Givaudan's “An Odyssey of Flavours and Fragrances”

PARIS – Givaudan’s net profits for 2016 advanced 3.1 percent year-on-year, bolstered by its fine fragrance activity.

The Vernier, Switzerland-based company said Tuesday that income in the 12-month period ended Dec. 31 reached 644 million Swiss francs, or $653.8 million.

Givaudan’s operating profit increased 10.2 percent to 875 million Swiss francs, or $888.4 million. And its earnings before interest, tax, depreciation and amortization (EBITDA) were up 5.2 percent to 1.13 billion Swiss francs, or $1.41 billion.

The company’s sales of 4.66 billion Swiss francs, or $4.73 billion, rose 6.1 percent.

The fragrance and flavors maker said the annual results were in line with its guidance for 2020. As reported, that includes outpacing the market with 4 percent to 5 percent revenue growth and a free cash flow of 12 percent to 17 percent of sales on average over the next five years.

However, the results fell below some analysts’ expectations, and Givaudan stock closed down 4 percent to 1,779 Swiss francs, or $1,795, on the SIX Swiss Exchange on Tuesday.

In 2016, Givaudan’s fragrance division posted sales of 2.23 billion Swiss francs, or $2.26 billion, up 6.4 percent. Among its highlights: Total sales of fragrance compounds advanced 6 percent to 1.93 billion Swiss francs, or $1.96 billion, while fine fragrance sales grew 7.2 percent on a like-for-like basis, backed by strong new business and low erosion, according to the company.

Sales of Givaudan’s consumer products activity were up 6.1 percent in comparable terms, bolstered largely by double-digit growth with local and regional customers. Revenues from fragrance ingredients and active beauty advanced 1 percent on a comparable basis.

The flavors division’s sales came in at 2.43 billion Swiss francs, or $2.47 billion, representing a 5.8 percent gain in reported terms and 3 percent rise on a like-for-like basis.

Dollar figures were converted at average exchange for the period to which they refer, unless otherwise indicated.

Givaudan, at its annual general meeting on March 23, will propose a cash dividend of 56 Swiss francs, or $56.27 at current exchange, per share, up 3.7 percent versus last year. Also at that time, all of the company’s board members will be up for re-election except for chairman Jürg Witmer. The board will propose to elect the current vice chairman, Calvin Grieder, as its new chairman and to appoint Werner Bauer as the new vice chairman.