Symrise flags slower Q4 growth, spending pressure on margins

Symrise Expects Slower Q4 Growth and Spending Pressure on Margins in 2024

Symrise's Financial Outlook and Market Performance

Q4 Growth Forecast and Margin Expectations

Oct 28 (Reuters) -  German flavour and fragrance maker Symrise forecast slower fourth-quarter growth and flagged spending pressure on its annual profit margin on Wednesday.

Growth is expected to moderate sequentially from the third-quarter level against tougher comparables, with reinvestments keeping margins in the lower half of guidance, the company said in a statement.

Factors Influencing Growth and Margins

A return to growth in pet food and beauty ingredients is broadening Symrise's recovery, but tougher comparisons and reinvestment are tempering the benefits of stronger sales volumes.

Key Highlights from Symrise's Statement

• Symrise kept its annual targets unchanged but now expects organic growth near 3%, the midpoint of its guidance range, against a Vara Research forecast of 3.2%
• It sees its adjusted core profit (EBITDA) margin in the lower half of the 21.5%-22.5% range, reflecting higher spending on technology, innovation and staff
• Third-quarter organic sales grew 5.3%, above the 5.0% expected in the Vara poll, supported mainly by higher volumes and easier year-earlier comparisons
• Natural ingredients and sweet and savoury flavours supported the food business, while higher volumes helped pet food return to growth despite declining beverage sales and continued price normalisation in pet nutrition.
• Swiss rival Givaudan reported third-quarter organic sales growth above expectations earlier this month, driven by strong fragrance demand and a recovery in food flavours
• Symrise shares were seen falling 3% in pre-market indications at 0641 GMT

Additional Financial Information

($1 = 0.8981 euros)

Reporting and Editorial Credits

(Reporting by Jesus Calero in Gdansk, editing by Izabela Niemiec)