Givaudan released its financials for the first nine months of 2011, recording sales of CHF2,971 million—an increase of 4.7% in local currencies but a decrease of 9.5% in Swiss francs compared to 2010 financial results. The company also announced it is working to implement new price increases in light of a significant rise in input costs, forecasting that this will help mitigate the input costs’ affect for half of 2011 and fully in 2012, while working to maintain a full project pipeline.
Mid-term, Givaudan notes its overall objective is to grow organically between 4.5–5.5% per annum, and to continue gaining market share over the next five years by focusing on key customers and segments, as well as emerging markets, the health and wellness segment, and research and sustainable sourcing. Givaudan expects to continue to achieve its current EBITDA margin while improving its annual free cash flow to between 14–16% of sales by 2015. The company also intends to return above 60% of its free cash flow to shareholders once the targeted leverage ratio of 25% has been reached.
Specifically for the Givaudan fragrance division, in the first nine months of 2011, it recorded sales of CHF1,395 million, a growth of 4.4% in local currencies and a decline of 9.4% in Swiss francs. Total sales for fragrance compounds (fine fragrances and consumer products combined) increased 4.2% in local currencies and declined by 10.0% in Swiss francs to CHF1,202 million from CHF1,335 million. Fine fragrance sales growth was at 1.3% in local currencies against strong comparables in 2010. The company’s growth in Latin America and North America was supported by the launch of new perfumes, while sales in Europe were below last year’s. The consumer products fragrance business grew by 5.1% in local currencies across both developing and mature markets. Asia-Pacific showed the strongest increase, and in Latin America, performance was driven by Mexico. In Europe, Africa and the Middle East, sales increased across all customer groups, while in North America, a solid performance was achieved due to double-digit sales growth with both local and regional customers. On a product segment basis, worldwide sales in fabric care grew by double digits. Fragrance ingredients sales increased by 5.3%, driven by a double-digit growth in the developing markets. The introduction of Givaudan’s new fragrance ingredient Paradisamide, launched earlier this year, added to the success of this segment.
For the company’s flavor division, the first nine months of 2011 saw sales of CHF1,576 million, an increase of 5.0% in local currencies and a decline of 9.6% in Swiss francs. Posting new market wins and growth in the segments of beverage, dairy, savory and snack, the division continued its global expansion, with a key focus on developing markets. Sales in Asia-Pacific increased 10.7% in local currencies, mainly fueled by growth in China and India, as well as a strong Japanese showing. Sales across Europe, Africa and the Middle East posted a 4.4% growth rate in local currencies for both the developing and mature markets. The developing markets continued to report solid gains, mostly in the Middle East and Eastern Europe, while the mature markets of Western Europe, such as Germany, the UK and Spain, also increased through new markets wins and existing business growth. North America saw an increase of 0.9% in local currencies from growth in beverages, savory and snack segments. Sales in Latin America increased 3.7% in local currencies supported by a double-digit growth in the third quarter. New wins and existing business enabled good growth in both the snack and sweet goods segments.