PARIS — Givaudan posted full-year 2007 net profits of 94 million Swiss francs, or $78 million at average exchange, down 77 percent year-on-year. The downturn was due largely to the integration of Quest International, which was consolidated in March.
On a pro forma basis, assuming that Quest had been acquired in January 2006, net profit declined 1 percent to 236 million Swiss francs, or $197 million.
The Vernier, Switzerland-based firm's actual net profits were impacted by some 328 million Swiss francs, or $274 million, in integration costs, plus a one-off tax adjustment of 28 million Swiss francs, or $23 million, Givaudan said in a statement Tuesday.
Meanwhile, operating profit for the 12-month period declined 37 percent to 322 million Swiss francs, or $267 million. Givaudan's gross profit margin for last year declined to 47 percent from 49.4 percent in 2006.
Givaudan's full-year sales grew 42.2 percent in local currencies and 42 percent in Swiss francs, to 4.13 billion Swiss francs, or $3.45 billion. On a pro forma basis, sales grew 4 percent both in local currencies and Swiss francs.
Givaudan said the integration of Quest has been "fast and seamless," and has resulted in savings of 50 million Swiss francs, or $42 million, from combining operations.
Givaudan's fragrance division increased revenues 54.9 percent in local currencies, and 55.3 percent in Swiss francs, to 1.9 billion Swiss francs, or $1.58 billion. Pro forma, sales grew 3.9 percent in local currencies and 4.2 percent in Swiss francs.
Its consumer products business unit posted high-single-digit growth, with strong performances in all regions, and its specialty ingredients enjoyed strong sales, Givaudan stated.
Fine fragrance sales declined slightly against a strong 2006 comparable.
For the year, its flavors sales increased sales 33 percent in local currencies, and 32.4 percent in Swiss francs, to 2.23 billion Swiss francs, or $1.86 billion.
The company said it is confident it will grow its sales in line with the market this year, excluding ongoing product streamlining and the divestiture of its St. Louis facility in the U.S. It is also bullish it will achieve its savings target related to the acquisition of Quest of 200 million Swiss francs, or $182 million at current exchange, with total integration costs of 440 million Swiss francs, or $401 million.
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