The year has started well for the Swiss manufacturer of flavors and fragrance Givaudan with CHF 1.24 million (US$1.23 million) recorded sales for Q1, 3.5% up on the same period last year, and with positive sales performance from the company’s flavors division.
The flavor division reported sales of CHF666 million (US$661.6 million), which is a 4.8% growth on a like-for-like basis and an increase of 12.6% in Swiss francs. The growth was 14.1% in local currency which includes the acquisitions of Spicetec in August 2016 and Activ International in January 2017.
The company says the sales performance is down to “new wins and strong business momentum” in North America, Europe, the Middle East and Africa. Meanwhile, Asia Pacific experienced a more modest growth because of slower sales in China and in Latin America there was a 3.4% decline compared with 2016.
Dairy, beverages, savory and sweet goods segments all contributed to the positive sales performance.
Sales in Asia Pacific increased by 2.0% on a like-for-like basis. South East Asia had good growth thanks to new wins and existing business expansion which was offset by slower growth in China and India. The mature markets continued to grow with a particularly strong performance in Oceania and Japan.
Sales in Europe, Africa and Middle East increased by 6.1% on a like-for-like basis. Double-digit growth in the high growth markets of Africa and Middle East and good growth in Russia and Turkey contributed to the performance in the region. In the mature markets of Western Europe, the division experienced positive sales development in the UK, Germany and France.
Sales in North America increased by 9.2% on a like-for-like basis. The strong growth, against a weaker comparable in 2016, was led by Dairy and Beverages as a result of new wins and growth of the existing business.
Meanwhile the fragrance division recorded sales of CHF 576 million (US$572 million), a growth of 2.1% on a like-for-like basis and an increase of 2.6% in Swiss francs. Total sales of fragrance compounds (fine fragrances and consumer products combined) increased by 2.7% on a like-for-like basis. In Swiss francs, sales of compounds increased by 3.4% to CHF 499 million (US$495.8 million) in 2017 from CHF 483 million (US$479.9 million) in 2016.
Givaudan reaffirmed its 2020 ambition with strong targets for future growth. The company says that it wants to outpace the market with 4-5% sales growth and a free cash flow of 12-17% of sales, both measured as an average over a five-year period. It is Givaudan’s intention to maintain its current dividend practice as part of this ambition.
