Executives: Tobias Erfurth - Head of Investor Relations Heinz-Juergen Bertram - Chief Executive Officer Olaf Klinger - Chief Financial

Officer
Analysts: Nicola Tang of Bank - American, Merrill Lynch Jack Gorman - Davy Heidi Vesterinen - Exane BNP Paribas Patrick Lambert - Raymond James Martin Evans - J.P.

Morgan
Operator: Ladies and gentlemen, thank you for standing by. My name is Emma, your Chorus Call operator. Welcome and thank you for joining the Symrise Half Year Results 2016 Conference Call. Throughout today's recorded presentation, all participants are in a listen-only mode.

The presentation will be followed by question-and-answer session. [Operator Instructions] I now hand over to your host, Mr. Tobias Erfurth. Please go ahead, sir.

Tobias Erfurth: Thank you, Emma.

Good morning, ladies and gentlemen, and welcome to our conference call on the Symrise half year results 2016. With me on the call are our CEO, Dr. Heinz-Juergen Bertram, and our CFO, Olaf Klinger. Our documents have been published this morning on our web page at events and presentations in the section investors. In the same area, you will find the playback of this conference call in the course of the day.

After the presentation, we are open for your questions. I will now hand over to our CEO. Dr. Heinz-Juergen Bertram, you may begin. Heinz-

Juergen Bertram: Thank you, Tobias.

Good morning, everyone. Welcome to our earnings call on our results for the first half of this year. With me today is our CFO, Olaf Klinger. As usual, I will kick off our call with an overview of the highlights. Afterwards, Olaf will walk you through the financials in detail.

We will then open the floor for your questions. Ladies and gentlemen, Slide 3 shows our financial highlights. As you can see, we took up on the successful start of the year and had also strong momentum in the second quarter. For the first half of this year, we report the sales growth of 10% in reporting currencies and an increase of 16% in local currency. Apart from good dynamics in both segments, sales also benefited from acquisitions such as Pinova.

Even without these portfolio effects, we recorded strong organic growth of 8%. We’re also very pleased with the earnings picture. EBITDA excluding one-off cost for the acquisition and integration of Pinova came in at about EUR323 million. This represents an increase of 8% compared to the prior year period. Despite the one-off items, we had our profitability at an excellent.

The normalized EBITDA margins stood at 22.1%. We were once again one of most profitable companies in the industry. Net income adjusted for the one-off cost grew by 6% to EUR142 million. Earnings per share rose accordingly from EUR1.03 to EUR1.09. On the strategic side, we continue to expand our backward integration and the diversification of our portfolio.

I will come back on that a bit later. Let us turn to Slide 4, which illustrates the sales development of the group and by segment. We grew sales to EUR1.463 million a plus of 10% in reporting currency and 16% in local currencies. Scent & Care grew sales by 22% to EUR668 million. This corresponds to a plus of 27% in local currency.

Scent & Care benefited from strong demand in fragrances, cosmetic ingredients and menthol. In addition, we gain contributions of more than EUR110 million through the acquisition of Pinova. Organically, sales grew by an excellent 7%. Flavor & Nutrition increased sales by 1% to around EUR795 million. In local currencies, this compared to a considerable 8% growth.

The segment particularly benefited from strong demand in applications such as sweet, savory, beverages and pet food. Please turn to Slide 5. We experienced strong growth dynamics in all our regions. We achieved the strongest regional growth in North America with a plus of 31% in local currency. Latin America was our strong second strongest region and grew sales by 26% in local currency.

Asia Pacific recorded an increase of 12% and EAME achieved plus of 7% in local currency. About 43% of our group sales were generated in immerging markets. Our sales split slightly shifted lately due to our acquisition of Diana as well as Pinova. Both have a stronger presence in developed markets and they have more room to grow in immerging markets. Overall, we increased sales in immerging markets by 17%.

Our earnings development is presented at Slide 6. On group level, EBITDA excluding the one-off costs related to Pinova rose by 8% to over EUR323 million and excellent result driven by high utilization and ongoing cost management. Accordingly the normalized EBITDA margin amounted to 22.1%. Scent & Care generated a normalized EBITDA of more EUR140 million which equals an increase of 13%. Despite the Pinova acquisition, the segment remained very profitable and delivered an EBITDA margin of 21%.

