Symrise AG, a leading global supplier of fragrances and flavours, cosmetic and active ingredients as well as functional products, continued to significantly increase its sales and earnings growth in the 2024 financial year despite challenging economic conditions. Symrise confirms its mid-term growth and profitability targets until 2028.
The Symrise Group generated sales of EUR 4,999 million, an increase of 5.7 % in the reporting currency. Excluding portfolio and currency effects, organic sales growth amounted to 8.7 %. Earnings before interest, taxes, depreciation and amortisation (EBITDA) amounted to EUR 1,033 million, up EUR 130 million from the previous year’s figure of EUR 903 million1. This corresponds to a margin of 20.7 % (2023: 19.1 %1).
Sales development in the regions
Business in the Europe, Africa, Middle East (EAME) region performed well, with sales growing organically by 10.9 %. Sales in North America were positively impacted by the resumption of production at the Colonel Island site. After a decline in sales in the previous year, organic sales growth of 1.5 % was achieved in 2024. The Asia/Pacific region achieved organic sales growth of 9.3 % year-on-year. Sales in Latin America were very dynamic, with organic growth of 15.2 %.
Earnings performance and net income
An important driver of the very positive development of earnings was the profitable sales growth and the execution of the efficiency program. The gross margin reached 39.3 % in 2024, an increase of 2.5 percentage points versus the previous year (2023: 36.8 %2).
Earnings before interest, taxes, depreciation and amortization (EBITDA) grew to EUR 1,033 million, an increase of EUR 130 million versus the previous year’s figure of EUR 903 million . This corresponds to a margin of 20.7 % (2023: 19.1 %2).
Net income attributable to shareholders of Symrise AG amounted to EUR 478 million and was EUR 138 million higher than in the previous year (2023: EUR 340 million). Earnings per share amounted to EUR 3.42 and were EUR 0.98 above the previous year’s figure of EUR 2.44.
Cash flow, net debt, and equity ratio
Operating cash flow was significantly higher than in the previous year and amounted to EUR 895 million (2023: EUR 720 million). The operating cash flow ratio as a percentage of sales was 17.9 %.
Business free cash flow, which is an important internal performance indicator consisting of EBITDA, capital expenditures (including cash effects from leasing) and changes in working capital, increased significantly to EUR 680 million in the financial year (2023: EUR 553 million2). The business free cash flow ratio improved to 13.6 % (2023: 11.7 %2) of sales.
Net debt decreased by EUR 330 million to EUR 1,836 million compared with the reporting date of December 31, 2023. The ratio of net debt including lease liabilities to EBITDA was thus 1.8. Including pension and lease liabilities, net debt amounted to EUR 2,343 million, corresponding to a ratio of net debt (including lease liabilities and provisions for pensions and similar obligations) to EBITDA of 2.3.
The equity ratio of 48.3 % was higher than in the previous year (2023: 47.0 %), a very solid basis for continuing to grow the business in the long term.
Segment Taste, Nutrition & Health
The Taste, Nutrition & Health segment achieved organic sales growth of 7.8 %. Taking into account portfolio and exchange rate effects, the segment’s sales amounted to EUR 3,091 million in reported currency, an increase of 3.8 %. The negative portfolio effect from the sale of the beverage trading business in the UK in the Food & Beverage division amounted to around EUR 38 million.
In Food & Beverage the application areas for savory products and beverages developed very well and achieved double-digit organic growth. In particular, the EAME (Europe, Africa, Middle East) and Asia/Pacific regions achieved high growth rates. The Naturals and Sweet application areas achieved low single-digit percentage growth with strongest growth in the EAME and North America regions.
The Pet Food business achieved single-digit organic growth. Sales development was particularly dynamic in the Latin America and Asia/Pacific regions, including China, with double-digit organic growth. In EAME, Turkey, Belgium and Spain in particular showed high growth.
The sales development of the Aqua Feed business unit recorded declining organic growth in the financial year. As part of the further portfolio streamlining with a focus on high-margin growth areas, Symrise intends to sell the business in Costa Rica and Ecuador.
EBITDA in the Taste, Nutrition & Health segment amounted to EUR 686 million in the reporting year, up on the prior-year figure (2023: EUR 627 million3). The increase is mainly due to profitable sales growth and an increased efficiency. The EBITDA margin of 22.2 % was significantly above the previous year’s level (2023: 21.0 %3).
Confirmation of long-term growth and profitability targets
Symrise has confirmed its growth and profitability targets for 2025. The Group continues to expect to grow faster than the relevant market. The projected long-term growth of the relevant market is about 3 % to 4 % globally. The Group’s long-term growth expectation of 5 % to 7 % (CAGR), which is also expected to be achieved in 2025, remains unchanged.
The Group is aiming for an EBITDA margin of around 21 % for 2025, In the medium term, a range of 21 % to 23 % is targeted. For the Business Free Cashflow, a ratio in relation to sales of around 14 % is targeted in 2025.
1Attributable to shareholders of Symrise AG 2Undiluted 3Including lease obligations
Symrise continued its profitable growth trajectory in the first nine months of the year, achieving organic sales growth of 11.1 %. Considering portfolio and exchange rate effects, Group revenue rose to EUR 3,824 million in the first nine months (9M 2023: EUR 3,610 million), a plus of 5.9 % compared to the year-ago period. Both segments contributed to the positive development and increased sales in a global economic environment that remained challenging. In the third quarter, overall sales increased organically by 10.2 %. Despite negative exchange rate effects of 4.0 %, sales grew by 5.2 % in the reporting currency. Against the backdrop of robust organic growth, Symrise has specified its organic growth target, sales expected to come in at around 7 %.
Jean-Yves Parisot, CEO of Symrise AG: “Symrise was able to seamlessly continue the positive business development of the past months in the third quarter. Despite the current volatile market environment due to geopolitical tensions and continued inflation pressure, we are confident for the rest of the year and expect robust demand. Our diversified portfolio and broad, international footprint will continue to help us realise our growth potential and create sustainable value this year. We are firmly convinced that we have set the right course for the future.”
Sales development by region
The strongest organic growth was recorded in the Latin America region with 27.4 %, followed by the Asia/Pacific region with 11.2 % and EAME (Europe, Africa, Middle East) with 11.1 %. The main growth drivers were the Food & Beverage, Fragrance, Aroma Molecules and Pet Food business units. The North America region achieved organic growth of 2.3 %, driven primarily by the Food & Beverage and Aroma Molecules business units.
High growth in food, beverages and pet food
The Taste, Nutrition & Health segment increased sales organically by 10.4 % in the first nine months of the current fiscal year. In the third quarter, organic growth was 11.3 %. Taking into account portfolio and currency effects, the segment’s revenue rose to EUR 2,349 million in the first nine months (9M 2023: EUR 2,267 million). The portfolio effect from the sale of the beverage trading business in the UK within the Food & Beverage business unit had a negative impact of EUR 27 million on sales development.
The Food & Beverage division achieved double-digit organic growth in percentage terms. Strong growth impulses came from the application areas for sweet and savory products and beverages. All four regions, especially the EAME region, achieved high growth. The Naturals application area increased its revenues, especially in the North America and EAME regions.
The Pet Food division also achieved double-digit organic growth in percentage terms in the first nine months. Sales development was particularly dynamic in the Asia/Pacific and Latin America regions, with double-digit organic growth.
Sales development in the Aqua Feed business unit recorded declining organic growth. As part of the further portfolio streamlining with a focus on high-margin growth areas, Symrise intends to sell the business.
