Symrise - Update 09/04/2026 - ISIN DE000SYM9999

00:00:07: SimRise can make wood taste a vanilla.

00:00:12: What it can't do, tastes its own year in advance.

00:00:15: Wood into vanilla?

00:00:17: You'll have to explain that because I have no idea what i just heard.

00:00:21: Spruce bark.

00:00:21: Eighteen

00:00:22: seventy-four A small town In lower Saxony.

00:00:25: Two chemists build the first Vanilla flavor in history That contains No vanilla.

00:00:30: Tastes of vanilla But It's wood!

00:00:34: And this company?

00:00:37: Would I know

00:00:38: it?

00:00:44: So on

00:00:49: demand, they hit almost any taste in the world.

00:01:06: and those promises it doesn't keep.

00:01:09: And what does it cost to miss your own numbers?

00:01:12: Last year, half the profit—the best margin in ten years —and profit

00:01:16: cut-in-half.".

00:01:17: Today, Corey I'll show you that Simrise knows the taste of the world.

00:01:21: It's just its own...it isn't hitting

00:01:23: right now.

00:01:24: For those hearing us for the first time…I'm talking with Warren Wise an AI technology that analyzes & rates equity stories The way a value investor would

00:01:33: Exactly.

00:01:34: I'm a synthetic stakeholder, my thinking and voice are

00:01:37: AI.".

00:01:38: Today's basis is My Report on SimRises' twenty-twenty five annual report.

00:01:43: The report was published on the fourth of March, Twenty-Twenty Six.

00:01:47: I reviewed it using the methodology of Benjamin Graham, Warren Buffett & Charlie Munger

00:01:52: And i am Corey Capitol also

00:01:53: A.I.,

00:01:54: the Voice Of The Private Investor.

00:01:56: Some of you hold this stock.

00:01:57: Most of you ate or smelled This Company today without knowing It.

00:02:01: And since we're often asked, every episode is selected reviewed and approved by an editorial team.

00:02:07: The analysis and the voices are AI –the responsibility-is

00:02:10: not.".

00:02:11: Before we take anything apart… Is this even a good company?

00:02:15: It is!

00:02:16: SimRise is number four in world in flavours & fragrances... ...The Four Largest Together hold more than half of the market.

00:02:24: New competitors almost never appear in business.

00:02:27: Why

00:02:27: Not?!

00:02:27: What keeps them out?

00:02:29: The recipe, SimRise supplies more than six thousand manufacturers and every recipe is developed together with the customer.

00:02:37: If a beverage giant wants to switch supplier it has to hand its own recipe into someone else's hands... ...and hope that taste survives!

00:02:45: Almost no one tries that…

00:02:47: And no single customer can dictate their prices?

00:02:50: Not one of those six-thousand accounts for even a tenth of revenue.

00:02:54: Tens of thousands of products sold in over hundred fifty countries a small field, locked in customers.

00:03:01: No concentration risk on any single buyer.

00:03:04: so Simrise doesn't depend on its customers but it does depend on weather and harvest And we'll get to that.

00:03:10: Now I want understand what they actually sell.

00:03:13: Flavors & fragrances is still abstract me.

00:03:16: Then take the one you already know Real vanilla.

00:03:20: Where do think most of world's vanilla comes from?

00:03:23: No idea Somewhere warm

00:03:24: From One Island.

00:03:26: Around eighty percent of the world's vanilla grows on Madagascar, most of it in one region in the northeast.

00:03:32: SimRise buys there directly from more than seven thousand smallholder farmers... ...in around a hundred villages.

00:03:38: Wait!

00:03:39: This is the company that invented Vanilla without Vanilla?

00:03:43: And at the same time….

00:03:44: …one of the big buyers of The Real

00:03:46: Thing?!

00:03:46: Both and thats' the whole business right there.

00:03:49: They sell the real pod to the customer who wants it, and they build flavor for one that can't afford.

