Symrise: Volume Growth Accelerates Substantially as Pricing Turns Slightly Negative

Wide-moat Symrise reported organic sales growth of 10.9% for the first quarter of 2024 with strong volume growth of 11.9%, driven primarily by heightened demand in the scent and care segment where volume was up by 19%. Underlying pricing appears to have softened quite substantially compared with fourth-quarter 2023. The company delivered negative 1% pricing, which included a 4% contribution from foreign-exchange-driven pricing actions, primarily related to Argentina. We expect this year, as a whole, to see accelerated volume growth after two years of substantial price increases, some volume weakness related to customer destocking, and customer emphasis on reformulation rather than innovation briefs. In reporting currency, sales growth amounted to 5%, which tracks our expectations for the full year and we’re leaving our fair value estimate unchanged at EUR 108. We believe shares are relatively fairly valued at current levels.