SHARING VALUES 2016 Diversifying Success. Successfully Diversifying. Symrise – Corporate AG Report CORPORATE REPORT 2016 Diversifying Success. Successfully Diversifying. Key Figures of the Group 2012 2013 2014 2015 2016 Business Sales € million 1,734.9 1,830.4 2,120.1 2,601.7 2,903.2 EBITDA 1 € million 338.9 373.1 464.5 572.2 625.2 EBITDA margin 1 in % 19.5 20.4 21.9 22.0 21.5 EBIT 1 € million 252.6 283.1 337.9 395.2 423.3 EBIT margin 1 in % 14.6 15.5 15.9 15.2 14.6 Net income 1 € million 157.5 172.3 211.6 246.8 265.9 Balance sheet total (as of December 31) € million 2,150.2 2 2,210.4 3,999.8 4,183.8 4,752.8 Capital ratio (as of December 31) in % 40.9 2 43.0 35.8 38.0 36.4 Investments (without M & A) € million 70.3 70.7 101.3 147.2 168.4 Net debt (incl. pension provisions and similar obligations) / EBITDA (as of December 31)1 ratio 2.4 2 2.0 3.2 2.8 3.1 Research and development expenses 1 € million 113.8 127.0 138.9 169.6 186.0 Operating cash flow € million 219.5 274.8 343.2 375.2 338.8 Capital Market Shares issued as of balance sheet date millions 118.2 118.2 129.8 129.8 129.8 Share price at end of fiscal year (Xetra® closing price) in € 27.12 33.50 50.13 61.33 57.83 Market capitalization at end of fiscal year € million 3,204.9 3,958.8 6,507.5 7,961.4 7,507.1 Earnings per share 1 in € 1.33 1.46 1.69 1.90 2.05 Dividend per share in € 0.65 0.70 0.75 0.80 0.85 3 Environment Carbon dioxide emissions (Scope 1 and Scope 2) 4, 5 in t 240.51 226.00 201.76 243.04 230.05 Chemical oxygen demand (COD) in wastewater 4, 5 in t 5.73 5.68 4.96 5.21 4.31 Sensitive waste 4, 5 in t 16.51 14.99 15.90 14.20 14.34 Employees Employees (as of December 31) FTE 6 5,669 5,959 8,160 8,301 8,944 Fluctuation rate in % 5.3 4.4 4.8 5.1 4.8 Number of accidents MAQ 7 5.3 5.3 4.8 3.9 3.8 1 Figures for 2014 and 2016 normalized for transaction and integration costs as well as one-off valuation effects related to business combinations 2 adjusted as a result of changes to accounting policies in 2012 3 proposal 4 per € m of value created; Figures for 2015 and 2016 including Diana but without Renessenz 5 In 2014, we have redefined the calculation basis for our consumption and emission values: We now record these data no longer per ton of product, but per million of added value. The values of previous years were restated accordingly. The basic trend remains unchanged. 6 not including apprentices and trainees; FTE = Full Time Equivalent 7 MAQ = Number of accidents (> 1 lost day) x 1 million/number of working hours Our Product World UV Filters Beverages Cosmetic Savory Ingredients S I T N U S Probi S E Sweet N I S U B L A N O I Aqua T I D D A Food S E C N A R G Pet A R Food F Fine & S R Fragrances O V A L F Beauty Menthol Care Fragrance & Home Care Sensory Ingredients Oral Care Symrise has always created exciting taste and fragrance experi- Symrise is different: We constantly seek out new challenges that ences – this is at the heart of our daily operations. With commit- we take on with entrepreneurial innovation and creativity in ment and dedication, we develop the best possible concepts for order to discover additional business potential. We are willing to our customers’ products. We do this so that consumers around go further than others. And that makes all the difference. Our the world can take pleasure in the most common things of ever- success speaks for itself. In this way we fulfill our motto of “al- yday life and also benefit from healthy or nurturing properties. ways inspiring more ...” day after day. DIVERSIFYING SUCCESS. SUCCESSFULLY DIVERSIFYING. Symrise is one of the world’s most successful manufacturers of fragranc­ es and flavors. Yet, we are always looking for new business fields and markets where we can apply and expand our strengths – and thereby separate ourselves from the com­ petition. A third of our business is already generated with cosmetic active ingredients and raw materials, functional ingredients, pet foods, aquacultures and probiotics. By con­ stantly forging new paths, we are ex­ panding our customer base, develop­ ing new customer benefits, advancing our business success and adding to our sustainability achievements. 