The probiotics business, which includes the majority stake in the listed company Probi AB, Lund, Sweden, generated slight growth, driven by the EAME region.
Strong sales growth in Consumer Fragrance and significant recovery in Aroma Molecules
The Scent & Care segment, which manages the fragrances, perfumery applications and cosmetic active ingredients business, achieved organic sales growth of 12.2 % in the first nine months and 8.4 % in the third quarter respectively. Taking into account portfolio and currency effects, revenue for the first nine months amounted to EUR 1,475 million (9M 2023: EUR 1,343 million).
The Fragrance division increased its sales organically in the double-digit percentage range in the first nine months. In particular, the Consumer Fragrance application area achieved double-digit percentage growth. The EAME, Asia/Pacific and Latin America regions in particular experienced very high market dynamics. The Fine Perfumery application area also continued its very positive development and achieved high single-digit percentage organic growth. Here, the Latin America and Asia/Pacific regions recorded good growth. The Oral Care application area achieved single-digit percentage organic growth, with good growth especially in the North America and Asia/Pacific regions.
Sales in the Aroma Molecules division recovered significantly in the first nine months of the current year. While the market environment continues to prove challenging, the resumption of production in Colonels Island, USA has resulted in a significant year-on-year increase in revenue. High double-digit growth figures were achieved in all regions.
Sales in the Cosmetic Ingredients division continued to develop strongly with high single-digit percentage organic growth. Revenues increased significantly in the EAME, Asia/Pacific and Latin America regions. Only the North America region showed just a slight year-on-year growth. The application areas for micro-protection and actives and botanicals also recorded very strong growth impulses.
Symrise specifies growth target for 2024
Based on the good business performance in the first nine months, Symrise is specifying its sales target for the full year 2024. The Group is now aiming for organic sales growth of around 7 %. The Group’s long-term organic growth expectation of 5 % to 7 % (CAGR) remains unchanged. The long-term EBITDA margin is expected to be in the range of 20 % to 23 %.
Elopak ASA has maintained its momentum from the first quarter of 2024 to deliver yet another strong quarter, with organic revenue growth of 3.8 % in the quarter and continued strong development in the company’s EBITDA margin. Elopak’s strong financial performance in the first half of 2024 reaffirms the company’s higher run rates.
Q2 2024 highlights:
Quarterly revenue of EUR 288.4 million (Q2 2023: EUR 278.1 million) with an organic revenue growth of 3.8 %
Pure-Pak® volumes grew in both Europe and Americas
Adjusted EBITDA of EUR 43.8 million with a margin of 15.2 % (Q2 2023: 14.9 %): Capital structure remains strong with leverage ratio of 1.9x – Record high dividend payment of EUR 34.4 million in May for FY2023 – Refinanced debt capital structure: triple-tranche inaugural green bonds successfully issued and new revolving credit facility signed
Commenting on Elopak’s performance, CEO Thomas Körmendi said: “I am happy to report yet another strong quarter with continued strong performance across all our markets. Our strong balance sheet and refinanced debt capital structure ensure that we remain in a solid position, enabling further investments in various growth initiatives going forward. We expect the strong financial performance to continue in the second half of the year in line with our reaffirmed run rates”.
Explore how different food and beverage categories in Germany are developing
Germany, known for its love of hearty meals and indulgent treats, is experiencing a fascinating shift in its food and beverage landscape. While Germans remain a nation of food lovers, they are increasingly prioritising health and sustainability. Here, through our 360 research into the German food and beverage market, we explore how these values are influencing purchasing decisions across various categories, from beverages to snacks and meal preparation.
Beverages in the German Market
German consumers want to reduce their alcohol intake; however, alcoholic beverages are still at large within the country. When asked why they want to control how much alcohol they drink, the most common consumer response was “because it is unhealthy.” Some consumers are turning to non-alcoholic beverages as replacements. Beer is the dominant non-alcoholic beverage in Germany, but variety and novelty is helping drive other non-alcoholic beverage purchases. Indulgent is the top claim for non-alcoholic beverage drinkers, chosen as most important by 25 % of consumers. A further 16 % look for low/no/reduced sugar claims, so healthy indulgence should be a target of note for innovators.
In soft drinks, bottled water consumption is on the rise, with more than one in five Germans increasing their intake in the past year. Two in three named its healthy image as a driver of consumption. For other key soft drinks subcategories, such as carbonated beverages, energy drinks, iced coffee and iced tea, the combination of low/no/reduced-sugar claims with indulgence positionings are the most influential claims for consumers …
According to DataHorizzon Research, the Energy Drinks Market was worth USD 92.3 billion in 2022 and is projected to hit USD 220.9 billion by 2032, boasting a Compound Annual Growth Rate (CAGR) of 9.2 %.
The surge in demand for energy drinks stems from their perceived ability to enhance both physical and cognitive performance. Market participants are promoting beverages devoid of sugar, glucose, and high fructose corn syrups as functional drinks that not only heighten alertness but also offer physical benefits.
Energy drinks have gained significant popularity as a supplement among teenagers and young adults in the United States, with a predominant consumption by men aged between 18 and 34. This surge in popularity can be attributed to the rising awareness of health and wellness, coupled with the increasing prevalence of sports activities among the younger demographic.
Recently, market players in the US have shifted their focus from targeting athletes to catering to the preferences of young consumers, reflecting the growing demand for mental alertness among this demographic.
Energy Drinks Market Report highlights:
The global energy drinks market growth is anticipated at a CAGR of 9.2% by 2032.
PepsiCo, Inc. announced two new nutrition goals as part of their strategic transformation to reduce sodium and provide essential sources of nutrition in the foods consumers reach for.
North America, particularly the US, has the highest per capita consumption worldwide. New product launches like ZOA cater to the increasing trend towards healthy organic diets.
In response to consumer preferences for healthier options, health-conscious brands are introducing a variety of sugar-free and calorie-free energy drinks. These products not only cater to the needs of athletes but also offer benefits for individuals who are overweight or obese. Additionally, sugar-free variants are particularly advantageous for those who are lactose intolerant.
Energy beverages, encompassing a wide range of options such as soft drinks, carbonated beverages, fruit and vegetable juices, beverage concentrates, ready-to-drink tea, and ready-to-drink coffee, are among the most commonly consumed beverages in the market. This diversity reflects the evolving preferences of consumers seeking convenient and functional beverages to support their active lifestyles.
Industry trends and insights:
Energy drinks are high-caffeine beverages that claim to improve physical and mental performance. Their popularity has contributed to the growth of the energy drinks market.
Monster Beverage Corporation acquired Bang Energy beverages and a production facility in Phoenix, Arizona, for approximately USD 362 million.
Energy drinks market segmentation:
By Product: Drinks, Shots
By Packaging: Cans, Bottles
By Distribution Channel: On-trade, Off-trade
By Region: North America, Latin America, Europe, Asia Pacific, the Middle East and Africa.
Regional analysis
North America held the largest market share, with the US having the highest per capita consumption worldwide. The US has experienced a shifting trend toward a healthy organic diet due to increased awareness about overconsumption of caffeine beverages. Several new product launches, such as ZOA infused with vitamins and antioxidants, sustain the image of healthy energy drinks in the market.
Competitive analysis
The competitive landscape of the industry is characterized by a high degree of fragmentation, with global brands holding the largest market share, leveraging their extensive experience in regional markets. Leading players in this space include Red Bull, Taisho Pharmaceutical Co Ltd., PepsiCo. Inc., Monster Beverage, Lucozade, The Coca-Cola Company, Amway, AriZona Beverages USA, Living Essentials LLC, Xyience Energy, and others.
