Executives: Tobias Erfurth - IR Heinz-Juergen Bertram - CEO Olaf Klinger -

CFO
Analysts: Martin Flueckiger - Kepler Cheuvreux Thomas Wrigglesworth - Citi Heidi Vesterinen - Exane BNP Paribas Ian Hunter - Investec Theodora Joseph - Goldman Sachs Geoff Hare - UBS Christian Faitz - Kepler Cheuvreux Michael Schaefer - Commerzbank Gunther Zechmann - Bernstein Aymeric Poulain - Kepler Cheuvreux

Tobias Erfurth: Well, we're going to start. Welcome everybody, good afternoon ladies and gentlemen. And welcome to our Full Year Results 2016 Symrise AG, here in Frankfurt [indiscernible]. With me today are our CEO, Dr. Heinz-Juergen Bertram; and our CFO, Olaf Klinger.

All documents, and I say this for the people on the phone, and not for the people here in the room because they have it on their table; all documents are published on our Internet web page in the section Investors at Events and Presentations. A replay of this call will be available in the course of the day. So welcome everybody here in the room from my side, welcome to my Board Members. And I open this now for the CEO, Dr. Heinz-Juergen Bertram.

Heinz-

Juergen Bertram: Thank you, Tobias. Ladies and gentlemen, welcome to our investor and analyst conference. We are happy to see you here in Frankfurt. Welcome also to all participants who joined us over the phone today. In today's session, our CFO, Olaf Klinger and I will look back on the fiscal year 2016 and provide an update on our strategy, as well as the market and outlook for 2017.

We will then open the floor for your questions. Let us get started with Chart 4 and our highlights and our 2016 highlights. It underlines that we have not only reached but in fact exceeded our objectives. We aimed to increase our revenues between 5% and 7% and delivered 8% organically, including acquisitions we achieved with 12%, significantly more. We aimed at an EBITDA margin of more than 20% and delivered 21.5%.

Our bottom line increased to €266 million, equaling €2.05 per share. Good news for

our shareholders: Management and Supervisory Board proposed a dividend of €0.85 per share. This represents a stable and attractive dividend policy. There is another novelty which I want to highlight right at the beginning. Please turn to Chart 5 for a better illustration.

We changed our operational setup to foster entrepreneurial drive, agility and transparency. In the Scent & Care segment, we are organized now by application areas instead of regions as a consequence of many global call listings which we achieved. We have changed our setup for Flavor & Nutrition, all activities related to beverages, savory and sweet application, form the segment Flavors. All Diana activities namely food, pet food, aqua and Probi form the Nutrition segment. Both are represented in the Management Board with Heinrich Schaper for Flavors and Jean-Yves Parisot for Nutrition.

This setup is absolutely unique. There is simply nothing comparable in our industry. Let us focus on our Group performance on Chart 6. We increased sales by 12% in reporting currency, and by even 16% in local currencies to €2.9 billion. We realized strong growth in all regions and business areas.

Our latest acquisitions, amongst them, Pinova Group also contributed. Without portfolio effect, we grew sales organically by 8% and yet again outpaced the market. Please turn to Chart 7 for the segment review. Scent & Care grew sales by 22%. The segment benefited from the strong growth, particularly in Fragrances.

The acquisition of Pinova Group contributed to this development as well. On an organic basis, we realized very good growth of plus 5%. The Flavor segment grew sales by 4% in reported currency and 10% in local currencies. In that context, it is worth mentioning that we had many new business wins in sweet and culinary applications. The Nutrition segment increased sales by 5% in reported currency and 9% in local.

It benefited from strong momentum in pet food and food ingredients. The fact that these activities have grown to the size of an own segment underlines we have the competence and the capabilities to make more core activities as substantial source of income. Let me come to our regional performance on Chart 8 now. Latin America was again the most dynamic region, delivering sales growth of 29% in local currencies. North America was almost as strong and ranked second with 28% sales growth.

In Asia Pacific, we grew local sales by 11% and in EAME by a solid 8%. Now let's also look at the sales split between mature and emerging markets. In the latter, we grew sales by 15%. We are particularly pleased with the performance in Mexico, Brazil, China and India. Overall we generated 43% of total sales in emerging markets.

Please turn to Chart 9 for earnings development. We grew our EBITDA, normalized for acquisitions and integration, expenses by 9% to €625 million. Accordingly, our EBITDA margin amounted to 21.5% is again at a very strong level. Including the one-off costs for M&A and integration initiatives, our EBITDA grew by 6% to €607 million. Let us come to earnings by segment on Chart 10.

Scent & Care grew EBITDA by an excellent 12%. As expected, profitability was not as strong as in the prior year with the margin of 19.7%. This is primarily due to the Fragrance Ingredients business from the former Pinova Group. The business is successfully integrated now. And as mentioned before, these activities will achieve our targeted margin level according to plan in 2019.

