By Symrise, the German chemicals company, experienced a significant drop in share prices on Friday following the revision of its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin target for the year.
Share Price Decline
As of 0912 GMT, Symrise shares fell by 8.9% to EUR96.70. This decline marks a drop of over 6% within the past 12 months.
Adjusted Margin Forecast
Symrise announced on Thursday that, due to special effects and delayed reduction in inventories, it expects its adjusted EBITDA margin for the year to be between 19% and 19.5%. This is a revision from its previous forecast of around 20%.
Impact on Profitability
The company stated that the delayed reduction in inventories is having an impact on its profitability. However, it still anticipates organic growth of over 7%, an increase compared to the previous forecast range of 5% to 7%.
Analysts’ Perspective
Deutsche Bank analyst Virginie Boucher-Ferte believes that Thursday’s update indicates that the company’s top-line growth trends are relatively stable. However, the revised outlook confirms a problem with profitability.
Jefferies analysts Charlie Bentley and Chris Counihan noted that Symrise’s revised outlook implies high single-digit cuts to its second-half EBITDA.
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