Givaudan (Geneva) has reported first half year 2008 sales of CHF 2.095 billion, an increase of 13.5% in local currencies and 4.5% in Swiss francs. On a pro forma basis—which reflects the combined activity of Givaudan and Quest over the period ending June 30, 2008, and assumes the acquisition had taken place on January 1, 2007—sales increased by 3.0% in local currencies and excluding the ongoing portfolio streamlining.
The gross profit margin on a pro forma basis declined from 47.6% to 46.5%. As a result of increasing raw material, energy and transportation costs, Givaudan will continue to pursue price increases, whilst maintaining tight cost control and pursuing further efficiency gains. The operating profit rose to CHF 238 million from CHF 186 million, an increase of 28.0%. Net profit increased by 13.3% to CHF 94 million, resulting in a margin of 4.5%.
Fragrance: The fragrance division reported sales of CHF 962 million for the period, an increase of 14.7% in local currencies and 5.7% in Swiss francs. The growth was driven by the solid performance of the consumer products business and a double-digit sales growth in specialty ingredients. Sales in fine fragrances declined compared to prior year particularly due to heavy de-stocking in the earlier part of the year.
Flavor: The flavor division reported sales of CHF 1.133 billion, an increase of 12.6% in local currencies and 3.4% in Swiss francs. Asia Pacific reported high a single-digit growth rate. The increase in the period was driven by growth of the existing business and new wins in all major segments, especially in the European and North American markets.
Integration of Quest: The first major phase of the integration has been completed after more than a year, with the complete integration of the commercial and administrative areas. Further progress is being made on the initiatives related to purchasing, supply chain and IT systems. Incremental savings of CHF 50 million were achieved during the first six months of 2008. The company is on track to achieve the targeted CHF 130 million savings at the end of 2008.
Outlook: For the full year 2008, Givaudan states that it will grow its sales in line with the market, excluding the ongoing product streamlining and the divestiture of the St. Louis facility in the United States.