Firmenich International SA, the world’s largest privately-owned Perfume and Taste company, announces its Full Year Results for the 52 weeks ended 30 June 2021.
“Firmenich achieved solid performance in a challenging year, demonstrating the strength of our business. I am proud and thankful for the dedication and commitment of our people that delivered these results. Throughout the year, we have continued to invest to position ourselves for the future, and I believe we are well placed to capture the opportunities that will arise after the crisis,” said Patrick Firmenich, Chairman of the Board.
“I am proud of our achievements this year. We maintained a sharp focus on the health and safety of our employees. I am grateful for the dedication and energy that our people have demonstrated in this challenging time. We delivered strong revenue growth and cash generation across the business, with double-digit growth in the key geographies of North America, China and India. We continued to make progress on the integration of our acquisitions and accelerated our innovation to help our customers win bigger in the post-pandemic world,” said Gilbert Ghostine, CEO of Firmenich.
Revenue reached CHF 4,272 million, up +10.2% year-over-year on a reported basis, and +4.7% on an organic basis at constant currency.
Perfumery & Ingredients Revenue increased +4.4%, on an organic basis at constant currency, driven by the rebound in Fine Fragrance and strong customer demand in Ingredients.
Taste & Beyond Revenue increased +5.2%, on an organic basis at constant currency, driven by growth in Beverages, supported by our Sugar Reduction solutions, and growth in Dairy.
In the second half of the year, we saw an acceleration in revenue growth, with continued momentum from our two Divisions, and a strong rebound in Fine Fragrance, which grew by +39%, on an organic basis at constant currency.
Adjusted EBITDA reached CHF 816 million, down -5.0% year-over-year. Excluding the impact of acquisitions and foreign exchange, Adjusted EBITDA would have decreased by -1.1% compared to the previous year.
Adjusted EBITDA margin as a percentage of revenue was 19.1%, a decrease of -3.0 percentage points compared to the previous year. This was driven by the impact of acquisitions, negative foreign exchange impact as well as the temporary impact of the pandemic on costs and mix. Excluding the impact of acquisitions and foreign exchange, Adjusted EBITDA margin would have decreased by -1.2 percentage points.
Free Cash Flow
Free Cash Flow reached CHF 511 million, a +12.5% increase compared to the previous year. This underscores our prudent execution and disciplined working capital management during the crisis, in line with our commitment to retain a strong investment grade credit rating through solid cash generation. Free Cash Flow was favorably impacted by the cash effect of disposals (CHF 42 million) and settlement of legal claims (CHF 30 million).
Continued progress with DRT Integration
The transformational acquisition of DRT, a leader in naturally derived renewable ingredients, has enabled Firmenich to build the world’s leading innovation platform for renewable, biodegradable, and sustainable ingredients for Fragrances, Flavors and Nutrition. This in turn has allowed us to meet our customers’ growing demand for sustainable products, a key long-term growth driver for our industry. During the period, the pandemic continued to have an adverse impact on revenue and profit due to lower demand in the DRT industrial end markets and in Fine Fragrance, resulting in us being behind our original business case assumptions for FY21. In the second half of the year, we have seen a significant revenue rebound, as well as improving profitability. We are confident in the strategic fit of this acquisition and in the long-term competitive advantage provided by our unique and proprietary access to renewable ingredients.
Leader in Responsible Business
Our responsible business model is a core part of our family heritage and is consistent with our values and company purpose. This year, we further strengthened our industry-leading sustainability credentials, announcing ambitious ESG goals for 2025 and clear measurable targets for 2030. We are taking an ambitious carbon emissions commitment: to reach carbon neutrality by 2025, and carbon positive impact beyond that date. By 2030, we will strive to achieve absolute carbon emission reduction in line with the 1.5°C Science-Based Targets. In a further demonstration of our responsible leadership, we are one of only two companies in the world to receive a triple “A” rating from CDP, in Climate, Water and Forests, for the third year in a row. We were also rated for the first time by Sustainalytics, with a score of 8.6, which not only places us as ESG leaders in our industry and the broader Chemicals sector, but also in the top 1% of companies rated worldwide. Additionally, in May we received the global EDGE MOVE™ certification, in recognition of our work and longstanding commitment for gender equality. This builds on our earlier EDGE certification, which we obtained for the first time in 2018.
Strengthening our Leadership Team
We have continued to strengthen our leadership team with new senior appointments and upgraded organizations in Perfumery & Ingredients and Taste & Beyond. This year saw internal promotions and external hires to key senior leadership positions, including a new Chief Financial Officer, a new Chief Procurement Officer, a new Chief Supply Chain Officer, and a new Chief Research Officer (effective 1 July 2021).