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What if I told you that one of the most dominant players in the luxury, food, and beauty industries operates largely under the radar? That some of the most prestigious brands in the world, think high-end perfumes, gourmet foods, and premium skincare, rely on this company’s expertise, yet most investors barely give it a second glance?
Robertet has quietly perfected a single art: the mastery of natural ingredients. For over 170 years, Robertet has operated with a long-term mindset, sourcing rare botanicals, controlling its supply chain from “Seed to Scent,” and building a very significant moat around its business. Yet, despite its rich heritage and deeply embedded competitive advantages, the market barely knows its name.
Let’s dive into the fundamentals, its story and rich heritage. Because sometimes, the best investments are the ones hiding in plain sight...
Audio analysis - Robertet
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Written Analysis - Robertet
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Summary
Robertet differentiates itself by specializing in 100% natural flavors and fragrances, with vertical integration ("Seed to Scent" approach) ensuring quality and traceability. High switching costs, exclusive raw material sourcing, and proprietary extraction methods give it a sustainable moat. I’m still unsure how strong it is compared to competition. Will need to do more research on competitors before deciding.
Despite being much smaller than competitors like Givaudan and IFF, Robertet has both the highest gross margins (55.7%) and best ROIC (~22%) in the industry. It has a conservative capital allocation strategy, focusing on organic growth with selective acquisitions.
The flavors & fragrances (F&F) market is consolidating, with larger players acquiring niche businesses. Robertet's sustainability-first approach aligns well with growing demand for ESG-friendly products, positioning it favorably for future growth.
While cheaper than competitors on EV/EBITDA and P/FCF, Robertet’s organic growth (~6%) is slow, and it needs acquisitions to accelerate. The valuation does not offer a clear margin of safety, limiting potential upside.
My curiosity about Robertet was sparked through conversations with Heavy Moat Investments, who holds this stock as a meaningful part of his portfolio. We decided to record an audio analysis together to explore what makes this company a compelling investment. With the global flavors and fragrances market projected to grow steadily over the next decade, Robertet's niche focus on natural products could be a long-term competitive advantage in an industry that increasingly values sustainability and transparency. But is it enough to make the company a great investment?
If you've ever enjoyed the delicate aroma of a fine perfume, the rich taste of a natural vanilla extract, or the soothing scent of a luxury skincare product, chances are you've encountered Robertet, whether you realized it or not.
Founded in 1850 in Grasse, France, the heartland of perfumery, Robertet has spent the last 170 years perfecting the art and science of natural ingredients. Today, it stands as a world leader in flavors, fragrances, and active ingredients, working with some of the most prestigious brands in food, beverages, and cosmetics.
But what makes Robertet truly special? Unlike many competitors that rely on synthetic ingredients, Robertet is obsessed with nature. They source, cultivate, and transform plant materials into high-quality natural extracts, ensuring the purity and sustainability of their products. With an extensive catalog of over 1700 natural raw materials, they are the go-to supplier for companies that prioritize authenticity and craftsmanship.
1.1 - History
I could copy and paste the entire history from the link below, into this PDF, but I doubt it would add anything to the report. The website has the entire history, complete with photos and everything else. (Click here to find the history of Robertet). For those who don't want to read the entire history, here is the short version of Robertet in 9 sentences.
1850 – Founded in Grasse, France, as A La Confiance, processing flowers and plants.
1875 – Renamed Robertet after Paul Robertet took over.
1935-1950 – Innovated natural essence extraction, gaining luxury perfume clients.
1984 – Went public on the Paris Stock Exchange and expanded globally.
1990s – Strengthened presence in the U.S., Asia, and Europe.
2000s – Grew its raw material sourcing to over 60 countries.
2010s – Launched "Seed to Scent" for full traceability and sustainability.
2021 – Introduced ‘Futuring Naturals’ to drive sustainable innovation.
Present – A leader in natural ingredients for food, fragrance, and cosmetics.
