Report on Q1 2009: Symrise: Stable Sales in Dif...
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* Positive sales trend in North and South America
* EAME experiences sharp drop in turnover
* Strong operating free cashflow
* Targeted restructuring steps initiated
Symrise AG could not escape the consequences of the global economic
downturn in the first quarter of 2009. Although sales at local
currency remained stable, the Group's earnings position was affected
by persistently high raw material prices, weaker sales development
and integration and restructuring costs.
Compared to the very strong first quarter of 2008, Symrise increased
its consolidated sales by 2.6% from ¤ 338.0 million to ¤ 346.7
million (-0.3% at local currency). In the important North American
market, the Group achieved growth of 48% (33% at local currency),
with last year's strategic acquisitions making an important
contribution. Even excluding acquisitions, sales in North America
developed very positively with organic growth of approximately 5%.
In the South American market also, Symrise posted pleasing sales
growth of 14% (22% at local currency). In the Asia-Pacific region,
sales remained virtually on a par with the previous year's (+4% at
actual rates, -3% at local currency). The effects of the negative
economic environment were felt most keenly in EAME - which accounts
for the largest proportion of sales - where sales fell by 12% (-11%
at local currency).
Profitability affected by persistently high raw material prices
As stated, limited sales developments combined with persistently high
raw material prices impacted the Q1 earnings position. Nonetheless,
Symrise succeeded in implementing further price increases in the
first three months of the year and thereby partly compensated for
these negative factors.
At ¤ 58.7 million, earnings before interest, taxes, depreciation, and
amortization (EBITDA) in the first quarter of 2009 fell short of the
previous year's figure (¤ 71.5 million). This corresponds to an
EBITDA margin of 16.9% (previous year: 21.2%). Earnings suffered due
to higher raw material costs, weaker sales development and
integration and restructuring costs. Adjusted for integration and
restructuring costs, the EBITDA margin came to 18.1% in the reporting
period. After adjustments for non-operating items, the adjusted net
income totaled ¤ 28.4 million, compared to ¤ 35.8 million in the
first quarter of the previous year. The adjusted earnings per share
dropped accordingly from ¤ 0.30 to ¤ 0.24.
Dr. Gerold Linzbach, Chief Executive Officer of Symrise, explained:
"The market environment still poses a huge challenge for the whole
industry. Customers are continuing to reduce their inventory levels
and their ordering behavior remains volatile. Symrise has succeeded
in holding its own in this environment, although we are not satisfied
with the earnings position. We have been working on restructuring
plans for some time now and have implemented the first phase during
the first quarter - primarily in Western Europe. We aim to
consistently adjust our cost base to the current underlying
conditions."
Linzbach continued: "Symrise is still pursuing its goal of growing
faster than the market. We believe that our strategy puts us in a
good position to achieve this goal, even in the difficult environment
of 2009."
Growth driven by key accounts, innovations and emerging markets
The course of business in the first quarter confirmed Symrise's
strategy of focusing on key accounts, innovations and emerging
markets as growth drivers. Both of the two divisions succeeded in
further boosting sales to their ten largest customers in the first
quarter. The "AND" products - those which offer significant
additional benefits to consumers - contributed towards growth at
Scent & Care. At the beginning of the year, Kaden Biochemicals'
business activities (acquired in 2006) were transferred from Scent &
Care to the Flavor & Nutrition division so as to enable the Group to
optimally serve the growing nutritional supplements market in future.
The Scent & Care division demonstrated its innovativeness in Q1 2009
by launching two successful new products in the Life Essentials
division.
The markets in South America, Africa and the Middle East were the
growth drivers in the emerging markets; Symrise achieved high
double-digit growth rates in these markets.
Scent & Care - stable business development in difficult times
Despite the global economic crisis, the Scent & Care division
recorded higher year-on-year sales in three of its four regions
(North America, South America and Asia-Pacific). The effects of the
global crisis and the associated reduction in inventory levels were
felt most keenly in the EAME region, where Symrise experienced a drop
in sales. At a global level, the Life Essentials division was the
main sales driver with a 10% increase in sales (4% at local
currency). Demand in the luxury segments Fine Fragrances and Personal
Care, by contrast, fell further. Overall, first-quarter sales based
on actual rates amounted to ¤ 179.8 million and therefore
corresponded with the previous year's Q1 figure. However, taking into
account the effects of the acquisitions made in 2008, sales fell by
2% (-5% at local currency).
