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Givaudan Sees “Improved Momentum” in First Half of 2009

Posted: August 12, 2009

Givaudan reported first half 2009 sales of CHF 1.996 billion, down from CHF 2.095 billion the same period 2008. Despite this, the company cites “improved momentum in the course of the first half year in both sales and profitability.”

The company’s first half report noted, “During the second quarter, sales erosion slowed down in Europe and North American, indicating a possible end to the destocking, but the lack of consumer confidence and continued reduced travel activity is likely to continue impacting fine fragrance sales throughout 2009. Customers are currently carefully evaluating new product introductions.”

The company reported that 38% of its sales are now achieved in the developing world. Givaudan plans to grow this over the next five years. Sales by region were: EAME; United States/Canada, 25%; Asia-Pacific, 23%; and Latin America 11%.

Fragrance sales for the period totaled CHF 899 million, powered by consumer product categories in markets such as the Philippines, Indonesia, Argentina and Brazil. North America and EAME consumer product sales were down. Strongest growth came from the fabric care and oral care segments. Sales in fine fragrance, “discretionary product segments” and raw materials remained soft. Despite this, fine fragrance sales improved in the second quarter, compared to the first three months of the year.

Flavor sales, accounting for 55% of the total, reached CHF 1.097 billion. Givaudan has identified health and wellness as its main competitive advantage in this category—novel taste modifiers, reduced sodium applications, stevia sweeteners for zero-calorie products, etc. Double-digit growth in developing markets boosted gains in Asia-Pacific. There, even Japan appeared to be recovering, though there was continuing softness in China. Sales in Brazil, Argentina and Mexico contributed to an overall sales increase in Latin America where beverage, dairy and savory categories showed strength. Savory and beverage wins led to gains in Africa and the Middle East. European and North American sales declined. In the latter, savory and snack segments declined, though beverages improved.

The complete report is available here.