Givaudan puts growth down to fragrance

By Staff Reporter

- Last updated on GMT

Related tags Fine fragrance business Fragrance division Flavor

Increased revenue from the fragrance division in Q3 offsets a slow
start to the year for number one flavours and fragrance maker

Overall sales for the Fragrance Division rose 2.8 per cent to CHF851 million francs and over the nine months of the fiscal to date have increased 3.3 percent in local currencies and 2.8 percent in Swiss francs, to CHF850.9 million.

For the group as a whole, sales in the nine months to September climbed to CHF2.086 billion, from CHF2.065 billion in the same period a year ago, said the Swiss company.

In the Fine Fragrance business unit all regions reported good sales growth. Although the current fiscal is still lagging behind last year, the latest results go some way towards closing the gap. New launches in the US market are particularly to thank for this.

In Consumer Products, the strongest performance came from hair and skin care. Personal care and fabric also performed well.

Fragrance Ingredients suffered a dip, however, although this was not unforeseen. The company is currently rebalancing its ingredients portfolio, and although specialty ingredients continued to bend a double-digit growth curve, this was not sufficiently steep to offset the decline in commodity ingredients.

However Givaudan predicts that the specialty ingredients growth will continue, thanks to its planned introduction of new patented molecules.

At the flavours division figures fell slightly to CHF1.235 billion (€797n) from CHF1.238 billion a year earlier.

Highlights at the flavour unit include beverage ingredients showing a strong performance as a result of new wins in Japan and South Asia.

China is spurring growth in Asia Pacific, a region slated to advance at about 7.3 per cent, year on year, until 2008. This compares to western Europe and the US with 3.7 and 3.3 per cent growth respectively.

Such escalating demand should help global flavour firms such as Givaudan tackle ongoing price squeezes that continue to slice into their margins.

Sales in Europe, Africa and the Middle East declined slightly versus last year. Further, a strong sales performance in Eastern Europe and Middle East, supported by new creation and application centres in Vienna and Dubai, "could not fully compensate the impact of lower vanilla prices and lower consumer consumption in Western Europe."

Reflecting the same story for global food firms, China has brought solid growth for Givaudan, with the firm reporting "a good sales performance driven by double-digit growth"​ from this emerging market.

Looking to build on gains over there, the firm said the construction of a new flavour creation, application and production centre in Shanghai "is progressing well and will become operational in the second quarter of 2006."

On the flip side, sales in North America remained slightly below levels of last year. The firm claims strong growth from beverage and confectionery sector helped stem the sales decline across the Atlantic.

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