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."The company is well positioned to grow again above the market beginning in 2009 and to reach pre-acquisition margin levels by 2010," Givaudan said.
— Ellen Groves
L'Oréal Pledges Bonus, Raises
PARIS — L'Oréal has promised each of its 12,000 employees in France a special bonus of 250 euros, or $367 at current exchange, in March, after it held annual salary negotiations with trade unions Tuesday.
The French beauty giant also announced that in 2008, employees who earn less than 50,000 euros, or $73,310, a year, will be guaranteed a raise at least level with inflation.
The measures follow a strike Monday, which was supported by about 10 percent of L'Oréal's French workforce.
Five of France's trade union organizations had called for the strike to press for a return to general salary increases, rather than raises determined on a case-by-case basis. The unions want a 9 percent wage increase to match the rising cost of living over the last five years, said Jean-François D'André, a trade union delegate for L'Oréal SA. D'André claimed some salaries have remained flat for the last three years and were increased by less than 1 percent in the two years prior to that.
L'Oréal said wages increased an average of 4.4 percent last year and by 3.8 percent in 2006. The firm said overall wages have risen an average of 20.7 percent since 2003, or twice the rate of inflation.
Last year, the lowest-paid employees with a year's experience at the firm earned 18,000 euros, or $24,673, which was augmented by participation in profit-sharing schemes, according to L'Oréal. In 2007, the average worker's salary was 25,600 euros, or $35,090, a year, plus a share of profits, which represents twice France's minimum wage, L'Oréal said.
Gleeson to Retire at Walgreen
NEW YORK — Walgreen Co.'s senior vice president and chief strategy officer John W. Gleeson will retire Feb. 29 after 45 years with the drugstore chain, the firm said Tuesday, adding that Robert G. Zimmerman, vice president of corporate development, will lead the company's strategy group. Gleeson, who had served as divisional vice president of marketing systems and services and vice president of corporate strategy and as treasurer, was named to his current post last year. He joined Walgreens as a stock clerk in 1962. "He conceptualized the freestanding store concept, which has been pivotal to our growth since the early Nineties," stated chairman and chief executive officer Jeffrey A. Rein.
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@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
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