Symrise shares sink nearly 12% on softer year-end growth and margin outlook

what happened

According to Reuters, shares of the German flavor and fragrance maker Symrise fell as much as 12% on Wednesday. The company kept its full-year guidance but narrowed it: it now expects organic growth near 3%, around the midpoint of the earlier range and slightly below the 3.2% Vara Research consensus. It also sees its adjusted EBITDA margin in the lower half of the 21.5%-22.5% range.

Third-quarter results were nonetheless ahead of forecasts, with organic sales up 5.3% against 5.0% expected in the Vara poll, driven by higher volumes despite lower prices. Bernstein said the pet food rebound looked softer than investors had likely hoped. Reuters also noted that Swiss rival Givaudan had earlier posted 8.6% organic growth in the quarter.

The sell-off is on track to be Symrise's worst day since 2008 and wiped €1.4 billion ($1.56 billion) off its market value.

why it matters

The move shows that investors expect more than solid sales from consumer ingredient makers; they also want steady margins into year-end. After strong updates from peers, a softer outlook can quickly turn into a sharp sell-off in European names.

market impact

Symrise shares and flavor makers: a weaker margin outlook pressures the company's stock

• ▼Symrise shares pressure down — margin guidance in the lower half of the range and a softer year-end

tags

instruments