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Symrise reports FY profitability miss after cyber attack hits sales

Mar 9, 2021

(Reuters) – German flavour and fragrance maker Symrise missed profitability and core profit expectations in 2020 after a cyber attack hit sales in the last quarter.

Earnings before interest, tax, depreciation and amortization (EBITDA) margin in 2020 rose to 21.1% from 20.1% a year ago, slightly below a company-provided consensus of 21.4%.

The maker of ingredients such as artificial mint flavouring said it was now targeting an EBITDA margin of 21% and sales growth of 5% to 7% in 2021, as it expected the global economy to recover from the COVID-19 crisis but raw materials costs to rise slightly.

“For Symrise the priority is on organic growth which can, however, be complemented by targeted value-adding acquisitions as well as by strategic partnerships,” the company said in a statement.

Symrise reported a rise in full-year sales in January slightly below its outlook and below expectations, citing “significant disruptions” following the cyber attack.

Its profitability target for 2021 meanwhile leans towards the lower end of its medium-term guidance of a margin in the range of 20-23% while its sales guidance is in line with its target to increase sales to 5.5-6.0 billion euros by 2025.

Regulators around the world have been limiting the use of some chemicals to protect the environment, workers and consumers, which is driving up their cost as producers invest to look for alternatives.

Prices of natural ingredients have also been buoyed by rising consumer demand for healthier, renewable options. To keep raw material prices under control, Symrise pursues partnerships and acquisitions of its suppliers.

The company, whose fragrances are used in the perfumes of French luxury giants LVMH and Kering, saw a 5.8% rise in core earnings (EBITDA) for the full year of 2020 to 742.1 million euros, below a company-provided consensus of 758.6 million euros ($903.49 million).

It proposed an increase in dividend to 0.97 euros per share from 0.95 euros a year ago.

($1 = 0.8396 euros)

(Reporting by Silvia Recchimuzzi in Gdansk; editing by Uttaresh.V, Andrew Heavens and Ana Nicolaci da Costa)