Chapter 2 - The Company
2.1 - The business model
Family-owned business; Robertet generates revenue by developing, producing, and selling natural ingredients used in perfumes, food flavors, and active components for health and beauty products. It serves industries such as food & beverages, cosmetics, and personal care.
Robertet’s revenue is divided into four main segments:
Fragrances: Robertet creates natural scents that are used in perfumes, skincare, and home products. For example, when you smell lavender in a body lotion or jasmine in a high-end perfume, there’s a chance Robertet supplied the natural extracts behind that scent.
Flavors: They develop natural flavors that make food and drinks taste better without artificial chemicals. For example, the real citrus flavor in a soft drink or the vanilla taste in a bakery product may come from Robertet’s natural extracts.
Natural Raw Materials: Robertet sources and processes plants, flowers, and herbs into oils and extracts for use in flavors and fragrances. For example, they harvest roses to make rose essential oil for perfumes or extract peppermint leaves for use in chewing gum flavoring.
Health & Beauty: They supply natural ingredients that enhance cosmetic and wellness products. For example, the aloe vera in a face cream or the antioxidant-rich botanical extracts in anti-aging serums may come from Robertet.
Robertet's management focuses on growth by prioritizing natural and innovative solutions. They invest heavily in research and development (R&D) to meet the rising demand for natural products and maintain a vertically integrated supply chain, known as the "Seed to Scent" approach, ensuring full traceability and quality.
As of FY2023, Robertet's revenue was distributed as follows:
Europe – 39%
North America – 35.6%
Asia-Pacific – 14.5%
Latin America & Caribbean – 7.1%
Africa & Middle East – 3.8%
Robertet’s business model appears highly sustainable with a bright future.
There are a few important reasons why I think that is the case:
The global shift toward natural and sustainable products aligns perfectly with Robertet’s strengths.
Vertical integration ensures quality control and a competitive advantage in sourcing rare natural ingredients.
Growing demand for clean-label, organic, and eco-friendly products in fragrances, flavors, and beauty industries further secures long-term growth.
With its commitment to sustainability, innovation, and natural ingredients, Robertet appears to be well-positioned to capitalize on future industry trends and maintain its leadership in the natural ingredients market.
They have 31 natural raw material sites (places where Robertet grows, harvests, or sources natural ingredients like flowers, herbs, fruits, and spices), 14 creation and research centers (labs and innovation hubs where scientists and perfumers develop new scents, flavors, and ingredients) and 1727 industrial sites worldwide (factories and production facilities where Robertet manufactures and processes its products).
Chapter 3 - Sector & Industry
3.1 - The flavor and fragrance market
F&F = short for flavor and fragrance market
The F&F market, is a dynamic and essential component of various industries, including food, beverages, cosmetics, and personal care. The market appears to be quite fragmented but consolidating by larger players.
As of 2023, the global F&F market was valued at approximately $40 billion. Projections indicate that this market will reach around $44.6 billion by 2033, reflecting a very low 1% CAGR during the period from 2023 to 2033. Other sources estimate it should grow between 3-5% CAGR until 2033.
The F&F appears fragmented with numerous larger and smaller players. However, there are a few players within the industry that hold significant market shares together. I expect the market to consolidate over time through M&A by larger players.
3.2 - Competitors
The industry is dominated by several key players, each holding substantial market shares:
Givaudan (Switzerland): Revenue was $8.1 billion.
The biggest player in the market, creating both synthetic and natural flavors and fragrances for food, perfumes, and personal care products. Used to be a shareholder in Robertet. Controls roughly 18% of the F&F market.
(DSM) Firmenich (Switzerland): Estimated revenue $12 billion.
Known for developing new scents and flavors, including sustainable and biotech-driven solutions. Used to be, a shareholder in Robertet. Controls roughly 17% of the F&F market.
IFF (USA): Revenue FY2023 $11.4 billion.
A global multinational that supplies flavors, fragrances, and ingredients for food, drinks, and cosmetics worldwide. Controls roughly 20% of the F&F market.
