Givaudan 2006 Results

Givaudan (Geneva) has reported 2006 sales of CHF 2,909 million, an increase of 3.5% in local currencies and 4.7% in Swiss francs. The year saw continued ingredient streamlining in flavors and fragrances, which impacted annual sales by CHF 33 million. Without this effect, sales in local currencies would have increased by 4.9%. The gross profit margin increased to 49.4% from 48.9% in 2005. Net profit rose to CHF 412 million, up 1.5%. Earnings per share rose to CHF 58.62 from CHF 56.57, due to a lower number of outstanding shares and the increase in net profit.

Fragrance: The fragrance division reported sales of CHF 1,223 million, resulting in a growth rate of 6.9% in local currencies and 8.2% in Swiss francs. This result was based on a strong performance of all three core businesses—fine fragrances, consumer products and specialty ingredients. Fine fragrance sales grew at a double-digit rate, while in fragrance ingredients commodities continued to be streamlined and specialties delivered double-digit growth rate. Operating profit increased to CHF 195 million, resulting in an operating margin of 15.9% versus 14.2% in 2005.

Flavor: The flavor division reported sales of CHF 1,686 million, resulting in a growth rate of 1.2% in local currencies and 2.4% in Swiss francs. The streamlining of commodity ingredients impacted flavor sales by CHF 16 million, mainly in North America and in Europe, Africa and Middle East (EAME). Without this effect, the underlying sales growth would have been 2.3% in local currencies. Latin America, EAME and China continued to show growth, while sales in the mature markets of North America and Japan declined. The confectionary, dairy and savory segments continued to grow, whereas beverage sales suffered, primarily in North America and Japan. The operating margin decreased from 21.4% to 18.9%, resulting in an operating profit of CHF 319 million.

It was announced in November 2006, that Givaudan had entered into an agreement to purchase Quest International. This acquisition is expected to be completed in March 2007 after the due diligence phase and final approval are made.

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