Symrise Unveils H1 Financial Report with €2.4Bn
- Chaileedo Press
- Aug 3, 2023
- 4 min read
The sales in the Scent & Care of Symrise recorded 886 million euros ($968.4 million) in the first half of 2023, up 2.7% year-on-year.
Yesterday (August 2), Symrise announced its 2023 H1 financial results.
In the first half of 2023, Symrise sales increased by 6.8% to 2.414 billion euros ($2.6 billion). However, EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) recorded 446 million euros ($487.5 million), a year-on-year decline of 8.1%. It can be seen that Symrise performance in the first half of this year was a mixed bag.
Continued high inflation led to increased costs
According to the financial report, Symrise sales in the first quarter of this year amounted to 1.23 billion euros ($1.34 billion), a year-on-year increase of 12.8%. Among them, sales in the Scent & Care were 454 million euros ($496.2 million), up 8.3% year-on-year, with organic sales growth of 4.2%.
In the second quarter of this year, the Group's sales amounted to 1.184 billion euros (about 9.343 billion yuan), of which sales in the fragrance care segment amounted to 432 million euros (about 3.408 billion yuan), basically unchanged from the same period last year.
On a consolidated basis, in the first half of the year, Symrise sales continued to grow, up 6.8% to 2.414 billion euros ($2.6 billion). The EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) declined by 8.1% year-on-year to 446 million euros ($487.5 million) compared with 485 million euros ($530 million) a year ago. The net income was recorded at 188 million euros ($205.5 million), a decrease of 41 million euros ($44.8 million) from the same period last year.
(Credit: from Symrise financial report)
Regarding the rise in sales, Symrise said in its financial report that both of the group's two divisions made outstanding contributions to sales in an environment where the global economic situation is still unstable.
But as for the decline in EBITDA, Symrise admitted that the increase in raw materials, energy and operating costs added to the group's burden. The closure of the Aroma Molecules division's plant on Colonel's Island resulted in a loss of 29 million euros ($31.7 million) for the group.
Heinz-Jürgen Bertram, Chief Executive Officer of Symrise, said that in the first half of the year, the group's development was relatively stable thanks to its proven business model. However, continued high inflation has led to increased costs. The Group has now been able to partially offset the external challenges by adopting a cost management and price increase strategy. With the Group's increased production capacity and closer cooperation with China, the Group will continue to enhance its core competencies.
Scent & Care segment grew 2.7% year-on-year
By segment, sales in the Scent & Care of Symrise recorded 886 million euros ($968.4 million) in the first half of 2023, up 2.7% year-on-year. It is worth mentioning that the acquisitions of Groupe nsamuoli and Romani contributed 15 million euros ($16.4 million) to the group's sales.
Specifically, the Scent & Care segment consists of the Fragrances, Cosmetic Ingredients and Aroma Molecules divisions.
(Credit: Symrise financial report)
The Fragrances segment achieved single-digit organic sales growth in the first half of 2023. This was mainly due to the boom in the fine fragrance business, which achieved double-digit organic growth, especially in the EAC and Latin America regions; not only that, the mass fragrance business also achieved single-digit growth.
The Cosmetic Ingredients division posted solid sales progress, again with double-digit organic growth, and particularly strong growth in Sun Care and Microsun Care, which grew substantially in EAME, Asia Pacific and Latin America.
However, not all divisions are riding high. The Aroma Molecules division has seen its share of challenges this year. Due to lower market demand, the shutdown of production in the Colonel Island region, and large stocks of fragrance ingredients and menthol, the division traded significantly lower compared to the same period last year.
As a result, the Fragrance segment recorded an EBITDA of 111 million euros ($121 million), down 3.5% year-on-year.
Business of Asian Market Shines
According to the World Bank's calculations, global economic growth will slow sharply from 3.1% in 2022 to 2.1% in 2023, before recovering slightly to 2.4% in 2024.
However, the performance of Symrise in Asian market is considered a bright color.
According to the financial report, in the first half of 2023, China is located in the Asian market to achieve organic growth of 4.4%, with total sales of 508.3 million euros ($555.6 million).
(Credit: from Symrise's financial report)
In the first quarter, the business in Asian market grew organic growth 2.1% to reach 247.4 million euros ($270 million) in sales. Sales in the second quarter of the Asian market achieved 6.6% organic growth to reach 260.9 million euros ($285.2 million) in sales.
Referring to developing countries and emerging markets, Symrise said that the economic output growth of developing countries and emerging markets increased from 3.7% in 2022 to 4.0% in 2022, and this is largely due to the recovery of the Chinese market.
And Symrise is also paying more and more attention to the Chinese market.
In May this year, Symrise Little Red House held the opening ceremony of its new Fine Fragrance creation hub in Shanghai, an initiative aimed at strengthening its position in China's major perfume market. It is understood that Little Red House would showcase a space that combines creative art and olfactory culture for its clients, and hosted exclusive events and cultural programs such as perfume master classes, perfumer meet-and-greets and trend talks. The Little Red House's audience will include Symrise customers, perfume enthusiasts, KOLs and the media, which will facilitate communication among different customer groups.
In its financial report, Symrise forecasts that China's economy is expected to achieve 5.6% year-on-year growth in 2023. As a result, Symrise will further develop the Chinese market.
Taking into account the performance of the first half of the year, Symrise confirms the Group's medium-term objectives: in 2023, the Group will achieve organic sales growth of 5% to 7%; profitability, measured by the normalized EBITDA margin, is expected to be around 20%.
Looking to the future, Symrise expects sales of 5.5 billion euros ($6 billion) to 6 billion euros ($6.6 billion) in 2025. To achieve this, the company should maintain a compound annual growth rate of 5% to 7% and will target increased foreign investment.
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