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Givaudan SA posted first-quarter sales of CHF 1,087 million, an increase of 5.7% on a like-for-like basis, and a decline of 0.2% in Swiss francs compared to the previous year.
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In the first three months of 2014 Givaudan recorded sales of CHF 1,087 million, an increase of 5.7% on a like-for-like basis, and a decline of 0.2% in Swiss francs compared to the previous year. Givaudan started the year with a strong business momentum, a full project pipeline and win rates sustained at a high level. Like-for-like growth rates were in line with the company’s mid-term sales growth objectives. Sales in developing markets increased by 9.8% on a like-for-like basis. Mid-term, the overall objective is to grow organically between 4.5% and 5.5% per annum, assuming a market growth of 2-3%, and to continue on the path of market share gains. By delivering on the Company's five-pillar growth strategy – developing markets, Health and Wellness, market share gains with targeted customers and segments, research and sustainable sourcing – Givaudan expects to outgrow the underlying market and to continue to achieve its industry-leading EBITDA margin while targeting an annual free cash flow of between 14% and 16% of sales in 2015. Givaudan confirms its intention to return above 60% of the Company's free cash flow to shareholders while maintaining a medium term leverage ratio target below 25%.
The Fragrance Division recorded sales of CHF 516 million, a growth of 5.6% on a like-for-like basis and a slight decrease of 0.2% in Swiss francs. The sales growth was driven by all business units, led by double-digit growth in Fine Fragrances, a good start into the year for the ingredients business and good growth of Consumer Products on top of last year’s strong first quarter comparables. The strong first quarter sales of the Fine Fragrances business have resulted in a 5.6% growth on a like-for-like basis of the compounding business (Fine Fragrances and Consumer Products). Fine Fragrance sales grew 12.3% on a like-for-like basis as a combination of new business and lower than historic erosion rates contributed to the performance. Developing markets delivered strong double-digit growth: Latin America, Eastern Europe and the Middle East each benefited from new business as well as volume growth within the established business. In mature markets, the business delivered solid growth in Western Europe and North America with gains recorded across a number of key accounts. Consumer Product sales increased by 4.0% on a like-for-like basis against last year’s strong comparables. The good growth was achieved across all customer groups. Developing markets posted solid growth on top of the double-digit increase in the same period last year, while mature markets showed a slowdown in their growth compared to last year’s first quarter performance. In Latin America the double-digit sales growth was driven by international customers. Sales in Asia increased strongly across all customer groups. In Europe, Africa and the Middle East, sales growth was spread across all customers, driven in particular by good performance with local and regional customers. The sales in North America were down compared to prior year, mainly driven by international customers. Local and regional customers reported a slight decrease against last year’s double-digit increase. On a product segment basis, the sales growth was achieved as a result of the strong increase on the personal care and home care segments, followed by fabric care whilst oral care sales remained flat. Sales of Fragrance Ingredients increased by 5.8% on a like-for-like basis, a performance which was helped by the low comparables last year, where sales recorded a decline. The European and North American regions recorded a moderate sales growth whilst Asia grew double-digit. Significant sales increase was registered in all major product groups, especially in Specialties where the turnover showed a strong, double-digit growth.
The Flavor Division reported sales of CHF 571 million, representing 5.8% growth on a like-for-like basis and a decline of 0.1% in Swiss francs. Sales increased in the developing markets of Africa, China, Eastern Europe, India and Indonesia as a result of existing business growth and new wins. Strong growth continued in Latin America driven by key markets while the mature markets of Asia and Europe showed good resiliency in delivering positive year-on-year growth. Growth was achieved across all segments with particular strength in Beverages, Dairy, and Snacks. Sales for Asia Pacific increased 10.5% on a like-for-like basis. The developing markets of China, India, Indonesia and Vietnam reported strong double-digit growth. The mature markets of Korea, Oceania and Singapore were above prior year. All major business segments achieved solid growth driven by a steady inflow of new wins and organic growth of existing business. Sales in Europe, Africa and the Middle East grew 3.5% on a like-for-like basis. The developing markets delivered good growth when compared to the prior year. The mature markets of Western, Central and Northern Europe reported a moderate growth. The overall increase was driven by Beverages and Dairy. Latin America experienced double-digit growth of 15.4% on a like-for-like basis, continuing on the success of the previous year. Increases in the largest markets of Argentina and Brazil led the way. New wins and growth of existing products in Beverages, Dairy and Snacks leveraged the sales performance. Sales increased by 0.2% on a like-for-like basis in North America. Strong double-digit growth in Snacks coupled with good gains achieved in Dairy and Sweet Goods were offset by weakness in the Savory and Beverage segments as result of unfavorable market conditions.