Givaudan Reports Sustained Volume Growth in All Markets
10 Oct 2013 --- In the first nine months of 2013 Givaudan recorded sales of CHF 3,318 million, an increase of 5.0% on a like-for-like¹ basis and 2.7% in Swiss francs compared to the previous year.
Givaudan continues to demonstrate strong business momentum with a full project pipeline and win rates sustained at a high level. Volume growth in all markets in the third quarter was consistent with levels during the first six months of the year. In the third quarter pricing effects were negligible.
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 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 while maintaining a medium term leverage ratio target below 25%. The leverage ratio is defined as net debt, divided by net debt plus equity. For this ratio calculation, the Company has decided to exclude from equity any impact arising from the changes of IAS 19 – Employee Benefits (revised) going forward.
Flavour Division sales were CHF 1,739 million during the first nine months of 2013, an increase of 5.4% on a like-for-like basis and 2.4% in Swiss Francs.
Sales growth in the first nine months was driven by increases in the developing markets, particularly across all Asia Pacific markets. The mature markets of Western Europe and North America contributed as well. All segments expanded globally with strong performances in Beverage, Dairy, Savoury, Snacks and Sweet Goods. Health and Wellness continued to evolve globally with significant double-digit gains in the salt, sweetness and bitterness masking capabilities of the TasteSolutions portfolio.
Sales in Asia Pacific rose 7.0% on a like-for-like basis, driven by solid new wins and growth of existing business. The developing markets of China, Indonesia and India delivered strong growth with increases in Beverage, Sweet Goods, Savoury and Snacks. The mature market of Japan was marginally above prior year with good growth in Beverage and Savoury offset by lower non-food segment sales. For the region, all business segments contributed to the incremental gains with Beverage, Dairy, Savoury and Snacks each delivering strong growth.
Sales grew 4.9% on a like-for-like basis driven by growth in the developing markets of Africa and Russia. The mature markets of Western Europe strongly contributed to the increased sales led by the markets of Great Britain, Italy and Spain. Overall performance was driven by volume gains and growth of existing business in the developing markets. All segments provided good year over year growth with Beverage, Savoury, Snacks and Sweet Goods delivering the growth.
Sales increased across the Latin America region by 7.9% on a like-for-like basis with strong growth coming from Argentina, Brazil and Mexico. New wins and growth of existing business contributed to the expansion. Growth was across all segments with Beverage, Dairy and Snacks leading the way.
Sales across the North America region grew 3.3% on a like-for-like basis. New wins contributed to the sales expansion with Beverage, Dairy, Snacks and Sweet Goods helping the overall increase.
