Givaudan’s Q1 results driven by “new wins” across all regions in dairy, snacks, savory & sweet goods
13 Apr 2021 --- In Givaudan’s Q1 business review, the company’s Taste & Wellbeing segment reported good growth driven by packaged foods, dairy, savory, sweet goods, snacks and beverages.
In the first three months of 2021, the flavor house recorded overall sales of CHF 1,674 million (US$1.8 billion), an increase of 7.7 percent on a like-for-like basis and 3.4 percent in Swiss francs.
“I am very pleased with the strong start that we have made to 2021, in what continues to be a very uncertain environment related to the COVID‑19 pandemic,” says CEO Gilles Andrier.
“We have seen continued strong demand across the parts of our business which are less impacted by the COVID‑19 pandemic and improving conditions in the parts of our portfolio which have been more affected.”
Givaudan started the year with strong business momentum while maintaining its operations and global supply chain at a high level.
The good growth was achieved across most product segments and geographies, with particularly strong performance in the high growth markets, which recorded sales growth of 14.5 percent on a like-for-like basis.
Growth in Taste & Wellbeing
Last month, Givaudan announced the reorganization of its Taste & Wellbeing product portfolio, centering on three food experiences that “inspire, feel good and do good” for consumers.
This portfolio reported sales of CHF 886 million (US$958 million), a growth of 5.8 percent on a like-for-like basis and an increase of 1.3 percent in Swiss francs.
Beverages, Dairy, Snacks, Savory and Sweet Goods all contributed to the positive sales performance driven by demand for traditional center-of-the-store foods.The strong sales performance was driven by “new wins and good business momentum” across all regions, mostly with local and regional customers.
The company’s foodservice business continued to be affected by the pandemic but to a lesser extent compared to 2020, as restrictions in relation to out- of- home food and beverage consumption started to be lifted in certain markets.
In the key strategic focus areas, sales saw a double-digit increase in the company’s Alternative Proteins division as well as high single-digit growth in Health & Wellness and in Naturals.
“Layered wellness,” in particular, comprising functional ingredients was previously tipped by Givaudan as a starring theme throughout 2021 product development.
From a segment perspective, Beverages, Dairy, Snacks, Savory and Sweet Goods all contributed to the positive sales performance driven by demand for traditional center-of-the-store foods.
Asia Pacific
Sales in Asia Pacific increased by 8.2 percent on a like-for-like basis. In the high growth markets, China and Malaysia delivered high double-digit growth followed by solid single-digit growth in Vietnam.
The strong sales performance was driven by “new wins and good business momentum” across all regions, mostly with local and regional customers.In the mature markets, Singapore delivered strong double-digit growth followed by single-digit growth in Korea. From a segment perspective, the growth was led by Dairy, Sweet Goods, Savory and Snacks.
South Asia, Africa and the Middle East
Sales in South Asia, Africa and the Middle East increased by 6.9 percent on a like-for-like basis.
Double-digit growth was achieved in the markets of India and North West Africa which was more than enough to offset weaker performance in South Africa, which is still heavily impacted by the COVID‑19 pandemic.
Growth in the region was driven by the Beverages, Sweet Goods and Dairy segments.
Europe
Sales in Europe increased by 0.7 percent on a like-for-like basis. Double-digit growth was achieved in the mature markets of Germany and Sweden, followed by good single-digit growth in Austria.
In the high growth markets there was good business momentum driven by double-digit growth in Poland followed by good single-digit growth in Russia, however overall the region was still heavily impacted by the COVID‑19 pandemic.
From a segment perspective, the growth was mainly achieved in Snacks and Savory.
North America & Latin America
Sales in North America increased by 4 percent on a like-for-like basis. The performance resulted from “new wins” and the growth of existing business in Beverage, Sweet Goods and Immunity Products.
Sales in Latin America increased 19.4 percent on a like-for-like basis across all markets, led by strong double-digit growth in Mexico, Brazil and Argentina, and across all segments.
The group has aligned the reporting of the regional performance of Givaudan Taste & Wellbeing with changes in the management structure of the business, effective since last January.
2025 guidance
Announced last August, the flavor house’s 2025 strategy is focused around three growth drivers, “Expand the portfolio,” “Extend customer reach” and “Focused market strategies” and is supported by four growth enablers.
These targets are aligned with the company’s purpose domains, namely “creations, nature, people and communities.”
Ambitious targets are an integral part of Givaudan’s 2025 strategy, with the company aiming to achieve organic sales growth of 4 to 5 percent on a like-for-like basis and free cash flow of at least 12 percent, both measured as an average over the five-year period strategy cycle.
In addition, the company aims to deliver on key non-financial targets around sustainability, diversity and safety, linked to Givaudan’s purpose. It aims to become “climate positive” before 2050.
By Benjamin Ferrer
