Givaudan boosts profits in 2023 thanks to price increases

On Thursday, Swiss group Givaudan, a specialist in fragrances and flavourings, reported a better-than-expected net profit for 2023. Profit was up by 4.3%, to CHF893 million (€940 million), thanks to the price increases introduced by the group.

Givaudan’s revenue fell by 2.8% to CHF6.9 billion, in line with forecasts, but it increased by 4.1% before foreign exchange adjustments and acquisitions, given the Swiss franc’s appreciation.

“The company introduced the price increases needed to fully offset rising raw material costs,” said Givaudan in a press release.

Analysts interviewed by Swiss agency AWP instead expected on average a net income of CHF867 million, and a revenue of €6.9 billion.

Givaudan’s sales were again driven by fragrances and ingredients for beauty products, which improved by 7.6% in local currency compared to the previous year.

Fine perfumery sales increased by 14% according to Givaudan, which designs fragrances for big names such as Christian Dior and Prada. Sales for so-called functional fragrances, which include scents for detergents and personal care products, instead increased by 7.1%, while those for cosmetics ingredients grew by 1%.

The flavourings division posted a more modest growth of 1.1%, against a backdrop of contrasting regional results. Sales increased by 16.8% in Latin America, by 13.2% in South Asia, Africa and the Middle East, and by 3% in Europe. Conversely, they slumped by 2.6% in Asia-Pacific and by 7.5% in North America.

Like its competitors, Givaudan has had to weather a prolonged period of inventory clearance, some of its clients having previously increased their stocks to ensure they had enough ingredients to deal with supply chain disruption in the wake of the pandemic. Many of these clients were then more cautious in placing new orders, in the face of uncertainty about global growth.

In Q4 2023 however, Givaudan’s sales grew by 7.9% before foreign exchange adjustments and acquisitions.

The group never provides forecasts for the current year, but has confirmed its medium-term objectives, and is still aiming for sales growth between 4% and 5% until 2025.

Givaudan expects to pay a dividend of CHF68 per share for 2023, up 1.5% over 2022.