2 — Our Company Magazine P. 18 The Fragrance of Forests P. 28 Partnership for Outstanding Products P. 30 Strategy: an Interview with Content Dr. Heinz-Jürgen Bertram P. 36 Everything’s Bananas! P. 46 Of Bees and Biodiversity P. 54 Sourced from Nature’s Diversity P. 59 WASH in School P. 60 Fragrances for the World P. 64 Social Petwork P. 66 Human Resources: an Interview with Dr. Iñigo Natzel Our Company P. 70 Awards 2016 P. 04 Editorial of the Global Management Committee P. 05 Symrise’s Global Management Committee P. 06 Our Values, Goals and Responsibility P. 08 Our Company P. 09 How We Generate Value for All This print publication is an abridged P. 14 Track Record 2016 – Goals 2020 version. The online report with a wide variety of additional information P. 16 Our Highlights 2016 is available at cr2016.symrise.com. Our Company — 3 From the Group Management Report & from the Consolidated Financial Statements P. 89 Overview of the 2016 Fiscal Year P. 89 Basic Information on the Symrise Group P. 100 Economic Report P. 110 General Statement on the Company’s Economic Situation P. 110 Outlook From the Sustainability Record P. 110 Corporate Governance Statement P. 111 Consolidated Income Statement P. 72 Sustainable Added Value with a Separate Presentation P. 76 Integrated Sustainability of the Special Influences for the Management 2016 Fiscal Year P. 78 Goals and management of P. 112 Consolidated Statement material topics of Financial Position 4 — Our Company Dear readers and friends of Symrise, “You can’t overtake someone if you’re following in their footsteps.” Such was the belief of French film director François Truffaut, who forged many new paths with his work. “Diversifying Success. Successfully Diversifying”, the motto of the 2016 Corporate Report, also harnesses this belief. Symrise is one of the most successful companies in the industry because we are willing to look beyond the classic areas of flavors and fragrances to find new areas of activity and mar- kets where we can utilize our strengths. Because of this, we have grown twice as fast as the rest of our market. On the one hand, we are expanding our custom- ary business units with innovations and new products. While on the other hand, we have also become stronger through business combinations, which in turn have redefined our portfolio and our structure. That Symrise often takes a different approach to things is clear from the articles in our magazine: How we sustainably extract scent molecules from natural by- products (see page 18). Why our employees visit banana plantations in Ecuador (see page 36). Or why Symrise keeps its own bees (see page 46). Striving for economic success is what drives us. The results for the 2016 fiscal year are presented in the summary of the Group management report and con- solidated financial statements. Sustainable business practices are an integral part of our corporate strategy and our business model. A comprehensive pic- ture of this is provided in an input-output model developed specifically for this report on page 9. As a signatory of the United Nations Global Compact, we actively support the principles of responsible business outlined therein. 2016 was a successful year for Symrise, in which we could also celebrate ten years of being a publicly traded company. Our share has more than tripled its value since 2006. We are sticking to our medium-term goals until 2020: annual sales growth of 5 to 7 %, an EBITDA margin between 19 and 22 %. We are optimistic about the prospects for 2017. Symrise will continue to be successful – successfully different. We hope you enjoy reading the Symrise Corporate Report for 2016. Your Global Management Committee Our Company — 5 » We are optimistic about the prospects for 2017. Symrise will continue to be successful – successfully different.« 1 2 4 3 5 7 6 SYMRISE’S GLOBAL MANAGEMENT COMMITTEE 1 DR. HEINZ-JÜRGEN BERTRAM CEO 2 ACHIM DAUB President Scent & Care 3 HEINRICH SCHAPER President Flavor 4 DR. NORBERT RICHTER Aroma Molecules Division 5 OLAF KLINGER CFO 6 DR. JEAN-YVES PARISOT President Nutrition 7 EDER RAMOS Cosmetic Ingredients Division 6 — Our Company Our Values, Goals and Responsibility Shared values provide the basis for shared goals at Symrise: striving for economic success while taking on responsibility for the environment, employees and society. Sustainability is an integral part of our business model. It supplies us with specific competitive advantages and secures the long-term success of the company. Successful companies have a strong corporate cul- ture. Symrise is a perfect example of this. Our OUR MISSION: What is our mission? employees, who work in more than 40 countries We develop customized fragrance and taste solutions, which around the world, share common values as the often contain health-promoting or nurturing properties.