What is Growth Strategy and Future Prospects of Symrise Company?

The acquisition of Probi in November 2024, securing approximately 90.2% of shares, significantly expands its health and wellness portfolio, particularly in biotic solutions for human and pet health. This move aligns with the company's 'ONE Symrise' strategy, aiming to diversify its portfolio to meet market trends in rapidly growing areas like health and wellness.

The company is focused on geographical expansion with ongoing capacity enhancements in high-growth regions to support future international growth. Sales in the Latin America region showed encouraging double-digit organic growth in 2024, and both the EAME and Asia/Pacific regions experienced strong business growth in Q1 2025.

Within its segments, Symrise is enhancing product pipelines. The Taste, Nutrition & Health segment saw strong growth in food and beverage applications in Q1 2025, with beverage applications achieving double-digit organic growth. The Pet Food division also recorded moderate sales increases, particularly in Pet Food Palatability, driven by ongoing capacity expansion.

In the Scent & Care segment, three new captives—Ambronova, Frostwood, and Salyssia—were launched in 2024 to enhance its floral, woody, and musky fragrance offerings. Symrise is also strategically assessing its chemical production activities and potential options for its terpene business as part of further portfolio streamlining efforts, with an intent to sell businesses in Costa Rica and Ecuador.

In the 2024 financial year, Symrise AG achieved sales of €4,999 million, marking a 5.7% increase in reporting currency and an impressive 8.7% organic sales growth. The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a significant rise of 14% year-on-year, reaching €1,033 million. This resulted in an improved EBITDA margin of 20.7% for 2024, up from 19.1% in 2023.

Net income attributable to shareholders surged by 40.5% to €478 million in 2024. The gross margin also saw an increase, reaching 39.3% in 2024, a 2.5 percentage point improvement over the previous year. Demonstrating its commitment to shareholder value, Symrise plans to propose a dividend of €1.20 per share for the 2024 fiscal year, continuing its streak of 15 consecutive dividend increases.

For the fiscal year 2025, Symrise reaffirms its guidance, projecting organic growth of 5% to 7%. The company anticipates an EBITDA margin of approximately 21% and a business free cash flow of around 14% of sales. Symrise aims to outpace the relevant global market, which is expected to grow at a rate of 3% to 4%.

Looking ahead to the mid-term through 2028, Symrise targets an average annual organic growth rate (CAGR) of 5% to 7%, with an EBITDA margin expected to be in the range of 21% to 23%. The company's long-term ambition by 2028 is to increase its sales to between €7.5 billion and €8.0 billion, reflecting its strategic expansion and innovation efforts.

Persistently high inflation rates can directly impact Symrise's profitability by increasing the cost of raw materials and operational expenses. The company's ability to pass these costs onto customers or achieve significant cost savings through efficiency programs is critical for maintaining its financial performance.

Changes in regulations, particularly those related to chemical production standards or the approval of new ingredients, can pose significant obstacles. Symrise must invest in research and development to ensure compliance and adapt its product offerings to meet evolving legal requirements.

The highly competitive nature of the flavors and fragrances industry means that margin ambitions can be challenged by competitors' pricing strategies. Analysts suggest that 2025 might see a focus on maintaining growth even if it means moderating margin expansion.

Vulnerabilities in the supply chain, including the availability and cost of key raw materials, remain a significant risk. Symrise's proactive management of its supply chain and its focus on cost control are essential for mitigating these risks to its Symrise business model.