THE NATURE OF OUR BUSINESS â€“ STABLE GROWTH - Symrise

More documents

Recommendations

Info

The Company’s Performance in 2008 – A Comparison between the Actual and Forecast Course of Business The forecast delivered on March 5, 2008 at the presentation of the 2007 business results was for organic, currency-adjusted sales growth of 5% to 6% (excluding acquisitions) and an increase in the EBITDA margin to 22% for fiscal 2008, the year having got off to a good start. However, in mid-2008 we had to revise our sales growth and EBITDA margin forecasts downwards. The main reasons for this were the rapidly weakening business environment, an unforeseeably high increase in raw materials prices and energy costs, and the slight margin dilution due to the acquisition of Chr. Hansen Flavors. The adjusted forecast issued at the end of July predicted sales growth at local currency (including acquisitions) of 6% to 7%, and an EBITDA margin of approximately 21%. In the course of the third quarter, the economic situation worsened further. At the same time, our negotiations with customers on price increases lasted longer than anticipated. In addition, our customers grew increasingly cautious over ordering their materials, making our business more difficult to plan and predict. In the end, we had to adjust our earnings forecast once again. At the end of October we announced an EBITDA margin of approximately 20%. We were able to maintain our sales growth forecast (currencyadjusted), including acquisitions, of 6% - 7%. Raw materials prices rose relentlessly until the end of November 2008, with price increases first starting to slow in the course of December. In the fourth quarter, moreover, customers transferred orders from 2008 to 2009 to minimize working capital. The positive effects of our price increases only became evident in the fourth quarter and failed to offset the significantly higher cost of sales. Against this backdrop, we failed to meet our target of achieving currency-adjusted EBITA on a par with the previous year. At current rates EBITA fell by 5%. The EBITDA margin reached 19.9%, within our target range of around 20%. ACHIEVEMENT OF GOALS Sales growth (in local currencies) EBITDA margin EBITA Adjusted EPS Free Cash Flow The fact that we did not meet our EBITA target had a negative impact on adjusted earnings per share (EPS). We were not able to increase adjusted EPS as forecast; instead they remained at the previous year’s level of € 1.02. However, we see this as an indication of the robustness of our business amid the steadily worsening business environment in 2008. 4. RESULTS OF OPERATIONS Sales Symrise achieved total sales of € 1,319.9 million in 2008. On a local currency basis, this represents an increase of 6.5%. Based on actual rates, sales rose by € 45.4 million (3.6%) compared to 2007. Sales excluding the acquisitions discussed above climbed in local currencies by 3.5% (0.8% at actual rates). The sales performance of Scent & Care in fiscal 2008 was mixed. While Life Essentials, Household, Aroma Molecules and Mint performed according to plan, the “luxury segments” Fine Fragrances and Personal Care had to contend with demand problems caused by the global economic situation. In 2008, Scent & Care generated sales of € 671.8 million. As a result, including the acquisitions Intercontinental Fragrances and Manheimer Fragrances, sales reached the previous year’s mark. At local exchange rates Scent & Care’s sales were up by 3%. Excluding Intercontinental Fragrances and Manheimer Fragrances, sales fell slightly by 0.7% to € 666.8 million (+ 2.2% on a local currency basis). Including Chr. Hansen Flavors, Flavor & Nutrition recorded sales of € 648.1 million in 2008, an increase of 7.4% (10.4% at local rates). Excluding Chr. Hansen Flavors, sales rose by 2.4% to € 617.5 million (5.0% on a local currency basis). After the acquisition in April, Chr. Hansen flavors posted sales of € 30.6 million. In fiscal 2008, sales in the emerging countries rose 8% (on a local currency basis) compared to the previous year, thus contributing to the overall sales growth. Goal in 2008 (as of October 28, 2008) 6% - 7% (incl. acquisitions) Approximately 20% EBITA at previous year’s level in LC Currency-adjusted growth of 4% - 6% 9% -10% of Sales Achievement of goals in 2008 6.5% 19.9% - 5% 0% 9.3% 68 Annual Report 2008 Symrise AG
SALES BY REGION € million EAME Asia/Pacific North America (including Mexico) South America Total Sales in the Asia/Pacific region increased by 8% at local currency, and sales in South America were 9% higher than in 2007 on a local currency basis. In North America (including Mexico) sales jumped 23% (in local currency). The acquisitions made in the year under review had a positive impact on sales growth. Excluding acquisitions, sales growth came in at 9%. This strong performance was driven by both the Scent & Care and the Flavor & Nutrition division. In the EAME region, acquisition-adjusted sales reached the previous year’s level. In the second half of 2008, the recession in the Western European markets and the significant sales declines in the Eastern European markets had a negative impact on sales growth. Further information on sales performance in the various regions can be found in the division reports. Sales with our top 10 customers grew by 9% on a local currency basis and by 5% at actual rates. The percentage of total sales generated