The company said that both divisions reported double digit gains across all regions in the first six months of the year, a performance that underlines the marked turnaround from last year when growth was restricted by tough economic conditions.
However, sales growth did slow in the third quarter, and the management also pointed to the fact that continuing pressures on raw material costs would be likely to affect manufacturing margins and profits.
Currency translations hit sales growth
The company reported that group sales for the period grew by 16.4 per cent to €1.21bn, a figure that represented 12.4 per cent growth when taking into account currency translations from overseas markets.
The strong revenue gains translated into an even stronger increase in earnings, which the company said was up 81 per cent to €127.3m, compared to €70.4m in the same period last year.
“Our broad international presence and firm foothold in emerging markets have paid off once again,” said CEO Heinz-Juergen Bertram. “The scent and care division in particular benefits from an increased demand in the luxury segment.”
Scent and care results lead the way
Breaking the results down by business segment, the company pointed out that its scent and care business had been a major driving force behind the growth, due mainly to the fact that it had managed to revive business with a number of key customers.
The revival was most pronounced in the fine fragrance and personal care segment, which was hard hit by the recession, particularly for the luxury segment, while new products in the oral care and fragrance ingredients segments also helped drive growth.
As a result sales for scent and care grew 19.9 per cent €621.8m, which represented an increase of 14.7 per cent in local currency revenues., while the EBITDA margin for the division increased from 16.4 per cent for the first nine months of 2009, to 21.1 per cent for the current period.
Asia Pacific and Latin America boom
On a regional basis, growth was most pronounced in the Asia Pacific region, where sales grew by 23 per cent and 13 per cent in local currencies. This was closely followed by the Latin American region, where sales grew by 19 per cent and 13 per cent in local currencies.
Looking ahead to the full financial year Bertram underlined his belief that the company is on track to achieve its target, reiterating forecasts that it expects to achieve full year organic sales growth of 6 per cent at local currency rates.
The company also said it was aiming for an EBITDA margin of more than 20 per cent, while continuing to focus on reducing its ration of net debt to EBITDA to around 2.5.