Givaudan, the renowned fragrance and flavour manufacturer based in Switzerland, has recently announced disappointing sales figures for the third quarter of this year. The company attributes this decline to currency exchange effects and lower volumes in its health care, savoury, and dairy divisions. Group sales dropped by 4.3% to 1.73 billion Swiss francs, falling short of the analysts’ average forecast of 1.76 billion francs. Currency conversion resulted in a loss of 148 million francs. However, excluding currency and acquisition effects, sales actually increased by 4% to 1.88 billion francs, surpassing the anticipated 2.5% growth.

One of the key factors contributing to Givaudan’s weaker sales is the reduction in inventory and lower demand, especially in North America. Unlike other regions, North America experienced a decline in like-for-like sales throughout the first nine months of the year. To counteract higher input costs, the company has implemented price increases in collaboration with its customers. Notably, Givaudan’s taste and wellbeing unit, which constitutes 53% of its total revenue and specializes in food and beverage extracts, witnessed a 7.3% decrease in Swiss francs over the nine-month period. However, sales remained steady on a like-for-like basis. On the other hand, the fragrance business, the company’s second largest unit, saw a 6.4% increase in like-for-like sales and a 0.9% growth in Swiss francs during the same timeframe.

Despite these challenges, Givaudan remains committed to passing on higher costs to its customers and maintaining strong collaboration to mitigate the impact of rising input costs. By focusing strategically on fragrance and flavour solutions, the company has managed to drive growth in these areas. Additionally, Givaudan continues to invest in innovation and develop new products to meet the ever-changing demands of consumers, solidifying its position as a global industry leader. Throughout the rest of the year, Givaudan will closely monitor market conditions and adapt its strategies accordingly to navigate any further obstacles.

Useful links relevant to the article:
1. Givaudan official website
2. Givaudan stock information on Bloomberg