Symrise Tweaks Profitability Goals Due to Inventory Woes and Currency Fluctuations
The bigwig in the aroma and flavor world, Symrise, headquartered in Holzminden, Lower Saxony, Germany, has revised its profitability targets recently. This move is due to a delayed reduction in inventories and unfavorable currency impacts. The company even had to slash the value of its inventory stock, as reported by the DAX-listed firm on Thursday evening.
In the new light, Symrise is taking a more cautious approach to projected profit margins for this fiscal year. Although the company's organic sales growth surpasses earlier prediction, Symrise's share price plummeted on Friday.
The management now anticipates an adjusted EBITDA margin, excluding special items, to hover around 19 to 19.5% in 2023, which is slightly lower than the previous goal of approximately 20%. However, Symrise expects a turnover growth exceeding 7% in the current fiscal year – significantly surpassing the prior estimate of 5 to 7%. This projected turnover level would amount to around 4.7 billion euros, according to the company. In 2022, Symrise's revenue was 4.6 billion euros.
Symrise maintained its medium-term targets in response to thriving demand at the company level. As a result, it aims to achieve an average organic growth of 5 to 7% annually by 2028. The company also expects a profit margin (EBITDA) within the range of 20 to 23% by 2028.
Press Release
Additional Insights:
- Symrise reported robust financial results in 2024, with an 8.7% organic sales growth, driven by both operational segments: Scent & Care and Taste, Nutrition & Health.
- The company's EBITDA margin expanded by 160 basis points to reach 20.7% in 2024.
- The Scent & Care segment saw double-digit organic growth in the Asia/Pacific, Latin America, and EAME regions.
- The Taste, Nutrition & Health segment reported significant improvements in EBITDA, reaching 686 million euros in 2024.
- Symrise remains optimistic about its long-term growth prospects and is targeting an EBITDA margin of around 21% for 2025, with a business free cash flow ratio in relation to sales of around 14%.
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