Swiss fragrance and flavour maker Givaudan reported third quarter sales a touch below market expectations, weighed down by currency exchange effects and weaker volumes in its health care, savoury and dairy segments.
Group sales fell 4.3% to CHF 1.73 billion (€1.8 billion) in the July to September period, below analysts' average forecast of 1.76 billion francs in a poll compiled by the company. This included a CHF 148 million (€154.7 million) hit from converting foreign currencies into Swiss francs.
On a like-for-like basis, which excludes effects from currency exchange and recent acquisitions, sales rose 4% to CHF 1.88 billion in the quarter. This beat analysts' estimate for 2.5% growth.
The Geneva-based group, which continued to pass steep input cost increases on to customers, has been suffering from weaker volumes driven by inventory reductions and lower demand especially in North America.
North America was the only region to record a like-for-like decline in the first nine months of the year.
'With sustained higher input costs in 2023, the company continues to implement price increases in collaboration with its customers to fully compensate for the increases in input costs,' the group said in a statement.
'Focus On Innovation'
Chief executive officer, Gilles Andrier stated, "We continue to have a strong focus on innovation to support the unique differentiation that we bring to support the growth of our customers, whilst at the same time delivering on our performance improvement plan objectives.”
In the first nine months of 2023, Givaudan generated sales worth CHF 5.3 billion (€5.5 billion), registering an increase of 2.9% on a like-for-like (LFL) basis and a decline of 3.5% in Swiss francs.
Givaudan's taste and wellbeing unit, which sells food and beverage extracts and makes up 53% of its revenue, saw its sales drop 7.3% in Swiss francs in the nine month period. They were flat on a like-for-like basis.
Sales in the fragrance business, its second biggest unit, recorded an increase of 6.4% on a like-for-like basis and grew 0.9% in Swiss francs over the same period.
News by Reuters, additional reporting by ESM.