Symrise Falls as Long-Term Targets Fail to Eclipse 2012 Margin

Symrise AG, the world’s fourth-largest flavors and fragrance supplier, fell the most in six months in Frankfurt trading as investors focused on margins that were shy of analysts’ estimates rather than long-term growth targets.

Profitability at the maker of perfume ingredients for Dior’s Fahrenheit narrowed by 50 basis points to 19.5 percent last year, the company said in a release today. DZ Bank analyst Thomas Maul had predicted 19.9 percent. The stock fell as much as 4.2 percent to 28.36 euros, its biggest intraday slide since Sept. 12.

Symrise forecast that the inflated raw-material prices that crimped margins in 2012 will remain at a high level and Chief Executive Officer Heinz-Juergen Bertram pledged to improve efficiency and expand in emerging markets to lift earnings to more than 500 million euros ($650 million) by 2020, with sales of 1 billion euros.

"All in all good prospects for Symrise have not changed at all, however, weaker than expected 2012 margin and change of guidance may cause some pressure on the shares in the first hours of trading,’’ said Maul in a note.

Earnings before interest, taxes, depreciation and amortization gained 7 percent to 339 million euros last year, in line with analysts’ estimates, Symrise said in a release today. Bertram said the company’s “well equipped” for 2013, and that the company’s growth should outpace expansion in the wider fragrances and flavors market.

The stock was down 4 percent at 28.40 euros as of 9:46 a.m. local time, valuing the company at 3.4 billion euros. Prior to today, the stock had risen 9.1 percent this year, less than the 12 percent gain of Germany’s MDAX index of mid-sized companies.

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