Company and Industry Highlights * **Company**: Givaudan SA (OTCPK:GVDBF) * **Industry**: Fragrance, Taste & Wellbeing * **Date**: January 24, 2025 * **Key Highlights**: * **Strong Performance**: Givaudan reported a strong performance in the first half of 2024, driven by high sales growth across all markets, segments, and customer groups. * **Sales Growth**: Sales reached CHF3.7 billion, a growth of 12.5% on a like-for-like basis and 5.7% in Swiss francs. * **EBITDA and Profitability**: Comparable EBITDA increased to CHF929 million, lifting the EBITDA margin to 24.8% from 22.7% last year. Net income increased by almost 31% to CHF588 million. * **Market Segments**: Fragrance & Beauty Group grew at 15.3%, while Taste & Wellbeing division grew at 9.9%. High-growth markets represented 46% of total sales. * **Innovation**: Givaudan focused on innovation, launching new products and addressing consumer needs in areas like biotechnology, sustainability, and digitalization. * **2025 Strategy**: Givaudan outlined its 2025 strategy, focusing on expanding the portfolio, expanding customer reach, and focusing market strategies. * **Outlook**: Givaudan expects continued growth in 2024, with a focus on operational excellence and navigating a volatile geopolitical environment. Key Points * **Management Changes**: Tom Hallam, CFO, retired and handed over the position to Stewart Harris, effective August 1, 2024. * **Sales Performance**: * **Fragrance & Beauty**: Sales grew 15.3% on a like-for-like basis, driven by volume growth and new wins. * **Taste & Wellbeing**: Sales grew 9.9% on a like-for-like basis, driven by volume growth and new wins. * **Market Performance**: * **High-growth Markets**: Represented 46% of total sales and grew at a strong double-digit rate. * **Latin America**: Showed the highest like-for-like growth with 31.5%, driven by FX pricing in Argentina. * **Asia Pacific**: Grew at 11.4%, with all key markets contributing to the growth. * **EMEA**: Grew 11.4%, with strong performance in mature and high-growth markets. * **North America**: Posted positive like-for-like growth in the first half of the year. * **Innovation**: * **Scentaurus Vanilla**: A long-lasting, high-performing non-colouring vanilla note for liquid detergents. * **Nympheal**: A game-changing ingredient for white floral fragrances. * **Alternative Dairy Ingredients**: Enabling customers to use natural proprietary ingredients for alternative dairy products. * **Digitalization**: Launching a new digital platform for co-creative innovative wellness experiences. * **Financial Performance**: * **Group Sales**: Over CHF3.7 billion, an increase of 5.7% in Swiss francs. * **EBITDA**: Increased to CHF906 million compared to CHF763 million in 2023. * **Net Income**: Increased to CHF588 million, a growth of 30.9% compared to 2023. * **Free Cash Flow**: Increased to CHF197 million, a growth of CHF93 million compared to 2023. * **2025 Strategy**: * **Expand Portfolio**: Acquired B kolor in Italy to expand in the beauty makeup space. * **Expand Customer Reach**: Focus on local and regional clients. * **Focus Market Strategies**: Focus on growth opportunities in high-growth markets and emerging markets. * **Outlook**: * **Input Costs**: Expected to increase slightly. * **Operational Excellence**: Focus on operational excellence and footprint optimization. * **Geopolitical Environment**: Navigate a volatile geopolitical environment. Additional Information * **Conference Call Participants**: Alex Sloane (Barclays), Celine Pannuti (JPMorgan), Charles Eden (UBS), Daniel Buerki (ZKB), Arben Hasanaj (Vontobel), Georgina Fraser (Goldman Sachs), Nicola Tang (BNP Paribas) * **Q&A Session**: Covered various topics including margins, volumes, pet food, packaged food, Taste & Wellbeing margin, FX impact, raw material procurement strategy, balance sheet, capital allocation priorities, and beverage and consumer products within fragrance.

