THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

OUR THREE
BRAND PILLARS
The flavors and fragrances market – a growing
market that is growing together
The market for flavors and fragrances (F&F market) achieves annual
sales of approximately € 13 to € 14 billion. More than 500
companies are active in this industry worldwide. More than 50% of
the total sales is generated by the top four companies: Givaudan
S.A. (20%) and Firmenich S.A. (13%), both from Switzerland; IFF
(12%) from the USA; and Symrise (10%). In recent years, the market
has been characterized by consolidation. We expect this consolidation
process to continue. Due to higher entry barriers, we
do not expect any new companies to enter the top tier in our industry.
However, we do anticipate continued stiff competition.
We estimate that the F&F market will grow by 2% to 3% a year in
the long term. The financial and economic crisis that became ever
clearer and more drastic in the second half of 2008 affected the
F&F market, albeit less so than other industries. According to our
estimates, the F&F market grew by less than 2% because of the
global economic downturn.
Symrise continues to grow – and faster
In 2008, we grew further, in spite of the fact that we had to struggle
with high raw materials prices throughout the year and with
the economic crisis. When the business environment worsened,
Annual Report 2008 Symrise AG 15
ALWAYS
INSPIRING
MORE…
THE POWER OF ‘AND’
the appeal of our products
and technologies
INDISPENSABLE
the measure of our service
BOLD
our unmistakable way
of doing things
we had to adjust our original expectations to the new situation.
Yet at the end of the year we had grown twice as fast as the market.
On a local currency basis, our sales including our acquisitions
in the US rose by 6.5% (3.6% at the current exchange rates). With
an EBITDA of € 262.5 million (- 0.4%), we reached the level of our
record year, 2007. Our adjusted earnings per share (EPS) were
€ 1.02, equivalent to the previous year’s level. With a good cash
flow of 9.6% of sales revenue, we recorded an EBITDA margin
of nearly 20%.
And the future?
At present, the economic signs are not good worldwide. Economic
policy measures are being implemented; it will take time before
we see whether they have an effect. We consider it a good sign
that we were able to achieve so much in 2008. The first half of
2009 will surely be difficult, and the year as a whole will be a
challenge. But we are well-positioned strategically, self-critical
enough to learn from last year and open to opportunities that can
arise even in times of crisis. And we believe we will be able to keep
the promise of our strategy next year as well.
Company