This is remarkable given the fact that Pinova has a lower profitability and does not yet meet our standards. But let me ensure you the integration is fully on track and is progressing according to our schedule. Flavor & Nutrition grew its EBITDA by 4% from EUR176 million to over EUR183 million. The segment’s EBITDA margin further improved and grew by 0.5 percentage points to an excellent level of 23%. It is one of our main objectives to further expand our competencies, also outside our traditional flavor and fragments business.

We are capitalizing on internal knowhow but also constantly screen the market for acquisitions that provide value. During the first half, we have made very targeted investments. Please turn to Slide 7. Most of you are already familiar with Pinova and Scelta. I just want to draw your attention to two new portfolio additions.

In May, we acquired Nutra Canada a small but very specialized manufacturer of fruit and plant extracts with additional out benefits. The new capabilities will further differentiate our new developments especially in beverage and sports drinks. In June, we supported Probi’s acquisition of U.S. based Nutraceutix, which is highly experienced manufacturer of probiotics, as you know the fast growth market segment. This transaction will be closed in Q4.

All these investments clearly support our portfolio diversification. In addition, they strengthen our clean label offering and contribute to further expand our backward integration. Ladies and gentlemen, I would now like to hand over to Olaf. Olaf?

Olaf Klinger: Yeah, thank you, Heinz-Juergen, and welcome also from side to all of you in today’s conference call. As you already heard from Heinz-Juergen, we have been able to continue our successful growth progress in quarter two 2016.

In fact the second quarter was even strong than the first one which is quite an achievement. Before we go into the presentation slides, please allow me a remark regarding comparability. A closing of the 60% stake on schedule Scelta Umami and Pinova early January is impacting the comparability versus prior year numbers during 2016. As communicated in March, we decided to normalize the effect of the Pinova integration cost and the step up of inventory for easier comparison of the operational development. Also the year-to-date purchase price allocation of Pinova and Scelta is now included in the half year figures.

So let’s start with Slide number 9. The total sales of EUR1.463 million for the reporting period, we have been able to grow the top line by 10% versus last year. The organic growth of the group amounts to strong 8.3%. Changes in our portfolio which include the acquisitions of Pinova, Scelta Umami and Nutra Canada as well as the divestiture of the Diana CAP business in the second quarter of last year had an impact of 7.4%. Currency headwinds especially from Brazil, Argentina, Venezuela, Mexico and South Africa, resulted in a 5.8% negative impact on our top line.

Looking and assuming a constant currency environment, we expect the slightly lower FX headwind in the second half of the year. Also our profitability developed very positively. The normalized EBITDA of the group grew by 8% in reporting currency and 14% in local currency. The normalized EBITDA margin reached 22.1% compared to 22.6% the year before which is a consequence of the lower margin environment of the Pinova business. The margin dilution caused by Pinova was about 100 basis points for a Symrise group perspective.

If you put now to on to Slide 10, which shows the development of our Scent & Care segment. Scent & Care increased revenues by 22.2% to now EUR667.8 million, this 6.9% standing from a good organic growth. Pinova added 20.2% or EUR110.5 million from a portfolio perspective. Currency headwinds slowed the overall revenue development by 5% compared to last year. The normalized EBITDA of the segment increased by 13% to now EUR140 million, representing a margin of 21% after 22.7% the year before.

Pinova on a standalone basis achieved a double-digit normalized EBITDA margin in the reporting period. Integration activities under the lead of highly experienced teams are progressing well. Integration costs are expected to come in at EUR60 million for the full year with EUR6.4 million being already absorbed during the first six months. We confirm the identified EUR20 million annual synergy potential to be realized until 2020. The PTA of Pinova results in an inventory step up of EUR4 million, which has been fully absorbed in the first half year result.

Please note that the one time inventory step up amortization is normalized but not part of the normalized integration costs. No further inventory related impact is expected in the second half of the year. Regarding intangible asset amortization, Pinova become as a full year impact of around EUR11million considering differed taxes of EUR6 million, the full year ‘16 PPA effect on net income is expected to be EUR 9 million. Our segment Flavor & Nutrition as shown on Slide 11, achieved a turnover of EUR794.8 million. This 9.3% organic growth, this segment shows an outstanding top line performance.

