Symrise continued its profitable growth course in the first half of 2020 amid the global COVID-19 pandemic. The group increased its sales by 7.6 % to €1,821 million in an economically challenging market environment.
In organic terms—i.e. excluding the portfolio effect of the ADF/IDF acquisition and exchange rate effects —sales were up by 3.4 %. All segments contributed to this positive development.
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Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 11.9 % to €393 million as compared to the previous year’s level normalized for acquisition and integration costs for ADF/IDF (H1 2019: €351 million).
Profitability developed particularly well: The EBITDA margin rose to 21.6 % and lies higher than the profitability target for 2020. The net income for the reporting period increased to €169 million.
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Basic earnings per share increased 10 % to €1.25 from €1.14 (normalized) in the first half of the previous year.
Against the backdrop of the strong business performance and profitability trend in the first half of the year, Symrise is raising its full-year EBITDA margin guidance from 20 % to a range of 21-22 %.
"In the second quarter, the coronavirus pandemic began to significantly impact the global economy and, above all, many people's everyday lives,” said Dr Heinz-Jürgen Bertram, CEO of Symrise AG. “Even in this historically exceptional situation, Symrise has done an excellent job of staying on course. Thanks to our global presence, diversified portfolio and broad customer base, our feet rest very firmly on the ground. We remained fully operational in the second quarter and were able to supply our customers in the usual reliable manner.”
“Of course, it is hard to predict the course of the coronavirus pandemic,” Dr Bertram continued. “However, after our performance in the first half of the year, we are looking ahead to the second half with confidence. For the full fiscal year 2020 we again want to grow faster than the market and expect that we will achieve increased profitability overall. We are therefore raising our guidance for the EBITDA margin to a range of 21-22 %."
Scent & care achieved solid organic growth of 2.6 % in the first half of 2020. Taking currency translation effects into account, sales in the first six months in the reporting currency amounted to €711 million and were therefore almost unchanged as compared to the same period of the previous year (H1 2019: €712 million).
The segment improved EBITDA to €146 million (H1 2019: €140 million). The EBITDA margin for the period under review increased to 20.6 % (H1 2019: 19.7 %).
Strong demand in the fragrance division drove sales in the consumer fragrances and oral care business units, which recorded high organic growth in the single and double-digit range respectively.
The fine fragrances business unit, at the same time noticed the effects of the coronavirus pandemic clearly. Overall, the fragrance division achieved solid organic growth in the single-digit percentage range with increases in all regions.
Sales in the aroma molecules division in the first six months of 2020 ranged slightly below the previous year, mainly due to weaker demand for fragrances. On the other hand, positive momentum came from the menthols business unit, which achieved organic growth in the double-digit percentage range.
The EAME, North and Latin America regions achieved the strongest gains.
Flavor achieved organic growth of 0.6 % in the period under review. Taking currency translation effects into account, segment sales in the reporting currency amounted to €636 million (H1 2019: € 637 million).
The EBITDA of the flavor segment was up 2.2 % to €147 million (H1 2019: € 144 million). The EBITDA margin improved from 22.6 % in the first half of 2019 to 23.2 %, mainly due to tight control on costs and proportionally lower raw materials costs.
Against the backdrop of the COVID-19 pandemic, the trend toward cooking and eating at home led to a strong demand for products from the savory business unit and product solutions for baked goods and cereals. At the same time, reduced out-of-home eating and drinking led to a lower demand for beverage products and sweets.
In the EAME region, the flavor segment suffered from significantly reduced demand for beverage products and sweets, while the savory business unit recorded a high single-digit growth rate.
Germany and the Gulf region achieved the strongest gains. Overall, sales in the EAME region remained slightly below the figure for the first half of 2019.
Organic sales in North America were roughly on par with the same period of the previous year. While savory product solutions enjoyed great demand, beverage products and sweets sold less.
The Asia/Pacific region reported organic growth in the single-digit percentage range, driven primarily by very strong demand for products from the savory business unit, which showed organic growth in the double-digit percentage range.
The largest increases came from the national markets of Indonesia, Thailand, Vietnam and Singapore.
The Latin America region achieved the strongest growth in the segment in the first half of 2020 and was largely unaffected by the COVID-19 pandemic. All business units realized high organic growth in the single or double-digit percentage range.
Strong gains were posted especially in the national markets of Brazil, Uruguay and Mexico.
The full H1 results are available on the Symrise webiste.