EBITDA in the Flavor segment grew by 7% and the EBITDA margin reached an excellent level of 23%. We particularly benefited from the good portfolio mix here. Our Nutrition segment increased EBITDA by 10% and delivered an EBITDA margin of 23.2%. One of the key drivers has been our highly profitable pet food business. Capital markets appreciate our performance as Chart 11 illustrates.

Over the past 10 years, we outperformed the MDAX and DAX and we significantly increased our market cap from €2.3 billion to about €7.5 billion. Ever since our listing, we have shared our economic success with our investors, and we will continue to do so, as stated earlier. Management and Supervisory Board proposed a dividend increase to $0.85 per share for 2016. This being said, I would now like to hand over to Olaf for more details of our financials. Olaf, please go ahead.

Olaf Klinger: Thank you, Heinz-Juergen. Good afternoon and welcome to everybody also from my side. 2016 was again a highly successful year marked by outstanding organic growth and high profitability levels. Before I continue with further financial details, I would like to make a few more general remarks. First, following the announcement of our new organizational structure as of full-year 2016, we have broadened our segment reporting, we now disclose the former Flavor and Nutrition segment as two separate segments.

Second, with regard to announced portfolio changes, the divestiture of the performance specialty business of Pinova was closed on December 9, 2016; the preliminary adjusted purchase price amounted to $141 million, of which $10 million were placed in an escrow account. Then the rest of business contributed was around $100 million sales in 2016. Total normalized one-time costs related to former Pinova amounted to €18.7 million. This amount also includes normalized divestiture gain of €3.5 million. With regards to the acquisition of Nutraceutix that was undertaken by our participation Probi, the closing took place on October 3, 2016.

The purchase price amounted to $106.5 million. This said let's move to Slide 13 of the presentation. Full year revenues increased by 11.6% in reporting currency versus last year; organic growth amounted to impressive 7.9%, which is well above our long-term growth guidance of 5% to 7%. The impact from portfolio changes amounted to 8% or €207 million, stemming primarily from the acquisition of the former Pinova Group. Currency headwinds resulted in the 4.3% or €112 million negative impact on our top line.

In Q4, we were again able to achieve 6.3% organic growth, which is clearly beyond the average growth of the fragrance and flavors market. This is a strong outcome against the current political instability and volatility in some of our country markets. FX headwinds of 1.5% were less during the fourth quarter compared to the rest of the year. Taking portfolio effects of 9% into account, reported growth in Q4 was 13.8% for the Group. Let's move to Slide 14 to take a look at our bottom line.

As you can see, sales rose stronger than gross profit, resulting in a lower gross profit margin in 2016 compared to 2015. This effect is mainly driven by the former Pinova activities that come with a higher proportion of manufacturing cost compared to the rest of the Group. Normalized EBITDA grew by 9.3% to €625 million, strongly supported by all three segments. The normalized EBITDA margin amounted to 21.5%. Margin dilution caused by Pinova was about 100 basis points.

Our price/volume mix remained relatively stable over the year with about one-quarter stemming from price and three quarters coming from volume increases. The LatAm region showed different dynamics, with about 50% coming from price and 50% from volume growth. With regards to raw material prices, we continued to see an increasing upward trend in certain naturals while oil-based raw material prices continued to decline moderately. In sum, we maintained a raw material quota of 41.7%, close to the prior-year level of 41.4%. Two reasons for this.

First, despite challenging market conditions, we were able to pass through raw material price increases to our customers. And secondly, our strategy of backward integration has helped us to actively manage our raw material basket and ensure predictability, quality and traceability of our products. Going forward, we now expect raw material headwinds of 2% to 3%. Looking at currencies, we had a net impact on EBITDA of minus €31 million. This effect was largely driven by a strong negative contribution from translation of €30 million, mainly stemming from the weak currency environment in Latin America, but also China, UK and Egypt.

The insignificant impact from transaction of €1 million proves again that we have a well-balanced natural hedge environment in place. In Q4, we had a few exraordinary items that impacted our EBITDA. Maintenance and hurricane related spends across in our sites in Florida and South Carolina again negatively impacted EBITDA by €2 million to €3 million. Furthermore, we booked a severance-related provision of around €1 million for the closure of our New York Chester site and the reorganization of the Fragrance division. Turning back to full year results, normalized EBIT was up 7.1% to €423 million, and the EBIT margin reached 14.6%.

Depreciation increased from €76 million in 2015 to €90 million in 2016, due to higher investments and the inclusion of former Pinova. Amortization increased from €101 million in 2015 to €112 million in 2016, mainly driven by the purchase price allocation of former Pinova. Moving to Slide 15, as already said, the overall strong performance is supported by all three segments proving, again, that our strategy of well diversified activities continues to pay off. Scent and Care grew the business in 2016 by 5.4% organically. The segment also added €208 million of turnovers with the Pinova acquisition.

