SYMRISE AG 30 JULY 2025_EN

LATEST FINANCIAL ANNOUNCEMENT

Symrise AG (SYIEY)

Associate: Anne Ching

Q2 FY2025

07/30/2025 Corporate | Financial

• Organic growth of 3.1% EBITDA margin of 21.7%, an increase of 100 basis points year-on-year
• Identified recurring cost savings through efficiency improvements of €40m in 2025, €20m realized in H1 as part of the ONE SYM Transformation
• Seeking strategic alternatives for terpene ingredients business
• Appointed Michael Friede as Symrise Executive Board Member and President of the Scent & Care segment
• Updating guidance to reflect the current global demand environment and execution of ONE Symrise Strategy:
• Moderating 2025 organic growth to 3-5% from 5-7%
• Increasing 2025 EBITDA margin to ~21.5% from ~21%

Symrise AG, a leading global supplier of fragrances and flavors, cosmetic ingredients as well as functional ingredients, continued to execute its ONE SYM Transformation, including advancing its profitable growth strategy in the first half of 2025. Despite the continued challenging global environment, Symrise delivered above-market organic sales growth and significantly improved its profitability through a focus on high-margin products and strong cost management.

For H1 2025, Symrise achieved organic sales growth of 3.1%. Taking into account portfolio and exchange rate effects, amounting to €91 million, reported revenue totalled €2,554 million. A healthy pipeline of sales opportunities and project vitality with selected customers in key markets offset tough year-on-year comparables.

Earnings before interest, taxes, depreciation and amortization of property, plant and equipment and intangible assets (EBITDA) amounted to €554 million, a 4.5% increase versus the prior year of €530 million. EBITDA margin increased to 21.7%, up 100 basis points versus the prior year of 20.7%, mainly attributable to Symrise’s focus on profitable sales and efficiency initiatives.

Jean-Yves Parisot, CEO of Symrise AG, commented, “Over the past year, we have successfully laid the groundwork of our multi-year ONE SYM Transformation and are now firmly entering the next phase of our journey. Building on the Design & Implementation phase, our focus is now on Activation to drive operational excellence, profitable growth, and shareholder value. While our Transformation is starting to gain momentum, as evidenced by our strong profitability performance, we are observing a shift in global market demand, with heightened consumer caution across certain sectors. Taking this into consideration, we feel it is prudent to moderate our organic sales guidance to a range of 3-5% from our previous outlook of 5-7%. At the same time, we continue to ramp our self-help initiatives and are increasing our EBITDA margin target to approximately 21.5% for 2025 from our previous outlook of around 21%. In addition, we are introducing a target for recurring cost savings through efficiency improvements of €40m in 2025, of which we have already achieved €20m in H1. In a dynamic demand environment, we are leveraging our strengths of differentiation and value-added while controlling what we can control to deliver on our 2028 financial targets. I want to thank our 13,000 Symrisers around the world for their commitment, excellence, and creativity as we transform Symrise into an even stronger organization and market leader globally.”

H1 2025 Group Financial Performance

Gross profit improved to €1,057 million, up 6.0% year-on-year. Gross margin of 41.4% increased 250 basis points over the same period, driven by a focus on value-added sales.

Earnings before interest, taxes, depreciation and amortization of property, plant and equipment and intangible assets (EBITDA) of €554 million, an increase of 4.5% year-on-year. EBITDA margin reached 21.7%, an increase of 100 basis points, mainly due to profitable sales delivery and efficiency initiatives.

H1 2025 Segment Financial Performance

Taste, Nutrition & Health Segment

The Taste, Nutrition & Health segment achieved organic sales growth of 3.3%. Taking into account portfolio and exchange rate effects, segment revenue was €1,564 million in reported currency, down 0.5% year-on-year (H1 2024: €1,572 million). The effect from the sale of the beverage trading business in the Food & Beverage division in 2024 had a negative impact of €10 million on sales.

• Food & Beverage developed positively with mid-single digit growth. Beverages continued to see strength, achieving double-digit organic growth. Naturals also recorded single-digit percentage growth while Savory products saw increased sales across all regions.
• The Pet Food division maintained flat organic sales despite continued cautious consumer sentiment across key markets.

