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Givaudan's First Half 2012 Profit Up 68% On Flavor, Fragrance Growth

Posted: August 3, 2012

Givaudan SA’s (Geneva) net profit for the first half of 2012 soared 68% from a year earlier, boosted by sales growth in both its fragrance and flavor divisions. The company also backed its mid-term forecast of 4.5% to 5.5% organic sales growth annually, based on a market growth of 2% to 3%. (Read first-quarter results here.)

For the first half of the year, Givaudan’s fragrance division sales were CHF 994 million, up 8.3% in local currencies and up 7.2% in Swiss francs, driven by a very strong performance in the consumer products business unit in Latin America and Asia-Pacific as well as moderate growth in the fine fragrance business.

By segment, fine fragrance sales grew 2.4% in local currencies, marked by a strong inflow of new business, marked by strong double-digit growth in Latin American sales. In Europe, new wins across key accounts drove sales growth. In North America, sales were down as new business wasn’t sufficient to offset erosion. Sales of fragrance ingredients fell 2.1% in local currencies during the period, reflecting a weak performance for sales of commodities.

Flavor division sales were CHF 1,132 million, up 5.6% in local currencies and 5% in Swiss francs, with double-digit growth in developing markets—up 12.8% in local currencies in Latin America—and good gains in the mature markets of North America and Asia-Pacific, which posted sales increases of 6.1% and 3.9%, respectively, in local currencies.

All flavor segments expanded globally with strong performance in beverage, sweet goods and snacks. Health and wellness sales, the company said, continue to evolve strongly with double-digit gains as sweetness, salt and masking capabilities improved taste results for consumers.

Givaudan also said it completed construction of the CHF 170 million plant at Makó in Hungary, a savory manufacturing facility aimed to support the company’s growth strategy in Eastern Europe. It expects to start commercial production during the second half of the year.

As a whole, Givaudan posted total first-half net income of CHF 201 million, compared to CHF 120 million a year earlier. Group sales for the first half of the year rose 6.9% in local currencies and 6% in Swiss francs to CHF 2,126 million.