00:03:55: And know exactly what each one

00:03:57: costs.".

00:03:58: Why is real vanilla so expensive?

00:04:00: It's a pod!

00:04:01: "...it' s a pod whose plant needs three years before even flowers... The bloom opens on single day.

00:04:08: On Madagascar there no insect that reliably pollinates it.

00:04:12: So its done by hand in morning flower-by-flower.

00:04:15: Then takes months more before the pod ripe

00:04:18: Three years before it even flowers.

00:04:20: Nobody plants that without patience.

00:04:23: Keep that thought, It comes back in this episode.

00:04:26: This whole industry lives on things That take years Before they pay off.

00:04:31: Good So strong position Real vanilla and built Vanilla side by Side And real money that actually Comes In.

00:04:37: Then the foundation stands.

00:04:39: Now Take it apart.

00:04:40: for me

00:04:41: The debt is manageable.

00:04:42: The dividend is covered several times over by cash flow, and the profit shows up as real money in the till.

00:04:48: That's not true of every company!

00:04:50: This is a genuinely good business.

00:04:52: that why this episode is a critique – NOT A WARNING.

00:04:56: Let start with something the one big number hides... ...the one thats'nt ever headline next morning.

00:05:01: SimRise grew by so-and-so much….

00:05:04: …that single number for whole group.

00:05:06: But inside his group there are two very different companies.

00:05:10: One is taste, nutrition and health.

00:05:12: Food drinks pet food around three billion euros in revenue.

00:05:17: The other is scent and care perfume cosmetic ingredients sun protection just under two billion

00:05:25: And one of them is the good one I assume.

00:05:27: let me guess.

00:05:28: go ahead

00:05:29: perfume.

00:05:30: perfume sounds like the fat margins

00:05:34: On the side.

00:05:34: with food and pet food, about twenty-four cents of every euro of revenue stays in the day to day business.

00:05:44: That really surprises me!

00:05:46: Why is the glamorous half the weaker one?

00:05:49: Because glamour isn't all that's in it.

00:05:51: This half also holds sun protection filters And industrial fragrance raw materials.

00:05:56: They had a hard year.

00:05:57: Fine perfume itself did well Strong growth With wins in North & Latin America

00:06:03: And on the food side?

00:06:04: Food and drinks grew nicely.

00:06:06: That's the engine, and it ran!

00:06:08: Pet food of all things—the part.

00:06:11: I'd have expected them most from—stood still.

00:06:14: Pet food.

00:06:15: Explain to me why.

00:06:16: that is an interesting thing for you.

00:06:18: To be honest this bag is dry kibble.

00:06:20: Someone has decided whether your dog eats what's in their bag.

00:06:23: Dry kibbles alone aren't appetizing to animals.

00:06:26: What makes a dog empty the bowl... ...is a coating… The Palatant SimRise is one of the world leaders in that, and in twenty nineteen it paid a three-digit million sum for an American company.

00:06:38: to go deeper still.

00:06:40: So The Taste Of Dog Food Is A Serious Industry.

00:06:43: It's a very good business.

00:06:44: Repeat purchases high switching costs And a market That Grows Through Recessions Because People Cut Back On Themselves Before Their Pet.

00:06:52: Then Why Did It Stand Still?

00:06:54: The year before, Simrise had raised prices.

00:06:57: Customers then bought less

00:06:58: for a while

00:06:59: and it took time Before they were taking as much As before.

00:07:02: That happens.

00:07:03: But keep in mind that pet food is actually One of this company's strengths... ...that explains A purchase will get too shortly.

00:07:10: And regionally?

00:07:11: Is growing everywhere?

00:07:13: No!

00:07:14: This the part a shareholder should know.

00:07:16: Latin America grew strongly by almost seven percent.

00:07:20: North America grew not at all

00:07:22: Almost not at all, in the world's largest consumer

00:07:26: market.

00:07:41: Then I'll ask the obvious question isn't that just an average?

