR 341.5 million). EBITDA increased by over one third, from EUR 68.0 million to EUR 92.2 million, while the EBITDA margin rose to an impressive 23.9 % (from 19.9 % the previous year).
Outlook for Full Year 2010 specified Based on the strong growth in the first six months Symrise enters the second half of the year with optimism: the Group is expecting further growth, albeit somewhat less dynamic than in the first half due to the higher reference values and the generally more moderate economic development. For 2010, Symrise aims to grow faster than the market again and expects sales growth at local currency of at least 8 %. Under the assumption that raw material prices for 2010 will remain at last yearÂ´s levels, the Management Board also emphasizes its goal of attaining an EBITDA margin of over 20.0 %.
In addition, the Management Board confirms its objective of further reducing the net debt (including pension provisions) to EBITDA ratio to a level of between 2.0 and 2.5 over the medium-term.
EUR million HY 2009 HY 2010 Change in % Change in % at lc Sales 685.1 797.5 16.4 13.9 EBITDA 118.6 177.7 50 49 EBITDA margin in % 17.3 22.3 EBIT 77.1 133.7 73 73 EBIT margin in % 11.2 16.8 - - Net income for the period 41.0 88.8 117 - EPS in EUR 0.35 0.75 117 - Operating cash flow 89.9 74.7 Divisions Scent & Care Sales 343.6 411.9 19.9 16.5 EBITDA 50.6 85.5 69 67 EBITDA margin in % 14.7 20.7 - - Flavor & Nutrition Sales 341.5 385.6 12.9 11.4 EBITDA 68.0 92.2 36 36 EBITDA margin in % 19.9 23.9 - -
31.12.09 30.06.10 Balance sheet total 1,895.2 2,087.1 Capital ratio in % 36.4 38.3 Net debt (incl. pension provisions)/EBITDA 3.1 2.7 Employees/FTEÂą 4,954 5,219 Âą Not including apprentices and trainees, FTE = full time equivalent
lc= at local currency
Symrise is a global supplier of fragrances and flavorings while also manufacturing raw materials and active ingredients for the perfume, cosmetics and food industries.
Its sales of EUR 1.36 billion in 2009 place the company among the top four in the international flavors and fragrances market. Headquartered in Holzminden, Germany, Symrise is represented in over 35 countries in Europe, Asia, the United States and South America.
Used by manufacturers of perfumes, cosmetics and foods, our products are an inseparable part of daily life. At Symrise we combine an awareness of consumer trends with cutting-edge technologies, focusing on innovative fashion and lifestyle products that have additional practical value for the consumer. Symrise - always inspiring moreÂ… www.symrise.com
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