Good corporate governance
Symrise grew for the 15th time in 2020 – despite the coronavirus and the global economic slump triggered by the pandemic. For CEO Dr. Heinz-Jürgen Bertram, one thing is clear: The companyʼs success is based above all on its long-term strategy of strong innovations, a broad portfolio, close partnerships, and sustainable business along the value chain.
Symrise has performed very solidly in a market environment dominated by the coronavirus pandemic. We were well on track until mid-December 2020, when we became the target of a criminal cyber attack with the intention of extorting the company. It was out of the question for us to give in. However, this meant that our business operations were severely restricted at times, and for that reason we were not able to fully achieve our growth targets. But we follow a clear ethical compass and reject any form of criminal fraud or extortion. Although there were delays in production and logistics, customers and business partners supported our stance. We would like to expressly thank them for this support.
We were fully operational across the entire Group worldwide. But for our employees, the pandemic is nevertheless a great burden. Many of them were able to work at home in cases where this was an option, but this was not possible in our factories. We reacted quickly and flexibly, introducing new shift models, severely restricting or partially discontinuing travel, and paying close attention to hygiene and cleaning cycles. As a thank you for their strong commitment to the Group, we paid all employees a coronavirus bonus.
The pandemic has had a major impact on people’s behavior since the spring. There were closures of businesses and schools, retail stores and the restaurant industry, as well as travel restrictions and hygiene regulations. This also had a direct or indirect impact on demand in many areas. People stocked up on supplies, had to prepare to work at home or for home schooling, shopped more online and focused on local products and brands.
In the Scent & Care segment, which includes fragrances and also the functional components of cosmetic and care products, demand has shifted – we sold fewer luxury items such as perfumes and sunscreen, but more products for cleaning and hygiene. Organic sales increased slightly by 1.5%. Incidentally, right in the early stages of the coronavirus pandemic, we produced disinfectants in our Holzminden production facility by the ton to meet the increased demand, including from public institutions. The Flavor segment was also affected both positively and negatively because, on the one hand, people were eating and drinking less outside their homes, but on the other, they were consuming significantly more ready meals, baking mixes and snacks. Here we achieved an increase in sales of about 1%. The strongest growth of 8.2% was in the Nutrition segment, particularly in the area of pet food. This market will continue to develop very positively. In reporting currency, including the acquisition of the ADF / IDF group, sales increased by around 27%.
Our diversified portfolio is one of the three pillars of our strategy, alongside our growth and efficiency in all processes. We now generate more than a third of our sales outside of our traditional business fields. In so doing, we rely first on identifying rapidly expanding areas, and then on repeatedly combining our resources and expertise to achieve strong synergy effects.
Only by understanding and constantly questioning the whole can we achieve excellence in the details.
Exactly, we always have to keep the whole system in mind: from the innovations in our research and development to the 10,000 raw materials we purchase all over the world and the way we process them, to the wishes of our customers and consumers. Only by understanding and constantly questioning the whole can we achieve excellence in the details. Our partners along the value chain are also important in this respect: These are the small-scale farmers and suppliers, research institutions and customers with whom we jointly develop sustainable products and bring them to market.
At the beginning of the year, some companies had problems with their supply chain, though we were able to deliver without interruption. One reason for this is our backward integration. In recent years, we have greatly expanded important production facilities such as those for menthols and vanilla extraction; we have also linked many of our raw materials closely to us through partnerships and our involvement in the countries of origin. This makes us more flexible and allows us to count on reliably available raw materials and products. It also makes us more sustainable. We proved this in many places once again last year. For example, the Carbon Disclosure Project (CDP) awarded us top marks in all three of the topics it examined – climate change, forests and water conservation. Only ten out of the 9,600 worldwide that took part achieved this, and we are the only one in Germany. This is one way we are pursuing the ambitious goal of being climate-positive by 2030.
Absolutely. Our shareholders and investors are increasingly taking this commitment into consideration because their decisions are based on how companies will fare in the future. And if companies donʼt act sustainably today, they will face high costs later, for example due to regulatory requirements. That’s why, for example, analysts and rating agencies such as MSCI, Sustainalytics, ISS ESG, CDP, EcoVadis and SEDEX are asking us more and more questions about our ESG performance – in other words, about environmental protection, social commitment and good corporate governance.
We need to do a better job of protecting our environment and climate; otherwise, one day we won’t even need to talk about our company’s success anymore.
