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Givaudan 9-month Sales Rise, Backs Mid-term View - Update

Givaudan AG (GVDBF.PK), a Swiss manufacturer of fragrance and flavor products, Thursday reported growth in sales for the first nine months of the year, with increases in both divisions. The company backed its mid-term growth target.

Sales rose 2.7 percent to 3.318 billion Swiss francs ($3.64 billion) from 3.231 billion francs in the same period last year. The increase was 5 percent on a like-for-like basis.

Fragrance Division sales advanced 3 percent to 1.579 billion francs and improved 4.5 percent on a like-for-like basis.

Within the business, sales of compounds increased 3.7 percent. On a like-for-like basis, Fine Fragrance sales improved, driven by growth in both mature and developing markets as new business more than compensated for erosion.

The Consumer Products business grew 6.2 percent on a like-for-like basis against double-digit comparables last year.

Sales of Fragrance Ingredients declined 2.6 percent on a like-for-like basis, as good performance of speciality sales in the third quarter could not make up for the continued price pressure in the commodities sales segment.

Flavour Division sales rose 2.4 percent to 1.739 billion francs and like-for-like sales growth was 5.4 percent, driven by increases in the developing markets, particularly in Asia Pacific markets that saw solid new wins and growth of existing business.

Sales in the July to September period fell to 1.093 billion francs from 1.105 billion francs with a 1.3 percent drop in the Fragrance Division and a 0.9 percent decline in the Flavour Division.

Volume growth in all markets in the third quarter was consistent with those in the first six months of the year and pricing effects were negligible.

Mid-term, the overall objective of the company is still to grow organically between 4.5 and 5.5 percent per annum, assuming a market growth of 2-3 percent.

Givaudan continues to expect to outgrow the underlying market and continue to achieve its industry-leading EBITDA margin while improving its annual free cash flow to between 14 and 16 percent of sales by 2015.

The company also confirmed its intention to return above 60 percent of the company's free cash flow to shareholders while maintaining a medium term leverage ratio target below 25 percent.

The stock rose 1.1 percent in Zurich on Wednesday to close at 1,244 francs.

by RTTNews Staff Writer

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