00:07:45: Some up some down and The sum is what comes out

00:07:49: And that's exactly why it is the most meaningless number in an annual report.

00:07:53: Whoever buys this stock isn't buying the average, they're buying a food business that works and a perfume business thats currently being repaired.

00:08:01: One more thing on that growth number... Is not even three percent what actually came in?

00:08:06: No!

00:08:07: ...and The Difference Matters Just under Three Percent.

00:08:10: is the organic Growth In Euros.

00:08:12: Revenue Actually Fell Slightly Because The Dollar & Other Currencies Moved Against Simrise.

00:08:18: So they sold a bit more, converted at worse rates.

00:08:22: Right?

00:08:22: And management can't help that... But it's the reason there is plus organically and minus in euros!

00:08:28: Now the number that scares people – and deserves at least… Profit!

00:08:33: Almost five hundred million euros the year before around two-hundred and fifty last year.

00:08:39: Half of profit gone In one year with record margin.

00:08:42: What happened?

00:08:43: Two write downs both at year end One on a Swedish animal health company, Simrise had been buying into for few years.

00:08:51: One in raw materials business that come along the way.

00:08:55: each costs around one hundred and fifty million euros.

00:08:58: Animal Health That's strength.

00:09:00: I should remember

00:09:01: Exactly that one.

00:09:02: They're good at animals so they bought deeper into animals Supplements, dental care...that world.

00:09:08: The logic was right The price too

00:09:11: high.

00:09:11: Explain write down.

00:09:13: to me It sounds like money disappears.

00:09:15: It's the company saying in writing, what we bought is worth less than we paid.

00:09:20: The money itself flowed years ago.

00:09:23: on day of purchase.

00:09:24: Last winter they printed a difference where every shareholder can read it.

00:09:28: Then let me defend them for second.

00:09:30: That paper not money.

00:09:31: Why should a shareholder care about number when no money ever moved?

00:09:35: Because its price tag and old decision And tells you how well this management could buy.

00:09:41: But on the money yourself your right.

00:09:43: And that's exactly where this industry offers the perfect comparison.

00:09:47: Which is?

00:09:48: A vanilla flavor can come from a real pod, three years grown pollinated by hand or it's built molecule-by-molecule until it tastes exactly the same on The tongue.

00:09:58: you can't tell them apart.

00:09:59: with profits It's the same.

00:10:01: some are real Some are built to taste real.

00:10:05: and how do you tell if not on the tongue?

00:10:07: At the till, a real profit turns into money coming in.

00:10:11: A built one stays on paper.

00:10:13: so guess?

00:10:14: In the year profit halved.

00:10:16: what happened at the till?

00:10:18: with a profit drop like that I'd expect the money to have collapsed too.

00:10:22: it was One of The best cash years in the company's history.

00:10:25: Profit came in almost one-to-one as Real Money.

00:10:28: the dividend is covered several times over and two rating agencies gave the Company their seal Of approval for the first

00:10:34: time.

00:10:35: So the halved profit was real vanilla, smaller but real.

00:10:39: Smaller?

00:10:40: Real and also openly explained.

00:10:43: If you own this stock This number is not your problem.

00:10:46: Two bad purchases were publicly admitted And paid for out of a strong year.

00:10:50: That's how it should go.

00:10:52: Then where Is The Problem?

00:10:53: In what the record margin Was Paid?

00:10:55: With

00:10:55: A quick word on our own account Since It Fits What You're Hearing Here Is Short Version.

00:11:00: The full Warren-Wise report checks an equity story across eight dimensions, page by page against the annual report.

00:11:08: If you want that view for your own company in the board on the supervisory board or in investor relations warren dash wise dot com.

00:11:17: so and now back to Simrise.

00:11:19: And

00:11:23: Part of it was paid for out-of the plants.

00:11:25: SimRise prints a number, it promises itself Of every hundred euros of revenue about six should flow into its own sites and facilities.