Segment EBITDA of €364 million, increased 4.7% year-on-year, mainly due to an improved input costs and efficiency gains. EBITDA margin of 23.3%, increased 120 basis points in the same period.

Scent & Care Segment

The Scent & Care segment achieved organic sales growth of 2.9%. Taking into account portfolio and currency effects, segment revenue was €989 million in reported currency, down 0.4% year-on-year (H1 2024: €993 million).

• The Fragrance division achieved strong organic growth across all application areas, resulting in double-digit gains in Fine Fragrances. The Consumer Fragrance applications also achieved solid single-digit percentage growth. Oral Care product solutions continued to show positive momentum with single-digit organic growth.
• The Aroma Molecules delivered single-digit organic growth, largely from strong demand in the USA, India and Mexico.
• The Cosmetic Ingredients division experienced lower sales due to high prior-year comparables in sun protection filters.

Segment EBITDA of €190 million, increased €8 million. EBITDA margin of 19.2%, increased 90 basis points from the same period.

ONE SYM Transformation Update

After designing and implementing the transformation roadmap over the last 12 months, inclusive of conducting a portfolio-wide strategic review, engaging our global workforce, and establishing a transformation office, Symrise is entering the second phase of its journey focused on Activation. In H1 2025, we have made meaningful strides in optimizing our portfolio, leadership impact, and efficiency to drive profitable growth and shareholder value creation. Selected actions include:

• In addition to €50m of cost savings achieved in 2024, inclusive of cost avoidance measures, identified an additional €40 million in cost savings as part of our 2025 efficiency plan.
• Continued to add key talent and strengthen the leadership bench; appointed Michael Friede to the Executive Board and President of Scent & Care and added senior leaders to oversee global procurement, global operations, global quality & regulatory and digital & information.
• Through the strategic review, identified portions of the portfolio that are non-core and that do not align with our focus on high margin and low capital intensity; specifically:
  • Aqua feed business: A specialized business in the valorisation of tilapia, tuna and shrimps’ by-products. Expected annual portfolio effect close to €10m, related to the divesture of the Costa Rica site and closing of the Ecuador site.
  • Terpene ingredients business, part of Aroma Molecules division: Seeking strategic alternatives for the business.
• Recycling a portion of the capital from the cost savings through efficiency improvements to invest in talent, digitization, and operational best practices.

Jean-Yves Parisot, CEO of Symrise AG, commented, “Symrise has a long heritage of market leadership, born out of our technical expertise, differentiated innovation, long-standing customer relationships, and a passionate, curious culture. We have embarked on this journey to take the best of Symrise and transform into a company that generates durable profitable growth, strong business free cash flow, and compounding returns. We are in the early phases of our multi-year journey and, importantly, are taking bold, decisive action. We are seeing momentum build as we continue to execute against our ONE SYM Transformation and One Symrise Strategy implementation. Amid an increasingly challenging consumer backdrop, our efforts will result in a structurally stronger Symrise and position us well to capture market share and deliver operating leverage as demand strengthens.”

Business Free Cash Flow, Net Debt, and Net Income

Business Free Cash Flow totalled €226 million. At 8.8% as a percentage of sales, BFCF remained constant compared to the prior year.

Net debt increased by €210 million to €2,046 million compared with the reporting date of December 31, 2024. Including pension and lease liabilities, net debt amounted to €2,535 million, corresponding to a net debt to EBITDA of 2.4x, within the communicated long-term range of 2.0x-2.5x.

Income tax expenses amounted to €98 million, corresponding to a tax rate of 26.7% versus the prior year rate of 25.3%.

Consolidated net income amounted to €268 million, up €29 million from €239 million in the same period of the prior year. Earnings per share reached €1.92 in the first half of 2025, compared with €1.71 in the first half of the previous year (+12.0%).

