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GOOD CORPORATE GOVERNANCE
Dr. Bertram, we’ve now had the second year of COVID-19. How was it for Symrise?
We continued on our chosen course and with an amazing organic growth rate of 9.6 %, we reached sales of € 3.8 billion. We even achieved our goals for the EBITDA margin, which got to 21.3 %. This means that we are still exactly within the medium-term targets we set for 2025: We want to grow by 5 to 7 % – much faster than the competition – with profitability of 20 to 23 % and sales of € 5.5 to 6.0 billion by the end of the 2025 fiscal year.
You’re already looking a few years ahead with the first question. Why?
If we’ve learned anything from the last few years, it’s this: We can’t just think about the next day, we have to think about the long term to be ready to act at any time. The title of this year’s Corporate Report makes exactly this clear: “Thinking beyond tomorrow” to me means that we – together with our customers, our suppliers, society and all other stakeholders – must always have an eye on the future. This applies to our sustainable business practices, without overstepping the earth’s natural boundaries, and equally to our actions here in the Group, where we rely on our many capable employees. We can only continue our economic success and contribute to a better world for all if we maintain this long-term perspective.
Symrise is publishing a company purpose for the first time with this Corporate Report. Why is this important to you?
The purpose – meaning the deeper sense and meaning of our business activities – has developed over the last few decades and gets slightly redefined as time goes by. However, it has always been present in our strategy and in our daily activities. Therefore, we essentially summarized what we are with a broad-based process. And that was a very significant measure, because we can now demonstrably align all our further steps with our purpose.
Why did you develop the purpose now of all times?
Over the last few years we have greatly expanded the portfolio, for example with the acquisition of Diana, Renessenz and ADF / IDF. These strategic decisions form the company. We think the purpose is a great way to sum it up on one level and to bring Symrise closer to our many new employees.
Dr. Heinz-Jürgen Bertram
CEO
Let’s get back to business. The year that just ended was successful, but surely also unpredictable again, right?
Yes, we had very high demand for products for travel and leisure such as sun protection products, perfumes, beverages and culinary products. This was partly due to the advances made in fighting the pandemic. In 2020 it was totally different. The Nutrition segment grew the most in that year, particularly in the area of pet food, because a lot of people were forced to stay home during the many restrictions around the world. For me, however, this also shows that our strategy is working and that the products in our broad portfolio complement each other. Since 2009, we have increased the share of products outside scents and flavors, our core business at that time, from 10 to over 30 %. By 2025, we want to increase the areas of nutrition and care – for people and animals – to 40 % and by 2028 to half of our sales.
The portfolio is, along with growth and efficiency, one of three pillars of the corporate strategy. How do you achieve the goals connected with this?
By concerning ourselves with new topics internally, for example. In recent years, for example, we have increasingly focused on cooperation within the Group. The divisions are working intensively on joint projects, as can also be seen in the Corporate Report. For plant-based alternatives to meat and dairy products, we have set up teams across the Group to increase the development, production, market and sales know-how of the whole company. The area of plant-based food alternatives is one of the most exciting markets out there. It will grow by about 15 to 25 % annually by 2030, which will mean sales of around € 85 billion. Some say this number could be as high as € 250 billion. We can contribute a huge amount to this with our products for taste, texture and mouthfeel.
Will there be more acquisitions in the next few years to expand the portfolio?
We will continue to acquire or invest in companies that generate a lot of value for us, particularly in the areas of health, nutrition and personal care. This is not just about sales and profit – it’s also about synergies. Here are two examples: At the start of 2022, we bought the Dutch company Schaffelaarbos, which extracts proteins for pet food from eggs. It is one of the market leaders in this area and helps us to expand internationally in the area of pet nutrition in combination with our activities with ADF/IsoNova. The Canadian company Giraffe Foods, which we bought in December 2021, creates sauces, dips, dressings, syrups and drinks for B2B customers. This acquisition allows us to bring together our flavor and nutrition expertise and our knowledge of customer-specific recipes, and therefore to become a leading supplier of integrated taste solutions in North America. In the next few months there will be even more acquisitions.
In 2020, supply chains were under extreme stress due to the COVID-19 pandemic. How do you think this developed in 2021?
The supply chains have proven very fragile in a lot of areas, but we have been able to compensate for this through our many years of efforts to sustainably backward integrate our most important raw materials. This allowed us to keep production running, which was very satisfying. Nevertheless, we have to think one step further. Climate change and the loss of biodiversity, as well as increasing social inequality, have a major impact on people and the environment, and thus on our supply chains. This is why, in 2021, we expanded our analysis and assessment of the environmental, social and governance performance of our suppliers.
At the beginning of 2021, we founded our Responsible Sourcing Steering Committee (RSSC), which brings together all the heads of procurement and sustainability experts at Symrise.Dr. Heinz-Jürgen Bertram, CEO
How are you doing that?
Since we cannot map many processes in procurement on our own, we have participated in joint initiatives for responsible procurement. One of these is the Initiative for Sustainable Agricultural Supply Chains (INA), in which 34 organizations and companies have come together to promote the planned German Supply Chain Act. This was adopted in 2021 to improve the protection of human rights along global supply chains. At the beginning of 2021, we also founded our Responsible Sourcing Steering Committee (RSSC), which brings together all the heads of procurement and sustainability experts at Symrise. We want to continually improve processes together.
What market developments could you see being a help to Symrise?
We have always been strong in product innovation. This helps us to offer a service that is increasingly in demand: In the future, major manufacturers will often outsource new product development to free up resources for other purposes, such as expanding their e-commerce divisions. This is also one of the consequences of the COVID-19 crisis. We are serving this development with our many integrated solutions, in which we bring together our expertise from different areas.
Was this also one of the reasons to set up the new Taste, Nutrition & Health segment?
Yes, we want to use it to more closely connect the topics of taste and healthy nutrition. The Flavor and Nutrition segments are hiding behind the new segment, which customers often access simultaneously anyway. We can fulfill customer needs a lot better with the new segment. Along with flavors and foods, the new segment also comprises nutritional supplements, products for the pharmaceutical industry, functional foods as well as animal food and products for animal health. The advantage of the new segment is that we can utilize the enormous synergies between the segments – for innovation, for contact with customers or for trend research.
in sales is our goal for 2025. This will take us into new dimensions.
On September 20, 2021, Symrise was promoted to the DAX®, Germany’s leading index. Was that a great day for you?
Of course the recognition for our company was great, but it’s not something we were specifically working toward. It was more a consequence of our growth momentum. For us, this means first of all that we receive much more attention. We have significantly more inquiries from the media, but also from survey institutes, business associations, investors and analysts, academia and NGOs. In the process, we have to position ourselves more frequently on economic or social issues; we are used more and more as an example for “the economy.” This is exciting, but requires additional effort. Nevertheless, we want to maintain our narrow structures with short decision-making paths in order to be able to react quickly. That has always worked very well for us, and it is the only way we can achieve what we have manifested in our purpose: Taking responsibility for a livable, future-oriented world and developing sustainable, safe and customized products for people and their pets. This is how we care for well-being and quality of life, for beauty and taste.