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

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€ million EBIT before restructuring costs Changes in working capital Income taxes paid Interest Capital expenditure Depreciation and amortization Other noncash expenses and income Operating Free Cash Flow Disbursements for acquisition of subsidiaries, recipes and business units Working capital deriving from companies purchased Restructuring costs from acquisitions Dividend payments Success-based remuneration (disbursements) Disbursements relating to the IPO and repayment of liabilities deriving from warrants Change in Cash Opening balance - net borrowings Net exchange rate impacts Closing balance - net borrowings To ensure that Symrise always has the capital necessary to consistently develop its corporate strategy, the Company is also considering the use of additional financial instruments. Additional information on cash flow can be found in the Consolidated Financial Statements. 7. NET ASSETS 2007 195.7 -20.3 -27.3 -28.7 -33.5 74.3 -14.7 145.5 -8.4 Total assets increased by € 99.8 million compared to December 31, 2007. Intangible assets and property, plant and equipment increased to € 1,244.7 million (2007: € 1,144.5 million), accounting for approximately two-thirds of total assets. The main components include the goodwill acquired through business mergers amounting to € 452.3 million (2007: € 411.9 million) as well as recipes, production know-how and trademarks amounting to € 403.9 million (2007: € 351.1 million). 0.0 0.0 -46.2 -17.7 73.2 -605.1 2.5 -529.4 2008 193.2 -27.7 -29.8 -27.3 -45.0 75.1 -15.1 123.4 -138.1 -5.8 -6.2 -59.1 -17.3 -103.1 -529.4 -9.1 -641.6 Short-term liabilities rose by 35.7% to € 548.0 million (2007: € 403.8 million), of which the main component was the increase in the short-term borrowings amounting to € 170.9 million, used mainly for financing. The acquisitions were made in 2008 (see Note 8.13 in the Notes on the Consolidated Financial Statements). Non-current borrowings decreased by 16% to € 362.8 million (2007: € 432.0 million). Equity increased by 0.9% to € 648.4 million, due mainly to the net income in 2008, offset by dividend payments in 2008 totalling € 59.1 million. NET ASSETS € thousands Cash and cash equivalent Trade receivables Inventories Intangible assets and property, plant and equipment Other assets Total € thousands Current liabilities Non current borrowings Retirement benefit Obligation Deferred tax liabilities Other non current Liabilities Liabilities Equity Total 2007 79,250 214,478 239,741 1,144,451 113,003 1,790,923 EQUITY AND LIABILITIES 2007 403,785 431,967 186,295 109,404 16,759 1,148,210 642,713 1,790,923 % 4.4 12.0 13.4 63.9 6.3 % 22.5 24.1 10.4 6.1 0.9 64.1 35.9 2008 68,860 221,686 258,974 1,244,677 96,482 1,890,679 2008 548,016 362,792 191,922 111,792 27,762 1,242,284 648,395 1,890,679 % 3.6 11.7 13.7 65.8 5.1 % 29.0 19.2 10.2 5.9 1.5 65.7 34.3 78 Annual Report 2008 Symrise AG
8. OTHER FACTORS RELEVANT TO RESULTS/ NON-FINANCIAL PERFORMANCE INDICATORS Procurement We use approximately 10,000 natural and synthetic raw materials from all over the world to manufacture our products. Among the natural raw materials are plants as well as plant and fruit extracts. Organic chemicals are among the synthetic products we use. When we purchase raw materials quality, availability and price are decisive factors. To optimize our supply chain, we organize purchasing centrally. Global contracts are negotiated for the most important raw materials. Approximately 50% of our raw materials come from Europe. We buy the remainder in other parts of the world, basing our decisions on price, quality, and production site. Local production sites outside Europe satisfy part of their requirements from local raw materials markets. They also purchase intermediate products from the main production facilities in Germany. Our raw materials are subject to price fluctuations, and we adopt various approaches to minimize price risks. We have fixed contracts over a maximum one-year period for a large part of our raw materials. In addition, we use new raw materials markets, for example India, where price and quality are offering new opportunities to reduce our production costs and thus increase our profitability in the long run. We also utilize new technologies, processes, and recipes to reduce the number of raw materials used. Raw materials prices rose constantly in 2008. In November, quotations were 6% higher than a year previously. Despite a slight drop in December, prices were still 5% higher year-on-year. We enjoyed currency-related advantages in the first half of 2008, because about half of our products are manufactured in the euro zone and many raw materials were purchased during that period in the weaker US dollar. In the second half of the year, however, this situation reversed when the US dollar gained ground against the euro. In recent months many raw materials prices have eased somewhat. However, in some areas, such as the production of citral, which is needed to manufacture fragrance compositions, the cost situation remains tense. At this stage we do not expect average raw materials prices to fall significantly in 2009. In our planning for the year we are therefore penciling in further price increases, although we do not expect them to be as steep as in 2008. Annual Report 2008 Symrise AG 79 Operations/Supply Chain The operational areas integrated into the divisions are responsible for production and the supply chain. The purpose of integrating operations into the divisions is to achieve closer customer proximity and to maximize the responsible business units’ scope for action. With our innovative Symchronize approach, we closely cooperate with individual customers to realize new potential in the value chain for both our customers and ourselves. Symchronize seeks to optimize the supply chain by taking an integrated view of the entire value chain, from raw material procurement to successful delivery of the end product. Total Productive Maintenance (TPM) forms part of Symchronize. TPM ensures continuous control of the results achieved by measuring and comparing performances. A scorecard system records performance in all relevant areas each month. The aim is to increase productivity continuously and measurably by quickly recognizing and remedying problems. Symrise operates production facilities at numerous sites worldwide. The largest capacities are in Germany at our Holzminden, Nördlingen, and Braunschweig sites, as well as in Teterboro (USA). Holzminden and Teterboro also have major chemical production plants available. Additionally, the Group maintains large production facilities in Singapore, Chennai (India), Shanghai (China), Cuautitlán lzcalli (Mexico) and São Paulo (Brazil). The other sites are focused on sales activities and have either relatively small mixed operations or no production facilities at all. As of December 31, 2008, Symrise employed more than 2,100 manufacturing and technology staff worldwide. The main focus of operations was successful integration of the companies we acquired in 2008 in the US. The Flavor & Nutrition division acquired Chr. Hansen Flavors. In July, Chr. Hansen’s production facilities in Mahwah (New Jersey) were integrated into our production operations in Teterboro (New Jersey). In August, we introduced SAP at the site acquired in Elyria (Ohio). This factory is now fully operative and linked to the Symrise production facilities. The integration of Chr. Hansen’s sites was completed by the end of the year, as scheduled. Scent & Care acquired Intercontinental Fragrances (Houston, Texas) in September and Manheimer Fragrances (Teterboro, New Jersey) in November. Intercontinental Fragrances’ site in Texas is being integrated into our operations network. The acquisition of Manheimer Fragrances did not involve any property, plant and equipment. We acquired recipes and know-how, which are being transferred to our Scent & Care division sites in the US. Group Management Report
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THE NATURE OF OUR BUSINESS - STABLE
Page 3 and 4:
Key Figures € million Sales Scent
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4 - 51 52 - 92 93-98 99-147 148-152
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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
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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 and 70: half of 2009. After integration cos
Page 71 and 72: SALES BY REGION € million EAME As
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: 6. FINANCIAL POSITION Main Financia
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
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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
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Symrise AG Mühlenfeldstraße 1 376
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THE NATURE OF OUR BUSINESS â€“ STABLE GROWTH - Symrise

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