Full Year 2025 Outlook

Symrise continues to expect to grow faster than the relevant market, which is projected to grow 2-3% in 2025 based on revised estimates globally. Taking into account a more challenging than expected global demand environment and transformation efforts, we are updating our annual guidance as follows:

• Moderating organic growth outlook to 3%-5% versus the prior expectation of 5%-7%.
• Increasing EBITDA margin outlook from ~21% to ~21.5%
• Reiterating Business Free Cash Flow as a percent of sales of ~14%.
• Introducing annual cost savings of €40 million

Symrise also reaffirms 2028 mid-term targets, aiming for an organic growth of 5% to 7% (CAGR), an EBITDA margin in the range of 21% to 23% and Business Free Cash Flow percent of sales of more than 14%.

Source: Symrise Reports First Half 2025 Results - Symrise

COMPANY PROFILE

Symrise AG (SYIEY)

Symrise AG operates as a supplier of fragrances, flavorings, cosmetic base materials and active ingredients, and functional ingredients and solutions in Europe, Africa, the Middle East, North America, the Asia Pacific, and Latin America. The company operates in two segments, Taste, Nutrition & Health; and Scent & Care. The Taste, Nutrition & Health segment provides functional ingredients and product solutions used in the production of food and beverages; savory flavors; natural and sustainable ingredients for food and beverage manufacturers, baby food, and dietary supplements; product solutions and services for pet food manufacturers; sustainable ingredients and services for fish feed manufacturers to develop solutions for fish and shrimp farms; and probiotics for food supplements and functional foods. The Scent & Care segment develops, produces, and sells fragrance ingredients and compositions, aroma molecules, cosmetic ingredients, and mint flavors, as well as specific application processes for such substances. This segment's products are used by manufacturers of perfumes, personal care and cosmetic products, cleaning products, detergents, air fresheners, and oral care products. The company was founded in 1874 and is headquartered in Holzminden, Germany.

https://www.symrise.com/

CORPORATE GOVERNANCE

EXECUTIVE TEAM

Name	Title
Dr. Jean-Yves Parisot	Chief Executive Officer
Mr. Olaf Klinger	CFO, Head of Finance, Legal & IT Department and Member of Executive Board
Dr. Stephanie Cossmann	Member of the Executive Board and President HR, Legal & Sustainability
Dr. Jurgen Nienhaus	Corporate Vice President of Operations
Mr. Walter Ribeiro	Member of Executive Board & President of Taste, Nutrition & Health
Mr. Michael Bjorn Friede	Head of Scent & Care and Member of Executive Board
Rene Weinberg	Head of Investor Relations
Mr. Roberto Ascoli	Senior Vice President of New Business Development - Scent & Care Division
Mr. Arnaud Bellon	Senior VP and Global Head of Botanicals & Colors - The Cosmetic Ingredients Division
Ms. Marie-Laure Roumiguiere	Head of Global Account Management of EAME - Cosmetic Ingredients Division

Source: Toyota Boshoku Corporation (3116.T) Company Profile & Facts - Yahoo Finance

ESG

Symrise earns consecutive top “A” rating from CDP for its supply chain Engagement

• Strengthens customer relations through transparent and climate-friendly sourcing
• CDP again awards Symrise an “A” for comprehensive supplier integration
• Confirms leadership in building sustainable supply chains

The current Supplier Engagement Rating (SEA) of the non-profit organization CDP has once again awarded Symrise the highest score “A”. Only two per cent of more than 16,000 companies worldwide could achieve this rating. This demonstrates Symrise's commitment to integrating climate action at every stage of its value chain – from growing raw materials to delivering product solutions. These far-reaching measures allow customers and consumers to benefit from climate-smart choices.

Symrise could meet the expectations of the expanded CDP methodology of the current year and repeat its top supply chain rating. To achieve this, it involves over 5,000 partner suppliers around the globe, all of whom have set themselves their own or science-based climate targets. Today, more than 80 per cent of Symrise’s purchasing volume comes from suppliers with individual climate goals. Symrise regularly documents and reviews each partner’s environmental data, to quantify carbon dioxide emissions along the chain and identify potential reduction opportunities.

