Symrise AG (SY1.DE) analysis
Symrise AG
Sector:Materials · Flavours and Fragrances
Country:Germany
Profile and moat
Symrise sells flavours and fragrances for food, cosmetics and perfume, and also nutrition ingredients. Givaudan and dsm-firmenich do the same trade. It is not a closed oligopoly.
The formula goes into the customer's product. Changing it is a project: it can go badly and it can go well. This report does not say the ingredient is 1% of the cost or that the price is inelastic. Volume follows what the brand sells. A year in which the customer destocks is not normal earnings.
The dividend comes from that cash. It has to fit. It is not a toll on the perfume.
Sustainable Competitive Advantage
"The advantage is the formula the brand already has in the product and the team that already develops it with them. The brand can reformulate or add a second supplier. The moat narrows if the customer's volume falls, or if the formula is changed."