Please note that the deconsolidation of the divested Pinova performance specialty business took place effective November 30, 2016, which is why we are missing around €8 million to €9 million of turnover in Q4. This Q4 organic growth of 2% to segment Scent and Care showed a slightly slower growth momentum during the quarter, which is still good part related to special (indiscernible) wins in the prior-year quarter, as well as hurricane-related expenses. Our Flavor segment, as shown on slide 16, grew 9.7% organically, with good growth rates in all regions. The growth of Flavors during Q4 reached 8% organically and 4% in reported currency. The Nutrition segment, as shown on page 17, grew with 9.7% organically, very well as well.

Positive portfolio effects from the acquisitions of Scelta Umami, Nutra Canada and Nutraceutix were slightly overcompensated by the 2015 divestiture of CAP pork specialties at Diana. The fourth quarter was particularly strong with 13% organic growth in Nutrition. On Slide 18, you find the P&L elements below EBIT. For 2016 the financial result amounted to minus €46 million versus minus €44 million a year before. The increase in interest expense related to the issuance of our Schuldscheindarlehen was largely compensated by foreign exchange gains related to currency depreciations in Egypt, Mexico, and the UK in Q4, where our local entities kept liquidity in hard currency.

Our average interest rate, including pension, amounted to 2.3% in 2016 after 2.4% in 2015. The tax rate of 27.2% reported and 27.8% normalized was slightly lower than the year before and stayed well below our longer term expectation of a tax rate below 30%. We achieved a normalized EPS of €2.05 which is an increase of €0.15 or 8% versus the reported EPS of €1.90 in the year before. Slide 19 shows the main balance sheet items, with an equity ratio of 36.4%. We maintained a healthy and strong balance sheet.

The Pinova acquisition, but also our support to Probi for the acquisition of Nutraceutix, as well as the increase of pension provisions and higher raw material inventories led to an extension of our balance sheet by €569 million. Net debt, including pensions to EBITDA, reached a ratio of 3.1 times, slightly higher than the 2.8 times the year before. Without pension accruals, the leverage ratio was 2.3%. In 2017, we expect to reduce our leverage ratio to a level between 2.5 times and 2.8 times, including pensions. The operating cash flow on Slide 20 decreased by 9.7% to €339 million, mainly driven by higher working capital related to acquisitions, as well as strategic and price driven inventory buildup.

The increase was partly compensated by lower tax payments compared to 2015, which was impacted by special tax settlements in that year. 2016 CapEx amounted to €168 million or 5.8% of total sales. Going forward for 2017 and 2018, we see a number of highly attractive internal growth opportunities, which will require CapEx spend in the magnitude of around 6% of sales. I would like to conclude this Page 21, which shows our impressive track record of profitable growth and the consistent delivery of an EBITDA margin within our long-term guidance of 19% to 22%. In 2016, we were able to keep the pace you saw from us in the past and we are all highly committed to continue this similar story of being successfully different in the Flavors and Fragrance industry.

With this, I would like to hand back to Heinz-Juergen for an update on our strategy, as well as our 2017 outlook. Heinz-Juergen?
Heinz-

Juergen Bertram: Thank you, Olaf. Let us look at the market and our initiatives ahead. Please turn to Chart 23. Symrise has been in the Flavors and Fragrances business for more than 100 years.

We're deeply rooted in this industry and are amongst the top providers worldwide. As you all know, it is part of our DNA to look beyond and think outside the box. We have consequently explored new areas new areas of growth outside our traditional business. Today, we generate already one-third of our total sales in these new areas. Symrise has become the number one address for customers in key application areas.

We offer, for example, the broadest portfolio for nutrition and care products with additional benefits. Let me assure you, we will not stand still, there is yet more to come. Along with our business development, go changes to the portfolio, which you can see on chart 24, I'm sure you remember the steps taken in 2014 and 2015. I will focus on three acquisitions in 2016. First, Nutra Canada, which is a specialized manufacturer for fruit and plant extracts with additional health benefits.

These extracts are used for functional beverages and sport drinks, a highly attractive market segment. Second, we acquired a majority stake in the Dutch Scelta Holding, a manufacturer and supplier of mushroom extracts. And third, we supported Probi's acquisition of Nutraceutix, a leading manufacturer of probiotics with complementary technologies. All these acquisitions not only represent a strong match to our own activities but also support our clean label offering and our focus on ingredients based on natural raw materials. In 2016, we've also divested to further strengthen our core business.

We sold the Industrial unit of the formal Pinova Group in quarter four to the French DRT Group. The activities which included applications for tires, coatings, adhesives and construction materials had very little to no connection with our core business. We therefore decided to divest, which now allows us to fully focus on Pinova's former Renison's activities dealing with fragrance ingredients. Chart 25 highlights our trends, which are key to our industry and to Symrise. Natural ingredients are on the rise, in food and cosmetic products alike.

Consumers are not only keen to stay in shape, they are also keen to know what exactly they buy, if food or cosmetic products are based on natural ingredients and where they come from. With our longstanding backward integration and strategic acquisitions such as the Diana and Renaissance, we are directly addressing this demand. I can confirm both were the right acquisitions at the right time. We have highly sophisticated processes to audit our suppliers to trace the origin and use of 10,000s of raw materials. Each bag in the supermarket, we can exactly trace down to the origin.

