Givaudan says chairman, CFO to retire as sales growth slows in the third-quarter

Givaudan's chairman and finance chief will stand down next year, the Swiss fragrance and flavor maker said on Monday while reporting slower like-for-like sales growth in the third quarter of 2016.

Geneva-based Givaudan, which makes fragrances for perfumes and toothpaste and flavors for food and beverages, posted third-quarter sales of 1.184 billion Swiss francs ($1.21 billion).

Like-for-like sales growth from July to September was 3.1 percent, half the 6.2 percent growth rate seen in the first half and short of a forecast for 3.4 percent in a Reuters poll of seven analysts.

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Analysts had expected a slowdown in sales growth due to a strong year-ago performance and an erosion of forex-driven price increases which had boosted its Latin America business.

"However, the reversal of the U.S. dollar pricing proved to be more acute than we had anticipated," Kepler Cheuvreux analyst Aymeric Poulain, who has a "hold" rating on the stock, wrote in a note to investors.

"This is likely to remain a top-line growth drag over the next few quarters and could cap earnings estimates for now, while putting pressure on the higher end of consensus."
Givaudan shares fell 1.7 percent in early trading, lagging a 0.5 percent fall in the Swiss blue-chip index.

Givaudan confirmed its mid-term targets of 4-5 percent sales growth and a free cash flow of 12-17 percent of sales.

Third-quarter sales at its fragrances division, which creates scents for Dior and Bottega Veneta, rose 3.4 percent to 567 million francs, while sales at the flavors division, whose products are used by food groups like Nestle and Danone, were up 2.9 percent at 617 million francs.

Givaudan has been seeking to compensate for a weaker trading environment in western Europe and North America by winning new contracts from food companies in faster-growing regions like South America and Asia.

Givaudan said Chairman Juerg Witmer will retire in March 2017 with Calvin Grieder proposed for election as his replacement.

Chief Financial Officer Matthias Waehren will also retire at the end of 2016 and Tom Hallam, head of group controlling and business development, will take over as CFO from Jan. 1, Givaudan said.