Symrise flavours and fragrances posts improved half-year results despite pandemic
Global flavours and fragrances group Symrise has reported strong half-year earnings, with sales increasing 4.8% to €1.9 billion, along with organic growth reported at 9.7%, writes Neill Barston.
The business has seen a particularly strong period of operating in 2021, with the company recently expanding its operations in the UAE, investing €1 million into sensory and application labs at its Dubai facilities in the region.
According to the firm, which has applications for a number of sectors including confectionery and bakery ranges, expressed a note of caution regarding the ongoing pandemic, it was encouraged by its latest performance.
Moreover, the business added that there were a number of key factors in its improved performance – this included the trend towards healthy cooking at home. Applications for beverages recorded very good organic sales growth in the double-digit percentage range.
The biggest growth was generated in the US market, China, Brazil as well as Germany, the United Kingdom and Ireland. Sales in the Savory business unit primarily increased in the national markets of South Africa, Egypt, Mexico and Brazil.
Consequently, latest half-year results revealed earnings before interest, taxes, depreciation and amortisation (EBITDA) rose by 6.8 % to € 420 million compared to the same period of the previous year.
“The progress made in combatting the worldwide coronavirus pandemic had a positive impact on our business during the second quarter. Demand increased significantly in many areas. In particular there was strong demand for cosmetics and fine fragrance applications again. Product solutions for beverages and food also developed very dynamically because falling case numbers for the coronavirus fueled outof-home consumption,” commented Dr. Heinz-Jürgen Bertram, CEO of Symrise AG.
“Although the pandemic will persist, we are very confident for the coming months following the good first half of the year, and we are more confident about our performance in the future. We are therefore raising our forecast for the organic sales target, as well as for the profitability target.” Strong growth in the Group and the segments In the reporting currency, the Symrise Group achieved sales growth of 4.8 % to € 1,908 million (H1 2020: € 1,821 million). The acquisition of the Fragrance and Aroma Chemicals business from the US company Sensient in April 2021 contributed € 14.4 million. In spite of the weaker prior-year figures due to the pandemic, organic sales growth was even stronger: During the first six months, Symrise increased sales by 9.7 %.
Alongside catch-up effects in the first quarter resulting from the cyber-attack in December, the good dynamic in the second quarter made a contribution. Due to the accelerating business and higher demand, sales increased organically between April and June by 8.8 %. As of 1 April 2021, Symrise AG modified segment reporting and from now on will publish earnings figures for the two segments Scent & Care and Flavour & Nutrition.
As part of a strategic realignment, the previously separate segments Flavour and Nutrition have now been combined in the segment Flavour & Nutrition. Activities for beverages and food, as well as the applications for pet food and probiotics are now grouped in this segment. The combination will allow a more targeted response to customer needs as well as the expansion of customer relationships. Furthermore, processes will be optimised by pooling competences and technologies.
The Scent & Care segment Scent & Care, the business with fragrances, aroma molecules and cosmetic ingredients, achieved very good organic sales growth of 9.0 % in the first half year of 2021. Taking currency translation effects into account, sales amounted to € 749 million in the first six months and rose significantly compared to the prior-year period (H1 2020: € 711 million). The Fragrance and Aroma Chemicals business from Sensient contributed € 14.4 million to this. Particularly during the second quarter, normalisation of consumer demand began to emerge as battling the pandemic progressed.