24 January 2025 2024 Full year results Outstanding financial performance I Record free cash flow I 2025 Guidance on track Performance highlights Gilles Andrier Chief Executive Officer 2024 full year results Outstanding financial performance * Like-for-like: excludes the impact of currency, acquisitions and disposals 2024 Full year results IR presentation 3 • Sales of CHF 7.4 billion, an increase of 12.3% on a like-for-like* basis and an increase of 7.2% in Swiss francs • Strong performance across all market ...

Givaudan SA Overview - Givaudan SA is a stock that has attracted investor attention due to its recent performance [1] - The company is part of the Basic Materials group, which includes 234 companies and ranks 13 in the Zacks Sector Rank [2] - Givaudan SA currently holds a Zacks Rank of 2 (Buy), indicating a favorable earnings outlook [3] Givaudan SA Performance - The Zacks Consensus Estimate for Givaudan SA's full-year earnings has increased by 1.9% over the past quarter [4] - Year-to-date, Givaudan SA has gained 9.9%, outperforming the Basic Materials sector, which has returned -3.7% on average [4] - Givaudan SA is part of the Chemical - Specialty industry, which has lost 16.7% year-to-date, further highlighting the company's strong performance [6] Carpenter Technology Overview - Carpenter Technology is another Basic Materials stock that has outperformed the sector, with a year-to-date return of 155.7% [5] - The consensus estimate for Carpenter Technology's current year EPS has increased by 11.3% over the past three months [5] - The stock currently holds a Zacks Rank of 1 (Strong Buy) [5] Carpenter Technology Industry Context - Carpenter Technology is part of the Steel - Specialty industry, which includes 5 stocks and ranks 166 in the Zacks Industry Rank [7] - The Steel - Specialty industry has seen a year-to-date increase of 53.3% [7] Investment Consideration - Both Givaudan SA and Carpenter Technology are highlighted as stocks to watch in the Basic Materials sector due to their strong performance [7]

Company Performance - Givaudan SA (GVDNY) has shown a year-to-date return of 8.1%, significantly outperforming the Basic Materials sector average return of 0.1% [4] - The Zacks Consensus Estimate for GVDNY's full-year earnings has increased by 2.3% over the past three months, indicating improving analyst sentiment [4] - GVDNY currently holds a Zacks Rank of 2 (Buy), reflecting a positive earnings outlook [3] Industry Comparison - Givaudan SA operates in the Chemical - Specialty industry, which has seen an average year-to-date loss of 12.6% among its 33 companies [6] - Intrepid Potash (IPI) belongs to the Fertilizers industry, which has experienced a 15.5% decline year-to-date among its 8 stocks [6] - The Basic Materials sector, comprising 235 stocks, currently holds a Zacks Sector Rank of 9 [2] Peer Performance - Intrepid Potash (IPI) has returned 12.4% year-to-date, outperforming both the Basic Materials sector and its industry [5] - IPI's consensus EPS estimate for the current year has increased by 50% over the past three months [5] - Both GVDNY and IPI currently hold a Zacks Rank of 2 (Buy), indicating strong potential for continued performance [3][5]

