has reported sales for the first six months of the year up 5.7% at CH 2,225 million. Fragrance sales were up 5.5% at CHF1,047 million, while flavour sales were up 5.8% at CHF1,178 million.Gross margins also increased to 44.3% from 42.3%, driven by the residual price increases implemented during the last two years to offset increases in raw material costs, and the positive leverage effect from the strong volume gains, the company said. In addition, Givaudan notes that it is capitalising on its recently completed ERP project to create supply chain efficiencies. The transfer of products to the new flavours manufacturing facility in Makó, Hungary continues in line with project timelines.
EBITDA increased by 16.4% to CHF509 million from CHF437 million in the first six months of 2012. A strong gross profit and a continued focus on internal costs were the main enablers of the improvement, according to Givaudan.
Sales growth in flavours in the first half was driven by the developing markets of Asia Pacific, Eastern Europe, Africa and Middle East and Latin America, coupled with gains in the mature markets of North America and Western Europe. All segments expanded with strong performances in beverages, dairy, savoury and sweet goods, said the company, while health and wellness sales continued to evolve strongly with double-digit gains as sweetness, salt and masking capabilities delivered improved taste solutions for its customers.
Mid-term, Givaudan said that 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 said that it expects to outgrow the underlying market.
