Givaudan Sales Boosted By Emerging Market Demand

10 Oct 2014 --- In the first nine months of 2014 Givaudan recorded sales of CHF 3,313 million, an increase of 4.5% on a like-for-like basis and a decline of 0.2% 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.

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 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%.

Flavour Division sales were CHF 1,726 million during the first nine months of 2014, an increase of 4.2% on a like-for-like basis and a decrease of 0.8% in Swiss francs driven by a continued good performance in the developing markets.

There was growth across all major segments, with strength in Beverages, Dairy and Snacks. The evolution of Health and Wellness sales continued with improved taste solutions involving sweetness, salt and masking capabilities being provided for our customers. In particular, there were strong double-digit gains in Latin America for this segment.

Sales in Asia Pacific rose 5.3% on a like-for-like basis. The developing markets of China, India, Philippines and Vietnam contributed to the sales expansion with gains coming from existing business and new win revenue with strong double-digit gains coming from India in the quarter. Mature markets were down slightly versus prior year with good growth from Australia and Singapore offset by slow economic conditions in Japan. All major segments had positive gains with Beverages, Savoury and Snacks each delivering strong growth.

Sales grew by 2.9% on a like-for-like basis, driven mainly by the emerging markets of Africa and the Middle East. The mature markets were slightly higher when compared to 2013. Growth across the Beverages, Dairy, Savoury and Snacks segments was partially offset by lower Sweet Goods.

Sales grew 1.9% on a like-for-like basis in North America with growth in Beverages, Dairy, Snacks and Sweet Goods, driven by new wins and volume increase from existing business.

Growth in Latin America was 10.4% on a like-for-like basis with strong increases coming from Argentina and Brazil. New wins and existing business expansion contributed to the growth in all segments with exceptional growth coming from Beverages, Dairy and Snacks segments.