with this customer group edged up slightly to 28.5%. Details are also available in the reports on the divisions. Annual Report 2008 Symrise AG 69 Q4 2007 158.6 54.7 50.7 21.2 285.2 Q4 2008 148.9 60.2 74.8 26.5 310.4 Change AR % -6 10 48 25 9 Change LC % -4 5 42 25 8 2007 712.2 248.6 224.2 89.5 1,274.5 2008 705.5 262.2 257.2 95.0 1,319.9 Change AR % -1 6 15 6 4 The table on top provides a breakdown of revenue by region: Change LC % 1 8 23 9 7 Based on the previous year’s exchange rates, Symrise’s sales amounted to € 1,356.8 million in 2008. The conversion of sales reported in foreign currencies reduced Group sales by € 36.9 million. Fourth-quarter sales were significantly impacted as many of our customers postponed the delivery dates of orders in a bid to maximize their year-end cash position and minimize their working capital outlay. Consequently, after strong year-on-year growth in October (due to differing order patterns from the third quarter of last year), sales in November and December were significantly lower than anticipated. Overall, sales in the quarter grew by 8.8% at actual rates and 7.8% in local currency, including acquisitions. Excluding the acquisitions, sales rose by a more modest 3.0% at actual rates and 2.0% in local currency, benefiting from strong October sales. Group Management Report
Page 1 and 2:
THE NATURE OF OUR BUSINESS - STABLE
Page 3 and 4:
Key Figures € million Sales Scent
Page 5 and 6:
4 - 51 52 - 92 93-98 99-147 148-152
Page 7 and 8:
April 25 Symrise organizes the “t
Page 9 and 10:
2008: A financial crisis became an
Page 11 and 12:
We can hope that 2009 will bring th
Page 13 and 14:
Dominique Yates CFO since October 2
Page 15 and 16:
Growth Means Stability - in Nature
Page 17 and 18:
OUR THREE BRAND PILLARS The flavors
Page 19 and 20: Flavors and Fragrances Are More Tha
Page 21 and 22: Our requirement is to meet new requ
Page 23 and 24: Innovation Is Never Just About Prod
Page 25 and 26: MORE INNOVATION THROUGH MORE INTEGR
Page 27 and 28: Responsibility Knows No Boundaries
Page 29 and 30: emissions. We require of ourselves
Page 31 and 32: Dr. Gerold Linzbach, speaking with
Page 33 and 34: divisions. At the same time, the na
Page 35 and 36: are increasingly strict and expensi
Page 37 and 38: ically examine the costs from the v
Page 39 and 40: Our People Success has many faces.
Page 41 and 42: A complete Junior Perfumer program
Page 43 and 44: cludes the Symrise share, declined
Page 45 and 46: Attractive Dividend Proposed for 20
Page 47 and 48: The Executive Board and Supervisory
Page 49 and 50: A breakdown of the total remunerati
Page 51 and 52: Report of the Supervisory Board In
Page 53 and 54: Annual and Consolidated 2008 Financ
Page 55 and 56: Detail Index Group Management Repor
Page 57 and 58: As a rule, our flavor, fragrance an
Page 59 and 60: The organizational structure is cus
Page 61 and 62: Flavor & Nutrition Beverages Sweet
Page 63 and 64: Flavor & Nutrition: Innovations and
Page 65 and 66: MARKET SHARE F&F INDUSTRY (total
Page 67 and 68: Financial Objectives and Value-base
Page 69: half of 2009. After integration cos
Page 73 and 74: RECONCILIATION € million EBIT EBI
Page 75 and 76: “AND” Products Grow Faster Sale
Page 77 and 78: ucts was significantly lower than o
Page 79 and 80: 6. FINANCIAL POSITION Main Financia
Page 81 and 82: 8. OTHER FACTORS RELEVANT TO RESULT
Page 83 and 84: High Performance Sales Training, co
Page 85 and 86: active health promotion programs an
Page 87 and 88: Customer complaints about product q
Page 89 and 90: The following table shows when our
Page 91 and 92: › our position on the core lists
Page 93 and 94: Dr. Gerold Linzbach therefore reque
Page 95 and 96: Consolidated Income Statement T€
Page 97 and 98: EQUITY AND LIABILITIES T€ LIABILI
Page 99 and 100: T€ Balance brought forward Invest
Page 101 and 102: Notes to the Consolidated Financial
Page 103 and 104: company is lost. The changed provis
Page 105 and 106: Further information on share intere
Page 107 and 108: If the requirements of IAS 39 with
Page 109 and 110: The sales tax amount that is recove
Page 111 and 112: opment costs recognized are amortiz
Page 113 and 114: tion results in a gain, any recogni
Page 115 and 116: 5. SEGMENT REPORTING For the purpos
Page 117 and 118: 2008 T€ Sales External sales Resu
Page 119 and 120: 6. CONSOLIDATED INCOME STATEMENT 6.
Page 121 and 122:
6.8.Financial Result T€ Interest
Page 123 and 124:
The interest risk that is hedged is
Page 125 and 126:
The deferred tax assets and liabili
Page 127 and 128:
2008 T€ Cost As at January 1, 200
Page 129 and 130:
8.12. Property, Plant and Equipment
Page 131 and 132:
8.13. Acquisitions Cambridge Theran
Page 133 and 134:
Current bank borrowings are not sec
Page 135 and 136:
A new pension plan was established
Page 137 and 138:
The entity in the US provides healt
Page 139 and 140:
Repayment of Bank Borrowings The Se
Page 141 and 142:
The following table shows amounts r
Page 143 and 144:
Sensitivity Analysis for Derivative
Page 145 and 146:
11. LONG TERM FINANCIAL RISK MANAGE
Page 147 and 148:
continuance Company M&G Investment
Page 149 and 150:
Annual Report 2008 Symrise AG 147
Page 151 and 152:
Responsibility Statement (“Bilanz
Page 153 and 154:
Dr. Peter Grafoner* Horst-Otto Gerb
Page 156:
Symrise AG Mühlenfeldstraße 1 376
show all

THE NATURE OF OUR BUSINESS â€“ STABLE GROWTH - Symrise

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?