In particular, the company’s fine fragrance unit, which had declined 5.5 percent in the first quarter, recorded growth of 2.5 percent in 2013 due to new wins and volume growth in Latin America.
The consumer products division, which produces items such as shampoos and detergents, increased like-for-like sales by 7.9 percent. Developing market sales, which are now said to account for 45 percent of the company’s total, grew 9.4 percent during the first half of 2013.
Givaudan controls approximately 25 percent of the global fragrance/flavor market share, with several branches and its main flavor headquarters being located in the US.
Fragrance sales boost
The company pointed to Brazil as a particularly strong area for fragrance sales growth, with overall fine fragrance sales increases in the region described as “double digit.” Consumer products also reported strong Latin American growth, driven largely by international customers.
North American and European sales growth were also good, with double digit increases reported in the second quarter making up for lower growth in the first quarter.
Givaudan’s overall fragrance sales increased by 5.5 percent, to CHF 1,047 million. The fragrance division’s EBITDA margin also increased to 24.1 percent, up from 20.6 percent in 2012.
Company earnings increase
The company’s earnings before tax jumped to 22.9 percent, compared to 20.6 percent in 2012.
Profits also moved up to 36 percent for a total of 271 million francs, thanks to decreased financing costs and tax rates.
Share prices have also jumped an average of 41.33 percent this year.
Medium term plans
Givaudan has stated that its mid-term objective is to grow its business by between 4.5 percent and 5.5 percent per anum, assuming that underlying market growth remains at 2-3 percent.
The firm has stated that its overall growth was driven by an increase in income levels in developing countries, leading to more widespread adoption of consumer products such as cosmetics, detergents and ready-to-eat meals.
Latin cosmetics market
According to Euromonitor International the overall Latin American cosmetics market is booming, with premium cosmetics increasing in value from USD $1.8bn to USD $3.7bn since 2007, whilst mass-market cosmetics have gone from USD $33.5bn to USD $60.6bn.
During the same time period colour cosmetics also reported increased sales, moving from USD $3.6bn to USD $7.1bn.