Oct 11, 2011
Givaudan confirms mid-term goals despite Q3 sales miss
Oct 11, 2011
ZURICH, Oct 11 (Reuters) - Swiss fragrance and flavour maker Givaudan stuck to its mid-term goals despite nine-month sales missing forecasts, saying its ability to push through price hikes should help offset higher raw material costs.
The Geneva-based company, which makes fragrances for Dior and Prada perfumes, said it expected to fully cancel out higher input costs for ingredients such as citrus and orange oil and crude oil-related products by next year.
"The company forecasts that it will mitigate half of the impact in 2011 and the full impact in 2012," Givaudan said in a statement on Tuesday.
Givaudan said nine-month sales rose 4.7 percent in local currencies, but fell 9.5 percent in Swiss franc terms to 2.971 billion francs ($3.2 billion) due to the strength of the Swiss currency. Analysts polled by Reuters had expected sales of 2.996 billion francs.
Its third-quarter sales slipped 10.9 percent to 966 million francs, also falling short of forecasts.
The group, whose ingredients help improve the taste of chicken and cheese, repeated that it wanted to grow between 4.5 and 5.5 percent organically per year over the mid-term and achieve an industry-leading core profit margin.
Givaudan, which competes with German peer Symrise and International Flavors & Fragrances, confirmed its goal to return over 60 percent of the company's free cash flow to shareholders as soon as the target leverage ratio of 25 percent has been met. ($1 = 0.915 Swiss Francs) (Reporting by Caroline Copley; Editing by Will Waterman)
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