By John Revill
ZURICH--Givaudan SA (GIVN.VX) on Friday reported an 11% increase
in first-half net profit as cost-cutting and a change to its
pension plans helped the world's largest flavors and fragrance
maker offset the stronger Swiss franc and flat demand for
perfumes.
Geneva-based Givaudan said net profit for the six months to June
30 rose to 339 million Swiss francs ($354 million) from 305 million
francs a year earlier. The figure beat analyst expectations of 294
million francs.
Revenue for the period fell to 2.18 billion francs from 2.19
billion francs, matching the 2.18 billion francs expected by
analysts.
Givaudan, which supplies flavors to food companies such as
Nestle SA (NESN.VX), Mondelez International Inc. (MDLZ) and
Unilever NV (UL), said its profitability had been "distorted" by
the impact of the currency movements following the appreciation of
the Swiss franc.
The franc has surged roughly 13% in value against the euro this
year since the Swiss central bank scrapped its cap on the Alpine
country's currency, reducing the number of francs Swiss companies
receive from their foreign sales. The company has responded by
cutting internal costs, while it also gained 20 million francs from
changing its pension scheme.
During the six months Givaudan said sales from its fragrance
unit were flat when currency effects were removed, but fell 1.1% in
Swiss francs. The flavors division increased 0.4%, helped by growth
in Asia and Latin America.
Givaudan kept its guidance of 4.5% to 5.5% sales growth for the
year, excluding currency fluctuations and acquisitions, and said it
still expects to gain market share.
-Write to John Revill at john.revill@wsj.com
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