Portfolio effects were negative with 1.5% coming from the divestiture of Diana CAP in 2015, partially compensation by Scelta Umami and Nutra Canada revenues. Currency headwinds of minus 6.3% led to reported growth of 1.3% for the segment compared to last year. Looking back, I am already mentioned the main growth drivers in flavors, let me add a few words on Diana. Diana, the other division of our Flavor & Nutrition segment saw a good organic growth in Latin America versus Brazil, Argentina developing well, was in a good market dynamic. In Asia Pacific, Diana saw the strongest growth in Australia and South Korean in the area of agriculture and pet food product solutions.

As an addition information, the turnover of the divested Diana CAP business amounted to EUR13.6 million in the first six months of 2015. Our Flavor & Nutrition business improved at EBITDA by 4% to EUR183 million, which results in an improved margin of 23% in half year 2016 compared to 22.5% in the prior year period. The margin development confirms the ongoing strong performance of the segment. Overall and despite the Pinova margin dilutions, we are enjoying healthy margins across the whole business portfolio. Turning to Slide 12, let me make some additional remarks on the main EBITDA drivers.

We obviously benefited from sales growth which was driven by further volume increases in the core business. Across the portfolio, the price impact was about one quarter, while about three quarter of the growth was driven by volume. Latin America was an exception is about half of the growth being related to price increases, while the other half was linked to volume increases. Raw material cost increased in the first six months mainly linked to price increases for certain non-oil based raw materials. The effect was partly compensated by price decreases for oil based raw materials.

Across the whole raw material portfolio, we saw a net impact on EBITDA profitability of around ERU10 million coming from raw material price changes. Manufacturing cost increased with Pinova joining the group and an EBITDA impact of around EUR34. Pinova comes with proportionally higher manufacturing cost in comparison to the Symrise legacy world which leads to a slight decrease in the gross profit margin compared to last year. Addressing the Pinova manufacturing costs will be the major driver for margin improvements over the coming years. And taking out the Pinova impact, the ratio of manufacturing cost based on sales improved across the Symrise group due to good factory utilization and further productivity gains across our global manufacturing and supply chain network.

Our normalized operating expenses for sales and marketing as well as research and development grew by 8.6%, besides Pinova, we also invested into the new positioning of our fragrance business under the title Better Living through Scent. Our vision of modern perfumery was recently presented with great success and recognition at the World Perfumery Congress in Miami. Just to complete the cross picture, our normalized general and admin expenses increased by 5.8%. Currencies had an unfavorable EBITDA impact of EUR22 million with transaction effects amounting to only minus EUR2 million and translation effects being at minus EUR20 million. This translation related effect of depreciation of the euro especially versus the Latin Currencies continue to pay its toll, overall the impact is still moderate and confirms that our revenue and cost structure is to a large extend very well balanced.

Depreciation increased from EUR36 million to EUR42.6 million due to higher investment in previous years, but also because of the inclusion of Pinova. Amortization increased mainly as a consequence of the Pinova PPA from EUR49.6 million to EUR56 million for the six months period. The normalized EBIT which excludes the Pinova integration cost and the inventory step up but includes the six months of PPA related Pinova DNA increased by 5% to EUR224.7 million. The EBIT margin however decreased from 16.1% last year to a normalized margin of 15.4%. Our financial result developed negative by EUR3 million to minus EUR24.3 million compared to half year one 2015.

The development is mainly linked to higher expense related to the Pinova refinancing and an impairment of EUR2.2 million already mentioned in quarter one on an equity participation. Adjusting for this impairment, the normalized financial result amounts for minus EUR22.1. The normalized earnings before income tax increased by 5% to EUR22.7 million. Our normalized tax rate was at 28.2% which is well below our long term expectation of less than 30% tax burden. The normalized net income, which also excludes the aforementioned asset impairment increased by 6%, while the normalized EPS is also up 6% to EUR1.09.

Our operating cash flow, on Slide 13, of EUR100 million increased versus half year one 2016. Main drivers were higher D&A and lower income tax payments partly related to larger tax settlement payment in 2015. The increase in the line change in working capital is explained by the Pinova asset account in the amount of EUR80 million which is impacting accounts receivable until expected payment in Q3 and Q4 of 2016. Once paid, the amount will be reclassified to the investing cash flow without any further negative impact on our liquidity position. Slide 14, shows the main balance sheet items since December 31st, 2015.