We can also tell when and where they were processed. Another differentiating factor for Symrise is our strong R&D expertise. We not only follow traditional disciplines, but also use new ones such as green and white chemistry. We have entered into co-operations with science experts and attract talents and strengthen our R&D teams. R&D is a key word, which brings us to innovations.

For this, please turn to Chart 26. Innovation is at the heart of our business. It determines purchasing decisions by our customers and the end consumer. The more innovative a consumer brand product is, be it in terms of a specific flavor, ingredient or function, the more successful it is in the market. We spend more than 6% of our annual sales for R&D, but money is just one side of the coin.

It also needs an effective use of knowhow. In all our R&D centers, we systematically foster the transfer of knowhow between business units. An active ingredient like SymUrban is a perfect example. We combined expertise in skincare with latest insight on our environmental pollution. Crosslinking expertise has strongly contributed to our innovation.

To give you some numbers. In 2016, we applied 48 patents in total, the highest number in our industry. This equals to almost one application per week. The IP index in the U.S. Department of Commerce, which [indiscernible] the IP environment in 28 countries worldwide underlines we have the most competitive IP portfolio in our industry.

Be assured, our pipeline is very promising. Over the next three to four years, we will launch a number of unique products, among them, several cosmetic and pet food concepts. It therefore comes as no surprise that innovation along with portfolio performance is pillar of our growth strategy. You can see it on Chart 27. I'm sure most of you are familiar with this graphic.

It is a recurring element of our presentation, our proven strategy. We are fully geared for profitable growth and we'll continue to focus on three pillars; growth through increased market share in emerging and mature markets, efficiency in our operations and raw material access, and portfolio diversification through investments and targeted acquisitions. Before we open the floor for your questions, let us look ahead now. Our main message for 2017 is on chart 29. We are fully committed to continue our profitable growth course, despite the more demanding economic environment.

We aim at outperforming the global flavor and fragrance market, which is expected to grow up to 3% this year. And we want to continue to be amongst the most profitable players in our industry. We aim at an EBITDA margin of around 20%. Accordingly, our mid-term goals, which range until the end of the fiscal year 2020, remain fully in place. We are fully committed to deliver an annual growth rate of 5% to 7% and an EBITDA margin of 19% to 22%.

Along with these objectives goes a clear roadmap to strategic investments and priorities. Chart 30 gives an overview of projects which we implemented, or which we will kick off shortly. As you can see on the right, capacity expansion is the dominating theme for this year. In our headquarter in Holzminden, for example, we will increase our fragrance production, which will serve to a great extent of various customers in the EMEA region, a new state-of-the-art plant with an automation level of more than 90%. In the US, we have many investments in the pipeline.

Amongst them, we are going to expand our spray drying capacity for pet food as well as for flavors. We will increase our production for cosmetic ingredients and menthol in South Carolina. And in addition, we started a major efficiency program for the former Renaissance business. Not to forget, in Singapore, we will open our new regional development center in May. All these projects are fully in line with our CapEx guidelines, which foresee investments of around 6% of our annual sales into new initiatives.

Most importantly, we will continue these projects, despite the trend for protectionism. We currently see the Brexit in the UK, on the plans of the Trump legislation in the U.S., please churn turn to chart 31 for this. It illustrates our imports and export rates for the U.S., Mexico and the UK in 2016. In all these three countries, we operate with own sites, manufacturing for local and regional clients. We have and will significantly invest in technology, production and people.

Against this background, we do not see ourselves exposed to potential trade restrictions. Please turn to chart 32 now for our conclusion. We expect 2017 to be more challenging than the prior year. Challenges are certainly the submerged political conflict such as in the Middle East, which we expect to continue, and also political developments in general that are at the moment difficult to foresee. Furthermore, certain exchange rates will remain volatile just as well as some raw material prices, but there are various opportunities ahead.

We will capitalize on our strong business presence be it in industry nations or emerging markets. We will make the most out of our existing portfolio and add new products that will further differentiate us from our peers, and we will continue to put our customers first and supply them with tailor-made solutions. Our unique setup, our global presence and our portfolio with an increasing focus on natural resources are strong levers. We are therefore confident for this year. Having said this, we believe our vision becomes reality.

We know the farmers and the fields; we have the innovation capabilities to generate value and products to care for the whole family. Having said that, we would now like to open the floor for your questions.

Operator: [Operator Instructions]

Tobias Erfurth: We kindly ask you, as always, to put only two questions. If we cannot take all your questions during the conference, we will answer the remaining questions later. We will start with the questions here in the room in Frankfurt; we will switch to the guests on the phone afterwards.

Many thanks. And first question, please.

Unidentified Analyst: [indiscernible] MainFirst. Two questions, A and B to the outlook. On 2016 outlook was also a 20% margin and the outcome was much better.

