- Normalized EBITDA slightly higher year-on-year
- Significant increase in operating cash flow
- Stable dividend of €0.50
Holzminden. Symrise AG enjoyed a robust increase in business in 2009 despite the challenging market environment. The company increased sales by 3.2 % at actual rates and by 2.7 % at local currency. Symrise thus again enjoyed stronger growth than the flavor and fragrances market, which stagnated in 2009. The EBITDA, adjusted for restructuring expenses, was slightly higher than in 2008. Symrise benefited from an increase in business during the second half of the year and the positive effects of the restructuring measures implemented over the course of the year.
Dr. Heinz-Jürgen Bertram, Chief Executive Officer of Symrise AG, said: “Symrise has demonstrated its resilience during the deepest recession in decades. We managed to maintain our above-average growth rate despite the difficult environment. Our strategic focus on large global customers, emerging markets and innovative products has paid off. At the same time we consequently ad-justed to changing market conditions and made our operations leaner and more efficient. This contributed significantly to our ability to keep our normalized EBITDA margin at a high level. We want to share our business success with our shareholders and therefore intend to pay a stable dividend of € 0.50 per share.”
Bertram added: “The market environment has improved in recent months, but continuously high raw material prices and the low level of consumer confidence still constitute challenges. We anticipate that Symrise will again exceed market growth and generate an EBITDA margin of at least 20 % in the current financial year. Our mid-term objective is to capitalize on our special strengths in dynamic regions and in innovative application areas to become the third-largest supplier in our market. We are confident that we can achieve this goal with our current strategy and under our own power.”
Rapid growth in emerging markets
In 2009, Symrise enjoyed a 3.2 % increase in Group sales from € 1,319.9 mil-lion to € 1,362.0 million. Sales at local currency rose by 2.7 %. Revenues gen-erated in emerging markets grew disproportionately and increased by 4.5 % at local currency. Their share of the Group’s total sales rose from 40 % in 2008 to 41 %.
The South American region grew particularly strong in 2009. Here Symrise increased sales by 12 % and by 17 % at local currency. The Asian/Pacific region contributed significantly to growth with an 8 % increase in sales (5 % at local currency). In North America Symrise revenues rose by 14 % (12 % at local cur-rency), partly due to the acquisitions made in 2008. The EAME region, which was hit especially hard in the first half of the year by the weak economy and by destocking of customer inventories, returned to growth during the second half of the year. Sales in this region for the entire year declined by 4 % (3 % at local currency).
Improved earnings in second half of the year
The Group’s earnings benefited from an upswing in business in the second half of the year as well as from positive effects of the restructuring measures. Moreover, the Group was able to maintain the price increases implemented at the end of 2008 and beginning of 2009. Earnings suffered from a decline in demand due to the destocking of customers’ inventories as well as from persistently high raw material costs, restructuring expenses and costs for the integration of acquisitions completed during the first half of the year. For the entire year Symrise had extraordinary restructuring expenses of € 19.9 million and final integration costs of € 2.4 million for acquisitions made in 2008.
At € 265.4 million, earnings before interest, taxes, depreciation and amortization (EBITDA) adjusted for restructuring expenses was slightly higher than the previous year’s EBITDA of € 262.5 million. The normalized EBITDA margin of 19.5 % nearly reached the level of 19.9 % in 2008. The EBITDA amounted to € 245.6 million in 2009. This translated into an EBITDA margin of 18.0 %.
Net income declined from € 90.4 million to € 84.3 million. Symrise thus achieved earnings per share of € 0.71 following € 0.76 in 2008.
In view of the stable development of business in a difficult market environment, the executive board and the supervisory board of Symrise AG will propose to the Annual General Meeting to keep the dividend at the previous year’s level of € 0.50 per share. This corresponds to a payout ratio of 70 % with respect to net income.
Significant increase in operating cash flow
Effective working capital management contributed significantly to the considerable increase in operating cash flow from € 153.1 million to € 225.7 million. Symrise used the cash inflow, among others, to further pay off financial liabilities. The company reduced net debt (including pension reserves) from € 833.6 million to € 773.4 million. The equity ratio improved to 36.4 % at the end of the year (Dec. 31, 2008: 34.3 %).
Above-average sales growth with core list customers
Symrise again saw business with large global customers grow disproportionate-ly. Sales with this strategically important customer group rose by 4.4 % in 2009. Large global customers thus accounted for 29 % of Group sales. With an in-crease of 9.1 % (9.0 % at local currency), the Flavor & Nutrition division in par-ticular enjoyed a significant rise in revenues with major customers. Top customer sales growth in the Scent & Care division was lower due to the weaker demand in the fine fragrances segment and the luxury segment of personal care. Both divisions gained additional core list positions in 2009, thereby laying a solid basis for the further expansion of business with major global customers.
Scent & Care – slight sales increase in 2009
The Scent & Care division benefited from an increase in business during the second half of the year. Sales for the division rose by 1.6 % to € 682.3 million (previous year: € 671.8 million). Positive developments in the application area Household and in the mid-price segment of Personal Care more than compen-sated for the weak demand in Fine Fragrances and in the luxury segment of Personal Care. Oral Care also developed positively.
Like the Group as a whole, Scent & Care achieved dynamic growth in emerging markets with an increase of 5 % at local currency. The division boosted its sales in particular in South America, where even the luxury segment Fine Fragrances grew in contrast to the trend in other regions. In North America Scent & Care benefited significantly from the acquisitions made in 2008. The emerging markets in the Asia/Pacific region also contributed to the growth in revenues. In EAME a surge in business during the second half of the year partially compensated for the slow development of business in the first half.
The Scent & Care division achieved an EBITDA of € 109.0 million (previous year: € 130.2 million) in 2009. The EBITDA margin amounted to 16.0 %. The normalized EBITDA was € 122.8 million, which translated into an EBITDA mar-gin of 18.0 %.
Flavor & Nutrition – EBITDA above previous year’s figure
The Flavor & Nutrition division increased revenues from € 648.1 million to € 679.7 million in the 2009 financial year. This represents a 5 % increase at local currency. Following the destocking of customer inventories in the first half of the year, business improved significantly during the second half of the year.
Growth was especially strong in the emerging markets of South America and in the Asia/Pacific region. Flavor & Nutrition’s sales in South America grew by 21 % at local currency. In North America the division outperformed the market, partially driven by acquisitions. Business in the EAME region recovered during the second half of the year following the destocking of customer inventories in the first half of the year.
The Flavor & Nutrition division made an important strategic move in the fourth quarter with the establishment of the new global Consumer Health business unit. Consumer Health focuses on the dynamic segments of functional ingredients for nutritional supplements and flavor solutions for the pharmaceutical industry. Symrise builds on its particular strength in innovation and on its technological expertise to systematically develop a new business area.
Despite persistently high raw material costs and the unfavorable business development in the first half of the year, Flavor & Nutrition increased its EBITDA to € 136.6 million in 2009 over € 132.3 million for the prior year. The division thereby achieved an EBITDA margin of 20.1 %. Adjusted for restructuring ex-penses, the EBITDA rose by 7.8 % to € 142.6 million. This corresponds to a normalized EBITDA margin of 21.0 %.
About Symrise
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 € 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 more…
ww.symrise.com
Press Contact:
Bernhard Kott
Tel. +49 (0)5531 90-1721
bernhard.kott@symrise.com
Investor Contact:
Dr. Andrea Rolvering
Tel. +49 (0)69 75 93 75 94
andrea.rolvering@symrise.com
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