Symrise Reports Lower-Than-Expected EBITDA Margin, Reaffirms Long-Term Guidance; FVE Maintained

Wide-moat Symrise reported 2022 EBITDA of EUR 922 million, a 13% year-over-year increase, before the fourth-quarter EUR 126 million impairment loss. EBITDA margin of 20% (excluding the Swedencare impairment) was below Vara consensus of 20.6% and guidance of 21%. The results were driven by price increases that could not fully offset the higher costs of raw materials, energy, logistics, and personnel, especially in the scent and care segment. For 2023, Symrise is guiding for organic growth of 5%-7%, above our forecast, and EBITDA margin around 20%, which is below our estimate and Vara consensus. However, we don’t see anything fundamentally changing the long-term outlook as the group reaffirmed its long-term profitable growth path. We don’t anticipate making a material change to our EUR 98.50 fair value estimate. The shares are trading in 3-star territory and down 3% intraday, but peers are also trading in negative territory.