By Matteo Allievi
(Reuters) – Germany’s Symrise forecast an annual organic sales growth of 7% on Thursday, encouraged by a strong momentum in its fragrance and taste segments, although it expects growth to be likely more modest “at some point”.
The flavour and fragrance maker had previously forecast an annual sales growth of 5%-7%.
“Despite the current volatile market environment due to geopolitical tensions and continued inflation pressure, we are confident for the rest of the year and expect robust demand,” CEO Jean-Yves Parisot said in a statement.
However, CFO Olaf Klinger warned on a conference call that comparisons are getting tougher and continuing with double-digit growth “would be a surprise”.
“The growth we have seen in the sector year-to-date is certainly exceptional. I think everybody is expecting some normalisation next year,” said Vontobel analyst Arben Hasanaj.
Shares were down 1.7% at 0739 GMT after falling as much as 3.7%.
Revenue rose more than 5% in the reporting currency to 1.26 billion euros ($1.36 billion) in the quarter ended September, slightly missing analysts’ estimates of 1.27 billion euros.
Like-for-like sales jumped 10.2% from a year earlier.
Organic sales in its Taste, Nutrition and Health business, which accounted for more than half of the total, rose 11.3%, while the Scent and Care division posted an 8.4% jump.
“The taste side looks quite good, but in fragrances we see quite a large gap opening up compared to peer’s Givaudan,” said Hasanaj.
While the rest of the German chemical sector is still facing a sluggish demand in a weaker economy, companies in fragrances and cosmetic business have seen a strong sales increase since the start of 2024.
Symrise, whose fragrances go into the perfumes of French luxury giants LVMH and Kering, confirmed its long-term outlook, expecting organic sales growth between 5% and 7% and a core profit margin in the range of 20%-23%.
Concerning the group’s pet food segment, Parisot expects prices to continue to stabilise until 2024 end before going back to a more normal environment next year.
Rival Givaudan also reported sales above expectations earlier this month on sustained high demand.
($1 = 0.9271 euros)
(Reporting by Matteo Allievi; Editing by Rashmi Aich)