Could you -- [indiscernible] surprise positively, so what in 2016 was better than what you expected when you have given the guidance? And looking into 2017, as you again quoted on the margin, what have you factored in why the margin could be less than the year before? And then on the growth target you have 5% to 7%, is that equal for all the three segments, or would you make differences between the three, pet food, Flavor and Scent and Care?
Heinz-

Juergen Bertram: Outlook 2016 versus 2017, actually we have three questions, so I just remembered -- I'll start with the first one, yes. 2016, as you rightfully said, on the margin, it was exactly the same wording like the one we use here now. Again, bear in mind, we are very early in the year and giving a clear outlook already at this point in time is very premature. I'm not sure if the outlook in 2016 was more positive than this one, let's just bear in mind we are confident that we achieve our targets of short and long-term targets and the outlook is positive. That's the main message.

Of course, another point is we cannot ignore that some factors like increasing volatility or some upcoming trends and then decisions like protectionism, and a lot of elections make it difficult to foresee how the future is. However, our main message which we try to convey is we feel very well prepared to address the challenges of the future whatever they may be, because we have a unique broad portfolio of capabilities, broader than anyone else. I keep saying we are the only Company serving the whole family, father, mother, son, daughter, cat and dog, and even if you want so, the goldfish. So, everyone and that is pretty much unique. We have about half of our business in emerging markets, half of our business in the mature markets.

We have one third of our portfolio in global customers, one third in regional customers, one third in local customers. We have one third in flavors, one third in fragrance, one third in additional capabilities, so which means this is a very, very well balanced portfolio, which makes us confident that we can provide positive outlook. However, for certain insecurities and volatility in the market, we cannot say. So if you read our outlook, slightly more or less positive than last year, well that's your interpretation. Let me confirm it is positive and the environment is as it is, and the bottom line guidance is exactly the same like last year.

So, Olaf, if you want to take on one of the next questions?

Olaf Klinger: Yes. So maybe a few comments on the 2016 performance. I think we saw that Flavors as well as Nutrition performed extremely well with margin levels of 23%. I think that's outstanding, supported by growth in all regions. I think we had some specific growth areas, which we did not expect at the beginning of the year and helped us last year to this performance.

And last, we had very, very good cost management in those parts of the Flavors and the Nutrition area. Scent and Care was impacted by Pinova, as you saw. So, that's the outperformance, which you saw in 2016, the main drivers there. It's very broad and that's the thing we appreciate that the portfolio itself pays off very well. On the 5% to 7% long term guidance, the ambition is there for all segments.

For all three segments, we want to be in this range. Scent and Care is a little bit at the lower end and the other parts are at the higher end so, a mixed situation, we should end in this range. That's the ambition and that's what we are committed to in the long run. Hope that answers the three questions.

Christian Faitz: Christian Faitz, Kepler Cheuvreux.

Two questions, if I may. First of all, you mentioned 2% to 3% higher raw material costs for 2017, which raw materials, if you can specify them, are expected to give you the biggest headwinds? Second of all, can you elucidate what sets you apart from your competitors, in your Pet Food business, and that seems to be so successful and seems to be hard to copy or any other of your peers. Thank you.

Olaf Klinger: I take this one. Raw material prices, we see some slightly upcoming trend, of course, starting with mineral oil, not dramatically, but slightly.

It is not too big effect anymore in our industry, about one quarter at max is driven by mineral, so it's not decisive. But some others are at a record price, vanilla to name something, citrus. So and there are some other key natural products, in particular, in the natural oil area where the price increase come from. The other one on the pet food that is a nice area to be in. Let me just stress again, it proves -- well, Diana was the best deal in our industry and happily enough, we made it.

When we cut -- we did the deal in 2015, Diana had a turnover of €425 million and an EBITDA margin of 19%. And I still hear many of you who said well, €1.3 billion was very pricey. Today, we can realize, about two years later, this part of our Company has a turnover of €576 million and 23.2% EBITDA. So the value of this thing is almost doubled in two years. I think it was a good deal.

Having said that, good part of it is pet food; Diana has market share of 40% to 45%. The major other companies active in the pet food segment is Mars and Nestle, which are also our clients. So this market is highly consolidated like the Flavor business, high entry barriers. It is highly a scientific market. Many of you had the opportunities to join us about one and a half years ago.

We took you to our site. Some of you are nodding, we took you to the site at Diana and I bet many of you were surprised how scientifically this is. So for newcomers to really over step this barrier of entry, it is very difficult, similar like Flavors and Fragrances. So that was the right deal at the right time and with the same confidence, we can say today, that we believe the acquisition of Renaissance was the right thing and the best is yet to come.

Michael Schaefer: Two question from my side.

Michael Schaefer, Commerzbank. On the Pinova integration, you mentioned that the Company is on track to deliver its margin target by 2019. Back in the Q3 conference call, you mentioned that in 2016, you expected Pinova to be more than 200 basis point below the targeted range, basically. And then 2017 should see a sequential ramp up in profitability, just to kind of flavor where you are in this process, how confident you are, what we should expect as a kind of sequential growth coming from Pinova heading into this one? And then, on the disposal of the Specialty Chemicals part, any kind of indication what kind of EBITDA you have disposed related to this business, which we are missing them basically next year 2017?

