Givaudan Sales Inch Up Despite Slowdown in Emerging Markets

ZURICH--Givaudan SA (GIVN.VX) posted better-than-expected first-quarter sales even as the flavor-and-fragrance maker faced tougher conditions in emerging markets, including China and Latin America.

Geneva-based Givaudan, the world's largest maker of flavors, said revenue rose 0.4% to 1.09 billion Swiss francs ($1.12 billion) in the three months ended March from 1.087 billion francs a year earlier. The results topped analyst expectations of 1.07 billion francs.

The company, which supplies flavorings to food makers such as Nestle SA (NESN.VX), Mondelez International Inc. (MDLZ) and Unilever NV (UN), doesn't report full earnings for the first quarter. Givaudan also makes ingredients for well-known perfumes such as Yves Saint Laurent's "Opium" and Christian Dior's "J'adore."

The slowdown in emerging markets weighed on Givaudan's performance. The company has focused on emerging markets for the past several years and they generate about 45% of its revenue. But food manufacturers and perfume makers, which use Givaudan's ingredients, have reported tough environments in many of these countries, reducing demand.

For the first three months of the year, Givaudan's sales of flavors to Asia-Pacific fell 3.1% in local currencies, excluding acquisitions, down from 11% growth a year earlier. Latin American flavor sales gained 7.6%, down from 15% revenue growth in the first three months of 2014.

In the fragrances division, which makes up around half of its sales, growth in Europe failed to offset sluggish demand from Latin America.

Givaudan kept its guidance of 4.5% to 5.5% sales growth for the year, excluding currency fluctuations and acquisitions, and said it still expects to gain market share.

Write to John Revill at [e-mail]

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