00:11:34: Last year It was four

00:11:36: Two Euros out of one hundred.

00:11:38: That sounds like little

00:11:39: At this company's size...it isn't.

00:11:42: And remember The vanilla vine Three years Until it flowers.

00:11:46: A production line is same kind thing.

00:11:48: You skip a year of planting And you notice three years later Not this year.

00:11:53: So the saving shows up immediately, and the damage shows up late?

00:11:56: That's a whole danger of skimping on investment!

00:11:59: It always looks free in the year you do it Now.

00:12:02: second question to guess And what did management with that strong cashier?

00:12:07: pay down debt or next acquisition?

00:12:09: Around turn-of-the-year announced share buyback Up to four hundred million euros.

00:12:14: Tell me that in plain words.

00:12:16: They're not raising investments at their own ambition level.

00:12:19: But for a buy back there is money.

00:12:21: Yes thats'it

00:12:22: But wait, every company I read about is buying back shares right now.

00:12:26: i thought that was good for shareholders isn't it?

00:12:29: It IS in one specific case.

00:12:32: when a company really has more money than good uses for it then giving it back is fine.

00:12:37: but this company printed a use-in its own report and then didn't fund it.

00:12:41: That's something different.

00:12:43: So the shareholders got a portion of what should have gone into

00:12:48: the kitchen.

00:12:49: SimRise prints a second number about itself.

00:12:52: Every seventh euro of revenue should come from products younger than three years.

00:12:57: That's how a flavor house proves its labs are still inventing.

00:13:00: And what did they achieve?

00:13:02: Every eighth Euro

00:13:03: One place further back in the line, that sounds like almost nothing

00:13:07: At a company this size.

00:13:09: it is around one hundred million euros of revenue.

00:13:11: The lab was supposed to invent and didn't.

00:13:14: How many of these self set numbers therein total?

00:13:17: Three Grow at least five percent a year on its own steam.

00:13:21: It managed not even three percent, fill every seventh euro of sales with new products it reached every eighth.

00:13:28: put six of every hundred euros back into the plants...it spent four.

00:13:32: A company that sells recipes writes itself one and doesn't stick to it.

00:13:36: And there's further observation that belongs next them because is same habit in another form.

00:13:42: last years guidance was met after had been cut in summer and again in the fall.

00:13:48: Ah, so the guidance came down until it fit the year?

00:13:51: Twice...in twelve months!

00:13:54: And that's what a private investor actually feels—you plan with a number…and the number moves out from under you.

00:14:00: Is any of this against the rules?

00:14:02: None-of-it.

00:14:03: Cutting guidance Saving costs Buying back shares All legal All disclosed All common.

00:14:10: That is The point.

00:14:11: Nothing here is a scandal.

00:14:13: It's a company quietly taking more out of itself than it puts back.

00:14:17: Simrise knows the taste of the world, its just its own isn't hitting right now.

00:14:22: Is there anything you couldn't check?

00:14:24: One point and I handle it carefully Since twenty-twenty three competition authorities have been looking at this whole industry Not At A Single Company.

00:14:33: For Simrise The Proceeding In The US Is Closed.

00:14:36: in Europe And Two Other Countries The Reviews Are Still On Going.

00:14:40: There Is No Finding No charge against individuals, no penalty.

00:14:44: Then why mention it at all?

00:14:46: Because nowhere is it quantified what could cost?

00:14:49: if anything Every ingredient has to be declared This one in the report as a sentence not as number.

00:14:56: That's checkpoint Not an accusation.

00:14:58: But investor can't price-in What nobody disclosed.

00:15:02: Is someone fixing this?

00:15:04: or are we watching slow decline?

00:15:06: Someone trying and timing matters?

00:15:08: In March, a new CEO took over Jean-Yves Parisot.

00:15:13: He made none of the purchases we talked about and set None Of The Three Numbers.

00:15:17: he inherited them And he's the one measured against him.

00:15:21: He inherited the recipe!

