Symrise Pledges to Stay in Top Profit League on Scent DemandSheenagh Matthews
Symrise AG, the fourth-largest maker of flavors and fragrances, pledged to remain one of the most profitable companies in its industry amid higher demand for aroma molecules and fragrances.
Earnings before interest, taxes, depreciation and amortization, will be about 20 percent of sales in 2013 and will stay in the range of 19 percent to 22 percent in coming years, the Holzminden, Germany-based company said today in a statement. That margin was 21.2 percent in the third quarter. The shares rose the most in six months in Frankfurt trading.
Bigger rival Givaudan SA last month reported a drop in quarterly sales amid emerging-market currency weakness. Symrise Chief Executive Officer Heinz-Juergen Bertram has expanded the German company with a new menthol factory and with the acquisition of U.S. air freshener scent maker Belmay.
“The group expects sustained robust demand and positive market dynamics for all regions and in both divisions,” the company said. “We successfully left behind slight economic slowdowns, which occurred in certain markets. Along with high demand, our investments paid off.”
The shares gained as much as 6.6 percent, the biggest intraday increase since May 7, and were up 5.8 percent at 32.97 euros as of 9:56 a.m. The stock has gained 22 percent this year, boosting the company’s market value to about 3.9 billion euros ($5.3 billion).
Average annual sales growth will be 5 percent to 7 percent until 2020, Symrise said.
Earnings before interest and taxes gained 10 percent to 76.4 million euros in the third quarter. Sales rose 4.1 percent to 466.5 million euros and net income climbed 10 percent to 46.5 million euros.
Givaudan, which has also pledged to keep its industry-leading profitability, boosted its Ebitda margin to 22.9 percent in the first six months. The company did not release profitability figures for the third quarter. International Flavors & Fragrances Inc., based in New York, is scheduled to report earnings today.