Production at Symrise

The Dax group warns of lower profits.

(Photo: Symrise)

dusseldorf The manufacturer of fragrances and aromas simrise expects lower-than-expected earnings for last year. to quit smoking the dax-Group on the Friday after the close of trading in an ad hoc announcement.

The main reason for this is a €126 million writedown on the stake in Swedencare, a manufacturer of nutritional supplements for pets. In the summer of 2021 simrise has a good five percent stake in the Swedish company.

Swedencare’s share price has fallen by almost 70 percent to EUR 3.13 in the last twelve months. The company suffers from global uncertainties resulting from the Russian war of aggression in Ukraine. Exchange rate effects are also having a negative impact. Swedencare does a lot of business in the United States.

The bad evolution of the investment is now also noticeable in Symrise’s balance sheet. Including the value adjustment, earnings before interest, taxes, depreciation and amortization (Ebitda) in the last year was 795.4 million euros, a drop of a good two percent compared to the previous year. The market expected 956.6 million euros.

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The Ebitda margin (earnings before interest, taxes, depreciation and amortization in relation to sales) fell to 17.2 percent, analysts had assumed 20.9 percent. However, Symrise exceeded expectations with another key figure: sales amounted to 4.6 billion euros last year. In 2021 there were still 3.8 billion.

Consumers come into contact with Symrise products 20-30 times a day. the daxGroup makes toothpaste taste like mint or ice cream like vanilla. Almost no cosmetic or food manufacturer can do without company supplies. Symrise also supplies companies like Nestle or Mars, which are also large feed producers.

Growing pet food market

The company from Holzminden in Lower Saxony is considered the economic miracle of the 2010s. Since 2006, sales have grown by almost eight percent per year on average. Even during the pandemic, the group was very profitable with a margin of around 20 percent. In autumn 2021, the company moved up to the leading Dax index.

>> Read also: Economic miracle of the 2010s: why Dax’s unknown newcomer Symrise has been growing for years

In the past, Symrise used to be more successful with its acquisitions. The biggest and boldest acquisition of 2014, at €1.3 billion, was that of Diana, a leading French manufacturer of flavorings primarily for the pet food industry.

Despite the setback, Symrise intends to continue to hold on to Swedencare, a spokesperson told Handelsblatt. The pet food flavorings business, in which Symrise is also seen as a leader through its acquisitions, has strong margins and is growing ten percent each year. Many clients are willing to spend large sums of money on their limbers. Symrise also benefits from this.

It is not for nothing that Symrise is expanding production in this area, new plants for animal feed flavors are being built in Brazil, France and the USA. In 2025, CEO Heinz-Jürgen Bertram wants to convert 1.5 billion euros into this area, more recently they were around 600 million. “The premium pet products market offers great growth potential,” Bertram said late Friday.

Symrise reaffirmed its long-term goals. The group wants to increase its sales by between five and seven percent per year and thus grow faster than the market. By the end of fiscal 2025, Symrise is targeting an Ebitda margin in the 20 to 23 percent range.

More: Perfume via AI goes into mass production: how the computer learns to smell

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