Symrise (Germany): Revenue FY2023 €4.7 billion.
A company focusing on natural and synthetic ingredients for perfumes, food, and beauty products, with an emphasis on sustainability. Controls roughly 12% of the F&F market.
Robertet (France): Revenue FY2023 €721 million.
Specializes in 100% natural ingredients, focusing on organic and plant-based extracts for perfumes, food, and wellness products. Controls roughly 2-3% of the F&F market.
Chapter 4 - Competitive advantages
In the competitive flavors and fragrances industry, Robertet stands out due to its unique business model and extreme focus on ESG. Below, we explore how Economies of Scale, Intangible Assets, and Cornered Resources apply to Robertet, including real-world examples of how these moats work for the company.
For Robertet, a company that differentiates itself through its focus on natural and organic ingredients, the following moats are particularly relevant:
1. Switching costs
In the flavors and fragrances industry, switching suppliers isn’t easy, especially for companies that prioritize high-quality natural ingredients. When a brand formulates a perfume, cosmetic, or food product, it must go through extensive testing, regulatory approvals, and consumer trials. If a company were to switch from their current supplier to another, they’d have to reformulate, risking changes in scent, taste, or performance, a costly and time-consuming process.
The business increases these switching costs by offering exclusive natural ingredients that are difficult to replace. Many of its luxury fragrance clients rely on them for rare, high-quality extracts, making substitution nearly impossible. Additionally, their "Seed to Scent" vertical integration ensures consistent quality and traceability, something many competitors cannot guarantee.
Because consistency is critical in the high-end fragrance, food, and cosmetics industries, switching away from this supplier would introduce risk and instability for customers. This strong dependence creates long-term partnerships, making it difficult for clients to leave, even if a competitor offers lower prices.
2. Intangible assets
Intangible assets such as brand reputation, patents, and expertise play a huge role in customer loyalty and pricing power. The flavors and fragrances industry is trust-based, where long-term relationships and consistency matter more than price alone.
With a heritage of over 170 years, the company has become one of the most respected names in natural ingredients. Unlike competitors that balance synthetic and natural production, they maintain an exclusive focus on high-end natural products, making them a go-to supplier for premium brands.
A prime example of this moat is their "Natural First" strategy. The business has positioned itself as the leader in 100% natural flavors and fragrances, attracting high-end clients like Chanel, L’Oréal, and Estée Lauder, who demand pure, traceable, and sustainable ingredients. Because the brand is associated with luxury and purity, customers are willing to pay more for its ingredients. Many premium brands prefer long-term partnerships to ensure consistency, making it difficult for competitors to replace them.
Another intangible asset is their unique extraction techniques. The company holds patents on proprietary extraction methods, allowing them to create superior essential oils with richer scents and longer-lasting properties. A standout innovation is CleanRScent™, a solvent-free extraction process that enhances the purity of natural extracts while reducing environmental impact. This method replaces traditional solvents like hexane with Dimethyl Carbonate (DMC), a biodegradable and non-toxic alternative.
Additionally, the company employs supercritical CO₂ extraction, a green chemistry method that uses carbon dioxide instead of synthetic solvents to extract fragrance and flavor compounds. This technique preserves delicate scent molecules that are often lost in traditional distillation or chemical extractions. While many competitors still rely on ethanol or hexane-based extractions, their CO₂ process is solvent-free, making it a preferred choice for luxury perfume brands seeking eco-friendly and natural formulations. This technology has expanded their palette of natural ingredients, particularly in the flavors division, where CO₂-extracted coffee, ginger, and berry flavors deliver more intense and natural tastes.
3. Cornered resources
Last but not least, the moat: cornered resources. This refers to exclusive access to valuable raw materials that competitors cannot easily obtain. Some of the rarest and most desirable fragrance and flavor ingredients, such as: rose oil, vanilla, and sandalwood, are in limited supply. Having direct access to these natural resources provides a massive competitive advantage.
