Fragrance sales down for Givaudan in first quarter

By Katie Bird

- Last updated on GMT

Related tags United states dollar Flavor Swiss franc

Fragrance sales for Switzerland-based Givaudan struggled in the first quarter and the sector is not expected to recover before the end of 2009.

Overall the fragrance and flavours supplier recorded sales of CHF 976.1m for the first quarter – a sales decline of 2.6 per cent in local currencies and a drop of 7.3 per cent in Swiss francs.

Excluding the impact of the sale of a St Louis flavours business improved the results slightly, with a 2.1 per cent decline in sales.

Fragrance suffered the effects of destocking

Although the flavours business did not put in a stellar performance (sales increased 0.8 per cent in local currencies excluding impact of divestment), it was the fragrance sector that dragged down performance in the quarter.

A sales decline of 5.4 per cent in local currency (10.4 per cent in Swiss francs) was recorded which the company puts down to destocking throughout the supply chain.

Many of the major perfume houses, manufacturers and retailers are running through their stock rather than ordering more and Givaudan predicts that the phenomenon, which started in the fourth quarter of 2008, is likely to continue throughout the year.

Sales of fine fragrances and fragrance ingredients declined throughout the quarter, in comparison to consumer products business unit where sales remained flat.

According to the company, instant recovery of the fine fragrances sector is unlikely.

“Lack of consumer confidence and reduced travel activity is likely to continue impacting fine fragrance sales throughout 2009,” ​it said in a statement.

However, Latin America was a strong market for both fine fragrances and consumer products delivering double digit growth in the latter.

Flavour sales strong in developing markets

Flavour sales were similarly affected by destocking, particularly in the mature markets, but new wins and strong sales in most developing markets partially made up for the losses.

Regionally, Latin America pulled in the best figures with sales increasing at a double digit rate. Confectionary and savoury sections were a start performer in the region reporting double digit growth, according to the company.

Like many of its compatriots, Givaudan has declined form giving detailed predictions for the quarter saying only that it is confident it will outgrow the underlying market.

Related topics Business & Financial

Related news

Show more