We need to do a better job of protecting our environment and climate; otherwise, one day we won’t even need to talk about our company’s success anymore. For Symrise especially, this is important because we obtain many of our raw materials from nature. At the same time, we can only be sustainable if we are economically successful. So the two issues are inextricably linked.
We will continue to grow in ways that are healthy and sustainable by using three levers. First, we want to become organically stronger, that is, to increase capacity in our old and new business units, win new customers and increase sales. We will also successively expand our business model and ultimately continue to make selected acquisitions.
In the past fiscal year, for example, we opened our largest single investment ever: the new site for flavor and fragrance production in Nantong, China, in which we invested € 50 million. By the way, because of the coronavirus, we held the opening ceremony via web conference for the first time in the company’s history. We also integrated the US company ADF/IDF, which we acquired for USD 900 million in 2019, into Symrise. This expands our portfolio while also creating synergies for us, such as market access and new technologies. ADF/IDF also made a strong contribution to sales and profit. In 2021, we plan to acquire the fragrance business and parts of the flavor business of the US company Sensient Technologies. Their products come mainly from renewable raw materials such as pine oil or citrus fruits, which are handled using green chemistry processes. Sensient has sites in Mexico and Spain, where we will invest heavily in Granada and develop the plant into the second-largest mixing plant for fragrances and perfume compositions in the EAME region.
All our divisions have the potential to further differentiate themselves by sharpening their profiles. In recent years for example, our acquisition of Diana positioned us very strongly in the pet food sector, which has enormous growth rates. We will continue to expand our business in that sector and make even greater use of our know-how, which is unique in the industry. Another fast-growing area is healthy food. By making use of our outstanding knowledge of natural raw materials, our backward integration and our taste know-how, we can tackle all challenges. These include, for example, putting less sugar, salt, fat and meat in food while keeping its taste the same, or using functional ingredients such as alternative proteins in food.
Yes, we are gaining more and more customers; by now, we have all the major global food, perfumery and cosmetics groups in our order books. At the same time though, none of them amounts to more than 5% of sales. We have found a healthy mix among our 6,000 customers. One-third are locally, regionally or globally active companies from all the industries that are important to us. This makes us independent and less susceptible to crises. Incidentally, we are also seeing internal diversity. In recent years, we have greatly increased the proportion of projects in which colleagues from different business units or even segments work together. This results in significant synergies because we rely on cross-divisional teams and know-how in project development or to make processes more efficient, for example.
We will continue to grow over the next four years, and our goal remains € 5.5 to € 6 billion in annual sales. We also want to become even more profitable. We have motivated employees who provide the best in their fields, outstanding technologies, a broad mix of products and a healthy raw material base, and we are active in many rapidly expanding markets. There are therefore plenty of good reasons why we will continue to grow.
Symrise places sustainability at the center of its business strategy throughout the entire value chain and aims to become climate-positive starting in 2030.Read more >
Symrise continuously increases its eco-efficiency by focusing on innovations and ideas. Two examples show how.Read more >
Meat and dairy products have traditionally been a part of diets around the world, but increasingly the products that end up on our plates no longer need to come from animals.Read more >
Acerola cherries come from northeastern Brazil. Symrise is now using them for a very special product.Read more >
What pets want or need does not always necessarily match the wishes of their owners. This also applies to perfumes and smells in pet care.Read more >
The lauded French brand Maison Lautier has been a part of the Symrise portfolio since the mid-1990s.Read more >
In a globalized world based on communication and cooperation, a company can only be as good as its partners.Read more >
With the acquisition of ADF, IDF and IsoNova, Symrise has further expanded its portfolio within its Nutrition segment.Read more >
In Colombia, Diana Pet Food, one of Symrise Nutrition business units, was previously represented by a single sales office.Read more >
One of the major health problems globally is excess weight, which can lead to diabetes, cardiovascular illness, heart attacks or strokes.Read more >
Cosmetics originated in plant extracts. Even in prehistoric times, humans used botanicals for their effects on the skin and to increase their sense of well-being.Read more >
For animals in aquaculture to be fed in a way that is healthy, nutritious, and tasty, their feed must have functional ingredients.Read more >
Consumers are increasingly placing value on products that are good for them and the environment.Read more >
Four out of ten employees working from home, production facilities all over the world working around the clock, and on top of that the health concerns of our colleagues.Read more >
Symrise initiated many projects and campaigns that focus on sustainability, occupational health and safety, and social responsibility. Here are just a few.Read more >
One of the UN’s most important goals is to aim for responsible consumption and production. A small contribution to this is made by using raw materials more fully – for example through upcycling.Read more >