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Givaudan 2012 Full-year Profit Surges 63%
Posted: February 5, 2013
Givaudan SA's (Geneva) full-year 2012 net income surged 63%, driven by sales growth in most of its regions and segments—particularly fast-growing Latin America—and successful commercialization of sweetness and salt replacement solutions.
The company also said it expects to grow between 4.5% and 5.5% per year, assuming a market growth of 2%–3% and to continue on the path of market share gains.
For the full year, Givaudan said its net income jumped to CHF 411 million from CHF 252 million a year earlier. Group sales, which includes flavor and fragrance division sales, totaled CHF 4.26 billion, up 6.6% in local currencies and 8.7% in Swiss francs from a year ago.
By segment, its flavor division posted sales of CHF 2.24 billion, a growth of 5% in local currencies and 7.4% in Swiss francs, boosted by growth in all major segments especially beverages and snacks including a focus on health and wellness. In health and wellness applications, the unit continued its successful commercialization of sweetness and salt replacement solutions, translating into a strong double-digit growth rate.
Latin America was the fastest growing region for flavor sales, which improved by 13.2% in local currencies in 2012 with all regions experiencing growth, marked by strength in Argentina, Brazil and Mexico. All major segments improved with double-digit growth in beverage, dairy and savory.
Flavor sales in Asia-Pacific grew 4.4% in local currencies for the year. The developing markets of Indonesia, Philippines and Thailand attained double-digit growth while India delivered high single-digit growth. Sales in China were low single-digit growth against strong prior year comparables. Sales in the mature markets escalated as well with growth in Japan and Korea outperforming the markets. Oceania was hurt by a decline in Australia. Investments continue in Asia Pacific to support the growth opportunities within the region. The company's India technical center expansion is scheduled for completion in early 2013.
In North America, full-year flavor sales rose 4.1% in local currencies as a result of new wins and gains on existing business. Sales increased, driven by double-digit growth in snacks, high single-digit growth in beverage and single-digit growth in savory and sweet goods. New wins in beverage and savory contributed to the strong single-digit gain in food service.
In the Europe, Africa and Middle East region (EAME), flavor sales for the year increased 3.6% in local currencies despite the adverse economic conditions in Northern Africa and Southern Europe. The developing markets of Africa, South Eastern Europe, Poland and Russia achieved high single-digit growth. The mature markets increased with gains mainly coming from Ireland and the U.K.
The fragrance division for the full year recorded sales of CHF 2.02 billion, an increase of 8.4% in local currencies and of 10.3% in Swiss francs as the strong performance in the first six months continued into the second half of the year.
Sales for fragrance compounds (fine fragrances and consumer products combined) rose 10.3% in local currencies and by 12.2% in Swiss francs to CHF 1.78 billion for the year. Fragrance ingredients sales slipped 3.9% in local currencies, driven by lower sales volume in commodities.
Fine fragrances sales grew 4.2% in local currencies, marked by a strong performance in developing markets and in Europe which compensated for lower sales in the U.S. For fine fragrances, the company said that new business and volume gains from a number of customers drove growth in developing markets. Meanwhile, the good growth in mature markets in Europe wasn’t enough to offset the erosion and challenging comparables in North America.