Olaf Klinger: Well, let's put it this way. Pinova business had around, not exactly, but around 12% EBITDA when we acquired it.

And we kept you always in the loop, where we are. And we said clearly over the course of last year that you will not see a significant increase because we had a lot of integration work, so. And that was the fact. For this year, so -- and you can make the calculation how much EBITDA was involved with this roughly, how much was divested into margin, you can make the math, how much EBITDA was going with us. Let's focus on because of the integration where we are, that was the other part of your question.

So at the moment, the efficiency increased, the implementation of new processes is making progress. We are getting progress. So this year, we expect about 2%, maybe even a bit more increase, so by end of this year we will be at 14% to 15% EBITDA of this business, next year 2% to 3% more, which brings us to 17% maybe even a bit more. And that gets us to 19% to 20% easily, which we indicated. Having said that, I hope you see we are very well on that track.

I personally was, as I knew you would be interested in this, about two to three weeks ago touring exactly the sites in South Carolina and in Florida to convince myself on the progress on the status of these things and let me assure you, we are very well on track, it looks very promising. That makes me so confident that this was the right acquisition. When the right product, which is very interesting, important for us, which are at the beginning of their life cycle, and our capabilities, our knowledge in green chemistry complements very well with the product portfolio which Renaissance has as that is a capability which fits and complements very well what they have. And with the numbers I just gave you, I guess you can clearly see what the outcome is. And rest assured, on the chemical part, the fragrance ingredient part, I'm not afraid at all that these guys will make their budget and their numbers.

Martin Flueckiger: Martin Flueckiger, Kepler Cheuvreux. Two questions. First question to Mr. Bertram. On page 5 of your new reporting structure, Scent & Care now showing these figures by application or are they more by region? Does this change in report also have impact on your organizational structure? And if so, what is the benefit for Symrise? Is it that it become now more agile, more efficient, more flexible or does this allow you to accelerate top line growth? The second question is to Mr.

Klinger. You mentioned in one of your answer, one of the questions before, that you were surprised about the performance in some regions. Maybe you can help us which region surprised you the most? And also which regions disappointed you?
Heinz

Juergen Bertram: Okay. Let me start with your question. Our reorganization, which took place on page 5.

Well, we reorganized in two segments, in Flavor & Nutrition and in Scent & Care. Scent & Care, we reorganized now in global business units, mainly to the fact we have come a long way from a business which in Fragrance was more with local and regional customers. As, that was our situation when Symrise started. Meanwhile, we're in as many global [Indiscernible] all the other big ones and they are also organized in business units and a big portion of our business in the Fragrance and Cosmetics, in particular in the Fragrance business, is organized on a global scale. So products from Europe are being and concepts are being taken to North America and vice versa, products are rolled out on a bit more global scale.

So this is just a clear result of us having become one of the true global players in that segment. The other part was on the Flavor & Nutrition, and shows that we have also delivered in that segment and to a unique situation. I do not see anyone else being able to do this breakout as separate business unit, but it was made for you to show you transparency on how we are doing it. And me just saying we did the best deal in the industry is just lip service. That's why we show you the numbers; we show you the growth rate of Diana, the bottom line of the Diana.

We are not shy on being fully transparent and giving you the transparency. We have nothing to hide. I think that's a value for you and transparency service and it's also a sign of our confidence.

Olaf Klinger: So on the second question, surprises in the regions, when you look back about a year, maybe little bit more, Latin America was not as promising as it came out. I think the spending of many countries was higher than expected.

So, that was a positive. Also positive was APAC, where we saw, in several countries, much higher growth rates than we expected. That includes even countries like Vietnam, Indonesia, Malaysia where we saw good and high growth rates. And also North America surprised especially on the flavor side, where we saw a strong growth. So, all in all, this came out better than we initially planned and had in our budget.

You always have country markets which do not come in as expected, and maybe one concrete example is UK. UK -- before the Brexit, UK was in economic difficulties. So the growth was not as expected in the UK in 2016. That's as one specific example. On the contrary, a country like Spain, for example, developed very well.

So you see that this portfolio, which we have also in a country level, there are countries which go up and countries that come down, it changes from one year to the other. And at the end, it gives us the stability in our business model from this perspective also. Heinz-

Juergen Bertram: Let me add to that. We keep saying, looking at our business and understanding our business, it is too short fetched just to look on a quarterly basis, or look at a very short time frame basis. The benefit of our business that is with this big amount of customers and products, these variations -- short term variations even out to an overly very stable business, if we do this right, and we should not make the mistake on looking on a quarterly base, simply one order maybe just coming two three days after a quarter.

And so, it appears that the quarter was weak, the next is very strong. Overall, let me assure you, our business momentum is still intact. And as you can see, we continue to have a very strong organic growth in all segments. That's the main message. I hope Tobias looks again at the reduced variation.