These companies have established partnerships with numerous retail and chain food service outlets, allowing them to maintain a strong presence across various sales channels. Their sustained market presence is reinforced by continuous product innovation and unique marketing strategies, which set them apart in this fiercely competitive industry.
Elopak rounded off a highly successful 2023 with yet another strong quarter, delivering on the mid-term targets set by the company during its IPO in 2021.
2023 was a year of significant progress and achievements for Elopak, extending the many successes of previous years in implementing the company’s sustainability driven growth strategy. The Board proposes a dividend of NOK 1.46 per share for the year 2023, in line with dividend policy.
Fourth quarter 2023 highlights
Revenues increased by 7.5 %, to EUR 287.2 million
Organic growth was 8.4 %, or EUR 22.4 million, adjusted for currency translation effects
Adjusted EBITDA was EUR 40.0 million, an improvement of EUR 4.1 million, reflecting a 13.9 % margin
Strong cash flow generation and down-payment of debt. Leverage ratio reduced to 1.9x
Commenting on Elopak’s performance, CEO Thomas Körmendi said: “I am happy to report yet another quarter of strong performance and I am pleased to confirm that the Elopak team has delivered on all the 3-5 year targets set in the IPO in 2021.”
“I would like to say a big thank you to all our colleagues, customers, suppliers and partners for their fantastic contributions and collaboration throughout the year. We are entering 2024 from a strong position and I look forward to further strengthening our contribution to a more sustainable society while continuing to create shareholder value in the years to come,” Körmendi added.
Full Year 2023 highlights
Revenues increased by 10.6 %, to EUR 1,132.0 million
Organic growth was 9.4 %, adjusted for currency translation and acquisition effects of EUR 11.9 million
Adjusted EBITDA was EUR 170.9 million, an improvement of EUR 51.5 million, reflecting a 15.1 % margin
Adjusted profit attributable to Elopak shareholders was EUR 68.3 million, up 55 % compared to 2022
Proposed dividend of NOK 1.46 per share for the year 2023, in line with the dividend policy
The Cartersville plant expansion is a pivotal step for Döhler North America. Doubling capacity and introducing advanced production lines for Compounds, Liquid Flavours, Extractions, and Syrups, this initiative underlines the company’s commitment to the Americas. With AI developments and automated flavour compounding system, Döhler aims to deliver agility and quality to the flavour industry. The recent groundbreaking ceremony signifies a dedication to transformative growth in the year ahead.
Döhler North America is gearing up for an exciting start to 2024 with the launch of the Cartersville, GA, plant expansion. Following a 2023 filled with significant achievements and partnerships, the company is ready for continued success, underlining its commitment to research, and enhanced production capabilities. The expansion demonstrates Döhler’s dynamic approach to shaping the future of the food and beverage industry and bringing ideas to life.
Last year, Döhler achieved remarkable milestones that strengthened their commitment to make the life of their customers better and easier. Including a strategic US-based global partnership with Ixora Scientific, an innovative hub in New Jersey, and the global acquisition of SVZ made a substantial impact in North America, broadening Döhler’s reach and capabilities.
Now, building on the successes, Döhler embarks on the expansion of its Cartersville plant, a key player in the company’s North American operations. The first phase of the expansion not only addresses immediate growth needs but lays the foundation for future expansions. The Cartersville facility will host advanced production lines and technologic R&D labs, with a specific focus on Compounds, Liquid Flavours, Extractions, and Syrups.
Paul Graham, General Manager Regional Cluster Americas, emphasises the strategic significance of the expansion, stating, “The Cartersville plant has been an integral part of Döhler’s success in North America for over a decade. This expansion reflects our dedication to meeting the evolving needs of our customers, and it positions us for even greater accomplishments in the future.”
Charles Spenceley, Head of Operations Regional Cluster Americas, adds, “We are excited about the potential this expansion brings. It enlarges our capacity for hot fill bottling and increases our flavour production capacity. This significant boost in capability enables us to better serve our customers and solidify our position as industry leaders.”
Looking ahead, Döhler plans to continue its investment across the Americas region adding an automated flavour compounding and sampling system to their taste innovation hub in North Brunswick, NJ, and a bigger version of it to their Cartersville plant. This system, capable of transforming raw materials into flavour samples in just a minute, will be complemented by AI developments from Germany.
To mark the initiation of the Cartersville plant expansion, a ceremony was conducted in January, signifying Döhler’s commitment to fortify its presence in the North American flavour industry.
In the first quarter of the 2023/24 financial year (the three months ended 31 May 2023), AGRANA, the fruit, starch and sugar company, achieved very significant growth of 23.1 % in operating profit (EBIT) to EUR 63.5 million. Revenue increased by 9.0 % to EUR 966.1 million. “We have made a successful start to the 2023/24 financial year and are especially pleased with the continuing healthy profit trend in the Sugar segment and the good performance in the Fruit segment, where structural measures to boost profitability of the fruit preparations business are already producing results. In the Starch segment, the expectation of a challenging financial year was proved correct in the first three months. EBIT declined significantly in this business segment, due especially to a lower ethanol performance driven by sales prices,” explains AGRANA CEO Markus Mühleisen.
Results in each business segment for the first quarter of 2023/24
Fruit segment
The Fruit segment’s revenue in the first quarter was EUR 401.1 million, up 11.2 % from one year earlier. The revenue expansion both in the fruit preparations and fruit juice concentrate businesses was the result of price changes. EBIT of the segment as a whole increased to EUR 24.4 million in the first three months of the financial year (Q1 prior year: EUR 19.9 million). The earnings result in fruit preparations was significantly above the year-ago level. The improvement was attributable mainly to a positive business performance in the Europe region. The fruit juice concentrate business as well further grew its earnings compared to the already very good year-earlier quarter. This was driven by improved contribution margins of apple juice concentrate made from the 2022 crop.
Starch segment
The Starch segment’s revenue of EUR 317.1 million in the first quarter was steady year-on-year (Q1 prior year: EUR 319.1 million), as lower sales volumes coincided with higher selling prices. Across most product categories, customers now are not fully utilising sales contracts that were concluded in fall and winter 2022 against the backdrop of the then-prevailing tight availability and resulting high market prices. Demand for native and modified food starches as well as saccharification products is more restrained, even in the normally stable food market. Many customers are facing weaker consumption and are increasingly running down their inventories. At EUR 22.1 million, EBIT in the Starch segment was down significantly from one year earlier (Q1 prior year: EUR 29.3 million). A key reason lay in the low-margin ethanol business, as a result of a considerable decline in Platts quotations.
Sugar segment
Revenue in the Sugar segment was EUR 247.9 million, up 20.0 % from the first quarter of the previous year. This growth was driven by a substantial increase in sugar selling prices. EBIT, at EUR 17.0 million, represented a marked improvement from the year-earlier period. The Sugar segment’s very good EBIT in the first quarter of 2023|24 reflected the significantly increased sugar sales prices in particular, as well as many reorganisation measures taken previously.
After record order intake in the first half of 2022, the strong demand for Krones products and services continued unabated in the third quarter. Order intake between July and September 2022, at EUR 1,493.3 million, exceeded the already good prior-year figure of EUR 1,148.3 million by 30.0 %. In total over the first three quarters of 2022, the contract value of orders increased by 44.1%, from EUR 3,192.6 million a year earlier to EUR 4,599.7 million. At EUR 3,449.0 million as of the end of September 2022, the order backlog at Krones was up 95.9 % on the previous year (EUR 1,760.9 million). Compared to the beginning of 2022, the increase is EUR 1.56 billion, or 82.2 %.
