Robertet H1 performance records increase in fragrance sales and “sharp” decline in raw materials business

05 Oct 2023 ---French fragrance and flavor manufacturer Robertet has released its half-year financial report for 2023, reporting positive sales growth from the previous year.

The company’s consolidated net sales for the first half of 2023 came to €376.4 million (US$395.9 million), up 4.9% in 2022. This increase was positive compared with the first half of 2022, which saw growth of 20% with consolidated revenues of €358.9 million (US$ 377.5 million). 

Given the slowdowns and destocking observed in many regions, Robertet’s sales growth target for 2023 is around +4% compared with 2022, while EBITDA profitability should approach the 2022 level. Profitability measured in EBITDA stood at €73.6 million (US$ 77.5 million), up 2.7% in the first half of 2022, and represented 19.6% of sales.

Growth across regions
By region, performance was driven by a good start to the year in North and South America, combined with stability in Europe and Asia.

Robertet reports a strong North American sales increase so far this year.Fragrance sales accelerated by 11.2%, with momentum in North and South America, particularly in fine fragrances. Flavors saw growth of 6.2% due to recent product launches.

Meanwhile, raw materials sales are down by 1% due to a slowdown in organic ingredients and continued strong destocking by North American customers — particularly in aromatherapy.

The health and beauty division increased by 3.4% and strengthened its commercial presence in the Asian market.

Robertet says its development teams introduced its customers to new extraction technologies, such as CleanRscent, a collection of new products that marks the transition to healthier, biodegradable extractions while “bringing new qualities and facets” to its natural products.

Uncertain socio-economic landscape
In the current uncertain economic climate, Robertet asserts that it has a reasonably positive outlook for the end of the year. The gradual easing of raw material and energy prices should help progressively to restore operating margins. Reductions in customer inventory levels and lower-than-expected consumption should lead to an annual organic sales increase of around 4%.

The inflationary context has kept raw material and energy costs high, putting ongoing pressure on its margins. The return of inflation has been confirmed and is weighing on consumer purchasing power, leading to a risk of lower consumption and a temptation to buy cheaper products.

Declining raw material businessFrench fragrance company saw a decline in its raw materials division. 
This organic growth remains solid and close to the fragrance manufacturer’s 2022 organic growth target of +5.4%. Its external growth brought additional growth of +1.1% versus +4.6% in 2022. The company also witnessed a reversal in currency effects, with a negative impact of 0.7% on sales, compared with +6% in 2022.

Robertet suffered a “sharp” decline in the raw materials division, down 5.1%. This was due to strong destocking by its customers, combined with a slowdown in the aromatherapy and organic products sectors. Finally, the company saw moderate growth in the health and beauty division of +3.4%, with a more robust sales presence in Asia.

The North American region reported strong double-digit growth, driven by a fine fragrance surge and nice flavors developments. Nevertheless, the economic activity slowdown and the decline in aromatherapy penalized Robertet’s natural raw materials division in the US.

Similarly, South America is developing well, both in volume and value, in all the company’s major markets, such as Mexico, Argentina and Brazil — which are recovering.

On the other hand, Europe was stable, impacted by an economic slowdown and inventory controls by Robertet’s customers, following a strong 2022 and the rebuilding of inventories. These effects are accentuated by the downturn in the organic products market, which is hit hard by the decline in consumer purchasing power.

By Sabine Waldeck