Givaudan has released its nine-month financials report, outlining a 6.4 percent rise in sales this year on a like-for-like basis. Within its Flavor Division, the Swiss flavor house highlighted increases in sales in its Asia Pacific, European, African Latin American and Middle Eastern markets, while noting a dip in North American sales. As part of the company’s 2020 strategy, Givaudan is seeking to further expand its business with targeted acquisitions.
“The company continues to implement price increases in collaboration with its customers to fully compensate for the increases in input costs,” Givaudan announced in its report.
In the first nine months of 2019, Givaudan recorded sales of CHF 4.7 billion (US$4.7 billion), an increase of 6.4 percent on a like-for-like basis and 14.5 percent in Swiss francs. Flavor Division sales were CHF 2.6 billion, an increase of 4.6 percent on a like-for-like basis and an increase of 17.4 percent in Swiss francs. Fragrance Division sales were CHF 2.1 billion (US$2.1 billion), an increase of 8.5 percent on a like-for-like basis and an increase of 11.2 percent in Swiss francs.
As part of the company’s 2020 strategy, Givaudan is seeking to create value through targeted acquisitions, which complement its existing capabilities. Since 2014, Givaudan has completed thirteen acquisitions.
Ambitious financial targets are a fundamental part of Givaudan’s strategy. The company has expressed a further ambition to outpace the market with 4-5 percent sales growth and a free cash flow of 12-17 percent of sales, both measured as an average over the five-year period of its strategy cycle.
In the first nine months of this year, Givaudan’s Flavor Division reported sales of CHF 2.6 billion (US$2.6 billion), a growth of 4.6 percent on a like-for-like basis and an increase of 17.4 percent in Swiss francs.
The sales performance was driven by new wins and good business momentum across all regions, mainly coming from local and regional customers. The key focus areas of the 2020 strategy, namely Health and well-being and Naturals, grew at double-digit and single-digit levels respectively.
From a segment perspective Beverages, Snacks, Savory and Sweet Goods all contributed to the division’s growth. This year, Givaudan has been particularly active in the plant-based protein space. Earlier this week, the flavor house launched a “unique flavoring approach” to transform the taste of plant-based meat alternatives. The flavor giants’ new techniques allow for extensive use of high moisture texturized vegetable proteins (TVP). Also this month, the company invited four top international chefs to take on its “Protein Challenge” in an event to showcase the potential of plant-based proteins.
Asia Pacific
Givaudan’s Flavor Division sales in Asia Pacific increased by 6.7 percent on a like-for-like basis. All of the high growth markets of South East Asia delivered double-digit growth followed by single-digit growth in India and China. In the mature markets, Korea recorded double-digit growth and Japan delivered solid sales performance. From a segment perspective, the growth in the region was led by Beverages and Savory, the company notes.
Europe, Africa and the Middle East
Sales in Europe, Africa and the Middle East increased by 4.3 percent on a like-for-like basis. Single-digit growth was achieved in the “mature markets” of Iberia, Italy and Switzerland. The high growth markets of Middle East and Africa achieved strong double-digit growth, which was partially offset by more challenging market conditions in Turkey. The growth was mainly achieved in the segments of Sweet Goods, Beverages, Snacks and Savory.
North America
Givaudan’s Flavor Division sales in North America decreased by 1.5 percent on a like-for-like basis despite reported “good performance of local and regional customers.” The performance was a result of “new wins” and the growth of existing business in Savory, Snacks, Beverages and Sweet Goods, offset by weaker performance in the company’s Dairy segment.
Latin America
The company’s Flavor Division sales in Latin America increased 19.7 percent on a like-for-like basis across all markets, led by double-digit volume growth in Mexico, Colombia, Peru and Argentina. The growth was driven by new wins in the Beverages, Dairy and Snacks segments.
