Givaudan flavor sales up 3.6% following shift in F&B demand amid COVID-19

22 Jul 2020 --- Linked to the COVID-19 pandemic, Givaudan’s Flavour division experienced a shift in demand from foodservice and alcoholic beverages into established products in categories such as Juice Based Beverages, Culinary Solutions, Nutritional Bars, Savoury and Snacks. This is in line with the company’s strong performance of high growth markets, which saw overall sales rise by 4 percent, and Flavour Division sales increased 3.6 percent (both on a like-for-like basis). According to the company, there was “excellent performance in parts of the portfolio that were not impacted by the pandemic.”

Good growth was achieved across most product segments and geographies, with a particularly strong performance in household, health and personal care segments within the Fragrance division, as well as in packaged foods, savory, snacks and nutraceuticals in the Flavour division. 

In the product segments most affected by the COVID-19 pandemic, namely Fine Fragrance and to a lesser extent Active Beauty in the Fragrance division and Foodservice in the Flavour division, the group experienced a significant reduction in business activity in the months from March through June. This was when restrictions related to the pandemic negatively impacted retail and travel retail activity as well as out-of-home food consumption.

“Our strong performance in the first half of 2020 demonstrates our market leadership and the important role that we play in sustaining the global supply chain in F&B and household, health and personal care products,” says Gilles Andrier, CEO. “I’m proud of the company’s dedication during this challenging period and enabling us to continue to support our customers to keep critical products available to consumers throughout the COVID-19 crisis.”

Flavour Division
According to Givaudan’s Flavour Division, sales were CHF 1,765 million (US$1,890.4 million), an increase of 3.6 percent on a like-for-like basis and 1.9 percent in CHF. Both new and existing products drove the sales performance with strong business momentum across all regions coming from both Global and Local and Regional customers. From a segment perspective, Dairy, Sweet Goods, Savoury and Snacks were the main contributors to the division’s growth.

The EBITDA increased to CHF 401 million (US$429.5 million) from CHF 390 million (US$417.8 million) in 2019, an increase of 2.8 percent, with continuing productivity gains and cost discipline contributing to the rise. The EBITDA margin was 22.7 percent in 2020, up from 22.5 percent in 2019. On a comparable basis, the Flavour Division’s EBITDA margin was 23.8 percent in 2020 compared to 23.1 percent in 2019.

The operating income decreased to CHF 268 million (US$287.0 million) in 2020 from CHF 278 million (US$297.8 million) in 2019, a decrease of 3.5 percent. The operating margin was 15.2 percent in 2020 compared to 16 percent in 2019.

Asia Pacific
Overall sales in Asia Pacific grew by 2.4 percent on a like-for-like basis, against a comparable growth of 6.2 percent in 2019. The high-growth markets of Thailand and China delivered strong double-digit performance, while the COVID-19 crisis heavily impacted India, Indonesia and Malaysia. In the mature markets, growth was driven by Japan, Korea and Singapore.

From a customer perspective in Asia Pacific, there was a shift toward global and international customers, who were less impacted by the COVID-19 crisis than local and regional customers. From a segment perspective, Savoury, Snacks and Sweet Goods contributed significantly to the growth.

Europe, Africa and the Middle East
Overall sales in Europe, Africa and the Middle East increased by 3.4 percent. In the high-growth markets of Africa and the Middle East, double-digit growth was achieved in Algeria, Egypt and Cameroon followed by the Middle East with good single-digit growth. Russia and Turkey led to growth in Central and Eastern Europe. In Western Europe’s mature markets, Givaudan saw very good momentum driven by France, the Netherlands, Belgium and Sweden.

The growth was driven by the Dairy, Savoury and Snacks segments.

The Americas
Sales in North America increased by 2.8 percent, driven by global and local and regional customers’ good performance. From a segment perspective, good growth was achieved in Beverages, Snacks and Sweet Goods.

Sales in Latin America increased by 10.6 percent, against a strong comparable of 22.8 percent growth in 2019. The strong growth was achieved across all markets and in the segments of Dairy, Beverage, Savoury and Sweet Goods.

Edited by Elizabeth Green