Givaudan got off to a good start in 2022 despite a high base from the previous year
Despite the high basis of comparison from the previous year, the flavors and fragrances manufacturer Givaudan managed to get the year off to a good start.
the essentials in brief
- In the first quarter, Givaudan lost momentum compared to last year.
- In 2021, however, the flavor and fragrance manufacturer experienced a strong year.
- Sales now rose by 6.4 percent to CHF 1.78 billion.
Givaudan lost slightly in the first quarter. However, the flavors and fragrances manufacturer also achieved below the high basis of comparison of the exceptionally strong previous year. The company intends to counter higher raw material costs with price increases.
Organically, i.e. excluding acquisitions and disposals and adjusted for currency effects, sales increased by 4.6 percent. The Geneva-based company announced this on Tuesday. As usual, Givaudan did not present earnings figures for the first quarter. Specifically, sales from January to March rose by 6.4 percent to CHF 1.78 billion.
Givaudan lost momentum at the start of the year
With organic growth, the industry leader thus rose within the medium-term target range of 4 to 5 percent. however, it lost some momentum compared to the final quarter of 2021, when organic growth was 5.3 percent. The expectations of the analysts were nevertheless clearly exceeded. According to the AWP consensus, this assumed organic growth of only 3.8 percent.
Givaudan grew organically at 7.1% in 2021, the fastest since 2010. The Geneva-based company had proven to be extremely crisis-proof during the corona pandemic. This as a supplier of flavors and fragrances for food and household items.
Sales prices will increase by 9 percent
However, raw material prices have also risen recently. Management forecast a price increase of around 9 percent for 2022. The company has now announced further price increases to fully offset the rise in production costs, it said.
In general, it is expected that Givaudan will be able to pass on the higher prices to customers as in the past. It remains exciting, however, how long this will take and what this will mean for profitability in the current year.
More on the subject: