Fragrance giant Symrise rethinks growth path for 2025
The Germany-based group, whose fragrances are used in perfumes by French luxury majors LVMH and Kering, now expects organic sales growth of 3% to 5% for the year, down from its previous forecast of 5% to 7%. It maintained its projected core profit (EBITDA) margin at around 21.5%, slightly above the original guidance of 21%.
'We are observing a shift in global market demand, with heightened consumer caution across certain sectors,' said Jean-Yves Parisot, chief executive officer of Symrise. He added that internal 'self-help initiatives' were expected to support margin improvements.
The company aims to reach recurring cost savings of 40 million euros ($46.2 million) in 2025 through operational efficiency efforts, of which 20 million euros had already been achieved in the first half of the year, it said.
Revenue for the January–June period fell 0.5% on a reported basis to 2.55 billion euros, below analyst expectations of 2.60 billion euros, according to a Vara Research poll. However, organic sales — which exclude currency exchange effects — rose 3.1% during the same period.
Swiss competitor Givaudan also reported weaker-than-expected organic sales growth last week, highlighting broader concerns over softening demand in the sector.
'U.S. demand has simply weakened over the past few months,' said Olaf Klinger, chief financial officer at Symrise, during a conference call. He noted that the pet nutrition and UV filter categories were among the most affected.
On the subject of U.S. tariffs, Klinger said the company had already implemented price increases in select cases and was prepared with additional mitigation strategies.
'We have the opportunity to relocate products if the tariff situation does not allow continued delivery from certain regions,' he said. 'We also have reformulation options, meaning sourcing raw materials from other regions to ultimately manage tariff situations.'
($1 = 0.8656 euros)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Fashion Network
2 hours ago
- Fashion Network
EU brands turn to obscure customs clause to soften blow of Trump's tariffs
Brands like Italy's high-end sneakers maker Golden Goose, outerwear specialist Moncler and fashion label Ferragamo have all touted the strategy. "It's a significant benefit," Moncler executive director Luciano Santel said in a call with analysts, estimating the production cost at around half the import price. The strategy, which can only be invoked for goods clearly destined for sale in the US and involving multiple foreign transactions, is not without risk, however. It requires a detailed paperwork trail, a firm grip on supply chains and legal structures to handle the required transactions. Consultants including KPMG and PwC have seen a surge this year in enquiries from companies into how to use this method to ease the burden of Trump's tariffs. "We've got three times more requests than usual," for mitigation strategies including the First Sale rule, said Ruth Guerra, a partner at KPMG in Paris, adding that the rule could also be combined with other measures. To benefit from lower customs duties, a company must prove that US-bound products have gone through multiple transactions. Usually that means the goods are sold from the factory gate to a middleman and then to a US-based company handling the goods. All transactions must be handled at arm's length by clearly distinct entities. Usually a US subsidiary is involved to avoid revealing confidential information to an external entity, PwC custom and tax lawyer Francesco Pizzo explained. "In our case the 15% tariffs will potentially translate into a 3% impact on the US retail price", Golden Goose CEO Silvio Campara said, adding that the US accounted for roughly 35% of its revenue. While several major textile and apparel companies have been using First Sale for a while, many had overlooked the strategy while the tariff environment remained low, said Mark Ludwig, national leader of trade and tariff advisory services at consultancy RSM in New York. "Now the cost-effectiveness is much higher," said Lucio Miranda, founder of consultancy firm ExportUSA, who expects a jump in First Sale use with interest from companies in other industries. There is no publicly available data on goods imported through the First Sale rule, but a 2009 investigation by the US International Trade Commission found that 8.5% of importing entities over a year used the workaround, equivalent to 2.4% of total US import value. Nearly half of that amount was linked to footwear and apparel. For French cosmetics producers, US duties present a new challenge as the industry had benefited from zero tariffs. "While the agreement brings an end to uncertainty, it brings a significant threat to the French cosmetics industry," said Emmanuel Guichard, head of French cosmetics lobby group Febea. The First Sale rule is also only available to companies that can comply with a strict process which entails other risks as well. "One of the biggest problems with selecting First Sale is that only fancy people can truly afford it - both the compliance costs and the risks of audit that come with it," said US-based tariff and trade lawyer Michael T. Cone. Improper use could also lead to penalties, he said, noting that the US Customs and Border Protection agency routinely audits and denies use of the rule. "Importers must proceed with utmost caution,' he said.
Fashion Network
2 hours ago
- Fashion Network
Italy competition authority fines China's Shein 1 million euros
Italy's competition authority (AGCM) on Monday announced a 1-million-euro ($1.16 million) fine on Chinese fast fashion online retailer Shein for misleading customers on the environmental impact of its products. The fine was imposed on Infinite Styles Services CO. Limited, a Dublin-based company that operates Shein's website in Europe, at the end of a "greenwashing" investigation that Italian watchdog had opened in September. AGCM said the environmental sustainability and social responsibility claims promoted on Shein's website "were sometimes vague, generic, and/or overly emphatic, and in other cases omitted and misleading." The Italian authority said its assessment was influenced by an "increased duty of care" falling on Shein, "because it operates in (the) highly polluting sector and with highly polluting methods" of fast and super-fast fashion. Reuters has contacted the company for a comment. When the investigation was launched last year, the company said it was "ready to cooperate openly with relevant Italian authorities, providing the necessary support and information to address any inquiries".
