(new: closing prices, Credit Suisse, Baader Bank)

FRANKFURT (dpa-AFX) - Shares in fragrance and flavorings manufacturer Symrise made up their losses by the end of trading on Wednesday. News of investigations by competition authorities into suspected price fixing in the industry had initially overshadowed the annual results of the group, which is listed in Germany's leading Dax index.

In the end, however, the company's annual targets, which were better than those of analysts, are likely to have prevailed on the market. Symrise shares closed up 0.6 percent, after falling to their lowest level since May 2020 during the course of the day, with a discount of more than 4 percent at times. The Dax rose 0.5 percent.

Meanwhile, shares of other major flavors and fragrances manufacturers in Europe remained under pressure until the evening in light of the antitrust investigations. In the Swiss SMI index, shares in Givaudan fell by 1.4 percent. DSM shares were also affected, losing around two percent.

The EU Commission as well as the Swiss Weko and other competition authorities from Great Britain and the USA are investigating suspicions of price fixing in the industry. While the EU Commission did not name any names, Weko was more specific. It named the largest companies in the industry as being affected: Symrise and Givaudan, as well as the Geneva-based family company Firmenich, which wants to merge with the Dutch DSM, and also the U.S. group International Flavors & Fragrances.

Symrise confirmed it had been contacted by the European Commission in connection with investigations into possible price fixing in the industry. The company's headquarters in Holzminden, Lower Saxony, is also affected by the investigation. However, there are no details yet. Symrise is cooperating fully and is currently being heard as a witness. Company CEO Heinz-Jürgen Bertram said at the annual press conference: "Price fixing: We don't see ourselves affected. Today, we think we have nothing to hide."

"The authorities have apparently found sufficient concerns and credible indications of wrongdoing to take coordinated action against the sector for antitrust violations," commented experts at Basler Kantonalbank. If the indications are confirmed, this would entail "very significant reputational damage" and, apart from expected fines, would also have an impact on ESG (environmental, social and corporate governance) ratings, which are becoming increasingly important. They also pointed out that the merger between Firmenich and the Dutch DSM might now be in question, which DSM has denied, however.

Bank Vontobel has a similar view. Apart from possible fines, it also fears considerable damage to the image of the industry and a weaker position in price negotiations in the future.

Analyst Gunther Zechmann of Bernstein Research pointed out that the investigations are not likely to be easy "given the complexity and interconnectedness of the 'Big 4' in the flavors and fragrances industry." Investors interested in buying could therefore hold back in the coming months. Nevertheless, according to him, an expected recovery in the industry's sales later in the year and falling prices for raw materials should give the sector a tailwind.

For now, Symrise will probably have to restore investor confidence by boosting its earnings momentum with improved profitability in the first half of the year, said Baader Bank analyst Konstantin Wiechert. In the long term, however, the expert still considers Symrise a high-quality investment - as well as the fragrances and flavors sector as a whole.

Meanwhile, Samuel Perry of Swiss bank Credit Suisse lowered his price target for Symrise shares to 107 francs - albeit due to a lower industry valuation. He maintained his positive vote for Symrise and was also positive about the group's business prospects in the medium term. He considers the potential financial damage from the antitrust investigations and a possible fine to be low./ck/tav/la/he