Symrise Announces Profit Warning and Impairment on Swedencare AB; Shares Fairly Valued

Wide-moat Symrise released preliminary numbers for full-year 2022 given EBITDA is expected to be below Vara consensus. Furthermore, the company announced a EUR 126 million impairment charge related to its interest in Swedencare AB. Shares were down around 6% intraday, worst among its peers. Full-year organic growth is expected to be 11.4%, better than consensus of 10.7%. However, the adjusted EBITDA margin (excluding the Swedencare AB impairment) is expected to be 20%, below consensus expectations for 20.9%. The margin decline is likely the biggest surprise given Symrise just confirmed its guidance for 21% in the third quarter. Full-year EBITDA is expected to be EUR 921.6 million, which is below the consensus estimate of EUR 956.6 million. Our full-year estimates were more conservative than consensus as we forecast 10% organic growth and EBITDA of EUR 858 million. As a result, we don’t expect to make a material change to our EUR 98.50 fair value estimate for Symrise. After their Jan. 23 decline, the shares look fairly valued.