Givaudan results gain on the strong fragrance division performance

By Simon Pitman

- Last updated on GMT

Switzerland-based flavours and fragrance business Givaudan showed strong financial results for the first half of the financial year, mainly on the back of gains in its fragrance division.

The company said that sales for the six month period ending in June were up 6.9 per cent in local currencies to CHF2.1bn (€1.75bn), which was a rise of 6.0 per cent when taking into consideration the negative impact of currency exchange rates.

The slightly smaller fragrance business led the way, with net sales increasing 8.3 per cent to CHF994bn, which represented an increase of 7.2 per cent in Swiss Frances, while flavour sales increased by 5.6 per cent to CHF1.132bn.

Sales increasess and restructuring drive profits

The increase in revenues also drove gains in EBIDTA, which increased 12 per cent to CHF428m, while net income for the six months increased by 68 percent to CHF201m, compared to the same period in 2011, results that have been driven by the company's ongoing cost savings programme.

Looking at the fragrance division results, the company said that the main driver of growth was the consumer products business unit, which was particularly strong in the Latin America and Asia pacific markets, helping to drive sales in local currencies by 12.2 per cent.

The fine fragrance was also singled out as returning moderate growth during the six month period, with sales in local currencies growing by 2.4 per cent, driven by new business in Latin America and Europe.

Total sales for the fragrance compounds, which includes fine fragrances and consumer products combined, making up the vast majority of sales, grew by 10 per cent in local currencies to reach CHF869m.

Full-year and longer-term forecasts confirmed

On a regional basis, the company stressed that sales in North America had seen decline in the fine fragrance division, which was counterbalanced by a stronger performance in the consumer products division.

Looking ahead to the rest of the financial year, the company said that it expects organic growth to be at between 4.5 and 5.5 per cent, while continuing in its ambitions to maintain gains in market share over the course of the next five years.

The company also reiterated its ambition to continue to grow its EBITDA margin while improving its cash flow to between 14 to 16 per cent of sales by 2015.

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