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Givaudan 2014 Profit Up 15% On Health, Developing Markets Boost

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Givaudan’s 2014 full-year net income jumped 14.9% from a year ago and its group sales rose, led by its flavor unit which benefited from health and wellness, developing markets and targeted customers. 

For the full year, the company's net income increased to CHF 563 million in 2014 from CHF 490 million a year earlier as group sales rose to CHF 4,404 from CHF 4,359.

  • Fragrance division sales were CHF 2,108 million, an increase of 3.6% on a like-for-like basis and 1.2% in Swiss francs. The sales of Soliance were CHF 14 million, following the acquisition on June 2, 2014. Total sales for fragrance compounds (fine fragrances and consumer products combined) increased by 3.2% on a like-for-like basis. In Swiss francs, sales of compounds decreased to CHF 1,844 million from CHF 1,847 million.
  • Fine fragrances sales grew 2.5% on a like-for-like basis. The growth was mainly driven by strong growth in developing markets. Consumer products sales increased by 3.3% on a like-for-like basis, driven by a good performance in developing markets and a moderate growth in the mature markets. Sales of fragrance and cosmetic ingredients increased by 7.4% on a like-for-like basis, driven by good growth of all product groups, led by double-digit growth of specialties.
  • Flavor division sales were CHF 2,296 million in 2014, an increase of 3.7% on a like-for-like basis and 0.4% in Swiss francs. The company said all major business segments grew favorably with beverages, dairy and snacks leading the way. Health and wellness, developing markets and targeted customers contributed to the overall performance, the company added.
  • Strong double-digit flavor growth in Latin America was driven by improved taste products involving sweetness, salt and masking capabilities.

As announced in the company's nine-month 2014 results, mid-term, the company's overall objective is to still grow organically between 4.5% and 5.5% per annum, assuming a market growth of 2-3%, and to continue on the path of market share gains.

In a separate report following Givaudan's earnings announcement, Gilles Andrier, the company's CEO, told Bloomberg news that he sees the same sort of market conditions for 2015 as for 2014. “We don’t see any sort of acceleration in our business,” he said in the report. He later added: "Maybe we’ll see a positive effect on consumer goods later this year, but I remain cautious about the U.S.”

Click here to view the company’s full earnings release.