(Reuters) - German maker of scents and flavours Symrise (SY1G.DE) beat first-half core profit margin expectations on Thursday, saying that acquisitions and partnerships with producers helped offset the impact of rising raw material prices.
Earnings before interest, tax, depreciation and amortization (EBITDA) margin in the first six months of 2019 rose to 20.8% from 20.1% a year ago, above a company-provided consensus forecast of 20.5%.
“We are looking ahead to the coming months with confidence, even if the economic prospects are slowing down in some regions of the world,” chief executive Heinz-Jürgen Bertram said in a statement, while confirming the company’s target of an annual organic sales growth of 5% to 7% and an EBITDA margin between 20% and 23% until the end of 2025.
The producer of ingredients, such as artificial mint flavour for toothpaste or chewing gum said half-year sales rose 7.4% to 1.69 billion euros (£1.56 billion), a touch below a consensus forecast of 1.70 billion euros.
Even as the global economy cools, Symrise and its rivals have been benefiting from strong demand from sectors such as consumer staples, resilient to cyclical swings thanks to population growth, urbanization and increasing prosperity in emerging markets.
Regulators around the world have been limiting the use of some chemicals to protect the environment, workers and consumers, which is driving up the costs of synthetic and natural alternatives. Prices of the latter are also buoyed by rising consumer demand for healthier, renewable options.
Reporting by Silvia Recchimuzzi in Gdynia; Editing by Tomasz Janowski