HOLZMINDEN (dpa-AFX) - Price increases and strong demand for additives for pet food, beverages and desserts have given Symrise strong sales growth at the start of the year. Flavors for toothpaste and fragrances for detergents, for example, were less in demand, however. Group sales rose by 12.8 percent year-on-year in the first quarter to 1.23 billion euros, the DAX-listed group announced in Holzminden on Wednesday. Analysts had somewhat less on the cards.

On the basis of organic growth, i.e. excluding exchange rate effects and the purchase and sale of businesses, the increase was 10.6 percent. The Group is thus well above its confirmed target for the year of organic growth of five to seven percent. Analyst Andreas von Arx of Baader Bank praised the development. There is positive news from Symrise again, he wrote in an initial reaction.

The group's share price rose slightly in the morning. Shortly after the start of trading, its price rose by 0.32 percent to 108.25 euros, slightly outperforming the Dax. The stock thus continued its recovery from the March low of 91.52 euros. At that time, concerns about business performance and news that authorities were investigating possible price fixing in the industry had pushed the share price to its lowest level since May 2020. Symrise CEO Heinz-Jürgen Bertram had stressed at the time: "We don't see ourselves affected by this. Today, we think we have nothing to hide."

Both Group divisions contributed to business growth in the first quarter. The Taste, Nutrition & Health division, which specializes in food additives for humans and animals, achieved particularly strong sales growth of 15.6 percent to a good 776 million euros. Organically, the increase amounted to 14.6 percent. The Food & Beverage segment, with products for beverages as well as sweet and savory foods, achieved strong growth, while the pet food business again recorded double-digit percentage growth. It has long been one of the biggest growth drivers for the company from Lower Saxony. Analyst Thomas Maul of DZ Bank estimates that the Pet Food division now contributes more than one-fifth of Group sales, thanks in part to acquisitions and capacity expansions.

The second division, Scent & Care, which focuses on fragrances such as perfumes, once again lagged behind in terms of growth. In the quarter just ended, it increased sales by a good eight percent to 454 million euros. Organic growth was 4.2 percent. While fragrances for expensive perfumes were in demand, sales fell in the Aroma Molecules division, which produces menthol for toothpaste, mouthwash and chewing gum, as well as fragrances for detergents and cleaning products. Symrise explained this with increasing competitive pressure from Asia as well as high inventories at customers who first reduce them before ordering new ones.

Symrise will not comment on the earnings trend until the publication of its half-year figures. According to the annual outlook, management expects an earnings margin before interest, taxes, depreciation and amortization of around 20 percent in 2023. This would just about reach the lower end of the medium-term target range of 20 to 23 percent.

Like most other companies, the Lower Saxony company is feeling the effects of higher costs due to inflation. Analyst Thomas Maul of DZ Bank also recently pointed out that it is questionable "to what extent Symrise will be able to maintain the price increases it implemented last year." Increased discount demands from customers would not come as a surprise./mis/stw/jha/