Givaudan: Organic Sales Growth Beats Consensus by 100 Basis Points

Wide-moat Givaudan GIVN reported sales of CHF 1.8 billion for its first-quarter trading update, resulting in 3.6% organic sales growth, ahead of the company-compiled consensus of 2.6%. Fine fragrance volume gains and consistently high levels of new business were the primary drivers of the sales growth. Management is still committed to its 2021-25 guidance of 4%-5% average organic sales growth and average free cash flow to be greater than 12% of sales. Our full-year expectations for 2023 are broadly in line, and we don’t expect to make a material change to our CHF 2,800 fair value estimate. At current levels, the shares are trading in 2-star territory.

Fragrance and beauty organic growth was 6.8%, driven by 20.9% organic growth in fine fragrances on a sustained high level of new business leading to strong volume growth. Consumer product organic growth was back to positive at 3% after a negative quarter last year (down 2.3%). Active beauty increased 5.1%. Taste and well-being organic growth was 1%, driven by double-digit growth in Latin America and South Asia/Middle East/Africa. In contrast, organic growth declined by 10.7% in North America and 3.8% in Asia-Pacific.