Flavor & Nutrition - growth in a weak market environment
In the first quarter of 2009, Flavor & Nutrition generated sales of ¤
166.9 million. This corresponds to growth of 5.5% (3.1% at local
currency). Business developments in this division were also affected
by clients reducing their inventory levels. In the EAME region, sales
were accordingly weak. By contrast, the Group recorded high growth
rates in South America. In North America, sales were up 45% at local
currency on the year, as a result of the contribution from the Chr.
Hansen Flavors business.
Sound long-term financing basis
In Q1 2009, Symrise profited from its consistent working capital
management and increased its operating free cashflow considerably
from ¤ 9.4 million to ¤ 27.3 million. Net debt totaled ¤ 629.3
million as of 03/31/2009. As a result of the acquisitions made in
2008, it was therefore ¤ 92 million above the figure for the first
quarter of the previous year. However, compared to year-end 2008, the
Group reduced its net debt by ¤ 12 million. With a slightly improved
equity ratio of 34.8% (12/31/2008: 34.3%), the Group maintains a
stable capital base.
The successful placement of a ¤ 75 million promissory loan note
announced today further consolidates Symrise's sound long-term
financing. By using this form of financing for the first time,
Symrise is optimizing its debt maturity profile. The placement met
with high demand from institutional investors.
Key Financial Figures Q1 2009
Change Change
Q1 | 2009 in % (at in % (at local
Q1 | 2008 in ¤ actual currency)
in ¤ millions millions rates)
Sales 338.0 346.7 2.6 -0.3
- Scent & Care 179.8 179.8 0.0 -3.3
- Flavor & Nutrition 158.2 166.9 5.5 3.1
EBITA 62.0 47.8 -23 -33
EBITA margin in % 18.3 13.8
EBIT 54.2 38.1 -30 -40
EBIT margin in % 16.0 11.0
EBITDA 71.5 58.7 -18 -27
EBITDA margin in % 21.2 16.9
Net income 24.9 20.9 -16
Earnings per share in -16
¤ 0.21 0.18
Adjusted earnings per -21 -32
share in ¤ 0.30 0.24
No. of employees
(FTE; balance sheet
date)* 5,097 5,057
Operating free cash
flow 9.4 27.3
* without apprentices and trainees
About Symrise
Symrise is a global supplier of fragrances, flavorings and raw
materials as well as active ingredients for the perfume, cosmetics
and food industry.
Its sales of ¤ 1.32 billion in 2008 place the Company among the top
four in the international flavor and fragrance market. Headquartered
in Holzminden, Germany, Symrise is represented in more than 35
countries in Europe, Asia, the United States and South America.
Used by manufacturers of perfumes, cosmetics and foods, our
innovative products are an inseparable part of daily life. At Symrise
we combine an awareness of consumer trends with cutting-edge
technologies, focusing on developing innovative fashion and lifestyle
products that have additional practical value for the consumer.
Symrise - always inspiring more...
www.symrise.com
For press queries, contact: For investor queries, contact:
Katja Derow, red roses communications Dr. Andrea Rolvering
Tel.: +49 (0)40 46 96 77 010 +49 (0)69 75 93 75 94
Email: k.derow@redroses-pr.com andrea.rolvering@symrise.com
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Symrise AG
Mühlenfeldstraße 1 Holzminden Germany
WKN: SYM999; ISIN:
DE000SYM9999; Index: MDAX, TecDAX;
Listed: Regulierter Markt in Frankfurter Wertpapierbörse, Freiverkehr
in Bayerische Börse München,
Freiverkehr in Hanseatische Wertpapierbörse zu Hamburg, Freiverkehr
in Börse Berlin,
Freiverkehr in Börse Düsseldorf, Freiverkehr in Börse Stuttgart,
Prime Standard in Frankfurter Wertpapierbörse;
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