Symrise AG: Updates long term targets and aims to further expand its business
Symrise updated its long-term targets and aims to further expand its business through 2025
- — Target corridor of 5 to 7 % for average annual sales growth (CAGR)
- — Increased profitability with EBITDA margin in the range of 20 to 23 % from 2020 onward
- — Continuation of successful strategy
- — Expansion of portfolio and sharpening the product mix: focus on high-margin applications
- — Updated targets for sustainability balance planned
Symrise AG announced its new long-term targets through 2025 for the first time at its Investors’ Day in Charleston, South Carolina, USA. The Company aims to increase its sales to € 5.5 to 6 billion. This target is supposed to be achieved with an average annual organic sales growth (CAGR) of 5 to 7 % and strategic acquisitions. During that period, profitability is planned to be further increased at a high level. From 2020 onward, Symrise intends to generate an EBITDA margin within the target corridor of 20 to 23 %. At the same time, Symrise will remain fully committed to its proven strategy. As in the past, the Company will focus closely on customer and consumer needs and convert market trends into concrete business opportunities at the earliest possible stage. Existing strengths such as the comprehensive product portfolio should be used and expanded in a targeted manner. Symrise plans to focus in particular on innovative and high-margin applications. The Company intends to identify and enter growth opportunities in the areas of naturalness and health. Digital business processes will also contribute to the growth strategy.
“We look back on the development of Symrise with pride. We have achieved dynamic growth and doubled our sales from 2008 to 2017 to € 3 billion. For 2025, we have set the target to increase sales to € 5.5 to 6 billion. Our strategy, with its three pillars growth, efficiency and portfolio, has proven its worth. It is the foundation for our long-term, profitable growth”, said Dr. Heinz-Jürgen Bertram, CEO of Symrise AG. “We will make even more systematic use of our strengths and enter adjacent growth areas, concentrating on the expansion of our global presence and our portfolio in high-margin business areas. We will also consistently expand our product mix, in particular with natural and health-related applications.”
Olaf Klinger, CFO of Symrise AG, added: “With our targeted investments in future growth and our reinforced focus on cash flow, we will create a solid basis for the Symrise stock to remain an attractive investment for our shareholders. We will further keep an eye on our healthy capital base.”
Securing long-term profitable growth
Symrise has built its updated, long-term plan on a strong foundation. With targeted investments, the Company intends to expand in high-growth business areas and to broaden its own natural raw material base. Symrise plans to further develop especially high-demand application areas such as Menthol, Cosmetic Ingredients, Food and Pet Food at an accelerated pace. The Company has largely completed its current capacity expansions. It will continue to maintain a balanced customer portfolio, comprising one-third each of globally, regionally and locally active customers. In addition, Symrise remains committed to the target of generating more than half of its sales in the fast-growing Emerging Markets.
Symrise already today has a broad portfolio that is unique in the industry. The Company expanded its strategic footprint beyond the conventional Fragrance and Flavor Business at an early stage. Today, Symrise generates one third of its sales through non-traditional applications, such as pet food and baby food, probiotics, active cosmetic ingredients and functional, health-supporting ingredients. By 2025, it aims to further increase that share. Natural product solutions for body care and foods are also playing an increasingly important role, as consumers attach greater importance to conscious nutrition choices and personal care.
Timely commercialization of innovations and focus on digitization
Symrise will further intensify its closely linked cooperation with its customers in the coming years. Therefore, the Company is fully committed to the increasing transition from a product developer and manufacturer to a comprehensive solution provider. Through digitized and networked processes, customer needs can be precisely identified and served across the entire supply chain.
Moreover, Symrise aims to rapidly commercialize its innovation leadership. Innovative approaches, for example using Artificial Intelligence for the creation of fine fragrances, should lead to new, market-ready products. The Company also wants to stronger cross-link the various application areas of its portfolio and use the knowledge transfer to drive innovation.
Outlook – long-term targets for 2025
Symrise intends to achieve its long-term targets through to the end of the fiscal year 2025 with targeted investments in additional organic growth and strategic acquisitions. The Company aims to increase sales to € 5.5 to 6 billion. The average annual organic sales growth is targeted in the range of 5 to 7 %. Symrise remains committed to generating more than half of its sales in Emerging Markets. With its favorable product mix and efficiency improvements, Symrise aims to generate an EBITDA margin in the range of 20 to 23 %. Most of the major investment projects will be completed by 2022. As a result, the Company aims to lower CAPEX to the range of 4 to 5 % by 2025. The Company will continue to create sustainable value for its investors and retain a dividend policy with a pay-out ratio of 30 to 50 %. In all aspects of its business activities, Symrise will remain committed to its sustainability targets and will therefore strive to reduce its ecological footprint by 50 %.