I believe the share price at the moment is undervalued. So, that's why we're happy to have you in here and convince that he may look again at his valuation.

Tobias Erfurth: So we've been to questions from the room until now. If there are more questions, of course, we can answer them on the coffee afterwards. I think with respect of time we have, I expect at least many more questions from the phone.

So, please go ahead with the questions from the phone. I kindly ask you to put only one question at the point of time to reach as many of you as possible in the remaining time of this conference. Thank you very much.

Operator: We have question from Thomas Wrigglesworth with Citi. Please go ahead.

Thomas Wrigglesworth: Thank you, gentlemen, for your presentation this afternoon. My one question, could you obviously you've created Nutrition as the third leg. What are your can you help qualify and quantify your ambitions for this division in terms of its size? Are we going to see it as €1 billion of business as well, in what timeframe, and how will the balance of organic and inorganic growth operate within that? So obviously one question, strategic outlook for Nutrition. Heinz

Juergen Bertram: Nutrition, it is obvious that we are very happy about us having made this step. It shows that it pays off that the expansion of our capabilities beyond Flavors and Fragrance, where we were the first to do this years ago, clearly pays off.

And on the Nutrition and it is not a secret that we have high expectations soon or later, and not less than 1 billion in that one. I'm not saying by when, but it is with the growth rate we enjoy there, clearly the ambition to drive that further, and that is and will continue to be one of the outperforming segments, which nicely distinguish us from the competitors and from the competition. We talked about it, will be difficult to copy. The other point is, could we envision to do this in other segments of our business as well. At this point in time, we did what we have to do, and it was also to give you a clear transparency on our business as we are confident that we have nothing to hide.

And when the time is there that we may have to do this in other areas of our business activities to guarantee you more transparency and we will do so. I would say, for the moment, this is what we do but again it shows clearly that we have a unique business model in our hands that that has a value and we would like to share that with you, okay.

Operator: Next question is from Heidi Vesterinen of Exane BNP Paribas.

Heidi Vesterinen: Maybe a question on Scent and Care then. Could you talk about why we had a bit of a slowdown in Q4? And how is Cosmetic Ingredients doing, because you didn't mention that.

You had highlighted fragrances and then I wonder if that had an impact on the margin, which was also softer as well. Last year, you had this exceptional marketing spend. So we had thought margins could be a little bit better. Could you elaborate on that, please? Thank you. Heinz

Juergen Bertram: Heidi, good to hear from you.

So, I'll -- I'm more than happy to take on the questions. Scent and Care is pretty straightforward. The major dip was in Scent and Care fourth quarter, because honestly and we reported that this hurricane season bad luck all four sites for two hurricanes, so we had two weeks downturn which is, in a sum, one month downturn. That's bad luck. When I saw the weather forecast, I said, how can this happen.

The trace of the hurricanes twice from one side to the next, and the next and the next. So and it's not a big secret that that has some impact and that had some impact. We do not expect this to happen each year. That was an exception, but you see it in the numbers. And the Cosmetic Ingredients, yes, there is no extra marketing stuff this year.

The Cosmetic Ingredient division is two parts. The bigger part is the actives. They are doing very well and having a nice growth rate, nothing to complain about. The sunscreen filter business at the moment is slower, is clear focus on margin protection and with less growth; and so overall Cosmetic Ingredient is very well on track. I hope that answers that question.

Heidi Vesterinen: Just on the sunscreen filters, maybe, is that just something seasonal, or is there more competition, or why is it lower?
Heinz-

Juergen Bertram: No, the sunscreen filter is more competitive. There's no secret than others, but with our capabilities on optimizing the processes in green chemistry, we see good chance to also bring that growth rate higher again. Competition is, for us, not a problem, as it is challenge and challenge is, well unlifted opportunities. So, we see that as a temporary effect.

Operator: Next question is from the line of Theodora Joseph with Goldman Sachs.

Theodora Joseph: I've have got one on the investment for 2017. So just running through the list and it seems like you have quite a long slate of facility expansions ongoing this year. Are there any higher year-on-year start-up cost as you ramp up that we should be thinking about?
Heinz-

Juergen Bertram: Clear answer, no higher ramp-up costs. We gave you the CapEx spending about 6%. Consider our CapEx spending as a sign of confidence.

We have high confidence in our ability to continue a strong organic growth, and if you look on what we're doing, it is to a big portion on capacity expansion and building of new products for new plants. We would not do that if we would not have the confidence that we have the products which sell in the market. Actually, we have in some areas we are sold out. I'm not tell you those segments where it is, but that is a good situation we're in. And in some of these areas, we are building plants.

So, you see us being very confident and I hope the rating of Goldman Sachs finds a different number pretty soon after my statement.

Operator: Next question is from the line of Gunther Zechmann with Bernstein.

Gunther Zechmann: Hi, one question from my side as well, Gunther Zechmann from Bernstein here. On the cash flow side, you mentioned that you posted inventories into year-end, mainly on the back of higher raw material costs. Is this building of strategic inventory is something you continue to do into 2017?

