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Emerging Market Sales Help Buoy Symrise's First Half 2011 Financials
Posted: August 10, 2011
Reporting on its first half 2011 financials, Symrise AG noted that the company increased its sales by about 3% at local currency and achieved and EBITDA margin of 20%, despite the strong comparables from the previous year. The major drivers for this increase were business in emerging markets, as well as business from major customers. However, Symrise also saw increased difficulty in the second quarter with the continued rise of raw material prices and negative currency fluctuations.
“Following the enormous catch-up effect during the previous year and a good first quarter, market growth slowed in the recent months," said Heinz-Jürgen Bertram, CEO, Symrise. "Whereas the flavor business continued to grow, the demand for fragrances declined. Nonetheless, Symrise continued to grow throughout the first half of the year. We are therefore continuing to pursue our strategy of focusing on innovation, emerging markets and major customers.”
In the first six months of the current financial year, Symrise posted a revenue increase of approximately 2 % to €811.8 million (previous year was €797.5 million). The sales increase was 2.6% at local currency, with the Asia/Pacific region exhibiting the strongest growth, followed by Latin America and EAME. The company also noted that while emerging markets did not contribute as extraordinarily high as the previous year, they did continue rising above average. Sales generated in emerging markets as a whole rose 4% and accounted for 46% of the company’s sales.
The Asia-Pacific region reported a 5% sales increase, as both divisions benefited from continuous high demand. Latin America grew at a more moderate rate than the previous year, but the region still achieved a 4% sales increase. Sales in EAME rose 3%, with Western Europe making a strong contribution, but North American sales declined 7% over the previous year, primarily due to the slower economy and significant currency effects. At local currency, revenues declined by 2%.
Specifically in its scent and care division, Symrise generated sales of €409.5 million in the first half of the year, down from the previous year’s €411.9 million. The division’s sales remained largely stable, and at local currency sales slightly rose by 0.3%. The application segments life essentials and aroma molecules continued positive development, especially in the area of fragrance ingredients, and the menthol business of enjoyed double-digit growth.
Latin America remained the fastest-growing region for Scent & Care with a sales increase of 5% at local currency. In Asia-Pacific and North America sales rose 1% at local currency. Sales in the EAME region declined 2% at local currency over the incredibly strong previous year.