Givaudan Profit Beats Estimates on Latin American Demand

Givaudan SA, the world’s largest maker of flavoring, posted a 36 percent increase in first-half profit driven by demand from Latin American consumers. The shares rose as much as 5.3 percent, the most since February.

Net income rose to 271 million francs ($289 million), the Geneva-based company said in a statement today. The average prediction by 10 analysts in a Bloomberg survey was for 229 million francs. Sales gained 5.7 percent to 2.2 billion francs, meeting analysts’ estimates.

“It’s a very, very solid set of figures, especially on the top line for the first half, we just have to be careful for the second half,” Chief Executive Officer Gilles Andrier said in a phone interview, adding that customers are growing “more cautious” about developing markets.

Argentina and Brazil led sales in flavorings and Latin American consumers also helped a rebound in revenue from perfumes, Givaudan said in the statement. Sales at Givaudan’s Health and Wellness division grew more than 10 percent.

Givaudan is targeting sales growth at about double the market rate even as recession in Europe weighs on demand for snacks and perfumes. Andrier has presided over a share price rise of 35 percent this year compared with a 16 percent gain in the Swiss market index. Shares of Holzminden, Germany-based competitor Symrise AG have risen 19 percent.

The company confirmed a mid-term objective for an increase in organic sales of between 4.5 percent and 5.5 percent a year, assuming market growth of 2 percent to 3 percent.

(Adds comment from CEO in third paragraph.)
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