Givaudan First-Half Profit Up 35.5%; Strong Recovery in Fine Fragrance

Givaudan SA’s first-half profit surged 35.5% led by sales increases in both its flavor and fragrance divisions, and a strong recovery in fine fragrance in particular.

The company said its net income for the first six months of 2013 was CHF 271 million compared to CHF 200 million in 2012, an increase of 35.5%. Group sales for the first half rose to CHF 2.23 billion from CHF 2.13 billion, a year earlier.

Mid-term, the company’s overall objective is to grow organically 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.

Fragrance division sales were CHF 1.05 billion, an increase of 5.5% on a like-for-like basis and 5.3% in Swiss francs. Fine fragrance sales grew 2.5% on a like-for-like basis, mainly driven by new business and double-digit growth in Latin America. In Central Asia, Middle East and Africa, the business also delivered strong growth. In Western Europe and North America, sales growth in the second quarter was double-digit, driven by an increase in new business and a reduction in the level of erosion.

Total sales for fragrance compounds (fine fragrances and consumer products combined) increased by 6.7% on a like-for-like basis. In Swiss francs, sales of compounds increased to CHF 926 million from CHF 870 million. However, sales of fragrance ingredients declined by 2.9% on a like-for-like basis. The decline was driven by the discontinuation of the sales of some commodity products. Consumer product sales increased by 7.9% on a like-for-like basis, driven by a strong performance in Asia Pacific, Latin America and CAMEA and across all customer groups.

Flavor division sales were CHF 1.18 billion during the first six months of 2013, an increase of 5.8% on a like-for-like basis and 4.1% in Swiss francs. Sales growth in the first half was driven by the developing markets of Asia Pacific, Eastern Europe, Africa and Middle East and Latin America, coupled with gains in the mature markets of North America and Western Europe.

All segments expanded with strong performances in beverages, dairy, savory and sweet goods. Health and wellness sales continued to evolve strongly with double-digit gains as sweetness, salt and masking capabilities delivered improved taste solutions for our customers.

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