Swiss fragrance and flavour maker Givaudan has reported quarterly like-for-like sales slightly above expectations, with price rises helping to offset lower sales volumes in North America.
Its first-quarter revenue rose 3.6% to CHF 1.84 billion (€1.9 billion) on a like-for-like basis, beating the CHF 1.80 billion (€1.8 billion) expected by analysts in a poll compiled by the company.
The sales growth was below Givaudan's mid-term target of between 4% and 5% on average, which it also reiterated.
On a reported basis, sales fell 0.4% to CHF 1.77 billion (€1.8 billion).
Challenges
The group, which has successfully passed steep input cost increases on to customers, has been suffering from weaker volumes driven by destocking and lower demand, particularly in its North American business.
Givaudan reported a 9.5% drop in like-for-like sales in North America, the only region to record a decline in the quarter.
"Overall, we believe the results mark a bottoming in volume deterioration seen since Q422 led by de-stocking, meanwhile pricing actions continue to be implemented to mitigate input cost inflation," J.P. Morgan analyst Celine Pannuti said in a note, adding that there is scope for a better volume set-up in the second half of 2023.
Recently, Givaudan reported better-than-expected earnings in a year characterised by high input costs and supply chain disruptions.
Annual Group sales increased by 5.3% on a like-for-like basis to CHF 7.1 billion (€7.06 billion) in 2022, but grew only 2.9% on the same basis in the final quarter.
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