Oct 31, 2012
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Symrise attracted by growth in cosmetic ingredients

Oct 31, 2012

FRANKFURT - German fragrance and flavours maker Symrise plans to leverage its links with global consumer goods companies to take a bigger slice of the market supplying ingredients for skin and hair care products, its chief executive told Reuters.

(photo: Symrise)

In the $20 billion global fragrance and flavour market, Symrise ranks fourth after Givaudan, IFF and unlisted Firmenich.

It sells cosmetic ingredients and scents that go into creams, shampoos and detergents made by global consumer goods groups like Unilever, Procter & Gamble and Colgate-Palmolive.

Chief Executive Heinz-Juergen Bertram said the group wanted to capitalise on its links with such heavyweights to accelerate growth in areas such as skin and hair care.

"In the area of active cosmetic ingredients we want to continue to grow much faster than in our other businesses," he said in an interview.

Similarly, Symrise's flavours business is aiming to build on its experience in developing snacks and drinks for global food companies to diversify into nutritional supplements.

Symrise this year bought a 12 percent stake in Sweden's Probi, which sells probiotic ingredients to yoghurt makers such as Danone, and a minority stake in Swedish food ingredient developer Indevex Biotech.

"We have made acquisitions in the past and we will continue to keep an eye out for opportunities. We have the financial means," said Bertram, who became CEO in 2009.

Asked about the group's full-year prospects, he said Symrise would do everything to avoid a negative surprise.

"We have managed to build up trust with investors and analysts. We don't want to put that at risk."

Symrise previously said it was targeting 2012 sales growth of 3-5 percent and a margin for earnings before interest, taxes, depreciation and amortisation (EBITDA) of 20 percent over sales.

Often subject to speculation it could be taken over, Symrise is keen to stress it is well placed as an independent player.

Diversified chemicals groups would not find sufficient cost savings by buying Symrise, and competitors would have a hard time justifying a takeover approach, the CEO said.

"Where would they squeeze anything (out of Symrise)? We have the best margins in the industry," he said

According to StarMine, Symrise sports an EBITDA margin of 19.9 percent, compared with 19.2 percent at Givaudan and 18.4 percent at IFF. Analysts on average expect an EBITDA margin of 20.3 percent for 2012, according to StarMine.

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