Givaudan reports 8.4 percent sales increase in first nine months

Fragrance and flavour maker Givaudan reported an 9.8 percent hike in sales during the third quarter of 2018 on Tuesday, slightly better than analysts had expected, led by strong performance in its fragrances division.

“Givaudan continued the year with good business momentum and with the project pipeline and win rates sustained at a high level,” the Swiss company that makes flavours for chicken and fragrances for washing powder said in a statement.

The company said it continued to implement price increases to compensate for rising input costs for materials its uses to make its scents and food flavourings.

Givaudan posted sales of 1.4 billion Swiss francs (1.08 billion pounds), narrowly beating forecasts for 1.37 billion francs by analysts in a Reuters poll. It did not give profit figures for the period.

In the first nine months of 2018, the Geneva-based company posted sales of 4.1 billion Swiss francs, an increase of 5.7 percent on a like-for-like basis and 8.4 percent increase in Swiss francs.

Fragrance and flavour makers are benefiting from consumers’ growing appetite for natural ingredients, a key focus area of recent acquisitions in the industry.

Givaudan last month completed its acquisition of natural ingredients group Naturex in a deal that valued the French company at 1.3 billion euros (1.14 billion pounds).

ACQUISITIONS

During the quarter Givaudan, which leads the global fragrance and flavour market with a 25 percent share, said its fragrance division increased sales by 6.8 percent on a like-for-like basis which strips out the effects of acquisitions and currency movements.

The fragrances unit was helped by strong sales at its fine fragrances business, which makes scents for aftershaves and perfumes.

But sales in the group’s flavours division, which offers anything from lemon to seafood and grill flavours to customers in the food and beverage industry, grew more slowly as it struggled with tougher comparisons in North America.

Givaudan confirmed its mid-term target for 4-5 percent sales growth on average over a five-year period to 2020.

Givaudan’s main competitor is U.S.-based International Flavors & Fragrances that acquired Israel’s Frutarom for $7.1 billion (5.4 billion pounds) earlier this year, vying for the industry’s top spot with the market leader.