Givaudan results hit by the strength of the Swiss currency
Full year sales were up 5.2 per cent in local currencies to CHF3.9bn 9 (€3.23bn), but this was down in terms of Swiss francs by 7.6 per cent, compared to sales of CHF4.24bn in 2010.
Sales for the fragrance division were up 4.7 percent in local currency terms to $1.83bn, a decline of 7.8 percent in Swiss franc sales, a performance that was weaker than the company’s flavour division, where sales grew by 5.7 per cent in local currency terms.
Latin America drives fragrance sales
The company said that the strong performance in the fragrance division during the first half of the year was sustained in the second half of the year in developing markets, particularly Latin American, counterbalancing more difficult economic conditions in developed markets.
Fine fragrances sales grew by 0.2 percent against strong comparables for the previous year, while sales for the consumer products business unit increased by 6.9 percent in local currencies, also against high comparables. Sales in fragrance ingredients increased 0.7 per cent in local currencies.
The results also meant that the company’s EBITDA margin and net income were impacted by the currency exchange rate, with EBITDA declining to CHF 758m, compared to CHF887m in 2010 and net profit falling to CHF 252m, compared to CHF340m in 2010.
Underlying results still look healthy
Givaudan CEO Gilles Andrier chose to focus on the company’s underlying sales results, which demonstrated continued growth, despite the difficulties it continues to face due to the currency exchange rates.
“The business achieved a strong sales momentum in a tough environment and a significant profit
improvement in the second half of the year. We are well on track for 2012 and to deliver on our mid-term targets,” Andrier said.
Looking ahead to the rest of the year, the company said it hopes to continue to achieve mid-term organic sales growth of 4.5 to 5.5 per cent a year, assuming it remains on the same path of market share gains for the next five years.