“Our products rely on more than 10,000 raw materials. Every ton of CO₂ saved makes them more climate-friendly,” says Dr Isabella Tonaco, Chief Sustainability Officer. “This renewed A rating confirms our commitment and motivates us to keep improving together with our suppliers.”

CDP, a global non-profit organization, assesses five areas: governance, climate targets, reporting of indirect or ‘Scope 3’ emissions (supply-chain CO₂), risk management and supplier collaboration. Symrise scores top marks across the board. A board-level mandate keeps climate action at the center of company strategy, while financial incentives encourage purchasing teams and suppliers alike to cut carbon dioxide emissions.

Symrise also complies with Germany’s Supply Chain Act, which sets strict environmental and social standards. This means fewer hidden emissions and clearer ingredient provenance. In the long term, Symrise aims to achieve net zero emissions for Scope 1, 2 and 3 by 2045. It also helps suppliers adopt energy-efficient technology, circularity and resource-saving farming methods such as regenerative agriculture.

Source: Symrise earns consecutive top “A” rating from CDP for its supply chain Engagement - Symrise

COMPETITORS

International Flavors & Fragrances Inc. (IFF)

International Flavors & Fragrances Inc., together with its subsidiaries, manufactures and markets food, beverage, health and biosciences, scent, pharma solutions, and complementary adjacent products in the United States, Europe, and internationally. It operates in four segments Nourish, Health & Biosciences, Scent, and Pharma Solutions. The Nourish segment consists of portfolio of natural-based ingredients that includes plant-based specialty food ingredients, such as soy and pea protein with value-added formulations, emulsifiers, and sweeteners; food protection ingredients, including natural antioxidants, and anti-microbials for natural food preservation and shelf-life extension; savory solutions, such as spices, marinades, and mixtures; combining flavourings with fruits, vegetables, and other natural ingredients products; a range of flavor compounds used in savory products, such as soups, sauces, meat, fish, poultry, and snacks; and beverages juice drinks, carbonated or flavored beverages, and spirits, as well as sweets bakery products, candy, cereal, and chewing gum; and dairy products, such as yogurt, ice cream, and cheese, as well as spices and seasoning ingredients. Its Health & Biosciences is comprised of health, cultures and food enzymes, home and personal care, animal nutrition, and grain processing. The Scent segment creates fragrance compounds, and fragrance ingredients. Its Pharma Solutions segment produces cellulosics and seaweed-based pharmaceutical excipients. The company was incorporated in 1909 and is headquartered in New York, New York.

https://www.iff.com/

Givaudan SA (GIVN.SW)

Givaudan SA manufactures, supplies, and sells fragrance, beauty, taste, and wellbeing products to the consumer goods industry. The company operates in two divisions, Fragrance & Beauty, and Taste & Wellbeing. The Fragrance & Beauty division offers fine fragrances; consumer products, such as personal, home, fabric, and oral care; fragrance ingredients; and active beauty products. The Taste & Wellbeing division provides beverages, such as fizzy drinks, bottled waters, ready-to-drink juices, and alcoholic drinks; dairy and cheese products, including dairy drinks, yoghurt, ice cream, chilled desserts, cream cheese, and spreads; snacks; givaudan flavour ingredients; savory, and supplements and nutraceutical products; and biscuits, crackers, and cereals, as well as confectionery products, such as chewing gums, chocolates, and sweets. It operates in Switzerland, Europe, Africa, the Middle East, North America, Latin America, and the Asia Pacific. Givaudan SA was founded in 1796 and is headquartered in Vernier, Switzerland.

https://www.givaudan.com/

DSM-Firmenich AG (DSFIR.AS)

