Demand for soap, snacks boost Givaudan's first quarter

[ZURICH] Swiss fragrance and flavour maker Givaudan said strong demand for products such as soap and snacks, notably in emerging markets in Latin America and Asia Pacific, pushed its like-for-like sales up by 7.7 per cent in the first quarter.

During the pandemic, Givaudan has been benefiting from demand for household items including soap and detergent, as well as snacks for which it makes ingredients. On the other hand, its business with foods for out-of-home consumption and perfumes took a hit last year.

"We don't give specific growth guidance for this year, but we remain optimistic for 2021 after the strong start," Chief Executive Gilles Andrier told an investor webcast on Tuesday.

He said some uncertainties remained, notably on the pace of vaccinations against Covid-19.

Givaudan's like-for-like sales rose 7.7 per cent in the first quarter. On a reported basis, they increased 3.4 per cent to 1.67 billion Swiss francs (S$2.43 billion).

Sales at the fragrance and beauty business rose 9.9 per cent, helped by a recovery in its perfume and active beauty business, while its taste and wellbeing unit was up by 5.8 per cent, Givaudan said in a statement.

Jefferies analysts called the set of results "a blowout first quarter", while Vontobel's Jean-Philippe Bertschy said the company offered an attractive growth profile and strong cash returns.

Shares in the company, flat so far this year, were up 2.8 per cent by 0824 GMT.

Mr Andrier said the company had seen strong demand across the parts of our business which are less impacted by the Covid-19 pandemic and improving conditions in the parts of its portfolio which had been more hit.

Sales linked to out-of-home consumption were still down, but less than last year "as restrictions in relation to out of home food and beverage consumption started to be lifted in certain markets," Givaudan said.

For the five-year period to 2025, Givaudan confirmed its target for like-for-like organic sales growth of 4-5 per cent on average per year.

Givaudan competes with Germany's Symrise which reports first-quarter sales on April 28.

REUTERS

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