Krones held a course of stable revenue growth in the third quarter. Revenue from July to September was up 14.7 % to EUR 1,058.9 million. In the first nine months of 2022, revenue went up by 15.2 % year on year, from EUR 2,643.0 million to EUR 3,043.7 million. Thanks to its great flexibility, Krones managed well with the resource shortages and international supply chain problems during the reporting period. This enabled the company to deliver strong revenue growth.
Krones improves profitability as forecast
The company was able to maintain satisfactory but, due to material shortages, not full capacity utilisation in the first three quarters of 2022. Due to the extensive efficiency improvement measures and the initial effects of the price adjustments, profitability nevertheless improved as planned in the reporting period. Earnings before interest, taxes, depreciation and amortisation (EBITDA) climbed by 27.0 % in the first three quarters from EUR 212.6 million to EUR 270.1 million. The EBITDA margin rose to 8.9 % (previous year: 8.0 %). Earnings before taxes (EBT) went up by 49.2 % to EUR 176.6 million (previous year: EUR 118.4 million). The EBT margin consequently rose to 5.8 % (previous year: 4.5 %). On the bottom line, Krones generated consolidated net income of EUR 128.3 million in the first three quarters of 2022, an increase of 48.2 % (previous year: EUR 86.6 million). This corresponds to earnings per share of EUR 4.06 (previous year: EUR 2.74).
Krones’ EBITDA of EUR 95.0 million in the third quarter was 26.8 % higher than in the previous year (EUR 74.9 million). The EBITDA margin rose from 8.1 % to 9.0 %. EBT improved by 48.5 % to EUR 63.4 million (previous year: EUR 42.7 million). At EUR 45.1 million, consolidated net income in the third quarter was 51.9 % higher than in the previous year (EUR 29.7 million). This made for earnings per share of EUR 1.43 (previous year: EUR 0.94).
Krones’ net cash at EUR 440.9 million as of the end of September 2022
Krones significantly improved working capital and free cash flow in the first three quarters of 2022. The ratio of average working capital for the past four quarters to revenue came to 20.5 % (previous year: 26.2 %). The decrease reflects the strong revenue growth and rising advance payments from customers due to the large order intake. Free cash flow in the first nine months of 2022 amounted to EUR 132.3 million, an increase of EUR 24.8 million on the already high prior-year figure (EUR 107.5 million). Krones’ net cash – cash and cash equivalents less bank debt – amounted to EUR 440.9 million at the end of September 2022 (previous year: EUR 283.4 million). In addition, Krones had available just under EUR 1 billion in free lines of credit as of 30 September 2022. Krones improved ROCE (return on capital employed) to 12.4 % in the first three quarters of 2022 (previous year: 10.1 %).
Krones has raised its growth guidance for revenue in the full year 2022
Krones faced many challenges in the first three quarters of 2022 that continue to apply. Uncertainties and risks include material shortages and problems in global supply chains, rising material and energy procurement prices, geopolitical risks in Europe and other parts of the world, and also strong inflation in many countries. It is also uncertain how the Covid-19 pandemic and the war in Ukraine will continue to play out and whether industry can be supplied with sufficient energy.
Krones has managed well with all challenges so far and remains fundamentally optimistic. Due to the continued very strong demand for Krones products and services, as well as good management of scarce resources, the company expects to maintain satisfactory production capacity utilisation in the fourth quarter of 2022. On 19 October, on the basis of current planning, Krones therefore raised its guidance for revenue growth in the full year 2022 to between 10 % and 12 % (previously 5 % to 8 %).
The guidance for the other two financial targets remains unchanged. This means the company continues to expect an EBITDA margin of 8 % to 9 % and ROCE of 10 % to 12 % in 2022. The Executive Board is confident of reaching the upper end of the target range for both figures.
These forecasts are subject to the reservation that the war in Ukraine does not further escalate, the coronavirus situation does not worsen and there are no significant energy shortages.
Elopak reported revenue growth of 7 % in Q2 supported by price increases and successful onboarding of Naturepak. This was achieved despite the discontinued operations in Russia.
Highlights from Q2 2022:
Revenue increased by 7 %, to EUR 259 million, driven by growth in EMEA and Americas
New revenue from acquired businesses in MENA and India was EUR 12 million in the quarter
Continued high raw material prices impacted the Q2 results negatively by approximately EUR 14 million
Adjusted EBITDA was EUR 25.3 million, reflecting an adjusted EBITDA margin of 9.8 %
The leverage ratio increased to 3.4x as of second quarter 2022, primarily driven by dividend payment in May and lower Last Twelve Months EBITDA compared to last year
Elopak completed the acquisition of GLS Elopak to supply Roll Fed and Pure-Pak® cartons to the Indian market
Commenting on Elopak’s performance in the quarter, CEO Thomas Körmendi said:
“I am pleased to announce strong revenue growth and profitability for Elopak in the second quarter. We are actively mitigating the unprecedented raw material prices and the challenging business environment. We expect margins to improve in the second half of 2022.
At Elopak, we are committed to delivering on our sustainability-driven growth strategy. We are very excited about entering India in a partnership with leading Indian packaging provider GLS, positioning Elopak in one of the world’s biggest and fast-growing markets. Further, the second quarter saw the post-merger integration and full first quarter of Naturepak operations as part of the Elopak Group. We continue to implement different value enhancing initiatives across all markets, aimed at improving both our top- and bottom-line.
I also want to praise our colleagues in Ukraine for their impressive resilience, managing to ramp up production despite all the challenges. Our Russian operation was sold to the local management this summer, following our earlier announcement that we were suspending our operations in the country in Q1.”
As of 30 June 2022, Year to date revenue increased by 8 %, to EUR 502.5 million. Year to date adjusted EBITDA was EUR 52.3 million, reflecting a 10.4 % margin.
Tim Berger (Photo: Eckes-Granini Group)
The past business year was a year of contrasts for the Eckes-Granini Group GmbH a year full of contrasts. The second pandemic year pandemic year and customer conflicts in the food retail sector once again presented the company with challenges, while 2021 also marked the start of the largest transformation in the company’s history. Sales revenue decreased moderately from 873 million euros in fiscal 2020 to 856 million euros (- 1.9 %), while sales volumes also declined, falling by 38 million litres to 805 million litres (- 4.5 %). Germany and France were particularly affected by the decline in sales volumes. Here, differing views on price adjustments led in part to the discontinuation of supply relationships with partners in the food retail sector. As a result, Eckes-Granini posted EBIT of 57.2 million euros (previous year: 71.0 million euros). The decline of 13.8 million euros is attributable to the effects of the pandemic, customer conflicts in the food retail sector and significantly higher costs for raw and packaging materials compared to the previous year. Tim Berger, CEO of Eckes-Granini Group GmbH, looks back on the business year as follows: “Despite considerable challenges posed by Corona, lower sales volumes and massive cost inflation, we succeeded in gaining market share – especially in the Nordic and Baltic countries – and strengthening our position during the past business year. Overall, our sales grew in nine out of ten countries. We also performed well in our international business in European countries and outside Europe.”