DSM-Firmenich AG provides nutrition, health, and beauty solutions in Switzerland, the Netherlands, rest of Europe, the Middle East and Africa, North America, Latin America, China, and rest of Asia. The company operates through four segments: Perfumery & Beauty; Taste, Texture & Health; Health, Nutrition & Care; and Animal Nutrition & Health. The Perfumery & Beauty creates scents using natural, synthetic, and biotech ingredients. The Taste, Texture & Health segment provides food and beverages solutions, including flavors, natural extracts, and sugar reduction; and food enzymes, hydrocolloids, cultures, natural colorants, nutritional ingredients, and plant-based proteins. The Health, Nutrition & Care segment provides solutions for the early life nutrition, dietary supplement, pharmaceutical, medical nutrition, biomedical materials, and nutrition improvement markets. This segment also offers vitamins, nutritional lipids, minerals, carotenoids, botanical nutraceuticals, digestive enzymes, postbiotics, probiotics and prebiotics, and active pharmaceutical ingredients; biomedical solutions; and premix, market-ready, and personalized nutrition solutions, as well as expert services in regulatory affairs and nutrition. The Animal Nutrition & Health segment offers animal proteins, vitamins, performance solutions, and data-driven precision services. The company was founded in 1902 and is based in Kaiseraugst, Switzerland.

https://www.dsm-firmenich.com/

BASF SE (BAS.DE)

BASF SE operates as a chemical company worldwide. It operates through six segments: Chemicals, Materials, Industrial Solutions, Surface Technologies, Nutrition & Care, and Agricultural Solutions. The Chemicals segment provides petrochemicals and intermediates. The Materials segment offers advanced materials and their precursors for applications and systems comprising isocyanates, polyamides, and inorganic basic products, as well as specialties for plastics and plastics processing industries. The Industrial Solutions segment develops and markets ingredients and additives for industrial applications, such as polymer dispersions, resins, additives, electronic materials, and antioxidants for automotive, plastics and adhesives, paints and coatings, construction, electronics, paper coatings, and energy and resources industries. The Surface Technologies segment provides catalysts, battery materials, automotive OEM and refinish coatings, surface treatment, and precious and base metal services for the automotive and chemical industries. The Nutrition & Care segment offers ingredients for consumer applications in the areas of nutrition, home, and personal care applications; and serves the food and feed producers, pharmaceutical, cosmetics, detergents, and cleaner industries, as well as fast-moving consumer goods sector. The Agricultural Solutions segment provides seeds and traits, and seed treatment products; fungicides, herbicides, insecticides, and biological crop protection products; and digital solutions. The company engages in engineering and other; rental and leasing; and commodity trading activities. BASF SE was founded in 1865 and is headquartered in Ludwigshafen am Rhein, Germany.

https://www.basf.com/

The Mosaic Company (MOS)

The Mosaic Company, through its subsidiaries, produces and markets concentrated phosphate and potash crop nutrients. It operates in three segments: Phosphates, Potash, and Mosaic Fertilizantes. The company owns and operates mines and production facilities, which produce concentrated phosphate crop nutrients, such as diammonium phosphate, monoammonium phosphate, and MicroEssentials ammoniated phosphate products; and phosphate based animal feed ingredients under the Biofos and Nexfos brands, as well as produces a double sulfate of potash magnesia product under the K-Mag brand. It also produces and sells potash for use in the manufacturing of mixed crop nutrients and animal feed ingredients, and for industrial use; and for use in the deicing and as a water softener regenerant. In addition, the company provides blended crop nutrients for agricultural use; triple superphosphate, single superphosphate, and dicalcium phosphate; and biological fertilizer complements, industrial products, and other ancillary services. Further, it owns and operates chemical plants, crop nutrient blending and bagging facilities, port terminals, and warehouses; distributes nitrogen based crop nutrients and phosphogypsum; and purchases and sells phosphates, potash, and nitrogen products. The company sells its products to distributors, retail chains, cooperatives, independent retailers and dealers, industrial accounts, animal feed industry, wholesalers, farmers, crop nutrient manufacturers, and national accounts through its sales force. It also exports its products. The company operates in the United States, Brazil, China, Canada, Paraguay, Argentina, Japan, Colombia, India, Australia, Peru, Mexico, Honduras, the Dominican Republic, Thailand, Indonesia, and internationally. The Mosaic Company was incorporated in 1987 and is headquartered in Tampa, Florida.

https://mosaicco.com/

Takasago International Corporation (4914.T)

