Un
fol
ding
Stren
gths

Unfolding Strengths

The 2017 fiscal year was the twelfth consecutive year in which Symrise grew profitably. CEO Dr. Heinz-Jürgen Bertram continues to look to the future with optimism. The foundations have been laid for long-term, profitable and sustainable growth.

Dr. Bertram, this corporate report is entitled “Unfolding Strengths.” What does that mean for you?

In addition to diversifying our portfolio, over the years we’ve also significantly expanded our access to key raw materials and markets around the world. We’ve also developed additional know-how with new business units and thus established a significant focus on sustainability. In this way, we’ve created a blueprint for our industry: Symrise is a company that knows exactly where its raw materials come from and develops innovations that increase customer benefits and cover even more market segments. We serve the entire family, from small children to adults, with our products. Not to mention pets. Through our work in recent years, we’ve generated strengths that are already bearing fruit today and we want to develop them more effectively in the future.

3

Symrise achieved sales of €3 billion in 2017 – a company record.

Is this also reflected in the figures?

Absolutely. Since the IPO in 2006, we’ve experienced growth for the twelfth year in a row – our organic growth alone was 6 % in 2017. At around € 3 billion, sales are at an all-time high. EBITDA increased to € 630 million, which is equivalent to a profit margin of 21 %. Our objective is and will continue to be growth above the market level along with high profitability.

»Through our work in recent years, we’ve generated strengths that are already bearing fruit today and we want to develop them more effectively in the future.«

Speaking of growth, what does long-term success mean to you in this context?

Our strategy is to serve an extensive range of customers, with one-third of our focus going to each of the following: global, regional and local customers. In addition to making us more independent, this also allows us to accelerate growth in individual areas. Take Cobell, for example, the British manufacturer of juice bases for beverages, which we acquired for the exceptional access it would afford us to the attractive British beverage market and the many different customer groups. Diversification not only applies to our portfolio, but also our customer base. It is a prerequisite for long-term success.

Does this mean you will continue to acquire companies?

Yes, but not only that. Organic growth is our top priority. We also turn to acquisitions whenever we can increase organic growth, whether it’s through new technologies, market access or areas of expertise. But acquisitions need to be a very good fit for our strategy and portfolio and truly move us forward. It’s always an issue of expanding existing strengths in an intelligent way.

Do you have any other examples of this?

Take for example our most recent acquisition, the manufacturer of perfume oils Citratus, which will allow us to strengthen our position in the important Brazilian market. We want to continue expanding there. The Pinova Group is another good example. Thanks to Pinova’s Renessenz division, we’ve developed into the market leader in natural fragrance components and cooling substances. This primarily allows us to secure and process our own raw material base. In times of volatile and scarce commodity markets, this is an immensely important strategic advantage which will pay off.

Are natural products on the rise?

Yes. We want to obtain 100 % of our strategic raw materials from sustainable sources by 2020 and thereby promote backward integration. We have provided a best practice example here in the magazine: the purchase of bergamot essential oils. Our employees not only pay attention to fair prices, high quality and reliable availability, but also to an ecological and sustainable value chain.

Let’s look at the portfolio. What has changed here?

Our goal was and is diversification in order to occupy new fields. We now generate one-third of our sales outside of our traditional areas of business, i.e., flavors and fragrances. Among other things, our Diana division develops nutritional solutions for aquacultures – and this market has enormous potential. Another example is our cranberry business. Here, we have processed a component of the fruit in such a way that it can be used in nutritional supplements that are intended to prevent urinary tract infections.

The third pillar of the strategy is efficiency. Where does Symrise currently stand and how is it preparing for the future?

Efficiency requires continuous improvement of our processes; this report illustrates a few examples of how we do this. However, there are also areas where we clearly still have some catching up to do. We are currently working hard to implement the UN climate targets. We achieved our own goals and have accordingly set ourselves new ones.

Symrise has acquired companies, grown organically, developed a large number of product areas and conquered new markets: Won’t this broad diversification eventually become unmanageable?

No, because we’re always focused on a very clear goal and implementing it with a tried-and-tested strategy. We want to be the partner of choice for our customers, by supplying them with unique product solutions and innovations. We’re therefore only investing in areas that expand or complement our existing area of product expertise.