Eckes-Granini remains market leader
While the market for fruit juices, nectars and fruit beverages (FJND) was still able to benefit from food stockpiling in 2020, it declined in both value (- 2.1 %) and volume (- 4.4 %) in the second pandemic year. In particular, there was less demand for ambient, non-refrigerated fruit drinks sold via retailers. Accordingly, the 2021 segment recorded a decline of 3.7 % in sales and 5.2 % in volume sales, thus performing somewhat weaker than the market as a whole. In this generally weaker market environment, Eckes-Granini recorded a 0.7 % decline in market share in terms of value (market share 12.2 %) and a 0.8 % decline in volume (market share 11.3 %). The good news is that brands continue to gain market share. The e-commerce segment also continues to grow strongly but is not included in these figures. Eckes-Granini was able to make significant gains here, growing by + 35 %.
Full focus on innovation, digitization, and sustainability
In the area of product innovations, the company got off to a flying start with the market launch of hohes C Super Shots in Germany and Joker Shots in France. The popular hohes C Super Shots are currently leading the two-digit growth of the shot category in Germany (+ 31.1 %). Since the past business year, the Eckes- Granini Group has also been investing heavily in new distribution channels and cooperative ventures, and growth and the acquisition of new customers in e-commerce are developing particularly promisingly.
The Eckes-Granini Group also scored points in sustainability in 2021. With the publication of the first Group-wide sustainability report and the implementation of numerous measures, Eckes-Granini took important steps toward a more sustainable orientation of its business activities last year. To reduce emissions in line with the latest climate science criteria and achieve its ambitious targets, Eckes-Granini has been working with the independent Science Based Targets initiative (SBTi) since 2021.
Successfully heading for the future with a strong growth strategy
2021 marked the launch of the Eckes-Granini Group’s Strategy 2025 and thus the largest transformation in the company’s history. “The transformation in the FJND market will continue and requires new ways of thinking and working – also from us as ‘category thought leaders’,” says Tim Berger. “At the same time, our goals are clearly defined: In 2025, we want to generate one billion euros in net sales and achieve a market share of 15 % in Europe. We successfully laid the foundation for these ambitious goals in 2021 and are now building on them. In the past fiscal year, we succeeded in maintaining our market leadership position despite numer ous challenges and a difficult market environment, growing locally and driving for- ward key innovations. We have thus made a solid and motivated start to 2022.”
About the Eckes-Granini Group Eckes-Granini is the leading supplier of fruit juices and fruit beverages in Euro-pa. For the inde- pendent family-owned company headquartered in Nieder-Olm, Germany (Rhineland-Palatinate), the focus is on committed and competent employees, strong brands in the areas of juices, fruit beverages and smoothies, and a long-term strategic orientation with sustainable value creation. Today, Eckes-Granini operates mainly in Europe with its own national companies and strategic partners and generates annual sales of 856 million euros with a total of 1697 employees. The com- pany’s foundation is formed by the internationally renowned premium brands granini and Pago to- gether with strong national and regional brands for juices such as hohes C, Joker and God Morgon. Consumers in 80 countries worldwide and especially in Europe know and appreciate our fruit juices and the variety of fruit drinks.
Omya, a leading global producer of industrial minerals and a worldwide distributor of specialty chemicals, announced the acquisition of Prima Inter-Chem Sdn Bhd, a diversified distributor of Ingredients and Specialty Chemicals in Malaysia and Indonesia.
Omya has acquired the distributor Prima Inter-Chem in Malaysia and Indonesia. With this move, Omya boosts and develops its ingredient and specialty chemicals distribution capability in these countries for the food, pharmaceutical, animal feed and industrial markets. In addition it establishes a platform for growth for the wider region.
Symrise AG outstandingly capitalized on the economic recovery in 2021 and successfully continued the profitable growth course. The Group once again significantly increased sales and earnings. Symrise grew Group sales in reporting currency by 8.7 % to € 3,826 million (2020: € 3,520 million). Without taking into account portfolio and currency effects, organic growth amounted to 9.6 %. Earnings before interest, taxes, depreciation and amortization (EBITDA) at € 814 million were significantly above the prior-year figure of € 742 million. The Group maintained profitability at a high level with an EBITDA margin of 21.3 % (2020: 21.1 %). Against the backdrop of the positive development, the Executive Board and the Supervisory Board of Symrise AG propose a dividend increase for the 12th year in succession. Shareholders are to participate in the success of the company with a dividend of € 1.02 for the fiscal year 2021.
Dr. Heinz Jürgen Bertram (Photo: Symrise)
“2021 was a successful year all round for Symrise. We made good use of the tailwind generated by the global economic recovery and we aligned our sails accordingly. As a consequence, we very successfully continued our course of profitable growth. Additionally, we were also able to realize trailblazing purchases and investments. This allowed us to strategically diversify our know-how and our portfolio, further increase our appeal to customers and differentiate our profile in the market. Since September, Symrise has also been a member of the DAX, Germany’s leading index. As a result, our share has continued to gain a higher profile and enhanced appeal, particularly on the international capital markets. Part of our capital market philosophy is for our shareholders to participate in the successful development of Symrise AG. The Executive Board and Supervisory Board therefore propose the twelfth dividend increase in succession in the amount of € 1.02 for the year 2021,” said Dr. Heinz Jürgen Bertram, CEO of Symrise AG. “For the current fiscal year, we confirm our long-term target to achieve an average increase in sales of between 5 and 7 % (CAGR) and to exceed market growth. Furthermore, we are once again targeting high profitability for 2022 with an EBITDA margin of around 21 %, in spite of the increasing raw materials costs and energy prices.”
Economic recovery drives demand and leads to strong sales growth
The impacts of the coronavirus pandemic significantly diminished in large parts of the world over the course of the year. The behavior of consumers normalized and demand surged. Symrise increased sales in reporting currency by 8.7 % to € 3,826 million (2020: € 3,520 million). Organic sales growth amounted to 9.6 %. Symrise not only exceeded the average growth of the relevant market but also the most recent sales forecast issued in November 2021 of around 9 %. Regarding the regions, Latin America once again recorded the strongest organic growth of 13.5 %, followed by Asia/Pacific with 10.3 %. The regions EAME and North America also delivered very good growth with 8.8 % and 8.5 % respectively.
Significant increase in EBITDA and net income
In fiscal year 2021, Symrise increased earnings before interest, taxes, depreciation and amortization (EBITDA) to an outstanding € 814 million. The Company exceeded the prior-year level by 9.6 % (2020: € 742 million) in spite of the increased raw materials costs and costs of strategic growth initiatives amounting to € 174 million.
The group-wide EBITDA margin rose in the second year of the pandemic to 21.3 % and therefore exceeded the prior-year level (2020: 21.1 %).
Symrise increased net income by € 68 million to € 375 million (2020: € 307 million). Earnings per share rose to € 2.74 (2020: € 2.27). In view of this positive development, the Executive Board and the Supervisory Board will propose to the annual general meeting on 3 May 2022 a dividend increase to € 1.02 per share for the fiscal year 2021 (2020: € 0.97).
Net debt with 2.4 in targeted margin range
As of 31 December 2021, net debt including pension and leasing liabilities decreased to € 1,964 million (2020: € 2,029 million). This corresponds to a ratio of net debt to EBITDA of 2.4.
The business free cash flow amounted to € 486 million (2020: € 564 million).In spite of the increase in earnings, it was defined above all by higher investments, an increase in inventories (strategic stockpiling in order to mitigate the risks due to delays in international supply chains) and a high level of trade receivables as a consequence of the strong growth in sales.
