Symrise says seeking growth rather than pushing margins

Probi AB

06/04/2016 09:32

HOLZMINDEN, Germany, April 6 (Reuters) - Symrise  SY1G.DE , 
among the world's four largest makers of scents and flavours, 
will place more importance on growth than on pushing profit 
margins as it invests in new businesses such as breeding vanilla 
varieties or developing probiotic skin creams, its CEO said. 
    Germany's Symrise is the fastest growing among its major 
listed rivals Givaudan  GIVN.VX  and IFF  IFF.N  but is also the 
one with the lowest margin. 
    Symrise widened its margin of earnings before interest, 
taxes, depreciation and amortisation (EBITDA) over sales 
slightly to 22 percent last year, trailing Givaudan's 24.3 
percent. IFF's margin, reported only after one-off items, stood 
at 23.6 percent. 
    Yet the German group's Chief Executive Heinz-Juergen Bertram 
told Reuters he would favour expenditures on growth projects 
over profitability, should the EBITDA margin push the upper end 
of the medium-term target range of 19-22 percent.  
    "We're happy for the margin to move above 22 percent, but we 
will preferably invest in more growth," Bertram said. 
    "Our focus will not necessarily be on expanding into new 
fields of business but rather to better recombine what we have," 
said Bertram. 
    For this year, Symrise has said it was expecting its margin 
to narrow to 20 percent this year, mainly on costs related to 
folding newly acquired Pinova, a U.S. maker of perfume 
ingredients from wood and other natural sources, into its 
organisation. 
    Among its expansion projects, it will seek to make better 
use of Pinova's plant-based substances in chemical reactors that 
re-use waste streams. 
    It also plans to start vanilla breeding in the world's 
biggest exporting country, Madagascar, part of a drive to 
increase control over raw material supplies, the CEO said. 
    In addition, it is working on creams based on bacterial 
cultures that keep the skin healthy, together with Swedish 
biotech firm Probi AB  PROB.ST , in which it holds a stake. 
    Helped by the recent purchase of Pinova and the 2014 
takeover of French pet food ingredients maker Diana, Symrise is 
roughly tied for second place in the industry by market share 
with IFF and unlisted Firmenich. 
 
 (Reporting by Ludwig Burger and Patricia Weiss; Editing by 
Maria Sheahan) 
 ((ludwig.burger@thomsonreuters.com; +49 69 7565 1311; Reuters 
Messaging: ludwig.burger.thomsonreuters.com@reuters.net)) 
 
Keywords: SYMRISE MARGIN/