The increases of assets and liabilities are mainly linked to the inclusion of Pinova. Liabilities also increased in the area of pension applications which were primarily caused by 1.1 percentage point reduction of the German discount rate since yearend. The pension related impact was around EUR110 million. Our equity ratio decreased to 32.7% as a result of the Pinova acquisition effects as well as the variation of the pension obligations. The leverage ratio is now at 3.6 times EBITDA including pensions and 2.6 times EBITDA excluding pension accruals.

This is in line with our projections. For the end of the year, we expect the range of 3.2 times to 3.5 times EBITDA including pensions with the midterm target being unchanged at 2 times to 2.5 times EBITDA including pensions. This concludes my remarks on our successful first half of 2016 and I would like to hand back to Heinz-Juergen Bertram for the outlook. Heinz-

Juergen Bertram: Thank you, Olaf. Before we open the Q&A session, let me give you an indication on our perspectives the second half of the year.

Please turn to Slide 16. Over the past few weeks and month, we’ve been dominated by political conflicts, some have further increase, others have newly immerged. This has led to more economic volatility in individual countries. However, we remain confident for the second half of this year. Symrise is a very resilient business.

Our tool segments and particularly our global presence have continuously supported our strong growth and also in the past compensated for individual regional and local impact. We therefore see ourselves well equipped going forward. We will capitalize on our strong presence in mature and immerging markets. We will work with our broad customer base and continue to diversify our portfolio. This will drive our profitable growth.

On the cost side, we expect certain currencies and individual raw material prices to remain volatile. Nonetheless, we carry forward our aspiration to remain one of the most profitable companies in the industry. With respect to sales growth, we aim at outperforming the global flavor and fragrance market also in 2016. Regarding our profitability, we now expect to achieve an EBITDA margin of more than 20%. Ladies and gentlemen, we would now like to open the call for your questions.

Tobias, please go ahead.

Tobias Erfurth: Thank you very much gentlemen. We are now happy to take and answer your questions. We kindly ask you to put only two questions. If we cannot take all your questions during the conference call, we will answer them later today.

Many thanks and first question please.

Operator: Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Nicola Tang of Bank of American, Merrill Lynch. Please go ahead.

Nicola Tang: Hi, everyone.

Thanks for taking my two questions. And firstly, I wanted to ask on North America where it looks like you’ve seen very good local growth. I was wondering whether you could split that out as to where the impact was from Pinova and what was the growth underlying organic growth and whether there was any significant impact from Pinova and any of the other regions perhaps in Europe? And then my second question was around raw materials which you sort of addressed a little bit in your presentation. Can I just confirm that you said the H1 impact was about 10 million negative from raw materials on EBITDA and saw almost sort of 1.5 in Q1 and what your sort of expectations of the second half of the year? Thank you. Heinz-

Juergen Bertram: Okay.

I think Olaf that goes for you, if you may take that one.

Olaf Klinger: Yeah, happy to take that. So North America Pinova growth, let me just look that up. Heinz-

Juergen Bertram: While you look at, I’ll take that part. The impact of Pinova for the other regions is insignificant Olaf, so that Pinova is mainly focused on North American business.

So insignificant and I hope Olaf figured out exactly what the impact on Pinova was in the meantime. You have it Olaf?

Olaf Klinger: I will get back to that. Let me -
Heinz-

Juergen Bertram: So in the second quarter, it was about $57 million, 80% of that is coming from North America. The rest is pretty much equally split between EAME, APAC and Latin America.

Olaf Klinger: So but Nicola, you see from that you see also without Pinova a healthy momentum in North America underlying strong organic growth.

And then I can confirm that the raw material impact was 10 million negative on the EBITDA in the first half year. So we hope that answered your question.

Nicola Tang: And, this in terms of outlook for the second half for raw materials?

Olaf Klinger: So we have a slight headwind now which is coming from the non-oil based raw materials and that will continue with a range of 1% to 2% for the rest of the year. Heinz-

Juergen Bertram: But so far not significant as Olaf said, but it has turned slightly from tailwind to slight headwind but not significant at this point in time. Okay.

Nicola Tang: Okay. Thank you. Heinz-

Juergen Bertram: You welcome.

Operator: The next question comes from the line of Daniel Gupta of MindFirst Bank [ph]. Please go ahead, sir.

