The Swiss fragrance and flavouring manufacturer sees its profit fall. Givaudan has seen its profits fall by 6.6% compared to the same period last year. The company issued a statement in which it pointed directly to weak demand, especially in North America, as the main reason for the decline.
The company's EBITDA in the taste and wellness unit, which accounts for 53% of Givaudan's revenues, fell by 16.3% in the first half of the year. However, its second key business line, the fragrances and beauty unit, posted an EBITDA increase of 5.8%. Sales in fragrances declined by 0.9%, with a decrease in Asia Pacific and North America.
The Swiss company reported in the same document that although sales rose by 2.4%, the figure fell short of analysts' forecasts, which put the company's sales growth at one point above. This could truncate the company's medium- and long-term target of average annual organic sales growth of between 4% and 5%.
This decline in profit is mainly due to lower sales in the North American region, which is the only region to show a decline. Another reason Givaudan pointed out for not meeting forecasts was high inflation worldwide, which caused customers, especially those in the chemical sector, to reduce their purchases.
Givaudan ended 2022 with a turnover of more than €7.09 billion and a net profit of €853 million. The cosmetics and perfumery division was the strongest for the Swiss company, with more than 3.244 billion euros. Although its growth in the past financial year has not been cut short, it is true that at the end of the financial year its gross margin decreased by 4% compared to the end of 2021. The Swiss fragrances, aromas and flavours company is in the middle of its growth plan that started in 2021 and is set to end in 2025 with the objective of increasing its annual sales by up to 5%. Givaudan, in the longer term, specifically until 2030, aims to double the size of its business and reach carbon positivity by 2050.