Sustainability Times
4 hours ago
- Sustainability Times
Former Nuclear Site Converted Into Giant Battery Set to Power 100,000 Homes in This Stunning Energy Shift
IN A NUTSHELL ⚡ The former nuclear site in Philippsburg is being transformed into a large-scale battery storage facility by EnBW. by EnBW. 🔋 The facility aims to stabilize Germany's grid by capturing surplus renewable energy and releasing it during peak demand. and releasing it during peak demand. 🌍 This initiative is part of a broader strategy involving hydrogen-ready gas power plants for long-term energy security. for long-term energy security. 🏗️ The development depends on EnBW's final investment decision and regulatory approvals, with operations expected by mid-2027. The global transition to renewable energy sources has sparked innovative solutions to balance electricity supply and demand. In Germany, a transformative project is underway at the former nuclear site in Philippsburg. The energy firm EnBW plans to construct one of the country's largest battery storage facilities, leveraging the site's strategic location. This initiative is part of a broader strategy to stabilize the power grid, accommodating the fluctuating output from renewable sources. As the world moves away from fossil fuels, the integration of such large-scale battery systems is crucial to ensure consistent power delivery, especially during periods of low renewable energy production. Balancing the Grid As the reliance on renewable energy sources like wind and solar power increases, the challenge of balancing the grid becomes more pronounced. Peter Heydecker, a board member at EnBW, emphasized the critical role of large-scale batteries in this new energy landscape. These batteries are pivotal in reconciling the variable generation capacity of renewable sources with actual electricity demand. The Philippsburg project is designed to capture excess electricity generated during periods of high renewable output and release it when demand surpasses supply, thus maintaining grid stability. Heydecker highlighted a dual strategy involving both batteries and hydrogen-ready gas power plants. While batteries manage short-term fluctuations, these advanced gas plants are intended to provide backup during extended periods of insufficient renewable generation. Together, they form a flexible system capable of adapting to varying energy conditions. 'These Simulators Are Unlike Anything You've Seen' Trak Racer and Airbus Join Forces to Redefine Flight Training for a New Generation of American Pilots 'In the energy system of the future, the task of large-scale battery storage systems will be to reconcile two factors in the short term: The weather-dependent generation capacity of renewable energy sources on the one hand, and the actual electricity demand of households, businesses, and industry on the other,' Heydecker explained. Energy Site is Tactical The selection of the Philippsburg site is strategic, given its proximity to a significant substation constructed by TransnetBW, a major transmission system operator. This substation links to the Ultranet power line, which channels wind-generated electricity from northern Germany to its industrial southern regions. By situating an 800 MWh storage facility at this location, EnBW aims to optimize the capture and redistribution of surplus wind energy. 'Germany Is Betting Everything on This' as $3.2 Billion Offshore Wind Farm Promises Power for 1.6 Million Homes but Sparks Fierce Backlash Over Costs and Impact Mayor Stefan Martus of Philippsburg underscored the town's historical significance in Germany's energy landscape. He expressed optimism about continuing its legacy as a central hub for sustainable energy storage and distribution. However, the project's success hinges on EnBW's final investment decisions and the acquisition of necessary permits. If these hurdles are cleared, the battery storage system is expected to be operational by mid-2027. 'Philippsburg has been one of the most important energy locations in the whole of Germany for half a century – and our town is set to continue to play this outstanding role as an anchor point and huge storage facility for sustainable power generation,' concluded Martus. Repurposing Nuclear Sites The transition from a nuclear power generation site to a battery storage facility marks a significant shift in energy policy and infrastructure use. The development is planned on land separate from the existing nuclear plant infrastructure, allowing for an independent timeline. This separation is crucial, as the decommissioning of the site's nuclear reactors is a complex process that will continue for several more years. By repurposing sites like Philippsburg, Germany is not only addressing the immediate needs of its power grid but also setting a precedent for sustainable development. The shift from nuclear to renewable energy storage reflects a broader commitment to reducing carbon emissions and enhancing energy security. This model could serve as an example for other countries grappling with similar transitions. Future Implications for Energy Security The Philippsburg project highlights the importance of innovative solutions in the global energy transition. As nations strive to meet climate goals and reduce reliance on fossil fuels, ensuring energy security becomes paramount. Large-scale battery systems, coupled with other renewable energy technologies, offer a path toward a more resilient and sustainable grid. However, the successful integration of these technologies requires careful planning, substantial investment, and regulatory support. As the world continues to innovate in renewable energy, the question remains: How can countries best balance technological advancements with the need for reliable and affordable power for all? This article is based on verified sources and supported by editorial technologies. Did you like it? 4.5/5 (28)