Unidentified Analyst: Yes. Thank you very much for taking my question. And the first one is on the guidance you say you’re now hoping for above 20%, if I see that you’re in the first half at 21.4%, what has to happen in the second half that this is realistic, if you also to say that raw materials now is a small tailwind? And the second question I would like to elaborate a bit more on the impact of prices in Latin America and what was the magnitude on organic growth for the first half and how is it split by segment. And on the other side, what can we expect here in the second half was the Brazilian real in reality especially being stronger now compared to the U.S. dollar and the euro?
Heinz-

Juergen Bertram: Okay.

I’d take the first one what has to happen so that we do not meet our revised guidance that was your question. Well we don’t see that we feel very confident to deliver above 20% for this year, that’s for sure. If your question was that we fall short on the second half? No, we will remain confident and that’s why we increased our guidance. But for the moment, let’s leave it where it is at the moment. And we feel confident more than 20%.

Although as we said, we will face in the future not any more tailwind from the raw material and but it is at the moment very well manageable and it’s not a strong headwind, so we feel very confident with our guidance. Okay.

Unidentified Analyst: Sorry it was my mistake, the question was more related, why not higher the margin because you’re now at 21.4% so it would mean a dilution of round about 200 basis points in the second half compared to the first half and this environment seems quite I would say?
Heinz-

Juergen Bertram: So for the moment, if you feel we can deliver more good for you then you put up a new target for us, fine. For the moment, we feel confident that we will deliver more than 20% whatever it might be for the moment at least we increased our guidance, we heard you when you said that 20% is not - is a bit too conservative. So we increased it and that’s where we would leave it for today.

Okay? And we’ll look at this again in third quarter and if it makes sense to revise it then we’ll do, so for the moment mid of the year, I think it’s a good news that we increased our guidance. Olaf, that gave you enough time to figure out on this real thing.

Olaf Klinger: Yeah, so the situation in Latin America is of course a little bit more complex. We have a lot of U.S. dollar pricing, as you well know, it’s quite common, that’s all it’s true for the cost side as well as the revenue side.

You see that more on the Scent & Care sides, flavors, partly U.S. dollar based, partly local currency. With the real situation in Brazil, especially the real has devaluated quite a little bit last year and is currently strengthening. That means that part of the local grows is U.S. dollar price driven and an environment which of course doesn’t allow a lot of price increases in U.S.

dollar. This situation is now turning; it might even turn against us in Brazil. That doesn’t mean that it turns against us in the other countries. So it’s a very mixed picture which you have their. Overall, it might lead at the growth; the organic growth in Brazil is coming a little bit down, but nothing which concerns us.

And again this is the beauty of our business model. It’s so diversified that we can balance out a lot of developments, one of them being the development of currencies in Latin America. Heinz-

Juergen Bertram: So I hope that answers your question - the second question. Okay.

Unidentified Analyst: Thanks very much.

Heinz-

Juergen Bertram: Thank you.

Operator: Next question comes from line of Jack Gorman of Davy. Please go ahead.

Jack Gorman: Thank you, gentlemen, good morning. I have two questions, please.

Firstly, just a house keeping one Olaf, on inventory, I knows at stop one stage the inventory is on the balance sheet are about 116 million ahead of the year end 2015, plainly, Pinova has an impact under some degree but just wondering if there are other facts driving that to especially given what you said on raw material pricing? My second question is a broader question on the Probi or the prospective Probi acquisition of Nutraceutix. Just wondering if you can give us a perspective from a Symrise point of view on what that could mean for you know no longer term prospects on the probiotics side for Symrise? Thank. Heinz-

Juergen Bertram: Okay. Jack, although you want to talk to Olaf, let me first pick a bit on the inventory. So it’s not all inventory just related to inventory increasing related to Pinova, we also have seen some inventory increase related to vanilla and also some sunscreen filter business and onion, but we believe that a sign of confidence in our business because we’ve done that as we believe.

We have some nice business opportunities in these areas. So it is not totally and only and as wholly related to Pinova, but to the larger part. Yes. Having said that, the second part of Probi, we have done this investment in Probi quite some years ago. As we wanted also to have a strong foothold in biotechnology which is an even become more becoming important, becoming tool in our industry and we decided that this should be something where we want to have a firsthand access and that’s why we took a strong shareholding in Probi, publicly listed company in Sweden, Sweden Stock Exchange and we have a major shareholder with more than 50% shareholding.