Takasago International Corporation manufactures and sells flavors, fragrances, aroma ingredients, and other fine chemicals. The company offers flavors for use in various beverages comprising fruit juices, carbonated drinks, coffee and tea flavored drinks, sports and energy drinks, dairy drinks, plant-based milk, alcoholic/ non-alcoholic beverages, powder mixes, jelly drinks, liquid foods, and others; confectionery products, including candies, chewing gums, compressed mints, tablets, and chocolates; ice creams, sweets, custard pudding, jelly, yogurt, fruit preparations, syrups, and dessert sauces; curries, stews, instant noodles, soups, pouch-packed, frozen foods, dressings, seasonings, seasoning powders, potato chips, snacks, crab sticks and paste products, ham and sausage, liquid, nutritional foods, and spice products; baked confections, bread, fillings, and coatings; and toothpaste, liquid toothpaste, and mouthwash. It also offers fragrances for use in perfumes and colognes; and various consumer products, such as soaps and shampoos, bath products, cosmetics, laundry detergents, cleansers, air fresheners, and other products, as well as aroma ingredients that are used to create fragrances. In addition, the company provides fine chemicals comprising intermediates of pharmaceuticals and electronics industries. It operates in Japan, the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was founded in 1920 and is headquartered in Tokyo, Japan.

https://www.takasago.com/

THE INDUSTRY

Source: Symrise AG (SYIEY) Interactive Stock Chart - Yahoo Finance

CHEMICAL AND PHARMACEUTICAL INDUSTRY SNAPSHOT

Third-largest industry in Germany

With a 2023 turnover of €225.5 billion, chemicals and pharmaceuticals are the third-largest industry in Germany, behind automotive and machinery and equipment.

Broad and strong

The German chemical industry is strong across all segments: basic inorganics, petrochemicals, polymers, agrochemicals, specialties, cosmetics and pharmaceuticals. It is also well spread across the country, although some regions are more specialised in basic chemicals, while others focus more on specialties or pharmaceuticals.

As an enabler of all other industrial sectors, the chemical industry has its role in all economic regions or clusters. To highlight just a few specific segments, technologies or regions would not be a suitable way to describe the strength of the German chemical industry.

In 2023 around 2,100 companies partly organized in 40 Chemical Parks employed 479,542 people. Due to the energy crisis and the industrial recession in 2023 sales decreased by almost 14 per cent to 225.5 billion euros. 60 percent of total sales were generated with customers abroad.

The German chemical industry is looking back on particularly difficult years that were marked by Russia’s war of aggression on Ukraine and the resulting energy crisis. Enormous energy prices and price increases for raw materials and inputs are making matters hard indeed for industry in Germany. Costs went up more sharply than sales prices, so that profits were falling Production dropped in 2023 the second year in a row by nearly 8 percent against the previous year. When excluding the pharmaceutical business, the decline was even around 10 percent. The last comparable slump in production was in 2009 in the wake of the global economic crisis.

Prospects remain bleak also for 2024. The energy crisis high inflation and rising interest rates were forcing the German and partly some European economies into recession. The decline in industry production in Europe will continue. The global industry is weak. Demand for chemical products made in Germany will be correspondingly weak.

In addition, there are structural problems in Germany: high taxes, levies and energy prices are driving up costs. Bureaucracy, infrastructure problems and slow approval procedures are also slowing companies down.   Therefore, import pressure will continue to increase and the challenges for the industry remain enormous. As matters stand now, the VCI is expecting for 2024 only a stable development for production in the chemical-pharmaceutical industry. Due to the structural problems, it remains questionable whether the German chemical and pharmaceutical industry will be able to benefit from an increase in global demand for chemicals.

Among the most important trends affecting chemical and pharmaceutical industry are sustainability, climate change, protection of natural resources, and circular economy. The German chemical industry, together with its customers, is developing and implementing new processes and products e.g. with the aim to reach greenhouse gas neutrality by 2050 or earlier, to use CO ₂ as an input or to use plastic materials via recycling as feedstock for the next generation of products.

New technologies such as nano- and biotechnology, the hydrogen economy and digitalisation are explored to find efficient ways to achieve these goals.