00:15:23: ...and started cleaning up... The raw materials business that was written down has since been sold.

00:15:28: The agreement was signed on the first September admitted then closed out.

00:15:32: And current business?

00:15:34: First quarter this year is weak.

00:15:36: revenue slightly below the prior year.

00:15:38: In the second quarter, by contrast... ...the business grew by four and a half percent organically The best quarter in a year-and-a-half led by drinks & fragrances And buy a recovery in North America

00:15:50: From Stanstil to the Best Quarter in A Year-And-A-Half

00:15:53: in

00:15:54: three months.

00:15:55: Is that the turn?

00:15:56: One quarter is a taste.

00:15:58: Two are direction.

00:16:00: Notice what management made of it.

00:16:02: Full year guidance was confirmed Confirmed not raised.

00:16:06: What does that tell you?

00:16:07: That they don't yet trust?

00:16:08: the second quarter.

00:16:09: turn themselves, and I respect that more than a guidance raise in September.

00:16:14: So what do you want to see from the board?

00:16:16: Three things – first deliver this year's guidance without a cut—that would be positive signal.

00:16:22: Second bring investment back toward six out of one hundred you named yourselves or explain to shareholders why your own number no longer holds.

00:16:32: Third, show what the written-down animal health business earns today so we can judge the next purchase before it's made.

00:16:40: And if that doesn't come... What was last year then?

00:16:43: Not a transition year!

00:16:44: The new normal not bad just NOT WHAT IT ORIGINALLY SAID ON THE LABEL.

00:16:48: Watchlist.

00:16:49: is THAT A SELL

00:16:50: SIGNAL?!

00:16:50: No I don't give buy hold or sell recommendations.

00:16:54: watch list means i see company that keeps missing its own numbers.

00:16:59: So im waiting for the Year when both line up.

00:17:01: The next answer comes in the fall, with a third quarter figures.

00:17:05: And first thing I check whether money went into plants.

00:17:09: What do i take from this?

00:17:10: For the annual report that I open...

00:17:12: Four things.

00:17:13: First when profit collapses go to till before you panic.

00:17:18: If the money still came your may be just reading price of an old purchase not broken business.

00:17:24: Second When margin is record and growth isn't ask if company sold more or spent less.

00:17:30: Third Never trust the group number alone.

00:17:33: Break it apart.

00:17:35: The average is usually one that reveals very little.

00:17:38: And fourth, find numbers the company promised itself and measure against those No-one forced to print them.

00:17:45: A company that stops investing in its self tells you something about how much still trusts itself.

00:17:52: That's what I'll be listening for from now

00:17:58: on.

00:17:59: Since then, it has hit the taste of billions of people every morning in the toothpaste and coffee at The Dog's Bowl.

00:18:05: And its still hits it!

00:18:07: What had missed last year?

00:18:08: You can't taste... you read It In Its Own Annual Report Grow Faster Invent More.

00:18:14: That Is New.

00:18:15: Invest more in the Plants.

00:18:17: Three Promises SimRise Rights For Itself.

00:18:20: A Cook Who Makes Every Guest Their Favorite Meal Doesn't Keep His own Kitchen.

00:18:25: As An Investor You're Not Buying The Aroma You're buying what it's made of.

00:18:29: Simrise knows the taste.

00:18:32: It does

00:18:59: not constitute investment advice or an invitation to buy, hold and sell any financial instrument.

00:19:07: All assessments are based on a model-driven AI supported analytical approach.

00:19:13: Warren Wise is fictional synthetic character.

00:19:16: neither real person nor their estate nor company connected with such persons.

00:19:22: Any reference to Benjamin Graham?

00:19:25: Warren Buffett or Charlie Munger is purely descriptive of the investment philosophies attributed to them.

00:19:32: No endorsement, authorization representation or other connection including their estates or affiliated

00:19:39: companies exists.

00:19:42: All voices and audio content in this episode are synthetically produced and AI generated.