The company has long-term partnerships with farmers, plantations, and specialty ingredient producers, allowing it to secure high-demand natural materials before competitors. In Madagascar, they work directly with vanilla farmers, ensuring a steady supply of one of the world’s most sought-after natural flavors. This protects them from price fluctuations, while other companies struggle with inconsistent sourcing. Additionally, the business controls citrus farms in Italy and botanical gardens in Asia, meaning it gets first access to essential oils before they reach the open market. These exclusive deals allow the firm to offer higher-quality, more stable, and often unique natural ingredients.
Luxury brands rely on consistent, high-grade materials, making this supplier an indispensable partner. By owning the supply chain from farm to final product, they ensure superior quality, stable pricing, and long-term customer loyalty. I think competitors have similar moats, but the ESG focus makes them unique here. I expect this does give them higher switchings costs than others.
Chapter 5 - Management
The year 2022 marks the debut of a non-family member as the chief executive officer of Robertet. Robertet’s current CEO, Jérôme Bruhat, has led the company since 2022, bringing years of experience from L’Oréal.
The Maubert family still holds significant influence, though. Philippe Maubert, former CEO for over 30 years, is now Chairman, while several family members run key divisions. Philippe Maubert’s main objective now is to protect the company’s vision and independence. Meanwhile, CEO Jérôme Bruhat’s main goal is to drive growth, modernization, and global expansion.
Below you can see that the Maubert family is all still deeply involved within the business.
Robertet’s management is focused on its natural ingredients and sustainability focus and makes strategic acquisitions to strengthen its niche in the F&F market.
In 2022, they bought Omega Ingredients, which makes clean-label natural flavors. This strengthened them in the growing market for organic food and drinks. A year later, they bought Aroma Esencial, a Spanish producer of high-quality essential oils, securing exclusive access to rare raw materials.
Financially, Robertet takes a pretty conservative approach. They favor organic growth, but don’t avoid M&A if this strengthens their long-term strategy. The company doesn’t rely on adjusted earnings tricks, such as ‘adjusted earnings’ or EBITDA. They also include lease obligations in net debt (sign of conservatism).
Many Robertet management members also sit on the board of directors, which creates both strategic benefits and governance risks.
On the positive side, this structure allows for faster decision-making, as management has direct insight into operations and can align strategies more effectively. Additionally, having management on the board can help maintain a consistent corporate culture and streamline communication between leadership and governance.
However, this dual role also comes with risks. A lack of independent oversight can lead to conflicts of interest, as the board is responsible for evaluating management's performance. With fewer external perspectives, there is a risk of groupthink, which may limit critical discussions and strategic challenges. This overlap can also weaken shareholder accountability, as independent directors typically provide stronger investor oversight. Furthermore, self-evaluation bias could arise, where management influences its own performance reviews and compensation decisions. Overall, I’m not a huge fan of this structure, but it is not necessarily a red flag.
5.1 - Incentives
Management receives a:
Monthly base salary (Annually €500.000 for the CEO)
Annual variable bonus (Target 70% of the annual salary)
Long-term compensation and performance shares, based on:
Revenue growth
EBITDA growth
Development through CSR criteria
The company has not disclosed the specific performance thresholds that must be met for the variable and long-term compensation to be awarded. The equivalent of €650.000 in free shares may be granted to the CEO.
CEO: Jérôme Bruhat earns €500.000 every 12 months, or roughly 11 times what the average Robertet employee earns. Seems reasonable for a company this size. He also received roughly 1000 shares of Robertet, worth +/- €800.000. In total, he earned €1.6 million in compensation (including one - time bonuses for becoming CEO).
Chairman: The Chairman Philippe Maubert (former CEO) earns €250.000 every 12 months. Very reasonable. He received 1085 shares of Robertet in FY2023, worth +/- €850.000. He also received 484 shares as compensation for the termination of his duties as Chief Executive Officer, worth €380.000.
