Givaudan (Geneva) has reported first quarter 2009 sales of CHF 976.1 million, a decline of 2.6% in local currencies and 7.3% in Swiss francs. Excluding the impact of the divested flavors business in Saint Louis, sales declined by 2.1% in local currencies. Givaudan still expects to outgrow the market this year. However, an official statement noted, "Overall it remains difficult to reliably forecast the market growth for 2009."
Givaudan's January through March sales reached CHF 438.4 million, down more than 10% (local currency) from the same period last year. Flavor sales, meanwhile, were CHF 537.7 million, a drop of 4.6%, year-over-year.
Givaudan noted that "strong destocking throughout the supply chain" affected results. Worst affected are fine fragrances and some "discretionary" products in consumer products and flavors. Over the next five years, Givaudan will continue its program of growth in the developing world and certain key market segments.
Weak 2008 retail sales led to heavy destocking in North America and Europe even as consumer demand remained weak. Meanwhile, declining travel among consumers will further hobble the fine fragrance market. Latin America presented a bright spot for the company, with strong growth, new wins and volume gains.
Consumer product segments were even with 2008 figures largely due to destocking and drops in mature market sales. Developing markets, on the other hand, reported double-digit sales growth, particularly in Latin America. Most affected were household care products, led by air care. Personal and fabric care categories grew slightly.
Fragrance ingredient sales dropped markedly as a result of downstream destocking. During this period, the company released its new musk, Cosmone.
Here again, results were hampered by destocking and drops in mature market sales. The company offset some of these effects with new flavor wins and strong developing market results. Asia-Pacific flavor sales were flat, led by mature and ailing markets such as Japan. However, the developing markets of India, Indonesia, Thailand and the Philippines showed good results. Europe, Africa and the Middle East sales declined slightly. Central and Eastern European markets were heavily affected by the economic crisis, though Africa and the Middle East showed a strong performance. North America sales declined at a low single-digit rate, aided by new wins. Confectionery and beverage sales declined. Latin America sales grew at a double-digit rate, driven by new wins. According to the company, "All markets contributed to this strong performance especially Brazil, Argentina and Mexico." The confectionery and savory segments achieved double-digit growth.