Areas of growth for the chemical industry lie in the topics addressed in the “High Tech-Strategy” of the Federal government. Due to digitalisation, process and organizational innovations are gaining in relative importance.

Progressing through research

Almost 80% of German chemical and pharmaceutical companies have research activities, and R&D spending reached around €14 billion in 2023. While German chemical companies get about 1% of their R&D expenditures through government funding, collaboration between industry and academia is well established: one third of chemical companies collaborate with academia in research projects.

Transport matters

Three states on the Rhine have the largest chemical industries: North Rhine Westphalia, followed by Rhineland- Palatinate and Hesse, with its strong pharmaceutical industry. Good access to transport infrastructure is one important locational factor for a successful chemical industry – more investment especially in waterways and rail is needed. In Eastern Germany, Saxony-Anhalt is the top chemical producer.

Our contribution to a competitive Europe

Creating a framework for success

The energy crisis also affects the long-term growth potential of the chemical industry. As energy prices will remain substantially higher than in other parts of the world, competitiveness of basic chemicals shrinks and the transformation of our industry is at risk. The consequences could be declining investments, relocation of production abroad and increasing import pressure. The threat of de-industrialization is real.

German policy tried to limit gas and electricity shortages with short-term policies e. g. new LNG-terminals, prolongation of nuclear power until April 2023 or implementation of strategic gas reserves. However, longer-term measures such as long-term gas supply contracts, expansion of domestic gas supplies, accelerating the expansion of renewable energies or extending the life of nuclear power plants have not yet been taken.

As a result, energy prices will remain extremely high in 2023 and 2024. To prevent structural breaks in the energy-intensive industries, an electricity and gas price brake will be introduced at the beginning of 2023. However, VCI expects that the effect of this remedy will be very limited due to unaccomplishable conditions – for big companies and for SMEs.

Meanwhile, the transformation challenge remains and is even heightened due the Inflation Reduction Act of the USA. German chemical companies use IPCEI, Horizon Europe and other programs for investments in new technologies and products. CCfDs/KSV will become another important element to facilitate transformation. However, these programs – European and national ones, are often too restrictive, complicated, and slow compared to the US (and Chines) approaches.

The German chemical industry needs urgently renewable energy – but the build-up of new capacities is far too slow. Therefore, speeding up approval times for infrastructures, but also for production sites, is one of the main priorities of industrial policy for Germany.

Research, digitalization and development of skills are other important parameters. The policies in these areas are often too rigid regarding technological openness.

With our initiative Chemistry4Climate, VCI contributes to the design of transformation policy in Germany.

Another field of industrial policy is the design of the Green Deal – it is putting too much emphasis on raising costs and limiting room for innovative manoeuvre. One example is CBAM, which replaces functioning carbon leakage protection by an instrument that is highly bureaucratic, raises costs for importers and reduces competitiveness for downstream sectors and exporters.

And it’s not only the Green Deal – it is accompanied by the taxonomy, CSDDD, national regulations as the BEHG: German companies are more and more handcuffed by new regulations.

Germany, with its “national China Strategy” from 2023, aims at de-risking bilateral relations. However, political goals of the EGD, locational conditions and lacking dynamics in trade policy are rather increasing risks of dependencies.

German Minister of the Economy Robert Habeck had announced that 2023 should be the “year of industrial policy”. However, a package that really supported industry with a national and European perspective never appeared, especially due to restrictions to public finance set by the Constitutional Court. In addition, the “Chemiepakt” is still waiting to be concluded. For the next Commission, VCI hopes for an “European Industrial Deal”, strengthening the single market by consolidating European programs to support transformation to make them more efficient and filling gaps where necessary and by re-evaluating the Green Deal regarding its effects on the industrial transformation and preparing a re-orientation of the Green Deal, focussing on enabling industry to manage its transformation as a global frontrunner and becoming an enabler for global industrial transformation. The deal should be about enabling companies rather than detailed planning by administrations.

