THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

ucts was significantly lower than overall growth at the division,
mainly because we lost a large Beverages account in 2008. We
successfully grew our business in natural savory products for culinary
use (particularly Steng products), achieving double-digit
growth of 11%.
Customer Segmentation Pays Off
The increase in sales with our top 10 customers was again in the
double digits in 2008, increasing by 11% at actual rates and keeping
us on our growth path with this important group of customers.
The establishment of integrated key account management with
strict assignment to customer teams on all functional levels is paying
off. This leads to faster and more successful project implementation
and, moreover, secures long-term growth perspectives
with these customers.
Emerging Countries Remain Growth Engine
The emerging markets of South America, Asia and Eastern Europe
including the states of the Russian Federation remain an important
growth engine for Flavor & Nutrition. Last year, we achieved
good growth of 10% at local currency in these markets. On December
31, 2008, sales in emerging markets accounted for around
42% of the division’s total sales.
Challenges in the Fourth Quarter
Sales in the fourth quarter of 2008 totaled € 148.3 million; including
Chr. Hansen Flavors, they were 9.2% higher than in the
same quarter of 2007 (8.4% at local currency). Excluding Chr.
Hansen Flavors, sales amounted to € 136.7 million, hitting the previous
year’s level. Adjusted for exchange rate effects, this corresponds
to a slight increase of 0.2%. As mentioned in the context
of Scent & Care (see page 73), sales performance in the fourth
quarter of 2008 cannot be viewed in isolation. In November and
December, customers postponed delivery dates of orders to minimize
working capital outlays.
Business Divided into Application Areas
In the Beverages application area our business grew by 3% in local
currency. Business with our global customers in the instant beverages
segment was brisk thanks to the high acceptance of our encapsulation
technology, which offers branded manufacturers a
differentiating factor in respect to shelf-life properties and sensory
characteristics.
As a partner of sweets manufacturers, including producers of dairy
products and ice cream, we increased our expertise in vanilla
flavorings, achieving growth of 6% at local exchange rates.
Annual Report 2008 Symrise AG 75
Strategic acquisitions in the field of culinary applications and
snack products enabled us to ramp up growth in this segment
by 24% at local currency.
Regions
EAME
Sales in the EAME region rose by 3% at local currency. Despite the
ongoing difficult market environment in Western Europe, the previous
year’s sales level was matched. Sales in the Africa, Middle
East, and east European markets grew 7% at local currency. All
areas of application contributed equally to this sales growth.
To exploit the growth potential in Austria, southeastern Europe,
and the Russian Federation intensively, we invested in the expansion
of our Vienna and Moscow sites. In Vienna, new offices and
laboratories were provided for the sales, development and application
technology departments. We are focusing on developing
culinary concepts for the Savory line. Consequently, new culinary
cuisine forms the core of the Austrian branch, which will develop
new product concepts together with customers. This will shorten
development times to market introduction, giving our customers a
clear competitive advantage. With state-of-the-art testing labs,
consumer research is also important at our Vienna site. The application
technology for sweets, snack products, and beverages
for Eastern Europe is also located in Vienna.
At the Moscow site, new development labs were installed for
Sweet, Savory, and Beverages, as well as a new center for sensory
and consumer research. Symrise’s sensory and consumer research
will enable us to meet the greater need for detailed knowledge
of consumers’ wishes and preferences. The center will help
us to better understand Russian consumers’ taste preferences and
to react to growing demand early on with innovative product concepts.
Both sites were also linked up to our global network of trend
and consumer researchers
North America
In North America, sales including Chr. Hansen Flavors rose by 42%
at local currency in 2008. Even excluding Chr. Hansen Flavors, we
achieved robust growth of 8%. Consequently, we grew considerably
faster than the market in an environment that had been so
difficult for us in the past. Overall, we significantly bolstered our
strategic position there, one of the main attractions of the Chr.
Hansen Flavours business Acquisition.
Integration of the Chr. Hansen division was completed according
to plan in 2008, the sites being consolidated or integrated into the
Symrise group. The technologies and competencies acquired with
Group Management
Report