THE NATURE OF OUR BUSINESS – STABLE GROWTH - Symrise

› our position on the core lists of large multinational customers
› our position vis-à-vis regional and local customers in the more
dynamic emerging markets
In 2009 we therefore expect to outpace market growth. Under the
present conditions, we anticipate currency-adjusted growth of between
5% and 7%, including the acquisitions made in 2008 (1% to
3% without these acquisitions).
With regard to certain raw materials, we expect price increases to
slow down in the course of the year. In the case of raw materials
in short supply worldwide, we expect demand to keep prices stable
or push them up. At the beginning of 2009, we had enough
raw materials and finished goods in stock to meet our requirements
for five to six months. These raw materials were bought at
prices that were significantly higher than those at the beginning of
2008, and this will be reflected in cost of sales in the first half of
2009. Any possible decline in the cost of raw materials will only
materially affect our results in the second half-year. However, the
effect of the price increases introduced in the fourth quarter of
2008 and of those that will take effect in 2009 will have an impact
on the first-half results.
We will steadily pursue the initiatives we introduced in 2008 to
continually optimize our results. Our policy of cash optimization,
cost reduction and price management, portfolio optimization plus
our focus on innovative products and technologies will ensure that
we are well prepared for crises. We will respond to external factors
that impede our ability to plan by introducing measures that we
ourselves can plan. In 2009 we will continue to actively review further
consolidation opportunities.
Compared with the strong first half in 2008, we expect the first half
of 2009 will be weaker. Nevertheless we expect sales for the entire
year 2009 to grow at least as fast as the market. Due to the volatility
in the current economic environment, precise statements about
profitability and the EBITA margin are not possible at this time.
Assuming that the price of raw materials remains at a high level
while our revenue growth slows down, we do not anticipate any
substantial increase in working capital. As a result of tax loss carry
forwards in numerous regions and thus lower tax payments, we
expect a positive influence on our cash flow. For 2009 as a whole
we expect strong cash flow.
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Our liquidity situation is good and our credit facilities are secure
until 2011. Financially, we are in a position to fully implement our
corporate strategy. We do not foresee any difficulties amortizing on
schedule any debts that are due for repayment.
It is too early to say whether the planned measures to stimulate the
economy and to normalize the financial and global markets will
have the desired success. We can therefore only make a forecast
for 2010 with certain reservations. We assume the measures
planned to stimulate the economy to take effect in the second halfyear
at the earliest. On that premise, we anticipate that the F&F
market will benefit from the recovery of the global economy. We
therefore consider growth of between 1% and 3% possible in 2010.
Based on our growth strategy, our portfolio and our good positioning
in all the key global markets, we assume that Symrise will
also outpace market growth in 2010. For Symrise we think that
growth of 3% - 5% is possible in 2010 at local currency. We also
expect to see a corresponding improvement in our margin and our
operating result.
During economic downturns, people do not cut out their basic
needs but they are particularly open to new ways of satisfying
them. If we succeed in satisfying these basic needs faster and
more creatively and with improved margins, we will not only encounter
problems in the crisis period but also discover new opportunities.
12. REMUNERATION OF THE EXECUTIVE BOARD
Remuneration Structure
Members of the Executive Board are remunerated in line with Sec.
87 of the Stock Corporation Act, pursuant to which the Supervisory
Board sets the remuneration. Remuneration is comprised of
fixed and variable components as well as fringe benefits. The appropriateness
of the remuneration depends upon the responsibilities
and the personal contribution of the individual Executive
Board member as well as upon the economic situation and market
environment of the Company as a whole.
All Executive Board members receive their fixed remuneration paid
as a salary in equal monthly payments. The variable component
of the total remuneration in 2008 comprised an annual bonus
based on the achievement of Company targets. To determine the
remuneration payment, the EBIT for the Symrise Group was used
as a key performance indicator for the Group and its divisions, in
accordance with the business plan, as were medium-term strategic
targets and qualitative evaluation criteria. The targets upon
which the variable portion of total remuneration is based were
Group Management
Report