The company has done very well and you may look this up the share price has been doing very well. So financially it was a good investment but the strategic rationale for us was to have access to a strong biotech platform and we have been starting way back then some projects on some proprietary applications, one in oral care based on probiotics and we’re at the moment in clinical trials with the big industrial partner. We are working on the cosmetic ingredient skincare products based on probiotics. We’re working on using probiotics experience in all kind of different applications. So you see there is a strong strategic rationale ascending done that very early as it gives us a strategic edge and we’re developing products which are not out there in the market and which are unique.

So I hope this gives you an answer on why we’ve done that.

Jack Gorman: Right, thank you.

Olaf Klinger: And then maybe from my side, just to add to the picture on the inventory side, Pinova came about $10 million impact in the picture and of course there’s a lot of growth relayed inventory increases naturally besides what Heinz-Juergen already mentioned.

Jack Gorman: Is there any seasonality is in half one comparative full year?
Heinz-

Juergen Bertram: Yes. Seasonality - thanks for putting up that question.

The sunscreen filters, there’s a strong seasonality of course. And that’s how it is with this type of business. There is this sun season and producing it in that season on time is not possible. So we approach using it earlier, so you see in and buildup of inventory which as was speaking is being reduced. So, yes there is strong seasonality.

Fortunately, to most extent, a different seasonality in most of the business, so it balances it out a little bit. Okay.

Jack Gorman: Great. Thank you. Heinz-

Juergen Bertram: You welcome.

Operator: Next question comes from line of Heidi Vesterinen of Exane BNP Paribas. Please go ahead.

Heidi Vesterinen: Hi, good morning. Maybe if we could go back to the pricing question, so you said a quarter of growth for that 2% was pricing, was that mainly the Latin America effect or where there actual price increases as well? And then the second question on maybe flavors, could you comment on what you’re seeing in Western Europe, please? Thank you. Heinz-

Juergen Bertram: Olaf, you brought up this price increase thing and you triggered the question highly, so you do take that one and I will do the flavor in Europe, and.

Olaf Klinger: Okay. Of course, Heidi, your assumptions right, good part is coming from Latin America. Nevertheless, here and there, we are also able to increase prices, certain ingredients pricewise go up. So that is an element which impacts the pricing from this perspective. Heinz-

Juergen Bertram: Okay.

Then I pick up the flavor view. And in flavors, fortunately we have a very well balanced business here in Europe. So if your question goes to name the first challenge the Brexit, thing it is insignificant, it is our total business in Great Britain is less than 3% and so we do not see any significant impact there. The other area which is also part of the region EAME is, of course Turkey, we have not seen any negative effect there yet and also we do not expect it to be significant. In other markets, we see a nice development like in Southern Europe, so that balances out some of the challenges we face in the other markets.

Overall, as you could see from the numbers which we showed, our business development in all mature markets was very healthy, so we kept going, growing and gaining market share. Okay.

Heidi Vesterinen: Thank you. Heinz-

Juergen Bertram: You’re welcome.

Operator: Next question comes from line of Patrick Lambert of Raymond James.

Please go ahead, sir.

Patrick Lambert: Hi, good morning. The Brexit question was already answered, so I’ll go on the essence. So on the end Flavors & Nutrition margins development, the cleanest division, no acquisition the portfolio, could you comment a bit on the impact on margins of disposal of the Diana CAP and specialties of more or less of set smaller acquisitions?
Heinz-

Juergen Bertram: Yes. The Diana CAP business which we divested, we talked about the turnover impact and we thought the margin was dilutive that was one point but what was more a criterion for us to divest the CAP was despite the margin dilution, the future growth perspective we saw for that type of business.

We have given you clear guidance that we want to focus on business which delivers a higher than typical market growth. So we would actively seek for business which has a higher growth potential. And I guess the numbers which we display here quarter-by-quarter, so we’re doing that. And CAP clearly was a business which showed historically 1% growth per year. So despite a margin dilution, yes but that was the less significant effect.

It had some turnover impact but the bigger point for us was to actively manage the portfolio and to sort out business which just does not to deliver our growth expectations. The same was by the way for another small business which we divested the DPS and we’ve done that end of last year. And I think the numbers we show it pays off, it was the right decision. Okay.

Patrick Lambert: Yeah, can I follow up on 9.3 organic growth, can you put some more color on our business unit inside flavors a bit Diana in particular and is that don’t put you well too.

Heinz-

Juergen Bertram: Yes. The good news is all business areas have done very well including as you just were guessing, yes, Diana as well. So there is nothing to complain with Diana. It was the best acquisition in our industry. We were convinced of this right away.

