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Symrise AG’s fiscal 2012 net income climbed 7% as sales rose 10% on growth in its scent and care and flavor and nutrition divisions despite higher raw material prices and one-off expenses such as the start-up costs for doubling its menthol production. Results do not reflect the company's recent acquisition of Belmay.
The company expects to outperform the flavor and fragrance market in 2013 and aims to boost sales by more than €1 billion by 2020 with emerging markets accounting for about two-thirds of group sales by 2020.
“In view of our balanced positioning with customer groups, products and regions as well as our investments in rapidly expanding business areas, we consider ourselves well equipped for 2013,” said Heinz-Jürgen Bertram, CEO of Symrise AG. “Once again, we aim to grow faster than the market for fragrances and flavors. For the first time, we have also formulated long-term targets, which underscore our strategic commitment, which aims at sustainable, profitable growth: By 2020 we want to increase sales by €1 billion and achieve an EBITDA [ Earnings before interest, taxes, depreciation and amortization] of more than €500 million.”
In releasing its fiscal year results, Symrise said total sales rose to €1.74 billion from €1.58 billion a year earlier, up 10%, or 6% at local currency. The company beat its internal raised forecast from May 2012, which targeted at a sales growth of 3% to 5%. Its boards will propose increasing the dividend for fiscal 2012 to €0.65 at the annual general meeting.
Net income for the year rose 7% to €158 million from €147 million a year earlier. EBITDA grew 7% to €339 million.
In established markets, Symrise said North America showed the most dynamic growth. Among the emerging markets, whose share of sales rose to 48% compared to 46% a year earlier, Latin America posted the strongest growth.
By division, scent and care’s full-year sales jumped to €883 million, up 10% or 7% at local currency, with the application areas of fragrances, oral care and life essentials leading the way. The company’s expanded menthol production plant in Holzminden also helped to boost results. Scent and care’s highest growth rate was in Asia/Pacific and North America, with each posting an increase in sales of 8% at local currency. Latin America was up 7% at local currency and sales in the Europe Africa Middle East (EAME) region were up 4%.
Flavor and nutrition generated sales of € 852 million, up 9%, or 6% at local currency, with savory and beverage applications as well as sweets generating particularly high growth rates. The highest growth rate was in Asia/Pacific and North America, with each posting an increase in sales of 8% at local currency. Latin America had a sales increase of 7% in local currency while EAME sales were up 4% in local currency. The Chinese market, Symrise said, played a particularly key role for the positive developments seen in Asia/Pacific. The company has been present there for 30 years and plans to expand its activities in 2013 and 2014 with further investments.
For the international flavors and fragrances market, growth has been estimated of 2% to 3% for the current fiscal year. Symrise aims to outperform the market in 2013, with growth in both industrialized nations and emerging markets from the fragrance and flavor business as well as life essentials and consumer health markets.
The group is expecting a generally advantageous economic environment, although it says Europe, in particular, will continue to be affected by uncertainties arising from the sovereign debt crisis. Symrise anticipates raw material prices to remain at a high level with short-term volatility in 2013.
Looking forward, Symrise aims to increase sales by more than €1 billion by 2020, which corresponds to an average annual sales growth (CAGR) of 5% to 7%. The company said it plans to expand its activities, particularly in emerging markets, which should account for about two-thirds of group sales by 2020.
In addition, the group plans to procure its most important raw materials from sustainable sources by 2020 while reducing its energy and water consumption, CO2 emissions and waste volumes by one third each.