Symrise reports first-half core profit margin beat, raises target

Credit: REUTERS/Paulo Whitaker

Adds detail, company comment

Aug 6 (Reuters) - German flavour and fragrance maker Symrise SY1G.DE beat first-half core profit margin expectations and raised its core profit margin guidance for the year, citing cost controls and lower raw material costs in its flavour division.

Earnings before interest, tax, depreciation and amortization (EBITDA) margin in the first half of the year rose to 21.6% from 20.8% a year ago, beating a consensus of 21.2%.

Symrise raised its full-year EBITDA margin guidance to 21-22% from 20%.

First-half sales grew 7.6% to 1.82 billion euros, slightly below a company-provided consensus of 1.83 billion euros ($2.17 billion).

"Against the backdrop of the coronavirus pandemic, the trend toward cooking and eating at home led to a strong demand for products from the Savory business unit and product solutions for baked goods and cereals," the company said in a statement.

The maker of ingredients such as artificial mint flavour for toothpaste and chewing gum confirmed its long-term target of 5-7% annual organic sales growth by 2025.

Even as the global economy faces a coronavirus-led recession, Symrise and rivals Givaudan GIVN.S, Firmenich and IFF IFF.N have been benefiting from strong demand for consumer staples, resilient to cyclical swings also thanks to population growth, urbanization and rising prosperity in emerging markets.

Swiss rival Givaudan GIVN.S said in July the COVID-19 pandemic boosted demand for soap and packaged snacks, driving the fragrance and flavour maker's sales and profit in the first half and enabling it confirm its guidance.

Demand for fine fragrances however, which go into the perfumes of French luxury giants LVMH LVMH.PA and Kering PRTP.PA, fell as many perfumeries and boutiques were closed during the lockdowns and travel bans did away with tourism-related shopping.

($1 = 0.8424 euros)

(Reporting by Silvia Recchimuzzi in Gdansk Editing by Tomasz Janowski)

((Gdansk.newsroom@thomsonreuters.com; +48 58 778 5274;))

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