The Swiss company reported that group sales totalled CHF 4,087m (€2,764m) in 2008, which was a decrease of 1.1 per cent in Swiss francs compared to the previous year (the equivalent of an increase of 6.7 per cent in local currencies).
But despite adverse economic conditions it said that for its flavour division, sales in the mature markets of Europe and North America increased due to “a strong inflow of new wins”.
It reported that sales grew across all segments, but it was “led by double-digit growth in snacks and high single-digit growth in the savoury and dairy”.
Gilles Andrier, Givaudan CEO, said at an investors’ conference: “Snacks is a growth segment in the US so you have more projects there.
“We also see a lot of projects related to health and wellness. This is one of the key strategic pillars for Givaudan in terms of growth initiatives for flavours.
“We are also making very good progress on those different ingredients which deal with salt, sweeteners and so forth and our clients have been quite responsive in that.”
However, he indicated that beverages were not as strong as consumers consider some beverages “discretionary spending” in the current economic climate, particularly functional and sports drinks.
Flavour division sales were CHF 2,189m, (€1,480m) representing a growth of 5.8 per cent in local currencies and a decline of two per cent in Swiss francs.
EBITDA for flavours increased 6.4 per cent to CHF 417m (€282m) in 2008 from CHF 392m (€265m) in 2007. Operating income increased 10.8 per cent to CHF 226m (€152m) from CHF 204m (€138m).
Activities in 2008 included investment in its TasteSolutions for salt reduction, sweetness enhancement and bitterness masking continued, with the introduction of new flavour systems.
Givaudan said this resulted in double-digit sales growth in the strategic area of Health and Wellness applications.
Overall Givaudan reported EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) increased 12.5 per cent to CHF 765m (€517m) in 2008, from CHF 680m (€460m) in 2007. Operating income increased 17.7 per cent to CHF 379m (€256m) from CHF 322m (€218m) last year.
Givaudan’s gross profit margin fell from 47.1 per cent to 45.6 percent which it said was a result of “exceptional increases in raw material, energy and transportation costs”.
However, Gilles Andrier said: “Integration savings, a tight cost control and overall efficiency improvements largely compensated for the decline of our gross profit margin.”
He highlighted how the company’s portfolio rationalisation strategy in 2008 allowed it to focus on its core businesses, close factories and improve profitability.
On the flavour side, this included the closures of production sites in the USA, Japan, Mexico, Australia and Brazil.
Meanwhile Givaudan’s acquisition of Quest in March 2007 for CHF 2.8bn (€1.9bn) continued to have an impact on its balance sheet.
However, Andreir said that it was able to integrate Quest in a rapid way, increasing Givaudan’s size substantially and its strategic fit, “making us confident that we can outgrow the market”.