Last update on 2024-06-04

Symrise (SY1.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 7/9)

Get detailed insights into Symrise (SY1.DE) with Piotroski F-Score analysis for 2023, scoring 7 out of 9. Evaluate profitability, liquidity, and operational efficiency.

Short Analysis - Piotroski Score: 7

We're running Symrise (SY1.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

The Piotroski F-Score grades the financial strength of companies on a scale from 0 to 9. Symrise (SY1.DE) scored a 7, indicating a relatively strong financial position. Out of the 9 criteria, Symrise excelled in having a positive net income, cash flow from operations, and positive return on assets, along with significantly higher operating cash flow compared to net income. The company demonstrated improving liquidity with a growing current ratio. However, they struggled slightly with increasing leverage and a declining asset turnover ratio.

Insights for Value Investors Seeking Stable Income

Symrise (SY1.DE) shows a strong financial performance with a Piotroski F-Score of 7. The company demonstrates excellent profitability and liquidity, suggesting it can be a reliable investment. However, it's worth considering the slight increase in financial leverage and the decline in asset turnover ratio. If these issues are addressed in future financial results, Symrise could become even more attractive. As it stands, Symrise is a fairly strong candidate for investment, but careful consideration of its operational improvements is advisable.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Symrise (SY1.DE)

Company has a positive net income?

The criterion assesses whether the company has generated a positive net income in the last fiscal year, which is crucial for determining consistent earning capabilities.

Symrise (SY1.DE) has reported a positive net income of €340.47 million for the fiscal year 2023. This marks a reversal from the significant losses it experienced in 2005 and 2006, when net income was -€52.41 million and -€89.85 million, respectively. Since then, the company has shown a strong upward trajectory in its earnings over the years, turning consistently positive from 2007 onward. The consistent growth in net income reflects the company's robust financial health and operational efficiency. Hence, according to the Piotroski scorecard, Symrise earns 1 point for this criterion, which is a positive trend for investors evaluating the company's long-term profit generation capabilities, strengthening their confidence.

Company has a positive cash flow?

Checking if Cash Flow from Operations (CFO) is positive or negative assesses a company's ability to generate cash from its regular business operations. Positive CFO indicates healthy business activities.

The Cash Flow from Operations (CFO) for Symrise (SY1.DE) in 2023 is €719,507,000, which is significantly positive. Compared to the past 20 years of historical CFO data, Symrise has demonstrated a strong ability to generate cash from its operating activities. Except for the year 2006, the CFO has consistently been positive, reflecting a solid track record of financial health and operational efficiency. This trend is highly favorable and suggests that Symrise has been able to maintain robust cash flows, even increasing them substantially over the years, especially evident from the leap to €719,507,000 in 2023 from €360,109,000 in 2022.

Return on Assets (ROA) are growing?

Change in ROA: Compare the ROA of 0.0436 in 2023 with the ROA of 0.0387 in 2022. If the ROA increased in 2023 add 1 point if not set it to 0.

The ROA for Symrise (SY1.DE) increased from 0.0387 in 2022 to 0.0436 in 2023, resulting in an improvement of 0.0049, or roughly 13%. This trend is a positive indicator for the company's profitability and operational efficiency. Despite this improvement, it is worth noting that Symrise's ROA is still significantly lower than the industry median ROA, which has hovered around 0.3018 in 2023. This discrepancy suggests that while Symrise is improving, it is still lagging behind industry peers. Consistent improvement in ROA would be necessary for Symrise to gain a competitive edge in the long run.

Operating Cashflow are higher than Netincome?

Operating Cash Flow higher than Net Income - This analysis criterion examines if a company's operating cash flow (OCF) is greater than its net income for a given period, typically a fiscal year. This is important as consistently higher OCF compared to net income suggests that the company is generating more cash than what it records as net profit, indicating strong cash-generating ability and potentially less reliance on accounting assumptions and adjustments.

After comparing the Operating Cash Flow (OCF) for Symrise (SY1.DE) in 2023, which stands at €719,507,000, with its Net Income amounting to €340,473,000, it becomes evident that OCF is indeed higher than Net Income. Assigning 1 point based on this criterion is justified as the OCF surpasses the Net Income by €379,034,000. Analyzing the historic data: - OCF reached its highest in 2023, indicating strong cash-generated operations over the past years. - Net Income has generally been on an upward trend, though with some fluctuations, over the same period. - Assessing the accrual trends, the accrual ratio in 2023 is 0.0917. Despite variations over the years, witnessing both positive and negative accruals, the consistent year-over-year positive accrual ratio highlights prudent earnings management by Symrise. Hence, the criterion for operating cash flow being higher than net income in 2023 is met, deriving a positive signal towards the financial robusticity of the company.

Liquidity of Symrise (SY1.DE)

Leverage is declining?

Change in Leverage evaluates if a company's financial leverage has decreased, indicating a stronger balance sheet.

For Symrise (SY1.DE), the leverage ratio in 2022 was 0.3203, while in 2023 it increased slightly to 0.3181. Thus, according to the Piotroski Score criteria, no point could be added here as the leverage has slightly increased. Historically, leverage appeared higher in 2014 and remained relatively stable around 0.20-0.34 through the last decade. While minor, this increase negates a point and signals Symrise's marginal reliance on debt financing in 2023.

Current Ratio is growing?

The Current Ratio represents a company's ability to pay short-term obligations with its short-term assets. It's an important liquidity metric.

In 2023, Symrise's Current Ratio increased to 2.8851 from 2.7631 in 2022, indicating improved liquidity. This positive trend results in a Piotroski point of 1. Symrise's Current Ratio also consistently surpasses the industry median, with 2023 showing a 2.8851 ratio compared to the industry's 1.9399. Over the past 20 years, the company's ratio has improved significantly from 1.0814 in 2008 and has remained above the industry median consistently since 2013. This long-term improvement is indicative of the company's strong liquidity management.

Number of shares not diluted?

This criterion evaluates whether the number of outstanding shares has increased or decreased over a period of time.

Upon examining the outstanding shares of Symrise (SY1.DE), it is observed that the number of outstanding shares remained constant at 139,772,054 between 2022 and 2023. Over the last 20 years, the data indicates that the number of outstanding shares has generally followed an upward trend but saw periods of stabilization, such as between 2005 and 2006. Despite the steady number over this recent period, since no decrease was noted, this criterion receives a score of 0. This trend can be seen as relatively neutral as there was no shareholder dilution in the last fiscal year but no reduction either.

Operating of Symrise (SY1.DE)

Cross Margin is growing?

Explain the criterion for Symrise (SY1.DE) and why it is important to consider

The Gross Margin, which represents the proportion of money left over from revenues after accounting for the cost of goods sold, is a vital indicator of a company’s financial health. Monitoring changes in this metric year-over-year offers insights into how well Symrise is managing its production costs relative to its revenue. An increase in Gross Margin is generally positive as it suggests higher efficiency or pricing power.

Asset Turnover Ratio is growing?

Asset turnover measures a company's efficiency in using its assets to generate sales. A higher ratio suggests better performance.

Comparing the asset turnover ratios, Symrise's asset turnover has decreased from 0.639 in 2022 to 0.6053 in 2023. This indicates a decline in efficiency in using its assets to generate sales, implying weaker operational performance. Therefore, no point is added according to this criterion. Historical data shows fluctuating asset turnover since 2005, peaking at 0.8392 in 2013 and generally declining afterwards. This year’s decrease conforms to a broader long-term downward trend, suggesting a possible need for operational improvements.