Givaudan sales flat; reiterates growth objective16 Apr 2015
In the first three months of 2015, Givaudan recorded sales of CHF 1,091 million, an increase of 0.9% on a like-for-like basis, and 0.4% in Swiss francs compared to the previous year. Flavour sales were broadly flat. In what the company described as a challenging economic environment, characterised by a slowdown in the developing markets […]
In the first three months of 2015, Givaudan recorded sales of CHF 1,091 million, an increase of 0.9% on a like-for-like basis, and 0.4% in Swiss francs compared to the previous year. Flavour sales were broadly flat.
In what the company described as a challenging economic environment, characterised by a slowdown in the developing markets of Asia and Eastern Europe, Givaudan says it started the year with a stable business momentum against high comparables in 2014. The project pipeline and win rates were sustained at a high level.
Mid-term, Givaudan said that 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. By delivering on the company’s five-pillar growth strategy – developing markets, health and wellness, market share gains with targeted customers and segments, research and sustainable sourcing – Givaudan said it expects to outgrow the underlying market and to continue to achieve its industry-leading EBITDA margin while targeting an annual free cash flow of between 14% and 16% of sales in 2015.
The Flavour Division reported sales of CHF 572 million, a growth of 1.5% on a like-for-like basis and a slight increase of 0.1% in Swiss francs.
Against strong prior year comparables, Givaudan said that the Flavour Division performance was positively impacted by the developing markets of Brazil, India, parts of Africa as well as from the mature markets of North America and Western Europe. Growth was in the segments of Dairy and Snacks.
Sales for Asia Pacific decreased 3.1% on a like-for-like basis against a strong double-digit comparable. The developing markets of India and Vietnam grew whilst China, Philippines and Thailand decreased. The mature markets of Australia and Japan declined reflecting continued difficult trading conditions. Snacks achieved solid growth driven by new wins and existing business growth while all other segments were soft.
Sales in Europe, Africa and the Middle East were flat on a like-for-like basis. The mature markets of Western Europe achieved a solid growth, offset by declines in the developing markets of Africa, the Middle East, Poland and Russia. Dairy, Snacks and Savoury increased as a result of new wins and existing business growth.
Latin America increased 7.6% on a like-for-like basis, versus high double-digit prior year comparables, with strong growth in Brazil and positive momentum in Mexico driving the growth. New wins and existing business growth contributed to the overall increase in all segments with particular good performance coming from the Sweet Goods, Savoury and Beverages areas.
Sales in North America increased by 6.2% on a like-for-like basis driven by double-digit growth in Beverages and Dairy. New wins and growth of the existing portfolio contributed to the strong performance.