5.2 - Skin in the game
Robertet’s ownership is firmly controlled by the Maubert family, which holds over 60% of the voting rights. This gives them the final say in strategic decisions and ensures that the company remains aligned with their long-term vision. The Maubert family’s stake is consolidated through Maubert SA, their holding company, while individual family members, such as Christophe and Julien Maubert, also own shares through the Maubert Family structure.
Robertet gained two new investors, FSP and Peugeot Invest, each investing €125 million by acquiring shares from DSM-firmenich, which has now sold most of its stake. Despite this, the Maubert family strengthened its control by purchasing €7.5 million in shares, keeping Robertet’s independence intact while increasing its free float by 6%, making the stock more accessible to investors.
Chapter 6 - Financial analysis
6.1 - Key numbers
Robertet will release its annual results on April 14, 2025. I’ll make sure to update the numbers once they’re out. We do have some preliminary estimates, which will help with FY2024 revenue and revenue distribution.
In FY2024, Robertet earned €807.6 million in revenue. Up 12%, or, on a like-for-like basis (LFL) up 9.6% The difference is mostly currency and acquisitions. All markets (Asia, China, Latin America, India, EMEA) contributed to growth. Revenue growth has looked like this over the past decade.
The cost of goods sold has increased by a similar growth rate. That’s why Robertet has basically the exact same gross profit margin as they had in FY2014 (55.7%).
Revenue distribution in FY2024 was as follows:
Revenue is well diversified, with health & beauty being a potential growth driver for the company. They’re not too reliant on a single segment. Great.
💡Health & Beauty is still unprofitable.
The most profitable segments (EBIT-margin wise), in order:
17.3% EBIT-margin for fragrances
17% EBIT-margin for flavors
10.5% EBIT-margin for raw materials
Revenue distribution by geography is as follows:
Just as revenue is well diversified for different segments, they are also well diversified geographically.
There's a lot to like about their business model and finances so far.
Over the past decade, operating- and net profit margins have increased. Mostly because of internalizing the supply chain, but also because of focusing on cost-efficiencies, cost control, pricing, negotiating power, and improved economies of scale (even though they are still relatively small compared to competition).
Robertet does not issue new shares to the market. Instead, they hold a large portion of their own shares, which they use for compensation and incentive programs. This allows them to increase insider ownership and align incentives without diluting existing shareholders. This strategy is reflected in the chart below. From 2014 to 2021, the company had 2.3 million shares outstanding, but since 2021, this number has decreased to 2.1 million, representing a small annual decline of -4%.
Scientific research has shown that, in the long run, EPS (Earnings Per Share) and stock price (valuation) tend to move in tandem. There are periods when certain companies are overvalued or undervalued, and Robertet is no exception.
Currently, we see that EPS is growing slightly faster than the stock price, which could indicate that the valuation may adjust over time. Overall, EPS seems to be a strong indicator of Robertet’s stock performance.
6.2 - Capital allocation
Table 1 | Capital allocation of Robertet
FY2024 will be filled in after the annual report comes out in April 2024.
6.3 - ROIC
Robertet's Return on Invested Capital (ROIC) has shown a strong upward trend over the past decade, rising from 13% in 2014 to a peak above 25% before settling at 22% in the latest period. This indicates that Robertet has steadily improved its capital efficiency, generating higher returns on its investments.
This decline is largely due to increasing goodwill from acquisitions. Their reinvestment rate on a 5- and 10-year average is 15% and 35% respectively. Robertet’s reinvestment rate has declined, averaging 35% over 10 years but just 15% in the last five. While it once reinvested heavily for growth, the company has become more selective, likely due to fewer high-return opportunities, increasing dividends, and acquisitions. If this continues, future growth may depend more on pricing power and margin expansion than reinvestment.
6.4 - Debt analysis
Robertet is very healthy. Net-debt has always hovered between 0.4 and 1.4. Our threshold is <3. Currently, they have a net-debt position of €140 million.
6.5 - Comparison with competitors
For the competitor comparison, we will use the largest players in the market as a benchmark, as I anticipate that the flavors and fragrances (F&F) industry will continue to consolidate in the coming decades through acquisitions.