Source: Germany - cefic

Germany Specialty Chemical Market Overview

The specialty chemical market in Germany is a thriving sector characterized by a diverse range of high-value products catering to various industries such as automotive, pharmaceuticals, electronics, and construction. Key segments include specialty polymers, industrial chemicals, advanced materials, and fine chemicals. Germany`s strong emphasis on research and development, coupled with its advanced manufacturing capabilities, positions the country as a global leader in specialty chemicals. The market is driven by innovation, sustainability, and stringent regulations on product quality and safety. Key players in the German specialty chemical market include BASF, Evonik Industries, and Lanxess, among others. With a focus on technological advancements, environmental sustainability, and customized solutions, the specialty chemical market in Germany is poised for continued growth and innovation in the coming years.

Germany Specialty Chemical Market Trends

The specialty chemical market in Germany is experiencing several key trends. One prominent trend is the increasing focus on sustainability and environmentally-friendly products, driven by both regulatory requirements and consumer demand for eco-friendly solutions. Companies in the specialty chemical sector are investing in research and development to create innovative products with reduced environmental impact. Another trend is the growing demand for specialty chemicals in the automotive and electronics industries, driven by technological advancements and the need for high-performance materials. Additionally, there is a shift towards digitalization and automation in manufacturing processes, leading to increased efficiency and cost savings. Overall, the Germany specialty chemical market is evolving towards more sustainable practices, innovative solutions, and digital transformation to meet the changing needs of industries and consumers.

Germany Specialty Chemical Market Challenges

In the Germany specialty chemical market, some key challenges include increasing competition from other European countries and emerging markets, stringent regulatory requirements and environmental standards, fluctuating raw material prices, and the need for continuous innovation and product differentiation to maintain a competitive edge. Additionally, the industry is also facing challenges related to sustainability and the shift towards more eco-friendly products and processes. Companies in the German specialty chemical sector must navigate these obstacles by investing in research and development, adopting sustainable practices, and actively monitoring market trends to stay ahead in this dynamic and evolving industry landscape.

Germany Specialty Chemical Market Investment Opportunities

The Germany specialty chemical market offers diverse investment opportunities across various sectors such as pharmaceuticals, agrochemicals, coatings, and personal care. With a strong emphasis on research and innovation, companies in this market are constantly developing new products and technologies to meet evolving consumer demands and regulatory requirements. Investing in companies that focus on sustainable and eco-friendly solutions, as well as those that cater to niche markets with high barriers to entry, can be particularly lucrative. Additionally, partnerships with research institutions and strategic acquisitions can provide avenues for growth and market expansion. Overall, the Germany specialty chemical market presents a dynamic landscape for investors seeking long-term growth potential and opportunities for innovation.

Germany Specialty Chemical Market Government Policy

In Germany, the specialty chemical market is influenced by various government policies aimed at promoting innovation, sustainability, and competitiveness. The German government has introduced initiatives to support research and development in the specialty chemicals sector, encouraging investment in cutting-edge technologies and fostering collaboration between industry and academia. Additionally, there are regulations in place to ensure environmental protection and product safety, such as the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) regulation. The government also provides incentives for companies to adopt sustainable practices and reduce their carbon footprint through programs like the National Action Plan for Sustainable Consumption. Overall, government policies in Germany are geared towards driving growth and innovation in the specialty chemical industry while promoting responsible and sustainable business practices.

Germany Specialty Chemical Market Future Outlook

The future outlook for the Germany specialty chemical market appears promising, driven by factors such as increasing demand for high-performance chemicals in various industries including automotive, electronics, and healthcare. The emphasis on sustainability and environmental regulations is expected to drive innovation in specialty chemicals, leading to the development of eco-friendly products. Additionally, the growing focus on advanced materials and technologies is likely to create new opportunities for market expansion. With Germany being known for its strong chemical industry infrastructure and skilled workforce, the country is well-positioned to capitalize on these trends and maintain a competitive edge in the global specialty chemical market. However, challenges such as fluctuating raw material prices and geopolitical uncertainties may also impact the market`s growth trajectory.

Source: Germany Specialty Chemical Market (2025-2031) | Trends, Outlook & Forecast

ACQ_REF: CS/18546/20250730/126736/DEU/31/294

ACQ_AUTHOR: Associate/Anne Ching