Investing.com — Givaudan (SIX:GIVN) on Thursday reported its third quarter results, posting an organic sales growth of 14.1%, surpassing consensus estimates of 10.4%.
This was driven by strong volume growth of 12.1% and a pricing increase of 2%, primarily influenced by foreign exchange pricing.
This exceeded not only company-compiled consensus but also aligned closely with the expectations set by analysts at UBS, who anticipated a slightly higher OSG of 10.5%.
Total reported sales for the quarter reached CHF 1,907 million, reflecting a year-over-year increase of 10.2% and exceeding the consensus forecast of CHF 1,857 million.
This variance was supported by a larger-than-expected foreign exchange headwind of approximately 5%. Both of Givaudan’s divisions contributed positively to the OSG, with the Fragrance & Beauty division achieving a remarkable 16.0% OSG, well above the consensus estimate of 11.5%.
The Taste & Wellbeing division posted a 12.4% OSG, outpacing both the consensus estimate of 9.0% and UBS’s forecast of 8.4%.
In terms of sales figures, the F&B division generated CHF 956 million, exceeding expectations by roughly 4%. The T&W division also reported strong results, with sales of CHF 951 million, slightly above consensus estimates.
Additionally, the Consumer Products category within F&B, which accounts for about 67% of the division’s sales, reported an OSG of 13.1%.
The Fine Fragrance posted an OSG of 23.6%, surpassing UBS’s forecast of 15.9%. The Fragrance Ingredients and Active Beauty segments also performed well, reporting an OSG of 16.4%.
Regional performance was varied, with OSG driven predominantly by South Asia, the Middle East, and Africa, which saw a substantial increase to 29%.
This was a marked improvement from the 12.5% OSG reported in the first half of the year. In other regions, Latin America experienced OSG of about 21.5%, bolstered by FX pricing, while Europe and North America recorded OSG of 8% and 6%, respectively. Asia Pacific reported OSG of 12%.
Despite the strong results, Givaudan has not altered its guidance for the year.
The company continues to project an average like-for-like sales growth of 4-5% and expects free cash flowto sales to exceed 12% through 2025.
For 2024, company-compiled consensus estimates an OSG of 10.4% with revenues of CHF 7,328 million and a comparable EBITDA margin of 24.2%.
“We expect the shares to outperform today on the 3Q24 OSG and sales beat to raised buyside expectations,” said analysts at UBS.