Givaudan, IFF, and Symrise are significantly larger than Robertet, which generates only a fraction of their revenue. Since 2016, International Flavors & Fragrances (IFF) has been the fastest-growing player, achieving a 20% CAGR (including acquisitions) in revenue. In contrast, Robertet has experienced the slowest growth, while also maintaining the smallest revenue base among these competitors. Robertet grew 6.1% organically over the past 5-years.
Robertet stands out with by far the highest gross profit margin among its competitors.
This is likely due to:
Their focus on natural ingredients. Robertet specializes in high(er)-quality, natural and organic raw materials, which (should) command premium pricing compared to synthetic alternatives.
Focus on vertical integration. By controlling much of its supply chain, from raw material sourcing to final product development, Robertet can maintain high margins while ensuring quality.
And niche positioning. Unlike Givaudan, IFF, and Symrise, which compete on scale and volume, Robertet caters to a specific high-margin, more exclusive market segment.
The higher gross margin tells me that Robertet prioritizes sustainable growth, vertical integration, retaining quality and profitability over aggressive (global) expansion. It appears Robertet is much more conservative in its approach.
Despite its smaller scale, Robertet achieves EBIT margins comparable to Givaudan and even higher than the other two competitors. This is likely due to premium pricing on natural ingredients and a focus on high-margin niche markets rather than mass (synthetic) production. However, its lack of significant scale advantages means higher operating expenses (OPEX) compared to competitors, which offsets its higher gross margin, keeping EBIT margins in line with larger players.
Robertet has the highest ROIC among its competitors, despite being the smallest player in terms of revenue and market share.
Unlike larger competitors such as IFF (purple) and Givaudan (orange), which invest heavily in acquisitions, Robertet (blue) remains more focused on organic growth. They also do strategic acquisitions (which is a key characteristic in the F&F market), but a lot less and much cheaper.
Additionally, Robertet (blue) has a more conservative debt structure, reducing financial strain and allowing for higher returns on capital.
Its niche positioning in natural raw materials further strengthens pricing power, setting it apart from competitors who rely more on synthetic and mass-market solutions.
This combination of financial discipline, premium product focus, and efficient capital allocation makes Robertet the most effective value creator among the four companies.
6.6 - KPI’s
I believe the most important KPI’s to monitor are:
Return on Invested Capital (ROIC)
Gross & operating margins (vs peers)
Free cash flow growth
Revenue growth (LFL)
R&D spending as % of revenue
Let’s briefly go through each KPI, why they matter, the main risk(s) associated with the KPI and target.
Return on Invested Capital (ROIC)
Why it matters: Robertet must maintain capital efficiency to justify its premium valuation and remain competitive, especially since that is a lot smaller.
If ROIC continues to drop, it means Robertet is not generating enough profit from its investments, potentially signaling that acquisitions and investments are not creating (shareholder) value. I estimate maintaining an ROIC above 20% is important. Industry leaders often operate at 10-15% ROIC, meaning a 20%+ target solidifies Robertet’s competitive advantage.
Gross & operating margins (vs peers)
Why it matters: Higher gross and operating margins (especially compared to peers) indicate pricing power, cost efficiency, and profitability. Robertet’s ability to charge higher prices than competitors is an indicator they have a (growing) competitive advantage.
If gross margins decline, it could indicate that Robertet is losing its pricing power, forcing it to lower prices due to increased competition or higher input costs. A falling operating margin suggests the company is struggling to control expenses, making future growth less profitable. I estimate Robertet should maintain gross margins above 50% to continue justifying premium pricing. Operating margins should move toward 20% over-time, ensuring that the company is scaling efficiently.
Free cash flow growth
Why it matters: Free cash flow is the lifeblood of any business. Unlike net income, which can be influenced by accounting adjustments, or EBITDA, which ignores maintenance capital expenditures, FCF shows how much money is truly available for growth, debt repayment, dividends, or share buybacks. For Robertet, a smaller company competing with giants like Givaudan and IFF, strong FCF means it can fund expansion without relying on excessive debt or issuing new shares.
