Givaudan reports solid finances after streamlining
fragrance giant is profiting from the streamlining of its commodity
ingredient operations.
Overall sales of CHF 2,909 million represent growth of 3.5 per cent in local currencies, while operating profit at a comparable basis increased to CHF 550 million. "Despite the continued ingredients streamlining in both divisions, the company continued to deliver above market sales growth for the sixth consecutive year," said the company in a statement. "This streamlining impacted annual sales by CHF 33 million. Without this effect, sales in local currencies would have increased by 4.9 per cent." The company has certainly been working 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. For 2006, the flavour division recorded sales of CHF 1,686 million, representing a growth rate of 1.2 per cent in local currencies and 2.4 per cent in Swiss Francs. The streamlining of commodity ingredients impacted flavour sales by CHF 16 million, mainly in North America and in Europe, Africa and Middle East (EAME). Without this effect, the underlying sales growth would have been 2.3 per cent in local currencies. Latin America, EAME and China continued to show strong growth, whilst sales in the mature markets of North America and Japan declined. The confectionery, dairy and savoury segments continued on their solid growth paths, whereas beverage sales suffered, primarily in North America and Japan. In 2006, several new initiatives and projects were launched to expand Givaudan's market position. The Accelerated Sales Growth Strategies for both divisions were developed over several months and introduced in July. For example, an announcement was made on 22 November 2006 to acquire Quest International, a division of Imperial Chemical Industries. Givaudan believes that this acquisition is complementary to its organic growth strategy and will enable the firm to implement its growth initiatives even faster. In addition, the Shanghai creation, technology and production centre was also inaugurated in November, representing a significant milestone for Givaudan in Asia and especially in the fast-growing market in China. "Givaudan is well positioned for another good result in a transition year," said the company.
