LONDON — Givaudan said Friday first-quarter sales slid 7.3 percent to 976.1 million Swiss francs, or $852.7 million at average exchange for the three months ended March 31. Sales in local currency terms dipped 2.6 percent.
The Swiss flavors and fragrances firm said destocking throughout the supply chain drove the downturn.
Stripping out the impact of the sale of its St. Louis-based flavors business last year, sales were down 2.1 percent in local currency terms.
Givaudan’s fragrance division took a hit in the quarter with sales slumping 10.4 percent to 438.4 million Swiss francs, or $383 million. They fell 5.4 percent in local currencies.
“Fine fragrance sales declined strongly in Europe and North America, due to destocking of high inventory levels throughout the supply chain as a result of very weak retail sales in the 2008 year-end holiday season,” the company said. “In addition, consumer demand remained weak during the first quarter of 2009.
“Lack of consumer confidence and reduced travel activity are likely to continue impacting fine fragrance sales throughout 2009.”
Givaudan’s consumer products business unit reported flat sales year-on-year, while sales of fragrance ingredients “declined strongly.” The company’s flavor division saw sales decline by 4.6 percent in Swiss francs in the quarter to 537.7 million, or $469.7 million. In local currencies sales were down 0.3 percent.
“Despite the weak economy, the underlying market should remain resilient for the remainder of the year, with the exception of fine fragrances, and, to a lesser extent, some discretionary products in consumer products and flavors,” the company said. “For the full year 2009, Givaudan is confident to outgrow the underlying market based on its leading position in the fragrance and flavor industry. Overall, it remains difficult to reliably forecast the market growth for 2009.”