Givaudan’s nine-month sales buoyed by fine fragrances

Shares in Swiss fragrances and flavours group Givaudan rose on Tuesday after the company reported ‘robust’ nine-month sales, easing concerns about a slowdown in the US, according to an analyst.

For the period from January to the end of September, the Geneva-based group posted sales of 5.7 billion Swiss francs (6.1 billion euros), up 5.7% excluding currency effects and acquisitions, and up 1.7% in Swiss-franc terms.

Growth was again driven by fine fragrance, with sales up 18.7% despite a demanding comparison base after several years of double-digit growth.

The group also continued to implement price rises to ‘fully offset’ higher ‘raw material costs’, including increased ‘customs duties’, it said in a press release.

In detail, its Fragrances and Beauty division, which also includes fragrances for laundry and personal care products, as well as skincare ingredients, generated sales of 2.9 billion francs, up 8% excluding currency effects and acquisitions compared with the same period a year earlier.

Sales in its flavours business for the food industry totalled 2.8 billion francs, up 3.4%. In North America, growth was at 3.9%.

Solid sales

These figures are in line with forecasts from analysts polled by Swiss agency AWP, who on average expected 5.7 billion francs in sales, including 2.9 billion in the Fragrances and Beauty division and 2.8 billion in flavours.

After opening more than 2% higher, shares were up by 0.86% at 08:28 GMT at 3,396 Swiss francs, bucking the trend of the SMI, the Swiss stock exchange’s flagship index, which was down 0.20%. Since January, the stock has fallen by almost 14%, which Daniel Bürki, an analyst at Zurich Cantonal Bank, attributes to ‘a general weakness in the food ingredients sector’ on the stock market, amid concerns about consumer spending.

In a market note, the analyst points to ‘a slight slowdown’ in third-quarter growth, although this was expected given the ‘very high’ comparison base. He considers the nine-month sales ‘solid’.

Arben Hasanaj, an analyst at Vontobel, also describes the sales as ‘robust’, saying they ‘dispel the markets’ immediate fears’, notably about ‘a weakening in the US’ or ‘a decline in perfumery’, he wrote in a market commentary.

Givaudan never issues short-term forecasts but always sets out a five-year roadmap. For the period to the end of 2025, the group was targeting sales growth of 4% to 5%, but says it is ‘very likely to exceed the upper limit’ of this target, as sales growth has already averaged 7.2% between 2021 and 2024.

At the end of August, Givaudan unveiled its objectives to 2030, this time targeting growth of 4% to 6% over the next five years.