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HOLZMINDEN (dpa-AFX) - Whirlpool at major fragrance manufacturers: competition authorities are investigating suspicions of price fixing. According to a statement Tuesday evening, the EU Commission is concerned that "companies and an association in the fragrance industry worldwide may have violated EU competition law, which prohibits cartels and restrictive business practices." The agency did not name names. The Swiss Competition Commission Weko was more specific in confirming its own antitrust investigation, naming Symrise, Firmenich International, Givaudan and International Flavors & Fragrances as affected companies Wednesday morning.

German DAX-listed Symrise confirmed when asked that it had been contacted by the European Commission in connection with investigations into possible price-fixing in the industry. Symrise's headquarters in Holzminden, Lower Saxony, is affected by the investigation. However, there are no details yet. Symrise is cooperating fully and is currently being heard as a witness. Symrise CEO Heinz-Jürgen Bertram said at the annual press conference scheduled for this Wednesday: "Price fixing: We do not see ourselves affected. Today, we think we have nothing to hide."

Such investigations usually drag on for a long time, analyst Celine Pannuti of bank JPMorgan said in an initial reaction. At the same time, possible fines would not have to be as high in the end as the EU Commission's rules suggested.

For example, the EU Commission states that fines in antitrust proceedings usually amount to 15 to 20 percent of the affected sales, with an upper limit of ten percent of the annual sales of the companies concerned.

Symrise shares fell by a good four percent to 91.76 euros on Wednesday morning. In the stock market year 2023, they are now bottom of the German leading index Dax with a minus of 9.7 percent, which has increased by 11.8 percent since the turn of the year.

The presentation of Symrise's final financial figures and outlook for the year this Wednesday took a back seat in light of the antitrust investigations.

The fragrance and flavorings maker expects profitability in 2023 to be at the lower end of its medium-term target range, according to the statement. The earnings margin before interest, taxes, depreciation and amortization (Ebitda margin) is expected to reach around 20 percent in the current year. In this context, Group President Bertram calculates with moderately rising raw material costs. The company has already felt the impact of rising raw material, logistics and energy costs in 2022. A large part of the cost increases have been passed on to customers, but there is still some work to be done here, says Bertram.

2022 operating profit margin fell from 21.3 percent to 20.0 percent, as has been known since January - and this already excludes an impairment charge of 126 million euros on the almost 30 percent stake in pet food specialist Swedencare. Excluding this special charge, last year's operating profit rose by a good 13 percent to 922 million euros. Below the line, Symrise earned 406 million euros, a good 8 percent more than in the previous year. The dividend is expected to rise by 3 cents to 1.05 euros, less than analysts had expected.

Swedencare's 2022 growth suffered from fewer orders from major customers as they first reduced their high inventories. As a result, Swedencare's share price had slumped by more than 80 percent in 2022. However, from the end of 2016 to the end of 2021, it had also soared by 2800 percent. In principle, Bertram remains confident about the supplier of nutritional supplements, for example for dental care and joints.

The manager also continues to see a lot of potential in the pet food market overall. Symrise has also greatly expanded its pet food additives business in recent years, most recently with the acquisitions of Giraffe Foods, Schaffelaarbos and Wing Pet Food. The division thus morphed into a key growth driver and also delivered in 2022: it grew by its own efforts in all regions at double-digit rates.

Overall, the Taste, Nutrition & Health division, which focuses on food additives for humans and animals and includes Pet Food, also achieved significant growth in 2022: the division grew by a good 15 percent under its own steam and by almost a quarter including acquisitions and foreign exchange effects.

In contrast to the second division, Scent & Care, which is concerned with fragrances such as perfumes, Taste, Nutrition & Health maintained high growth rates at the end of the year. Organic growth in the fourth quarter amounted to almost 18 percent, compared to just one percent for the fragrances business. JPMorgan analyst Pannuti saw the latter as a bigger disappointment.

Overall, Symrise grew by more than one-fifth in 2022, and by its own efforts - i.e., excluding acquisitions and exchange rate effects - the increase amounted to 11.4 percent. Until 2025, the company's management calculates average annual organic growth of 5 to 7 percent. The average analyst estimate for 2023 is at the lower end of the range./mis/mne/stk