Olaf Klinger: Mr.

Zechmann, there is, of course a harvesting season, and a good part of this is related to the vanilla, where you see the harvesting going on in June to September. And then it's fermented in Madagascar and shipped to Holzminden, so that is a long supply chain and it's a typical situation where we build up further inventories before we process this and then sell it off to customers. One major example why you see this increase, that is, of course, also a strategic build out because the main natural vanilla supplier in the world and so that's very important for us. Heinz-

Juergen Bertram: And let me add also, we have each year at this time of the year, certain level of inventory in other products like sunscreen filters, which we produce and some seasoning, hopefully will come as always. And then you can see a decrease in inventory.

So this is nothing, which is unusual, one thing mentioned by Olaf, the vanilla with the problems we're having because of the storm in Madagascar, now everyone is happy that we have the products which we need to serve all contracts. So actually, looking back that may have been the wise decision, okay?

Gunther Zechmann: But there is no buildup in things like citrus stocks or some of the natural oils that you mentioned earlier?
Heinz

Juergen Bertram: Nothing, which we haven't done the years before. So the only slight exception is vanilla, in particular, with the high prices we have the valuation of the inventories is slightly different than in the past. The rest essential oils, depending on the seasons, as Olaf said, we have to build some inventories because in some key areas, it's just harvest time once a year. And in other areas because of the business is highly seasonal like in sunscreen filter business, we have to build some inventories, which is nothing different compared to other years.

Okay?

Operator: The next question is from Geoff Hare of UBS. Please go ahead.

Geoff Hare: Good afternoon. Just wanted to ask a quick question on pricing. You said the raw materials would be up 2% to 3% in 2017.

And the price increases that you pushed through already, is this enough to offset that increase that you see for the year?
Heinz

Juergen Bertram: Yes, we pushed that through and so far we were very successful in doing so. So from this side, at the moment, we have no concerns that we cannot wait, especially the increase in vanilla prices into our customer situations. There's always this time lag which you see. Normally, it takes us three months to six months to react to either increases, but as well to decreases in raw material prices. We see these price adjustment losses in many areas.

And therefore, that helps us also to balance out the raw material price situation, even if it become a little bit tougher at the moment.

Geoff Hare: Just to clarify on that, and does that mean that the price increases you've pushed through in Q4, you won't actually see that coming through until Q1, Q2 or sorry, until Q2, Q3?
Heinz

Juergen Bertram: Correct, this is the time delay plus the fact that a lot of this vanilla campaign of last year will go into the pipeline to the customers in the first two quarters of this year, 2017, for example, for ice cream, that's the season, which is now coming.

Operator: Next quesiton is from Aymeric Poulain of Kepler Cheuvreux.

Aymeric Poulain: Yes, thank you. Good afternoon.

Most of my question have been answered, but I've got one left on the tax rate, where would you think the tax rate for 2017 will end up at?
Heinz

Juergen Bertram: Tax rate, sorry, I think we should expect the same area, 27% to 28% also for 2017.

Operator: Next question is from Ian Hunter with Investec. Please go ahead.

Ian Hunter: Good afternoon, gentlemen and apologies, I can do one better than the last person. My questions were on CapEx and inventory, which you've already addressed.

So sorry to have taken up time. Thank you.

Operator: And we've a follow-up question from Heidi Vesterinen of Exane.

Heidi Vesterinen: Hi, sorry, just another question on vanilla. You had mentioned the storm in Madagascar, is it true that crops have been destroyed and that prices are shooting up further to around €600 or so? Is that what you're seeing? And I understand you are back integrated, but I guess directionally if costs move up, you would need anyway more as well.

Is that correct?
Heinz-

Juergen Bertram: Heidi, thanks for that question, I was waiting for that as that is a very valuable final question for this round. Vanilla, that's exactly the advantage of backward integration. First clear message is we do have the vanilla quantities, which we need to serve all contracts. So that's the first point. What Heidi pointed out, yes, there is devastation going on there, but again the advantage of backward integration, if someone gets vanilla extract, the vanilla qualities required, then it's the one who is locally present with the own people, the own team, helping to restore what has been to be destroyed.

So a lot of stuff has to be done. Yes, we are also there to support the local communities, but we feel ourselves in a very good position also in the future to serve all the contracts. The good news is here, this is exactly why we do backward integration. If someone is well positioned to address these challenges, it's us and the good news as well is we are covered to serve all contracts because this is a question we are getting from many of our customers. We will not let any customer down.

I hope that answers the question as this is a clear answer why backward integration really pays off for natural products. Heidi? I would say this was it for the moment. Ladies and gentlemen, this concludes today's conference. We would now like to invite those of you here in the room to join us for coffee now. To those on the phone, I would like to say goodbye and thanks for joining us today.

We hope to meet or talk to you soon again. Take care and the rest, we will have a coffee together. Thanks.

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

Goodbye.