In a year-on-year comparison, the equity ratio rose from 39.8 % to 49.0 %. Symrise thus has a very solid foundation for continued sustainable growth of its business in the future.
Taste, Nutrition & Health segment
In April 2021, Symrise merged the former two segments Flavor and Nutrition into a new segment and renamed it Taste, Nutrition & Health to reflect the purposefully implemented portfolio expansion. It is intended to align the expanded activities even more closely with customer needs and hence make know-how, technologies and product knowledge a shared asset. Over the course of the year, Symrise strengthened the activities through the acquisition of the Canadian manufacturer Giraffe Foods and invested in a stake of the Swedish animal health company Swedencare. The core business no longer includes the food color application areas which have been sold to Oterra as well as the Drinkstar Velcorin activities. The distribution model with Lanxess was terminated effective 1 January 2022.
Taste, Nutrition & Health increased sales by 8.5 % to € 2,335 million (2020: € 2,151 million). Organic growth even amounted to 10.6 %. The change in behavior in out-of-home leisure activities and the increasing trend of on-the-go consumption resulted in a particular high demand for beverage applications. Furthermore, the segment benefited from very dynamic growth rates in the Pet Food segment.
Taste, Nutrition & Health increased EBITDA to € 531 million (2020: € 471 million). The EBITDA margin at 22.7 % was at an outstanding level and significantly exceeded the prior-year value (2020: 21.9 %).
Symrise confirms long-term growth and profitability targets
According to experts estimates, the global economy will slow down slightly in the current fiscal year after the strong recovery in 2021. Symrise is excellently positioned with its robust business model, the diversified application portfolio and its broadly based regional presence and customer base. The Company therefore confirms its long-term growth and profitability goals. Symrise continues to target above market growth and increase average annual sales by 5 to 7 % (CAGR). This objective also applies to the current financial year 2022, in spite of increasing raw material costs.
Symrise is committed to organic and inorganic growth, which includes the acquisition of the Dutch company Schaffelaarbos in January 2022 and the Chinese Wing Pet Food in February 2022. Furthermore, Symrise will maintain strict cost consciousness and continue the holistic sustainability management in all its divisions.
Profitability is projected to remain at a high level in 2022 with an EBITDA margin of around 21 %. Over the medium term until the end of fiscal year 2025, Symrise has a target of achieving an EBITDA margin in the corridor of 20 to 23 %.
In the first three quarters of the 2021/22 financial year (the nine months ended 30 November 2021), AGRANA, the fruit, starch and sugar company, generated an operating profit (EBIT) of EUR 76.0 million (Q1-Q3 prior year: EUR 84.3 million). Revenue was EUR 2,169.6 million (Q1-Q3 prior year: EUR 1,965.3 million).
Markus Mühleisen (Photo: AGRANA)
AGRANA Chief Executive Officer Markus Mühleisen says: “Since the beginning of the financial year we have been forecasting that, after a weaker first six months of 2021/22, earnings in the second half of the year would be better than one year earlier. This outlook was confirmed in the third quarter with quarterly EBIT of EUR 31.2 million (Q3 prior year: EUR 28.5 million). Following this positive trend in Q3, we also expect a very significant year-on-year improvement in EBIT in the fourth quarter. We therefore remain optimistic that, for the full financial year, we will exceed the prior year’s EBIT significantly, i.e., by at least 10 %. Getting there has, however, become much more difficult in the past few months amid a very strong rise in raw material and energy prices.”
Results in each business segment
Fruit segment
Fruit segment revenue in the first three quarters grew to EUR 939.1 million, a moderate increase of 5.3 %. The fruit preparations business saw revenue growth stemming mostly from higher sales prices. Revenue in the fruit juice concentrate activities declined slightly for volume reasons. Segment EBIT in the first nine months was EUR 36.2 million, off 12.3 % from one year earlier. The principal reason for the deterioration lay in weaker sales of fruit juice concentrates from the 2020 crop, which were marked by reduced delivery volumes in combination with lower contribution margins of apple juice concentrates in the first half of 2021/22.
Starch segment
Revenue in the Starch segment in the first three quarters of 2021/22 was EUR 737.8 million, or a significant 18.8 % more than a year ago. Higher volumes of core products and by-products were demanded than in the same period of the prior year. In the ethanol business, Platts quotations reached historic highs in the third quarter and averaged 24 % stronger in the first three quarters of 2021/22 than in the prior-year comparable period. Segment EBIT in the first nine months, at EUR 53.5 million, eased by 8.5 % from the year-earlier level. The main reason was a significant year-on-year increase in prices for raw materials (wheat and corn/maize) and energy, which could not yet be fully offset by adjusting product prices.
Sugar segment
The Sugar segment’s revenue in the first three quarters of 2021/22 grew to EUR 492.7 million, up 8.8 % from one year earlier. In addition to renewed high sales volumes with resellers, there was also a recovery in the industrial customer segment, where more sugar was sold than in the same period last year. While the EBIT result in the first three quarters of 2021/22 was better than in the year-ago period, it remained negative at the nine-month mark, at a deficit of EUR 13.7 million. This still reflected the fact that AGRANA’s own sugar production had been below average after the pest-related small 2020 harvest, with a resulting lower margin from the necessary compensatory reselling and refining of sugar.
Outlook
For the full 2021/22 financial year, AGRANA continues to expect significant growth in Group EBIT, in other words, an EBIT increase of at least 10 %. Group revenue is projected to show moderate growth. It should be noted, however, that due to the extreme volatility in commodity and energy prices and a once again more acute COVID-19 situation – the fourth wave in combination with the advent of the new Omicron variant – the forecast for the full year is subject to a very high degree of uncertainty.
In the 2021/22 financial year, the AGRANA Group is investing EUR 92 million, an amount significantly less than the budgeted depreciation of about EUR 120 million.
Symrise AG successfully continued its profitable growth course in the third quarter of 2021. The Group recorded excellent organic sales growth of 8.3 %. In the first nine months of the current financial year, growth even amounted to 9.2 %. Taking into account the portfolio effect from the acquired fragrances business of Sensient as well as currency translation effects, Group sales rose to € 2,883 million during the reporting period (9M 2020: € 2,703 million), up 6.7 % compared to the prior-year period and 10.6 % in the third quarter. Both segments contributed to this positive result.
Dr Heinz-Jürgen Bertram (Photo: Symrise)
“We can look back on an exceptionally successful third quarter of 2021. As a result of the progress made in battling the coronavirus pandemic, demand has continued to increase significantly. The demand was particularly high for applications associated with more travel or leisure activities – including, for example, sun protection products, fragrances, but also applications for beverages and culinary products. We are extremely satisfied with our business development since the beginning of the year and we are continuing our accelerated growth path,” said Dr Heinz-Jürgen Bertram, CEO of Symrise AG. “This is why we are once again raising our sales forecast to around 9 %. We are confident that we can achieve even more growth than forecasted after six-months and we will make the best possible use of the remaining weeks in 2021 to achieve this target.”
Applications for beverages and pet food drive strong sales growth for Flavor & Nutrition segment
The Flavor & Nutrition segment increased organic sales by a strong 10.0 % compared to the previous year. In the third quarter, organic growth amounted to 9.7 %. Taking currency translation effects into account, segment sales increased to € 1,752 million (9M 2020: € 1,646 million). Flavor & Nutrition also saw a normalization of consumer behavior owing to progress in combatting the coronavirus pandemic. The increase in out-of-home consumption exerted a positive impact and led to strong demand for beverages. At the same time, the increasing number of households with pets across the world generated high demand for pet food applications, resulting in strong growth in this business unit.
