Givaudan maintains its growth despite the Covid-19 crisis

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Givaudan maintains its growth despite the Covid-19 crisis


The turnover of the specialist in aromas and perfumes was 4.79 billion francs between January and September, an increase of 2.7% over one year.


The verniolan chemist ensures that he is going through the pandemic


© KEYSTONE
The verniolan chemist ensures that he is going through the pandemic “without significant disruption” to its activities or its supply chain.


Givaudan continued to generate growth, particularly organic, in the third quarter. Despite the uncertainty linked to the Covid-19 pandemic, the verniolan giant claims to have maintained its activities and its supply chain “without significant disruption”. The medium-term roadmap is maintained.

From January to September, the turnover amounted to 4.79 billion francs, up 2.7% over one year, Givaudan said Thursday. Organic growth reached 3.7%.

The Perfumes division, now called Perfumes and Beauty, generated sales up 5.3% (+ 4.5% organic) to 2.20 billion francs. The activities related to flavors, renamed Goût et Bien-être, stagnated (+ 0.6%) at 2.59 billion for organic growth of 3.1%.

In the third quarter, organic revenue growth was 3.1%, compared to + 4.0% in the same period of 2019.

Analyst forecasts

The performance of the verniolan group misses the average forecast of analysts, who expected a turnover of 4.84 billion, including 2.23 billion and 2.61 billion for Perfumes and Aromas respectively. Nine-month and third-quarter organic growth slightly exceeded expectations.

For Managing Director Gilles Andrier, Givaudan’s resilience can be explained by the resumption of activities which had particularly contracted in the second quarter.

“Fine perfumery and Food Service, which represent 17% of our turnover, have recorded a significant improvement. The more resilient part of our business, which grew to double digits in the second quarter, has returned to normal, ”he told AWP.

The rebound in “non-resilient” business was particularly felt in the United States, in the field of fine perfumes. The recovery in Food Service, intended for the catering sector, is fairly widespread, with a notable performance in Europe, according to the boss of the group.

Gain market share

“The Fine Perfumery segment in Western Europe is improving, but more slowly. Latin America continues to represent very strong growth, despite the strong impact of Covid. It’s a bit counter-intuitive, ”he said.

After comparison with the revenues generated in the first half of the year by competitors, such as the Geneva firm Firmenich, Gilles Andrier claims market share gains for Givaudan, which should continue on this path during the second half of the year.

The French leader did not wish to provide any indication of profitability in the third quarter.

Medium term objectives

The management confirms its medium-term objectives of exceeding the market with an increase in turnover of 4 to 5% and a free cash flow of 12 to 17% of revenues. The group remains on the lookout for acquisitions.

In a context of uncertainties, notably linked to a possible second wave of coronavirus, Gilles Andrier is being very cautious for the last three months of the year. Givaudan “sails on sight”, according to him. “There is no reason why the current trends will reverse in the fourth quarter,” he said, however.

Analysts have laurels for Givaudan, more particularly for the diversification of Geneva society, which has enabled it to pass the crisis smoothly. Around 15% of the group’s product portfolio is affected by the coronavirus, while the rest remains very robust, according to analyst Daniel Bürki of the Cantonal Bank of Zurich.

The current crisis could trigger more structural growth than in the past, while food and health security will gain in importance, explains Jean-Philippe Bertschy, analyst at Vontobel.

At 11:55 am, the Givaudan title lost 1.8% to 3,959 francs, in an SMI up 0.64%.

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