Givaudan gains momentum after streamlining

Givaudan claims to have continued its good sales growth momentum despite strong comparables in the third quarter and the ongoing streamlining of commodity ingredients.

The flavours giant recorded sales of CHF 2,200.5 million from January to September 2006, resulting in a growth of 3.3 per cent in local currencies and 5.5 per cent in Swiss francs.

Givaudan said it was now confident that it would grow above market averages and sustain its solid 2005 year-end margins.

The flavour division recorded nine months sales of CHF 1,281.9 million, which represents an increase of 1.6 per cent in local currencies and 3.8 per cent in Swiss francs. The flavours sector currently accounts for 59 per cent of business.

Third quarter sales in local currencies stayed at previous year's levels due to strong comparables and the acceleration of the ingredients streamlining (nine months impact CHF 15 million, expected full year CHF 25 million), mainly affecting North America and Europe.

The company said that developing markets in Europe, Asia Pacific and Latin America showed a strong growth.

Sales in Asia Pacific however declined slightly primarily due to the Japanese beverage segment. This segment however started to recover in the third quarter with the launch of new products.

The developing markets of China and India continued to grow at a double-digit rate thanks to significant new wins and solid growth of existing business.

Latin America posted high single digit growth against strong comparables. All major segments contributed, with confectionery and savoury achieving double-digit growth, mainly due to new wins.

Argentina and Columbia recorded double-digit growth, along with solid sales growth in Brazil.

Sales in North America stayed at previous year's level primarily due to the impact of discontinued savoury ingredients. Beverages and confectionery continued to show good growth driven by new wins and a strong performance coming from the existing confectionery business.

Givaudan said that sales in Europe continued their positive momentum. All major segments reported favourable results, with confectionery growing at a double-digit rate. Central and Eastern Europe recorded double-digit growth, lead by Poland, Turkey and the CIS countries.

This, said Givaudan, reflected the firm's investments in these fast growing markets.

The fragrance division on the other hand recorded nine months sales of CHF 918.6 million, which represents a growth of 5.7 per cent in local currencies and 8.0 per cent in Swiss francs.

The company has worked hard to better streamline its operations. At the end of 2005, the company successfully completed the transfer of the liquid and dry flavour production from Barneveld (Netherlands) to Dortmund (Germany) and Zurich (Switzerland).

The French market commercial team was moved from Tremblay (France) to the newly refurbished facilities in Argenteuil (France).

And in August 2005, the final phase of the Savoury Development Centre in Kemptthal (Switzerland) was completed with the inauguration of a fully dedicated pilot plant, capable of handling a wide range of food manufacturing processes. The firm said at the time that this would allow the development of flavours together with customers in a realistic setting.

Speciality ingredients also showed strong results, with five ingredients in this category proving to be amongst the company's top-selling ingredients.