In the first nine months of 2012 Givaudan recorded sales of CHF 3,231 million, an increase of 6.1 percent in local currencies and 8.8 percent in Swiss francs compared to the previous year.
Givaudan continues to demonstrate strong business momentum with a full project pipeline and win rates sustained at a high level.
Mid-term, the overall objective is to grow organically between 4.5 percent and 5.5 percent per annum, assuming a market growth of 2 to 3 percent, and to continue on the path of market share gains. By delivering on the company's five pillar growth strategy—developing markets, Health and Wellness, market share gains with targeted customers and segments, research and sustainable sourcing—Givaudan expects to outgrow the underlying market and to continue to achieve its industry-leading EBITDA margin while improving its annual free cash flow to between 14 percent and 16 percent of sales by 2015.
Givaudan confirms its intention to return above 60 percent of the company's free cash flow to shareholders once the targeted leverage ratio, defined as net debt, divided by net debt plus equity, of 25 percent has been reached. For this ratio calculation, the Company has decided to exclude from equity any impact arising from the proposed changes of IAS 19 - Employee Benefits (revised) going forward.
Fragrance Division sales were CHF 1,533 million for the first nine months of 2012, an increase of 7.6 percent in local currencies and 9.9 percent in Swiss francs. This increase was mainly as a result of the double digit performance in Consumer Products.
Total sales of Fragrance compounds (Fine Fragrances and Consumer Products combined) increased by 9.7 percent in local currencies and by 12.1 percent in Swiss francs to CHF 1,348 million from CHF 1,202 million in 2011.
Fine Fragrance sales increased by 0.6 percent in local currencies, driven by strong growth in the developing markets, particularly Latin America. The gains in these markets more than offset the decline in North America and Europe. In these two markets, the new wins could not offset the strong erosion. New product launches were at a slightly lower level in the discrete quarter when compared to the exceptionally high level of new launches in the prior year, particularly in North America.
The Consumer Products business grew by 12.5 percent in local currencies in the first nine months against a strong base in 2011. This solid nine months performance was driven by developing markets, coupled with some increases in mature markets. Latin America and Asia Pacific posted double digit growth. The growth was spread across all customer and category groups. In Europe, Africa and the Middle East, the increase was driven by sales in the Fabric Care segment. North America delivered strong growth, particularly with International customers and in the Air Care and Personal Care categories. On a product basis, Consumer Product sales increased in all segments. Personal care, fabric care and oral care all had strong growth year to date.
Sales of Fragrance Ingredients declined 5.7 percent in local currencies in the first nine months of the year, following a lower market demand, mainly in the regions of Europe and North America. For the first nine months of the year growth has been driven by Specialities, which showed strong growth in all regions, particularly in Asia Pacific and Latin America, offset by lower demand for commodities.
Flavour Division sales were CHF 1,698 million during the first nine months of 2012, an increase of 4.8 percent in local currencies and 7.7 percent in Swiss francs over the same period in 2011. The increased sales were as a result of new wins in key segments and volume growth of the existing business.
Sales expansion in the developing markets continued while the mature markets continued their good performance during the first nine months against very strong comparables. All segments continued to expand globally with strong performances in Beverage, Sweet Goods and Snacks.
Sales in Asia Pacific increased by 4.6 percent in local currencies as a result of new wins and growth of the existing business. The developing markets achieved high single digit growth driven by particularly strong performances in Indonesia and Thailand. The mature markets continued their good performance against last year's strong double digit comparables. New wins across major markets fuelled the growth in Beverages, Savoury and Snacks.
Sales in Europe, Africa and the Middle East grew by 3.5 percent in local currencies for both the developing and mature markets. This was driven by high single digit growth in the developing markets of Africa and Eastern Europe coupled with moderate growth in the mature markets of Western Europe led by Great Britain. All business segments increased with the exception of Savoury. Growth of the existing business in Beverage and new wins in Snacks led the overall expansion in the region.
North America sales increased by 3.4 percent in local currencies. All segments grew with the exception of Dairy. High single digit gains in the Beverage segment and double digit growth in Snacks were driven by new wins and existing business evolution.
Sales in Latin America increased by 12.9 percent in local currencies with strong performances in all of the major markets. Argentina and Mexico saw double digit growth and Brazil also experienced strong growth. Growth in Latin America was a result of new wins and volume gains in existing business, especially in the Beverage, Dairy and Savoury segments.