Givaudan Q1 Sales Up as Raises Prices

Fragrance and flavour maker Givaudan is managing to push through price increases to offset higher raw material costs, the Swiss group said as it posted a 4.7% rise in first-quarter sales, driven by strong demand in China and India.

Sales at Givaudan, which makes flavours for foods and drinks as well as perfumes for groups such as Dior and Calvin Klein, rose to 1.06 billion Swiss francs ($1.15 billion), just topping the average estimate of 1.05 billion francs in a Reuters poll.

"Givaudan started the year with a continued strong business momentum with a full project pipeline," the group said in a statement on Wednesday, adding it was managing to push through price increases to help offset higher costs for ingredients such as citrus oil and vanilla.

Raw material prices were starting to level out after spiking 15% last year, a Givaudan a spokesman said.

Last month German rival Symrise, which expects to increase its sales by between 2 and 4% this year, said it was aiming to further increase its prices as the costs of raw materials were still rising.

Givaudan also confirmed its mid-term organic sales growth target of between 4.5 and 5.5% per year, assuming a market growth of 2-3%.

Givaudan's first-quarter sales rose 8.4% in local currencies.

"The reported sales figures are really strong and above expectations. Especially the fact that the Givaudan was also able to show a reasonable volume growth is positive," Kepler Capital Markets analyst Arne Rautenberg said in a note.

Rautenberg also said he was optimistic Givaudan improved its profitability thanks not only due to price increases but also due to a favourable product mix.

U.S. peer International Flavors & Fragrances is due to publish its first-quarter results on May 8.