Givaudan Reports Decline in Profit, Eyes Acqusitions

Givaudan AG, Geneva, Swizterland, reported an unexpected decline in full-year net profit, but said it will raise its dividend and added it’s optimistic about the current year. The Swiss fragrances and flavors company reported a 6.6% fall in 2002 net profit to $191 million from 2001’s $204 million. The result was below market forecasts of around $222 million.

Givaudan said the decrease was due to costs tied to impairment charges and the integration of acquired companies, including Nestle’s SA Flavor unit, FIS, which it bought in May 2002. Sales increased to $1.99 billion from $1.79 billion. Operating profit rose to $302 million from $295 million. Looking ahead, Givaudan said it expects a “good overall result” for 2003.

Among the company’s various units, sales in the flavor division grew 6.7% pro forma in local currencies. Sales from the company’s fragrance consumer products unit were the key driver to the 5.2% local currency sales growth of the fragrance division, Givaudan said. Sales in the company’s fine fragrances and fragrance ingredient units–which cater to the perfume and cosmetics industry–were still impacted by current market conditions, Givaudan said.

The company also said that it will continue to eye acquisitions. “We will continue to eye small acquisitions but I don’t exclude big acquisitions if they would fit with our strategy,” chief executive Juerg Wittmer said. He said Givaudan’s sales in 2003 will grow more than the 2% to 3% growth of the market.