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Symrise AG’s first-half 2012 sales jumped 7%, or 4% at local currency, to €871.6 million from a year ago, driven by strength in scent and care and flavor and nutrition in North America and emerging markets, particularly Latin America.
First-half results were driven by the second quarter, when the group's sales rose by 11% to €438.9 million from €395 million in the year-ago quarter. As a result, Symrise backed its full-year 2012 sales outlook of 3% to 5% growth at local currency.
“Although many questions remain surrounding the development of the Eurozone, we expect further growth in the second half of the year,” said Heinz-Jürgen Bertram, Symrise’s CEO. “We are well-positioned internationally and enjoy a broad customer base. Additional growth is expected from our new menthol production plant which has been operating since the end of June,” he added.
For the first half, net income for the period rose by 8% to €84 million, from €77 million a year earlier. Symrise improved its earnings before interest, tax and depreciation, or EBITDA, by 7% in the first half to €174 million despite persistently high raw material and energy costs as well as ramp-up costs from its new menthol plant. EBITDA margin was 20%, the same level as a year ago, and the company kept profitability at a sustainable high level.
North America sales were up 19%, or 10% at local currency; Latin America sales were up 18%; Asia/Pacific sales were up 11%, or 4% at local currency. Sales were stable in the EAME region despite economic uncertainties in Southern European markets. In particular, the emerging markets in Latin America were substantial growth drivers along with those in Eastern Europe, Russia and the Middle East. Latin America also benefited from growth initiatives implemented there. By region, the share of group sales generated in the emerging markets rose to 47% in the first half after amounting to 46% in the first half of 2011.
By division, scent and care increased sales in the first six months of 2012 by 9%, or 6% at local currency, to €444 million, led by double-digit growth in oral care, fragrances and life essentials. With a 29% jump in sales at local currency, Latin America was the strongest growth driver in the scent and care division.
Flavor and nutrition’s sales climbed 6% in the first half 2012 to €427 million. The division posted the strongest growth in North America with sales up 12%. Sales were up 3% at local currency in the EAME region—driven by Russia—although the sovereign debt crisis continued to have a notable effect on Western European markets. Sales growth was restrained in the Asia/Pacific region, up 1%. In Latin America, flavor and nutrition sales were up 2% at local currency.
For the company as a whole, Symrise expects further growth in both emerging markets as well as industrialized nations, although it anticipates Western Europe will be “reserved” due to the sovereign debt crisis. Symrise also continues to focus on its goal for an EBITDA margin of about 20%, despite persistently high raw material and energy prices.