HOLZMINDEN (dpa-AFX) - The fragrance and flavor manufacturer Symrise wants to become more profitable again in 2024. Last year, a reduction in inventories on the customer side, negative currency effects and the consequences of fire damage at a US plant weighed on the DAX-listed company. Inventories also had to be devalued due to lower raw material prices. The company is now focusing on further growth above that of the end market. Savings are also to be made. Overall, the annual figures and the targets for 2024 were well received on the stock market.

"The Group will take targeted measures to further increase earnings and profitability," writes Symrise in the annual report for 2023 published on Wednesday. This includes an efficiency program, and processes and procedures are to become less complex. The focus will also be on high-margin businesses.

All in all, Symrise aims to grow faster than the relevant market in 2024, specifically by 5 to 7 percent. In 2023, the Group increased revenue by 2.4 percent to € 4.73 billion. Excluding exchange rate effects and acquisitions and disposals of business units, the increase amounted to 7.9 percent. In an initial assessment, analyst Gunther Zechmann from Bernstein Research spoke of a strong final quarter, with the Group outperforming its competitors in terms of growth.

In the Taste, Nutrition & Health division, business with additives for sweet and savory products as well as beverage flavors provided a tailwind. Pet food activities also grew significantly, while the probiotics business weakened.

In the second division, Scent & Care, Fine Fragrances continued to grow strongly under its own steam, while sun protection products were also in demand. The Aroma Molecules division was under pressure, however, as demand for fragrances and menthol was weak. Customers were still sitting on large stocks that they wanted to use up first. This was compounded by the consequences of fire damage at the US site on Colonel Island, which caused production to be shut down for long periods in 2023.

Against this backdrop, earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 7.6% to just under 852 million euros in 2023. Excluding the special charges due to the consequences of the fire and a divisional reorganization as well as costs in connection with an antitrust investigation, there was only a small drop to 903.5 million euros. This corresponds to an adjusted operating profit margin of 19.1 percent.

The bottom line was a net profit of 340 million euros, which was 16% below the previous year. An impairment loss on an investment was deducted in 2022. Including this, net profit in 2023 was higher than in the previous year. The dividend is set to rise by 5 cents to 1.10 euros.

For 2024, the management team led by outgoing CEO Heinz-Jürgen Bertram is forecasting an operating margin of 20 percent. Bertram will retire at the end of March after around 15 years at the helm of the company. He will be succeeded by Jean-Yves Parisot, who has been a member of the Management Board since 2016 and heads the Taste, Nutrition & Health segment.

Although the margin target is slightly below the average analyst estimate provided by the company, according to expert Charles Eden from Swiss bank UBS, it is certainly more than many investors had expected.

This is also reflected in the share price performance. The shares topped the Dax this morning with a plus of a good four percent to 100.50 euros. With this jump above the 21-day line, an important short-term indicator, the chart picture is also brightening up again. The focus has now shifted back to the EUR 106 area. The shares had been trading at this level in December before a lowering of the margin target by Symrise triggered a price slide./mis/mne/stk