Nine Months 2010 Sales: Growth momentum maintained
Geneva, 8 October 2010 – In the first nine months of 2010, Givaudan recorded sales of CHF 3,283 million, a strong increase of 9.8% in local currencies and 8.5% in Swiss francs with both divisions contributing to this good result. Sales in the developing markets continued to show an excellent momentum as the mature markets showed similar good patterns to those of the first six months of 2010.
For the fourth quarter 2010, Givaudan expects a continued good performance and is therefore confident of achieving its stated 2010 full year objectives: a sales growth above 5% in local currencies and an EBITDA-Margin of 22.7%, equivalent to the pre Quest acquisition profitability.
As the integration of Quest is now successfully completed, Givaudan enters into the next era of growth for its business. 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 over the next five years.
By delivering on the company's three pillar growth strategy - emerging markets, health and wellness as well as market share gains with targeted customers and segments - 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 once the targeted leverage ratio - defined as net debt, divided by net debt plus equity - of 25% has been reached.
Sales January-September 2010
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Sales July-September 2010
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In the first nine months of 2010, the Fragrance Division recorded sales of CHF 1,539 million, a growth of 12.0% in local currencies and 10.9% in Swiss francs. This excellent performance has been achieved as a result of a number of new wins with key customers and improved sales of existing products.
Total sales for Fragrance compounds (Fine Fragrances and Consumer Products combined) increased 11.9% in local currencies and 11.0% in Swiss francs to CHF 1,335 million from CHF 1,203 million.
Fine Fragrance continued to deliver strong growth. Against the backdrop of more challenging comparables, third quarter sales continued to grow strongly due to a combination of new wins and solid volume gains. Year to date sales are up 20.7% in local currencies, driven by a significant number of new wins, customers returning to normalised order patterns and the favourable impact of re-stocking earlier this year.
On a regional basis, Europe and North America continued to deliver the strongest growth both in the quarter and on a year to date basis. In Latin America the business delivered high single digit volume gains over the course of the year. The business pipeline remains strong with a significant number and value of new briefs received during the first nine months of the year.
The Consumer Products business grew by 9.4% in local currencies in the first nine months against positive prior year comparables. Sales growth was across all customer segments. Developing markets continued to generate double digit growth while developed markets still delivered solid positive growth versus last year.
Asia Pacific reported double-digit sales growth spread across all customers groups and all products segments. Sales increases were particularly strong in India, Thailand and China.
Latin America posted strong growth led by sales in the fabric care segment, especially driven by good results in Argentina, Mexico and Venezuela. Local and regional customer sales, as well as International customer sales showed double-digit growth.
Europe, Africa and the Middle East reported an increase versus previous year among all customer groups. The sales increase was driven by the developing markets of Central and Eastern Europe, Africa and the Middle East, as well as growth in the mature markets.
North America posted a double-digit growth which was strongly supported by sales in the air care category and by significant results with international customers.
On a worldwide basis, all product segment sales were above prior year levels. Sales in home and fabric categories reported double digit growth. In particular, the air care category continued to deliver a strong double digit increase, led by sales in North America.
Sales of Fragrance Ingredients increased by 12.6% in local currencies. This double digit growth was achieved thanks to an overall high level of demand, particularly for specialities. Sales growth includes a certain restocking element.
In the first nine months of 2010, the Flavour Division recorded sales of CHF 1,744 million, an increase of 7.9% in local currencies and 6.5% in Swiss francs.
All four regions and all major segments posted gains with the Beverage, Snacks and Sweet Goods delivering double digit gains. The developing markets, with almost 40% of sales, continued their strong growth trends whilst the growth of the mature markets was driven by volume gains, both with existing products and new wins.
Sales for Asia Pacific increased by 9.3% in local currencies, clearly outpacing the underlying market. The developing markets of China, Indonesia and India recorded strong growth coming from Beverage, Snack and Sweet Goods wins. The mature markets remained positive with strong growth from Japan and with all segments contributing to the regional performance.
Sales across Europe continued to build on the positive first half results, posting a 4.8% growth rate for the developing and mature markets in local currency. New wins in Africa and Middle East coupled with an improved economic environment in Eastern Europe helped fuel the developing markets increase. The mature markets were negatively impacted during the third quarter specifically in Ireland, Great Britain and Northern Europe markets as a direct result of the weaker Western European economic environment and outlook. Growth in the remaining mature markets remained strong and consistent with first half performance.
Recent volume gains and new wins coming from Beverage, Dairy and Sweet Goods helped improve North America's sales growth rate to 8.1% in local currencies. The double digit growth for the quarter was the result of the strong growth of existing products and new wins.
Year to date sales performance in Latin America was a strong growth rate of 16.9% against very high comparables. All markets are above last year with Brazil and Argentina posting very strong growth rates. Existing products and new wins contributed to the growth across all segments, particularly in Beverage, Dairy and Sweet Goods.
For further information please contact:
Peter Wullschleger, Givaudan Media and Investor Relations
5, chemin de la Parfumerie, CH-1214 Vernier
T +41 22 780 90 93
F +41 22 780 90 90