Applications for beverages recorded sales growth in the double-digit range. In all markets, growth was particularly driven by the strong increase in demand for beverages destined for out-of-home consumption.
Sales in the Savory business unit in all regions slightly exceeded the exceptionally high prior-year level, which was characterized by the particularly high demand during the initial months of the coronavirus pandemic.
Sales for sweet product solutions were slightly below the prior-year level. Medium single-digit growth driven by new customers in Latin America and Asia/Pacific was offset by the current low price level for vanilla.
The Pet Food business unit continued its strong growth compared to the already excellent prior-year period and increased sales in the double-digit percentage range. The sales development was particularly dynamic in the national markets of Mexico, Russia and South America.
The Food business unit achieved modest organic growth. This was driven by rising sales in Western Europe, while sales in North America declined slightly.
The ADF/IDF Group also developed extremely well, achieving double-digit organic sales growth. The business recorded strong growth in its home market, the American domestic market.
The Probiotics business unit, including the majority shareholding in the Swedish company Probi AB, did not maintain the strong level of the previous year and recorded a slight decline in sales. This is balanced by strong project vitality with numerous new product launches of customers.
Symrise once again raises its sales forecast for 2021
With its global presence, the continually growing, diversified portfolio and its broad customer base, Symrise considers itself as being robustly positioned despite the ongoing challenging market environment. Symrise has full delivery capability and can reliably meet the strongly rising demand in the wake of successful combatting of the coronavirus pandemic.
Based on the positive business development in the first nine months, Symrise is once again raising the sales target and now expects organic growth of around 9 % for the full year 2021. This corresponds to an increase of around two percentage points compared to the raised forecast of 7 % in August 2021. Symrise thereby highlights its aspiration to once again significantly outperform growth in the relevant market for fragrances and flavors during the current financial year. In the present business environment, current estimates assume market growth of 3 to 4 %.
Furthermore, Symrise is adhering to its profitability target for the financial year 2021 and is aiming for an EBITDA margin of more than 21 %.
The medium-term targets continue to be unchanged. The company expects to increase its sales to between € 5.5 and € 6.0 billion by the end of the financial year 2025. Symrise intends to achieve this increase with annual organic growth of 5 to 7 % (CAGR) and complementary strategic acquisitions. Profitability over the medium term is projected in the target corridor of 20 to 23 %.
In the reporting currency, the Symrise Group achieved sales growth of 4.8 % to € 1,908 million (H1 2020: € 1,821 million). The acquisition of the Fragrance and Aroma Chemicals business from the US company Sensient in April 2021 contributed € 14.4 million. In spite of the weaker prior-year figures due to the pandemic, organic sales growth was even stronger: During the first six months, Symrise increased sales by 9.7 %. Alongside catch-up effects in the first quarter resulting from the cyber-attack in December, the good dynamic in the second quarter made a contribution. Due to the accelerating business and higher demand, sales increased organically between April and June by 8.8 %.
The Scent & Care segment
Scent & Care, the business with fragrances, aroma molecules and cosmetic ingredients, achieved very good organic sales growth of 9.0 % in the first half year of 2021. Taking currency translation effects into account, sales amounted to € 749 million in the first six months and rose significantly compared to the prior-year period (H1 2020: € 711 million). The Fragrance and Aroma Chemicals business from Sensient contributed € 14.4 million to this. Particularly during the second quarter, normalization of consumer demand began to emerge as battling the pandemic progressed. Sales in the Fine Fragrances business unit and Cosmetic Ingredients division increased strongly.
The Flavor & Nutrition segment
The combined Flavor & Nutrition segment increased its sales organically by 10.1 %. Sales in the reporting currency increased to € 1,159 million and thereby significantly exceeded the prior-year figure (H1 2020: € 1,110 million). In the second quarter, the segment recorded gradual normalization of consumer behavior. The increase in out-of-home consumption exerted a positive effect on demand for beverage products. At the same time, the trend towards healthy cooking at home and the continuing high demand in pet food solutions ensured strong growth.
Applications for beverages recorded very good organic sales growth in the double-digit percentage range. The biggest growth was generated in the US market, China, Brazil as well as Germany, the United Kingdom and Ireland.
The latest research from Mintel* reveals the online grocery market is forecast to grow by 33 % in 2020 to reach an estimated value of £16.8 billion, up from £12.7 billion in 2019. This phenomenal rise follows four consecutive years of slowing growth: in 2019 growth fell to a historic low of just 2.9 %. The market is set to be worth £17.9 billion by 2024, growing by 41 % over the five year period.
Online shopping behaviour as a whole
This comes as Mintel reveals a dramatic change in online shopping habits over the COVID-19 lockdown period, habits that Mintel believes could prove lasting. In the very early days of the spread of the coronavirus in the UK, before social distancing measures were announced, 7 % of Brits increased the total amount of online shopping (both food and non-food)**. In the space of fewer than two months, online shopping has seen a dramatic boost with the number of consumers who say they’ve increased their online shopping rising to 36 %***.
Meanwhile, 50 % of Brits have tried to limit the time they spend in-store, while a further 9% have used click-and-collect more ***.
Nick Carroll, Associate Director of Retail Research at Mintel, said: “Over the course of just a few months, COVID-19 has had a seismic impact on Britain’s grocery sector. The pandemic is giving a significant short-term boost to online grocery services, as shoppers look to avoid stores and limit their contact with the outside world. However, the impact will last beyond the crisis. Shopper numbers in the online grocery market have plateaued in recent years as retailers struggled to get new customers to try these services. The outbreak is bringing a new audience to online grocery, and this should boost the market long term with strong growth forecast through to 2024. While there is currently a significant disruption to the online grocery market, with some retailers not accepting new customers, this will ease in the short-term as more capacity is brought online.”
Over 65s still face challenges shopping online
The current guidelines, which ask those aged 70 and over to remain at home, mean that older shoppers are more heavily reliant on having groceries and other goods delivered. But while some older Brits are experienced in ordering online, they are by far the minority. Less than three in 10 (28 %) UK internet users aged 65+ were online grocery shoppers prior to the COVID outbreak****. However, Mintel’s latest research shows that 37 % of over 65s have increased the amount of online shopping they’ve done since the outbreak began***.
But while some Brits are going online for their grocery requirements, many are relying on the kindness of friends and family – as a quarter (24 %) of consumers aged under 44 say they have been helping friends/family and/or neighbours with their shopping.
Nick Carroll, Associate Director of Retail Research at Mintel, said: “Older generations that had previously shied away from online grocery have, effectively, been forced to change their habits in the face of social distancing measures. While there has been a rise in online grocery shopping among the over 65s, the reality is a significant number of consumers in the older age groups have no experience shopping online for groceries and/or are not digitally native. There is a real need to ensure access to online grocery deliveries for older consumers. We’re seeing some retailers already thinking of easier ways to order goods, including phone orders for next-day delivery.”
* Mintel’s latest estimates as of 23 April 2020; subject to change based on ongoing research and economic shifts. ** Research conducted 28 February-13 March *** Research conducted 16-23 April **** Research conducted in December 2019
There has been a 14 % average annual growth in food and beverage launches with a snacking claim (Global, CAGR 2014 – 2018), according to Innova Market Insights. For most consumers, snacking is a part of daily life and always has been. What is changing is the way people think about snacking and what is considered to be a snack.
