Givaudan Continues Growth Momentum in Q3

For the fourth quarter 2010, Givaudan expects a continued good performance and is therefore confident of achieving its stated 2010 full year objectives: a sales growth above 5% in local currencies and an EBITDA-Margin of 22.7%, equivalent to the pre Quest acquisition profitability.

Oct 8 2010 --- In the first nine months of 2010, Givaudan recorded sales of CHF 3,283 million, a strong increase of 9.8% in local currencies and 8.5% in Swiss francs with both divisions contributing to this good result.

Sales in the developing markets continued to show an excellent momentum as the mature markets showed similar good patterns to those of the first six months of 2010.

For the fourth quarter 2010, Givaudan expects a continued good performance and is therefore confident of achieving its stated 2010 full year objectives: a sales growth above 5% in local currencies and an EBITDA-Margin of 22.7%, equivalent to the pre Quest acquisition profitability.

As the integration of Quest is now successfully completed, Givaudan enters into the next era of growth for its business. 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 over the next five years.

By delivering on the company's three pillar growth strategy - emerging markets, health and wellness as well as market share gains with targeted customers and segments - Givaudan expects to outgrow the underlying market and to continue to achieve its industry leading EBITDA margin while improving its annual free cash flow to between 14% and 16% of sales by 2015.

Givaudan confirms its intention to return above 60% of the company's free cash flow to shareholders once the targeted leverage ratio - defined as net debt, divided by net debt plus equity - of 25% has been reached.

In the first nine months of 2010, the Flavour Division recorded sales of CHF 1,744 million, an increase of 7.9% in local currencies and 6.5% in Swiss francs.

All four regions and all major segments posted gains with the Beverage, Snacks and Sweet Goods delivering double digit gains. The developing markets, with almost 40% of sales, continued their strong growth trends whilst the growth of the mature markets was driven by volume gains, both with existing products and new wins.

Sales for Asia Pacific increased by 9.3% in local currencies, clearly outpacing the underlying market. The developing markets of China, Indonesia and India recorded strong growth coming from Beverage, Snack and Sweet Goods wins. The mature markets remained positive with strong growth from Japan and with all segments contributing to the regional performance.

Sales across  Europe continued to build on the positive first half results, posting a 4.8% growth rate for the developing and mature markets in local currency. New wins in  Africa and Middle East coupled with an improved economic environment in Eastern Europe helped fuel the developing markets increase. The mature markets were negatively impacted during the third quarter specifically in Ireland, Great Britain and Northern Europe markets as a direct result of the weaker Western European economic environment and outlook. Growth in the remaining mature markets remained strong and consistent with first half performance.

Recent volume gains and new wins coming from Beverage, Dairy and Sweet Goods helped improve  North America's sales growth rate to 8.1% in local currencies. The double digit growth for the quarter was the result of the strong growth of existing products and new wins.

Year to date sales performance in  Latin America was a strong growth rate of 16.9% against very high comparables. All markets are above last year with Brazil and Argentina posting very strong growth rates. Existing products and new wins contributed to the growth across all segments, particularly in Beverage, Dairy and Sweet Goods.