If FCF declines or becomes negative, Robertet could struggle to finance new projects, forcing it to take on higher debt or dilute shareholders. A shrinking FCF could also signal higher costs, lower pricing power, or poor capital allocation, making it harder to sustain profitability in the long run.
Revenue growth (LFL)
Why it matters: Revenue growth is essential, but how that growth is achieved is just as important. If organic growth (LFL) slows significantly, it could indicate that Robertet is struggling to gain new customers, increase prices, volume or expand its market share. Relying too much on acquisitions to drive revenue can lead to integration risks, higher debt or dilution, and potential overpayment for deals. Without organic growth, Robertet loses control over its trajectory, making future expansion less predictable.
Organic revenue should outpace at least inflation (2-3%), preferably at least 5% per year. It would show me that they have a (growing) competitive advantage. Acquisitions should complement, not replace organic growth.
R&D spending as % of revenue
Why it matters: Innovation is a key driver in the flavors and fragrances (F&F) industry, making strong R&D investment essential. Competitors like Givaudan have significantly larger budgets to spend on R&D, but they primarily focus on biotech and synthetic materials, a different approach than Robertet’s natural ingredient expertise. This makes Robertet’s niche a critical advantage, but to maintain and expand that edge, the company must continue investing heavily in R&D to stay ahead of both competitors and shifting market trends.
If R&D spending declines (currently about 5% of revenue), Robertet risks falling behind. Without new product development, customers may shift to competitors with more advanced or cost-effective solutions.
Chapter 7 - Risk analysis
7.1 - Risks
Dependence on natural raw materials
Robertet’s focus on natural ingredients is a key strength, but it also comes with supply chain vulnerabilities. Unlike competitors that rely (mostly) on synthetic alternatives, Robertet depends on the availability and pricing of natural raw materials such as flowers, spices, and plant extracts. Factors like climate change, crop failures, and geopolitical disruptions can lead to higher costs and supply shortages. If Robertet cannot secure stable and cost-effective raw materials, it may struggle to maintain its high margins and pricing power, putting pressure on profitability, leading to less cash for R&D and innovation, etc.
The company must expand and diversify sourcing agreements while investing in sustainable farming partnerships to reduce dependency on specific regions. This is also one of the reasons they so heavily invest in ESG.
Competition
The F&F industry is dominated by large players, like Givaudan, IFF, and Symrise, which have significantly larger financial resources to invest in R&D, acquisitions, and production efficiency and volume. These competitors are increasingly targeting natural ingredients, putting pressure on Robertet’s niche. If larger players successfully expand into natural products, Robertet could lose market share or face pricing pressure, reducing its competitive edge. Robertet must therefore continue differentiating itself through superior quality, sustainability, exclusive partnerships and agreements, and unique product offerings.
Macro-economic
Although Robertet does not sell D2C, its clients, luxury brands, food companies, and beauty businesses, do have direct customer exposure. This means that while Robertet has strong pricing power, it is still limited by the purchasing behavior of its clients. If the luxury industry struggles, with lower sales from high-end brands, demand for Robertet’s premium ingredients will eventually also decline. Similarly, the health & beauty segment is quite sensitive to economic downturns, as consumers tend to cut back on non-essential purchases during tough times.
However, the food segment is likely to be more resilient, as food is a basic necessity that people continue to buy regardless of economic conditions. Additionally, currency fluctuations, while not a major long-term risk, can cause significant short-term swings. Robertet operates globally across many different currencies, and in FY2024, currency effects reduced euro-denominated revenue by -2.4%. Diversifying revenue streams across multiple regions and industries can help reduce exposure to specific economic cycles and limit the impact of currency volatility.
