Berenberg sees good growth in 2025 for food manufacturing

Symrise AG

14/02/2025 09:00

** Berenberg sees good growth in 2025 for food
manufacturing, with all flavours and fragrances companies
outperforming an expected 3% growth on average in end markets
    ** According to the broker, volume growth in end markets
will be supported by increasing promotional activity on the back
of an acceleration in innovation launches
    ** "This scenario seems to be most positive for categories
such as beauty, personal care, and ready-to-drink beverages,"
the broker says 
    ** It upgrades Givaudan  GIVN.S  to "buy" from "hold",
seeing a new era of profitability for the Swiss fragrance and
flavour maker
    ** It says Givaudan is best placed to benefit from growth
this year, given its over 50% exposure to the above categories
    ** "With consistently higher FCF conversion (16% sales) and
ROIC than peers (14%), we argue that Givaudan deserves a
valuation premium," the broker says
    ** It flags that Symrise's  SY1G.DE  self-help journey will
take time, as required investments in IT and changes in the
company's culture could limit margin expansion over the next two
years
    ** It sees International Flavors & Fragrances  IFF.N 
on-track to reduce its debt ratio to 2.5x by the end of 2025,
expecting management to be now able to focus entirely on
improving its execution in the remaining business

 (Reporting by Linda Pasquini)
 ((Linda.pasquini@thomsonreuters.com))