Our integrated
corporate strategy
Economic success, sustainability and social acceptance are inextricably linked. We believe this wholeheartedly. For this reason, we have made sustainability an integral part of our corporate strategy at Symrise. The goal is to continuously increase the value of the company and to minimize risks. This way we strengthen the future viability of our company.
Symrise has set itself the goal of increasing its sales to an amount of € 5.5 billion to € 6.0 billion by 2025. At the same time, humanity is living beyond its means concerning the climate, environment and resource consumption – which is exacerbated by the fact that the global population surpassed 8 billion in November 2022. How does that fit together? The only solution can be to decouple our economic activities from the consumption of limited resources, which is why we apply the principles of the circular economy to our portfolio of raw materials and products wherever possible. This entails the elimination of waste and environmental pollution, the circulation of nonrenewable resources in cycles and the sustainable extraction of renewable resources while simultaneously regenerating nature. Symrise applies the principles of the circular economy to each and every level of value creation, beginning with procurement, for which Symrise has developed a responsible sourcing strategy that encompasses all of the steps of the supply chain, takes environmental aspects into account and, more importantly, respects human rights.
The Symrise business model is based on the diversity of nature. We manufacture our approximately 35,000 products based on around 10,000 – mostly natural – raw materials such as vanilla, citrus products and flower and plant materials. Nature is a source of inspiration and innovation for us. Symrise has therefore always been committed to protecting biodiversity. Going far beyond this, we aim to increase our sustainability performance along the entire value chain. In 2020, we set a milestone in our sustainability concept with the goal of having climate-positive operations starting in 2030. From this point forward, the business activities of Symrise are expected to contribute to preventing or sequestering more greenhouse gas emissions from the atmosphere than we produce through our operating activities.
The integrated corporate strategy at Symrise is based on the United Nations’ Sustainable Development Goals and links our economic ambitions with the commitment to our four sustainability approaches:
Environment / climate:
Minimizing our environmental footprint
Innovation:
Maximizing the environmental added value of our products
Sourcing:
Maximizing the sustainability of our supply chain
Employees / society:
Creating lasting value for all stakeholders
Sustainability aspects play a role in the decision-making process across all levels and are a key factor with regard to the Executive Board’s remuneration. Our routine materiality analysis carried out in summer 2022 consisted of expert interviews, an online employee survey and in-depth discussions with the management and is a confirmation of this approach, as the issues of “climate protection and climate change adaptation,” “use of raw materials and the circular economy,” “environmental protection and biodiversity” and “procurement and human rights” are extremely important to Symrise. Please see the “Sustainability & responsibility” chapter for additional information on this materiality analysis.
In economic terms, Symrise focuses on three drivers, i. e. growth, efficiency and portfolio. In order to gain market share, we aim to achieve above-average organic sales growth of 5 to 7 % (CAGR). One strategy is early, committed involvement in rapidly emerging markets. For example, Symrise has been present in Brazil since 1956, in China since 1982 and in India since 1994. In addition, we want to further deepen the collaboration with our customers by bringing our broad product range to them in an even more targeted manner. Furthermore, we make sure that we remain innovation leaders in our core competencies. Symrise invested € 270 million in property, plant and equipment and in intangible fixed assets (excluding acquisitions) in 2022 to reinforce its growth. In 2023, Symrise plans to implement projects in the USA, China, Australia, Mexico and the Netherlands to expand the Pet Food business unit as well as establish a new liquid-flavor production in Holzminden, expand production facilities in Spain and build a spray dryer for powder production in Mexico.
These measures to increase efficiency support our goal of becoming one of the most profitable companies in the industry over the long term. They mainly concern the improvement of internal processes and optimization of the raw materials portfolio. When it comes to improving internal processes, the spectrum ranges from the Group-wide bundling of sourcing processes to warehousing and receivables management to the increased use of artificial intelligence (AI) in research and development. Optimization of the raw materials portfolio involves reducing the number of raw materials used, improving yields, expanding the backward integration of strategic raw materials and also ensuring traceable, reliable and consistently high-quality supplies. Backward integration also enables long-term social commitment in regions where vanilla, citrus fruits and patchouli are grown, for example.
THE INTEGRATED CORPORATE STRATEGY OF SYMRISE
Sustainability along the value chain
With our integrated corporate strategy, measures to increase efficiency often go hand in hand with an increased contribution to sustainability. Efficient use of natural raw materials, for example, has a positive impact on both our profitability and the environmental impacts of our activities.
What will our global customers and consumers want and need tomorrow, or the day after? Which of our products can achieve above-average margins thanks to our innovative strength and our expertise in sustainable product solutions? Which business areas outside the traditional fragrance and flavor industry are opening up new growth potential? The third pillar of our integrated corporate strategy – continuous optimization of our business portfolio – addresses these questions. While the traditional flavor and fragrance markets are growing very solidly at an average of 3 % to 4 % per year, the pet food market, for example, is expanding at an annual rate of 7 % to 8 %. Symrise was the first company in the industry to begin moving into neighboring business areas years ago. Today, we generate more than 30 % of our sales in new divisions. We aim to increase this proportion to 50 % over the next few years, for growth and profitability. This path of expansion is further reinforced by additional acquisitions and partnerships, including the purchase of Schaffelaarbos, a leading manufacturer of proteins sustainably sourced from eggs for pet food, and the acquisition of Wing Pet Food, which provides us with increased access to customers in the Asia / Pacific region.
A SETSCREW – MULTIDIMENSIONAL EFFECT
One of many examples
A strategic course set in 2021 / 2022 contributes to all three elements – growth, efficiency and portfolio. By concentrating our strengths in the Taste, Nutrition & Health segment, we can offer our customers an even more comprehensive value proposition and secure a higher level of added value for Symrise. Resource conservation based on the use of material flows also plays an essential role here. Our “One road to market” approach is ultimately driven by customers and creates a comprehensive range with a key focus on health, which is how Symrise is expanding its unique character. Our aim is to be a global market leader in the food, beverage and pet food industries.
Our integrated corporate strategy combines dynamic growth, sustained high profitability and continuous, tangible improvement in our sustainability performance. Even the core function of company financing incorporates sustainability aspects. For example, Symrise agreed to a revolving line of credit of € 500 million with specific sustainability components in May 2021 and then placed its first ESG-linked promissory note of € 750 million in April 2022. The purpose of these sustainable, “green” financial instruments is to finance strategic growth initiatives. Growth, profitability and sustainability will determine the future of our company.
Corporate strategy beyond sales growth and EBITDA margin: Symrise has its sights firmly set on non-financial key performance indicators.
Greenhouse gas emissions
CO2(t) / € million of added value
Sensitive waste and chemical oxygen demand
(t) / € million of added value
Water consumption
(m3) / € million of added value