Symrise increased sales substantially by 7.0 per cent in 2006, from EUR 1 148.9 million to EUR 1 229.4 million and thus recorded higher growth than the market average. The high increase in sales in 2006 was attributable to a very large extent to the successful implementation of the strategic realignment.
Gerold Linzbach, Chairman of the Management Board of Symrise AG: “With the strong growth achieved in the 2006 financial year, Symrise enjoyed the benefits of the comprehensive restructuring exercise and technological product innovations in the previous years. We reached our ambitious targets in every respect and grew considerably faster than the market. This dynamic development has continued in the initial weeks of the current financial year too. We are therefore confident about the rest of the year.”
Many leading international companies in the consumer goods industry have made Symrise one of their core suppliers. This success is mainly due to the systematic implementation of our strategy in the research, marketing and organizational fields. Products that have an additional benefit above and beyond the flavor or fragrance – the so-called “and” products – have been given particularly high priority here.
EBITDA adjusted to eliminate non-recurring factors increased to a disproportionately larger extent than sales, from EUR 193.1 million to EUR 243.2 million in 2006. The adjusted EBITDA margin went up from 16.8 per cent to 19.8 per cent as a result. The non-recurring factors include expenses in connection with the IPO and the restructuring program. The outcome was a net loss for the year after taxes of EUR 89.9 million.
Substantial reduction in debt
Group debt was reduced emphatically with the help of the gross proceeds of the IPO of EUR 652 million. The equity ratio improved to 30.5 per cent as a result. Interest payments will decrease considerably in future thanks to this too.
Developments in the Flavor & Nutrition Division
Sales in the Flavor & Nutrition Division in 2006 increased strongly by 7.5 per cent to EUR 582.0 million. The adjusted EBITDA developed accordingly and went up from EUR 105.7 million in 2005 to EUR 130.3 million in 2006. The strategic focus was on the marketing launch of the "Taste for Life™" program: Taste for Life™ flavors aim to make good taste even healthier in future. The sugar, salt and fat content of food products can, for example, be reduced considerably with the help of these flavors – keeping the same authentic taste.
The new business with such innovations – the “and” products that give customers an additional benefit – was one of the growth drivers in the Flavor & Nutrition Division. In addition to this, the strategy of growing primarily with the major customers as well as maintaining and continuing to expand Symrise's core list positions has already paid off. We succeeded in recording disproportionately fast growth with global food and beverage manufacturers.
Symrise achieved above-average growth rates in the emerging markets. Sales in South America increased by 15.0 per cent, for example.
Developments in the Scent & Care Division
Sales in the Scent & Care Division in 2006 increased by 6.5 per cent to EUR 647.4 million. The adjusted EBITDA improved far better, climbing 29.2 per cent from EUR 87.4 million to EUR 112.9 million in 2006.
This means that Symrise grew faster than the market in this division. Active cosmetic ingredients, UV filters, special aroma chemicals and sensates as well as fine fragrances recorded double-digit growth rates. Symrise benefitted from successful market launches in the luxury perfume field with such exclusive names as Donna Karan (Red Delicious), Jil Sander (Jil Sander Style) or Givenchy (Amarige Mariage).
The Scent & Care Division recorded above-average growth in the emerging markets of China (+ 18.6%), Brazil (+ 25.0%) and India (+ 8.2%) in particular. Sales in the EAME region (Europe, Africa and the Middle East) improved by 5.2 per cent.
Positive outlook
Following an intensive phase of strategic realignment, Symrise is excellently positioned to continue growing profitably. We are concentrating on the development of innovative products and the improvement of our services. It is our objective to achieve faster, primarily organic growth than the market. We are also planning to make selective strategic acquisitions to improve our know-how.
All in all, average sales growth of about 5 per cent p.a. is planned for the two-year period from 2007 to 2008. The adjusted EBITDA margin is to increase from 19.8 per cent in 2006 to substantially more than 20 per cent in this context. The company also intends to pay a dividend of the standard size for the industry for the first time in 2008 for the 2007 financial year, depending on the development of the business.
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