7.2 - Opportunities
Strong ESG tailwinds
The global shift towards sustainability, clean-label ingredients, and environmentally friendly production is a major advantage for Robertet. Unlike competitors who rely more on synthetic alternatives, Robertet specializes in natural and plant-based ingredients, positioning itself as a leader in ESG-compliant products. Consumers and brands are increasingly prioritizing sustainability, pushing companies in food, fragrance, and beauty to use natural, traceable, and eco-friendly ingredients, which plays directly into Robertet’s strengths. Givaudan and DSM Firmenich have a meaningful stake in Robertet because of this.
Industry consolidation
The F&F market is consolidating, with larger players acquiring niche, high-margin, smaller businesses. This trend favors the larger players, but also niche players, like Robertet, as brands look for differentiated, high(er)-quality ingredients to stand out in the competitive market. Additionally, Robertet could expand through acquisitions itself (which they rarely do currently), further strengthening its position and increasing vertical integration. They could also get acquired by a larger player, but I don’t think this is likely at all.
Chapter 8 - Valuation
8.1 - Ratios
EV/EBITDA is a great metric for companies with strong profitability and stable cash flows like Robertet. It accounts for debt and cash, making it more reliable than P/E when comparing companies with different capital structures. Robertet is the cheapest based on EV/EBITDA.
Unlike net income, which can be affected by accounting adjustments, or EBITDA, which ignores capital expenditures, FCF shows how much real cash is available to fund growth, dividends, or share buybacks without relying on debt or issuing new shares. Based on P/FCF, Robertet also appears to be the cheapest.
8.2 - Scenario analysis
For the scenario analysis of Robertet, I have chosen to use the 10-year model. Why? Because this industry experiences little disruption, and the market is becoming increasingly consolidated. Robertet holds a uniquely strong position, differentiating itself from competitors. This allows me to make conservative yet realistic assumptions with confidence.
The market is expected to grow in the high single digits, in line with Robertet's own projections. By gradually tapering organic growth each year, I believe we maintain a sufficiently conservative approach. Additionally, I anticipate that Robertet’s profit margin could reach 12% within the next decade. This is driven by vertical integration, its positioning in the premium segment (or as our analyst Mathijs likes to call it premiumization), and a strong commitment to sustainability, ensuring a better future for the planet, people, plants, and animals.
Figure 21 | Scenario analysis | TDI Tool
Chapter 9 - Conclusion
Robertet is a fascinating company, family led, deeply entrenched in a must-have industry, and uniquely positioned within the natural flavors and fragrances market. It operates in a unique niche that prioritizes quality, sustainability, and control. The company’s "Seed to Scent" approach and control over rare raw materials give it a significant edge that competitors struggle to replicate.
It has high margins, a disciplined capital allocation strategy, and a debt level well under control. The company is not chasing aggressive M&A but rather focuses on steady, organic growth with occasional strategic acquisitions. Management has significant skin in the game, with the Maubert family controlling over 60% of voting rights.
From a competitive standpoint, Robertet plays in the premium, sustainable, high(er)-quality segment, making it less susceptible to cost-cutting pressures from clients. Its ingredients represent only a small percentage of the cost for end products like luxury perfumes or high-end food flavors, meaning customers are unlikely to switch or reduce orders. Moreover, its position in a consolidating market gives it an advantage as a niche player in a high-demand and hard-to-replicate sector.
While there is much to like about Robertet, the valuation isnot that attractive, especially considering they grew just 6% organically and need M&A to grow revenue faster. Although cheaper than competitors on all fronts, it’s not cheap. Its current price does not offer enough margin of safety (for me personally) to make it an obvious buy. The current valuation doesn’t leave much room for upside, but downside seems limited as well.
That being said, Robertet feels like a "forget and hold" type of company, one that, once bought at the right price, could be left in a portfolio for years. It’s a stable, growing, and strong-moat business in an industry that is essential and relatively disruption-proof.
I will not be adding it to our TDI watchlist because I don’t feel I can gain an edge here (yet). I am, however, genuinely interested in knowing more about the industry and competition. So perhaps I am going to analyze one or two others, before making my final decision.