Givaudan's semi-annual report: Weak flavors, one subsidiary ceases operations

Givaudan, a leading global flavor and fragrance company, disclosed its performance report for the first half of fiscal year 2020 (January to June) on its official website on July 21. In Swiss francs, total sales increased to 3.221 billion Swiss francs, of which the sales of daily chemical flavors and fragrances increased by 7%, while the increase of edible flavors and fragrances was only 1.9%. Sales in the Asia-Pacific region were 816 million Swiss francs, a slight increase of 3.3%.

According to data, Givaudan’s total sales in the first half of 2020 reached 3.221 billion Swiss francs, an increase of 4.0% after excluding changes in sales factors such as mergers and acquisitions and exchange rates, and 4.1% in Swiss francs.

Earnings before interest, taxes, depreciation and amortization (EBITDA) was 734 million Swiss francs, a year-on-year increase of 11.3%. The EBITDA margin rose to 23.7% from 22.3% in the same period in 2019.

Net profit was 413 million Swiss francs, an increase of 8.8% from 380 million in the same period in 2019. The net profit margin reached 12.8%, higher than 12.3% in the same period last year. Accordingly, basic earnings per share rose from 41.24 Swiss francs to 44.81 Swiss francs.


1. The fragrance of daily chemicals is strong, but the fragrance of food is weak

Fragrance Division's sales amounted to 1.456 billion Swiss francs, an increase of 4.5% after excluding changes in sales factors such as mergers and acquisitions and exchange rates, and an increase of 7.0% in Swiss francs. Among them, the sales growth of the consumer goods (flavors and fragrances) business was very strong, offsetting the impact of high-end perfumes due to the new crown epidemic, thus driving the sales growth of the entire department.

Flavour Division (Flavour Division) sales of 1.765 billion Swiss francs, excluding changes in sales factors increased by 3.6%, in terms of Swiss francs only increased by 1.9%. Earnings before interest, taxes, depreciation and amortization increased from 390 million Swiss francs in the same period last year to 401 million, an increase of 2.8%. The profit margin was 22.7%, higher than the 22.5% in the same period in 2019.

2. 5 subsidiaries: one closed and the other rose

Comparing Figures 3 and 4, it is found that the sales of French Albert Vieille, which was first incorporated into Givaudan in January-March and January-June, did not change. Both of them contributed 4 million Swiss francs to fragrances and fragrances. Sales in the second quarter were zero, and it is suspected of being completely closed due to the new crown epidemic. In this regard, Givaudan did not give any explanation in the performance report.

In February of this year, Engel, which was incorporated into Givaudan, had sales of 96 million Swiss francs in one fell swoop (30 million for daily chemical flavors and fragrances, and 66 million for food flavors). Since the sales in the first quarter were 39 million, the sales in the second quarter were 57 million, a 46% increase from the previous quarter. However, this is because the company's sales in the first quarter are only included in the two-month performance from February to March. On average, Engle’s average monthly sales in the first quarter were 19.50 million Swiss francs, and in the second quarter were both 1900 Swiss francs. The overall performance was stable.

The sales of the remaining three companies are normal.

Golden Frog, a Vietnamese food flavour company that merged with Givaudan in September last year, had sales of 6 million Swiss francs, doubling the first quarter. It is speculated that it has not been significantly affected by the new crown epidemic.

In the same month, the German century-old fragrance company Drom, which was incorporated into the Givaudan family, also doubled its sales to 62 million Swiss francs.

The sales of Fragrance Oils in the first half of the year were 31 million Swiss francs, an increase of 15 million from the 16 million in the first quarter and failed to double. It can be seen that sales in the second quarter fell slightly from the previous quarter.