Symrise continued its gains in Q3, with strong menthol business!

On October 29, local time, Symrise released its first three quarters performance report. According to the report, Dezhixin’s sales in the first nine months of 2020 were 2.703 billion euros, an increase of 5.9% from the 2.551 billion euros in the first nine months of last year. Excluding the impact of ADF/IDF's investment portfolio and exchange rate conversion, sales achieved an organic growth of 3.3% in the first 9 months, and the organic growth rate of sales in the third quarter was 3.1%.

Strong growth in personal care, oral care and menthol business

The fragrance and care business (mainly engaged in fragrances, cosmetic raw materials and synthetic fragrances) achieved a 3.1% organic sales growth in the first nine months. Sales in the third quarter increased by 4.0%. Taking into account the impact of currency conversion, sales were 1.057 billion euros, slightly lower than 1.07 billion euros in the same period last year.

Due to the strong consumer demand for personal care and sanitary products, the fragrance and oral care business continued to increase in the fragrance sector, and both segments achieved double-digit organic growth. The perfume business is still affected by the new crown epidemic. On the contrary, in the third quarter, the vitality of projects for major luxury customers in North America increased. Overall, the fragrance and fragrance sector achieved strong single-digit growth in all regions.

The performance of the synthetic fragrance segment was affected by both the decline in market demand for fragrance solutions and the strong demand for menthol products. Due to capacity expansion, the menthol business achieved double-digit growth. Europe, Africa and the Middle East, and North America and Latin America have the strongest growth. In general, the sales of the synthetic fragrance segment declined slightly year-on-year.

The new coronavirus pandemic has led to a reduction in travel activities and a decline in consumer demand for sunscreen products, which has impacted the cosmetics raw material business to a certain extent. Other application areas have achieved single-digit to double-digit organic growth. Latin America and North America, especially Brazil, Canada, the United States and Mexico are the main growth drivers. Overall, the sales of the cosmetics raw materials division declined slightly year-on-year.

Home cooking and dining trends drive growth in the flavors sector

Due to the new coronavirus pandemic, the trend of cooking and dining at home is strong, and the market has strong demand for savory flavor products and solutions for baked goods and cereal products. At the same time, the reduced demand for outdoor catering has further affected the demand for beverages and sweet flavors. This sector achieved 0.6% organic growth in the first nine months and the third quarter. Segment sales in reporting currency were 949 million euros, compared with 966 million euros in the same period last year.

Pet food leads gains

The nutrition sector (including Diana Foods, pet food and probiotic applications, and ADF/IDF) achieved organic sales growth of 9.1%, growth of 6.1% in the third quarter, and sales of 697 million euros in reporting currency, compared with The 516 million euros in the same period last year increased by 35.1%. During the reporting period, ADF/IDF contributed 156 million euros.

Pet food is still the growth driver of the nutrition sector, achieving single-digit or double-digit organic growth in all regions, among which the United States, Mexico, Brazil and South Korea have seen significant market growth.

Confirm sales and profit targets

Symrise predicts that the organic growth rate will reach 3%-4% in fiscal year 2020, which is higher than the market growth rate. It is estimated that under the current market environment, the market can grow up to 3%.

Based on the continued strong business performance, Symrise confirmed that the profit margin before interest, tax, depreciation and amortization for the 2020 fiscal year is 21%-22%.

The group's mid-term goals remain unchanged. Symrise's goal is to increase annual sales to 5.5-6 billion euros by the end of 2025.

Symrise hopes to achieve this goal by achieving a 5%-7% annual organic growth rate (CAGR) and other targeted acquisitions. In the medium term, the profit margin should be maintained at 20%-23%.