“Fundamental changes in eating patterns largely driven by increasingly busy lifestyles mean that the traditional pattern of three meals a day has been giving way over some years to a less formal eating pattern,” says Lu Ann Williams, Director of Innovation at Innova Market Insights. “This is shifting to a more fragmented and flexible eating style, encompassing multiple small meals or snacks, often eaten alone or on the go,” she adds.
This rise in the so-called “fourth meal” culture has increased demand for quick and convenient yet healthy solutions for busy consumers. This is creating opportunities for wholesome, satisfying and sustaining snacks to fulfill the role of mini meals and play a more meaningful role in contributing to refueling and nutritional needs throughout the day.
Healthy snacking choices are seeing the fastest growth rates for NPD overall, with nutritious options gaining ground. This is led by vegetable-based snacks, with an increasingly high profile for on-trend ingredients such as more unusual nuts, ancient grains, hummus, avocado, seaweed, hemp and baobab, for example. On the go and lighter options such as miniatures, bites and puffs are also increasingly in evidence, as is the search for the right balance between health and indulgence.
There are also regional differences in preferred snack types, with Innova Market Insights consumer research indicating that nuts & seeds, chocolate and yogurt/drinking yogurt are the top three choices in the US, for example, while chocolate leads from potato-based snacks and sweet biscuits/cookies in the UK.
“As traditional meal times and occasions disintegrate and people seek quick, convenient, yet healthy solutions for busy lifestyles,” Williams notes. “We are continuing to move away from the traditional three-meals-a-day norm,” she concludes.
Chr. Hansen delivers solid half-year result of 9 % organic growth and maintains overall outlook for the full year.The growth comes from all business areas: Food Cultures & Enzymes 10 %, Health & Nutrition 11 % and Natural Colors 5 %
Solid organic revenue growth of 9 % in the first half of 2018/19: Food Cultures & Enzymes 10 %, Health & Nutrition 11 % and Natural Colors 5 %. EBIT before special items increased by 10 % to EUR 150 million, corresponding to an EBIT margin before special items of 27.0 % up 0.8 %-point compared to last year. In Q2, organic growth was 8 %, and EBIT before special items increased by 11 %. The overall outlook for 2018/19 remains unchanged.
CEO Mauricio Graber says: “We continued the solid momentum, with Food Cultures & Enzymes delivering strong organic growth with an increasing contribution from volume in Q2, which was in line with our expectations. Towards the end of Q2, we launched CHY-MAX® Supreme, a truly innovative enzyme which raises the bar for what cheesemakers can expect from coagulants. Organic growth in Health & Nutrition was solid and with a more balanced growth contribution between Human Health and Animal Health compared to what we saw in Q1, although livestock farming economics in North America remain challenging. Yesterday, we announced a joint-venture with Lonza AG, which marks a quantum leap for Chr. Hansen’s Human Microbiome lighthouse and which will create a global pioneer and partner of choice for production of live biotherapeutic products. In Natural Colors we secured important conversions in North America, but this was to some extent offset by weaker demand from Latin America in particular.”
“Our EBIT margin before special items in the first half of the year increased by 0.8 %-point and was driven by improved margins in all business areas. In FC&E, we achieved a gross margin benefit of more than 1 %-point from the ramp up of the new capacity in our facility in Copenhagen, which more than offsets the increasing investments we are making in the business. We continue to pursue strong and profitable organic growth while also investing significantly for the future.
“The progress in the first half year makes us confident about our overall outlook, which is maintained and in line with our long-term financial ambition.”
Krones, the world’s leading manufacturer of filling and packaging technology, continued to grow in 2018 despite difficult conditions. The company benefited as a full-service provider from its extensive product and service range and broad international footprint.
Krones achieves growth target for 2018 financial year
Revenue increased by 4.4 % year-on-year, from €3,691.4 million to €3,854.0 million. The company thus achieved the revised target of 4 % revenue growth announced in autumn 2018. Revenue grew operationally (i.e., adjusted for currency and acquisition effects) was around 5 %. Krones increased revenue, in some cases significantly, in Europe, China and South America/Mexico. Revenue was down in the Asia/Pacific region, the Middle East/Africa and in North and Central America.
Despite the high prior-year figure, order intake increased by 4.5 % in 2018, from €3,786.8 million to €3,957.3 million. Growth in order intake was above average in Western and Eastern Europe and in China. Krones had orders on hand totalling €1,261.1 million at the end of 2018. This once again exceeded the very high prior-year figure by 1.7 %.
Krones continued to invest in the growth of its workforce in 2018, primarily for the expansion of its global footprint. The company employed 16,545 people worldwide at the end of 2018. This represents an increase of 1,246 employees on the previous year, about 400 of which related to acquisitions.
Profitability affected by one-off expenses, mainly for reorganisation
Krones’ earnings were significantly impacted by higher material and labour costs in 2018. The 5.3 % EBT margin includes approximately €42 million in one-off expenses, mainly for reorganisation.
Had these expenses not been incurred in 2018, the EBT margin would have been 6.4 %. The costs related to establishing the production site in Hungary account for the largest share of this amount. In total, earnings before taxes (EBT) in 2018 were down by 21.1 % or €54.5 million year-on-year to €204.3 million (EBT margin: 5.3 %).
Earnings decreased in both segments. In the core segment, Machines and Lines for Product Filling and Decoration, EBT went down by 15.2 % year-on-year, from €263.3 million to €223.3 million. Expenses for reorganisation reduced segment earnings here by around €25 million. In the Machines and Lines for Beverage Production/Process Technology segment, EBT deteriorated from –€4.5 million in the previous year to –€19.0 million. This mainly related to a total of around €17 million in one-off expenses.
Krones improves free cash flow by €271.4 million
Krones was able to significantly reduce working capital between October and December 2018. This had a positive impact on free cash flow, which improved in 2018 by a substantial €271.4 million compared with the prior year, to €120.7 million (previous year: –€150.7 million). The ratio of average working capital over the past four quarters to revenue developed slightly better than expected, holding stable at 27.3 % in 2018. Net cash went up to €215.1 million at the 2018 reporting date (previous year: €157.4 million). Due to the increase in total assets, the company’s equity ratio decreased slightly to 43.2 % (previous year: 43.8 %). Overall, Krones continues to possess a very robust financial and capital structure.
With the above figures, Krones has confirmed the preliminary figures published on 21 February 2019. No significant changes arose in the course of the auditing process.
Shareholders to receive stable dividend of €1.70 per share
At the Annual General Meeting on 5 June 2019, the Executive Board and Supervisory Board of Krones will be proposing a dividend of €1.70 per share for the 2018 financial year. The proposed dividend is stable relative to the previous year. The planned payout is 35.7 % of consolidated net income.
Outlook
Based on the prevailing macroeconomic outlook and the current expected development of the markets relevant to Krones, the company expects consolidated revenue growth of 3 % in 2019.
In order to achieve its medium-term corporate targets, Krones will continue in 2019 to work towards a global structure fit for the future challenges. The company does not expect any noticeable fall in material procurement prices in 2019; the same applies to labour costs. Krones’ sales price increases on all bottling and packaging equipment and for process technology with effect from 1 May 2018 are likely to have a slight positive effect on earnings in the 2019 financial year. Overall, Krones expects an EBT margin of around 6 % for 2019.
Above all due to the focus on increases in the sales price level, in the current economic and geopolitical climate, Krones sees the achievement of its targets for 2019 subject to greater uncertainties than in the past. For its third performance target, working capital to revenue, Krones expects a figure of 26 %.
