Flavors Boost Sales For Givaudan, While Fragrances Stagnate
22 Jul 2015 --- International flavors and fragrance giant Givaudan Group has reported that sales for the first six months of the year were €2,271m, an increase of 1.3% on a like-for-like basis and a decline of 0.3% in Swiss francs.
The EBITDA increased by 0.6% to €588m from €584m for the same period in 2014. A continued focus on internal costs was the main enabler of the improvement. The operating income increased by 1.6% to €445m from €439m for the same period in 2014. When measured in local currency terms, the operating income increased by 8.8%. The operating margin increased to 19.6% in 2015 from 19.2% in 2014.
The net income for the first six months of 2015 was €352m compared to €317m in 2014, an increase of 11.2%. This results in a net profit margin of 15.5% versus 13.9% in 2014.
Givaudan’s financial position remained strong at the end of June 2015.
Mid-term, the overall objective is to grow organically between 4.5% and 5.5% per annum, assuming a market growth of 2-3%, and to continue on the path of market share gains. By delivering on the Company's five-pillar growth strategy – developing markets, Health and Wellness, market share gains with targeted customers and segments, research and sustainable sourcing – Givaudan expects to outgrow the underlying market and to continue to achieve its industry-leading EBITDA margin while targeting an annual free cash flow of between 14% and 16% of sales by the end of 2015.
Flavour Division sales were €1,207m during the first six months of 2015, an increase of 2.6% on a like-for-like basis and 0.4% in Swiss francs.
Sales growth during the second quarter was influenced by strong growth in the mature markets as well as the emerging markets of Asia Pacific and Latin America. New wins and existing business growth contributed to the increase. Difficult economic conditions continue to impact growth in Eastern Europe, Africa and the Middle East. Segment growth in Beverage, Dairy and Snacks was achieved as a result of new wins and existing business increases.
The EBITDA increased by 3.9% to €334m in 2015 from €322m for the first six months of 2014. The EBITDA margin was 27.8% in 2015, up from 26.8% in 2014.
The operating income increased by 5.7% to €256m in 2015 from €234m for the same period in 2014. The operating margin increased to 21.3% in 2015 from 20.2% in 2014.
Sales in Asia Pacific increased 1.5% on a like-for-like basis. New wins and existing business expansion in the developing markets of China and India contributed to the growth. The mature and developing markets showed an improved momentum in the second quarter. Dairy and Snacks strengthened with solid growth from new wins.
Sales increased 0.2% on a like-for-like basis in the Europe, Africa and Middle East region, driven by solid growth in the mature markets of Western Europe, notably France, Germany, Spain and the UK. Challenging economic conditions continue to negatively impact sales in the emerging markets of Eastern Europe, Africa and the Middle East. Dairy, Savoury and Snacks increased as a result of new wins and existing business growth.
Growth in Latin America was 6.9% on a like-for-like basis with strong growth in Argentina and Brazil. New wins and existing business growth in Beverage, Dairy, Savoury and Sweet Goods led the way.
In North America, flavors sales increased 6.1% on a like-for like basis. The strong performance carried forward from the first quarter as double-digit growth was achieved in the segments of Beverage and Dairy with moderate growth coming from Snacks. Growth from existing business as well as new wins contributed to the increase.
