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Investing.com -- Symrise AG (ETR:SY1G) lowered its full-year organic growth guidance after missing second-quarter sales expectations, sending shares down over 5% on Wednesday.
The German fragrance and flavor manufacturer now expects organic sales growth of 3% to 5% for 2025, down from its earlier forecast of 5% to 7%, as weaker performance in its Taste, Nutrition & Health segment weighed on results.
Group organic sales rose just 2% in the second quarter, falling short of the 3.8% expected by Jefferies and the 4.1% consensus forecast.
Total (EPA:TTEF) revenue came in at €1.24 billion, also below Jefferies’ estimate of €1.29 billion and the €1.28 billion expected by analysts.
The miss was led by the Taste, Nutrition & Health division, where organic growth slowed to 0.8%, well under the 4.4% consensus.
Segment revenue dropped 4% year over year to €766 million. Jefferies noted that pet food sales were flat for the first half of the year, a slowdown from the moderate growth reported in the first quarter.
Food and beverage products maintained mid-single-digit growth but were not enough to offset the broader slowdown in the unit.
Symrise reported first-half EBITDA of €554 million, which slightly beat estimates of €551 million.
Net income also exceeded expectations at €268 million, compared to the €261 million consensus.
However, operating cash flow fell sharply to €107 million in the first half from €288 million a year earlier, though free cash flow held steady at €226 million.
In contrast to the weak performance in Taste, Nutrition & Health, the Scent & Care division posted 4.1% organic sales growth in the quarter, ahead of both Jefferies’ 3.5% forecast and the 3.7% consensus.
Segment sales totaled €471 million, down 1% from a year earlier due to currency effects.
Fragrance products showed particularly strong growth in fine fragrances, while consumer and oral care lines were softer.
Aroma products reported slower growth compared to the first quarter, and cosmetic ingredients declined year over year.
Despite cutting its top-line outlook, Symrise raised its expected full-year EBITDA margin to about 21.5%, up from a previous target of 21%.
The company said this was due to ongoing margin improvement efforts, though details were not disclosed in the earnings release.
A new head of the Scent & Care business was also announced, joining from Brenntag Specialties. The change in leadership comes as Symrise looks to strengthen performance in its higher-margin product categories.
Symrise’s second-quarter results follow a stronger comparison base from the prior year, when the company posted 12.1% organic growth.
The steep slowdown this year has raised questions about underlying demand trends in key markets, particularly North America and Asia-Pacific, which reported negative and marginal growth, respectively.