Givaudan: Solid Underlying Performance Clouded by Negative Currency Effects

Wide-moat Givaudan reported third-quarter 2023 organic sales growth of 4%, ahead of company-compiled consensus of 2.5%. Both reporting segments had a relatively equal contribution to the outperformance. The fragrance and beauty segment delivered organic sales growth of 6.5% (compared with 4.9% consensus) and the taste and wellbeing segment delivered 1.7% organic sales growth (compared with 0.1% consensus). Still, despite the solid like-for-like growth for the group a negative currency effect of around 8% in the quarter meant that sales, reported in Swiss francs, were lower year on year. All in all, we are maintaining our CHF 2,900 fair value estimate and we expect full-year organic sales growth of 3.1%, but a decline of around 3% for sales in Swiss francs. We believe shares are fairly valued at current levels.