FRANKFURT (dpa-AFX) - A write-down in Sweden and a disappointing margin performance last year weighed heavily on Symrise shares on Monday. The paper of the fragrances and flavors manufacturer lost 8.5 percent at times, reaching the lowest level since mid-October at just over 96 euros. The share price recovered only slightly from this around midday. Most recently, the share lost a good 6 percent to 98.62 euros.

With the slide in the share price, Symrise was the laggard in the Dax, which the company is already significantly behind in the still young year. The Dax, which was almost unchanged on Monday, has gained eight percent so far in 2023, but Symrise has now slipped into the red by just under three percent. This makes them the largest among only four weaker index stocks so far in 2023.

Symrise already shocked its shareholders with a profit warning on Friday evening. The operating profit margin fell short of the Dax group's own target in 2022. Currently, many companies are feeling the effects of high raw material prices. In the past, however, Symrise had often fared better than its competitors, even in difficult times.

It is not exactly surprising that the fragrance and flavorings maker missed expectations with its margins for the second half of 2022, wrote analyst Virginie Boucher-Ferte of Deutsche Bank. Arguably, however, the magnitude was greater than expected. The market's profit expectations are now likely to fall, expected Georgina Fraser of US investment bank Goldman Sachs. She stressed that there are few details so far on the reasons for the margin weakness. She sees the papers under pressure as long as it is not known whether the effect might be felt throughout the year.

Investors were also bothered by a 126 million euro writedown on the company's stake in pet food specialist Swedencare - only shortly after it bought into the Swedish company. Charlie Bentley of investment house Jefferies warned in an initial assessment that despite the write-down, Swedencare should still be on Symrise's balance sheet at a higher value than implied by the recent sharp drop in the Swedes' share price.

In the view of Gunther Zechmann of the U.S. analyst firm Bernstein Research, the write-down on the investment does not send any negative signals for Symrise's pet food additives business. The DAX-listed company had strongly expanded this business area, which has recently become a key growth driver. In addition, the explicit mention of dividend security should make investors confident about the cash inflow, Zechmann said.

Notwithstanding the profit warning, the fragrances and flavors group has also once again reported excellent sales and earnings growth for 2022, wrote analyst Thomas Swoboda of major French bank Societe Generale. This is likely to continue in the new year, albeit at a slower pace.

Against the backdrop of the question of whether Symrise's margin trend is company-specific or market-driven, Goldman analyst Fraser is now eagerly awaiting what Swiss rival Givaudan will announce on Wednesday as part of its financial results presentation. Shares in Givaudan were down only moderately by about 1 percent in Zurich on Monday./niw/tih/jha