Symrise AG (SY1), the fourth-largest flavor and fragrance maker, raised targets for full-year sales after posting first-quarter profit that beat analyst estimates.
Revenue may increase by 3 percent to 5 percent, the Holzminden, Germany-based company said today in a statement. That compares with a previous prediction of 2 percent to 4 percent. Earnings before interest, tax, depreciation and amortization rose 2 percent to 87 million euros ($113 million), exceeding the 84.9 million-euro average of 10 analyst estimates.
Chief Executive Officer Heinz-Juergen Bertram has pushed through price increases to combat rising costs for oil and energy, defending a 20 percent profit margin. The company has shielded itself from some higher costs by expanding its own production of methanol and ingredients for medical nutrition.
“The increase of the sales guidance comes as a positive surprise and may require upwards revisions of consensus,” Thomas Maul, an analyst at DZ Bank AG in Frankfurt, said in a note to clients. Maul recommends clients buy the stock.
First-quarter sales rose 3.8 percent from a year earlier to 432.6 million euros, beating the 429.9 million-euro average estimate. Net income gained 3.3 percent to 42.5 million euros.
“After the subdued development at the beginning of this year, the market environment improved faster than originally anticipated,” Bertram said in the statement.
Symrise is increasing the business it does with international food and consumer-goods companies. Sales to the 10 biggest customers increased faster than total growth, generating almost a third of revenue, it said today.
Unlike competitors, Symrise has its own production for key ingredients including citrus and mint flavors, onion oil and vanilla, which complements its purchasing.
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