And you may recall two years ago when we were going for it there was some concerns you, we paid the full price and you see it really paid off. We’ve seen a strong development in Diana and we are very happy with the co-operation and the work with our new French colleagues at Diana. So yes, you are absolutely right. They did a strong contribution.

Patrick Lambert: So to be frank, everything is high single-digits in flavors and fragrances?
Heinz-

Juergen Bertram: Yes, yes.

So I would not single out one area where we did not deliver according to our expectations. So all areas including Diana, I think that’s a clearly answer.

Patrick Lambert: Great. Thank you. Heinz-

Juergen Bertram: You welcome.

Operator: Next question is from the line of [indiscernible]. Please go ahead.

Unidentified Analyst: Yes. Thank you for taking my question. Just to add on last question.

If I look at my quarterly model, it seems that in Flavor & Nutrition, you’re running against a more favorable base in the second half, whereas you have a double-digit growth in Flavor & Nutrition now in the second quarter. So I mean would you anticipate acceleration here in the second half or just continue with double-digit. How do you see the outlook here? And then on the CapEx would be my second question. It seems to be a bit on the low end of what I was had expected. I mean could you give maybe an update on your guidance for the full year and the major projects that we’re going to see in the second half? So maybe if I could sneak in a very short one, could you provide a quick update on the U.S.

menthol factory and when that one is going, when the expansion is going large? Thank you. Heinz-

Juergen Bertram: Okay. I’m going to pick it up. Although Olaf clearly signaled, he wanted one, I’m taking this. So outlook, you’re right, flavor is having healthy momentum and we are confident for the second half of the year.

We would not expect acceleration. I think that what we see at the moment is already, is already a strong momentum. So - and we expect this to continue for the second half of the year. So we were not fall-off the cliff, but we do not see acceleration. What we’ve shown here today the numbers, I think is a strong statement.

And so I think we would leave it there. CapEx as we indicated for this year, guidance about 6% and we would leave it there. We believe we can - we will come in about that area. So some major CapEx investments are ongoing as we’re speaking. We were building a new site in China.

We are - we have about just completed the power plant here in Germany which is 30 million investment. We have just completed an encapsulation plant here in Germany which is 10 million investment. We are about to complete fragrance expansion here in Germany 10 million. We are - the investment in China is significant and it is being done as we’re speaking. And in the U.S.

we have some major investment in a new cosmetic ingredient plant, so you see our cosmetic ingredient business is from a different size and quality of then that what you see from some of our competitors who are in a few 100 million turnover and we you’ll see the confidence we’re having, we’re building a plant in the U.S. last year we build one in Germany, so in the U.S. Then U.S. menthol that was the last question you had. We’re building that as well and so the expenses are coming in.

It will be on stream latest into 2018 begin to 2019. That’s our expectation. But the first quantity from small expansions will hit the market already, I would say in beginning of 2018. So step-by-step we’re upgrading it. And the menthol is not like the menthol expansion we’ve done a few years ago in one shot, so we’re doing it step-by-step gradually as we don’t want to see such a big impact in one shot as we saw few years ago.

I hope that answers your question.

Unidentified Analyst: Thank you very much. Heinz-

Juergen Bertram: You’re

welcome
Operator: The last question comes from the line of Martin Evans of J.P. Morgan. Please go ahead sir.

Martin Evans: Yeah, just back on your target for 2016 and your statement which you had sometime of outperforming the global SNS market, have you got any more clarity of precision on that market what it is, what’s in it and who provides you with that data on the global SNS market, so we can charge you against that?

Olaf Klinger: Yeah, sure. So we - actually in our annual report, we give the source, it’s the IAL, it’s London based institute which monitors the market and we’re - we base our figures on that. And you can look that up, okay. So - and we believe that’s the fairest so it’s not our own data, IAL, okay.

Martin Evans: Yeah, thanks.

Olaf Klinger: You’re welcome. Heinz-

Juergen Bertram: So having said that, ladies and gentlemen, thank for joining today’s call. Should there be any open questions, please feel free to contact our IR team. We hope to talk to you soon again as latest on November 2nd when we present our results for the nine month period. Thank you and good buy.

Operator: Ladies and gentlemen, the conference is now concluded. And you may disconnect your telephone. Thank you for joining and have a pleasant day. Good-bye.