Zacks Rating Upgrade for Givaudan - Givaudan SA has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a powerful force impacting stock prices [1] - The Zacks rating system relies solely on a company's changing earnings picture, tracking EPS estimates for the current and following years through the Zacks Consensus Estimate [1] - The upgrade reflects positivity about Givaudan's earnings outlook, which could translate into buying pressure and an increase in its stock price [1] Earnings Estimate Revisions and Stock Price Movement - Changes in a company's future earnings potential, as reflected in earnings estimate revisions, are strongly correlated with near-term stock price movements [2] - Institutional investors use earnings and earnings estimates to calculate the fair value of a company's shares, leading to bulk investment actions that influence stock prices [2] - For Givaudan, rising earnings estimates and the consequent rating upgrade indicate an improvement in the company's underlying business, which should push the stock higher [2] Zacks Rank System and Earnings Estimate Revisions - The Zacks Rank stock-rating system uses four factors related to earnings estimates to classify stocks into five groups, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [3] - The system effectively harnesses the power of earnings estimate revisions, which have a strong correlation with near-term stock movements [3] Givaudan's Earnings Estimate Revisions - For the fiscal year ending December 2024, Givaudan is expected to earn $2.88 per share, a 33.3% increase from the year-ago reported number [4] - Over the past three months, the Zacks Consensus Estimate for Givaudan has increased by 1.4% [4] Zacks Rank System's Superiority - The Zacks rating system maintains an equal proportion of 'buy' and 'sell' ratings for its universe of over 4000 stocks, with only the top 5% receiving a 'Strong Buy' rating and the next 15% receiving a 'Buy' rating [5] - Givaudan's upgrade to a Zacks Rank 2 positions it in the top 20% of Zacks-covered stocks in terms of estimate revisions, indicating potential for market-beating returns in the near term [5]

Investors interested in Basic Materials stocks should always be looking to find the best-performing companies in the group. Is Givaudan SA (GVDNY) one of those stocks right now? A quick glance at the company's year-to-date performance in comparison to the rest of the Basic Materials sector should help us answer this question.Givaudan SA is one of 235 individual stocks in the Basic Materials sector. Collectively, these companies sit at #12 in the Zacks Sector Rank. The Zacks Sector Rank considers 16 differen ...

Givaudan SA Overview - Givaudan SA is one of 238 individual stocks in the Basic Materials sector, which ranks 11 out of 16 sector groups in the Zacks Sector Rank [2] - The company currently holds a Zacks Rank of 1 (Strong Buy), indicating a strong earnings outlook and potential for market outperformance over the next one to three months [3] - Givaudan SA has returned 13.7% year-to-date, significantly outperforming the Basic Materials sector average loss of 4.5% [4] Earnings and Analyst Sentiment - The Zacks Consensus Estimate for Givaudan SA's full-year earnings has increased by 14.3% over the past quarter, reflecting improving analyst sentiment [4] - The company's strong performance is attributed to its positive earnings outlook and favorable earnings estimate revisions [3] Industry Performance - Givaudan SA operates in the Chemical - Specialty industry, which includes 33 companies and ranks 72 in the Zacks Industry Rank [6] - The Chemical - Specialty industry has lost 19.2% year-to-date, making Givaudan SA's 13.7% return particularly notable [6] Comparison with Avino Silver - Avino Silver, another Basic Materials stock, has returned 98.5% year-to-date, significantly outperforming both Givaudan SA and the sector average [5] - Avino Silver's consensus EPS estimate for the current year has increased by 25% over the past three months, and it also holds a Zacks Rank of 1 (Strong Buy) [5] - Avino Silver belongs to the Mining - Silver industry, which ranks 11 and has gained 31.6% year-to-date [6] Investment Consideration - Investors interested in Basic Materials stocks should monitor both Givaudan SA and Avino Silver due to their strong performance and positive earnings outlooks [7]

Financial Data and Key Metrics - Group sales for H1 2024 reached CHF 3.7 billion, a 12.5% like-for-like growth and 5.7% in Swiss francs [4] - Comparable EBITDA amounted to CHF 929 million, with an EBITDA margin of 24.8%, up from 22.7% in 2023 [4] - Net income increased by 30.9% to CHF 588 million, and free cash flow was CHF 197 million, representing 5.3% of sales [4][19] - Net debt to EBITDA improved to 2.9x from 3.7x in June 2023 [19][27] Business Line Performance - Fragrance & Beauty division grew 15.3% like-for-like, with sales of CHF 1.826 billion, driven by Fine Fragrance and Consumer Products [11] - Taste & Wellbeing division grew 9.9% like-for-like, with sales of CHF 1.8 billion, driven by strong performance in snacks, beverages, and dairy [12] - Fragrance Ingredients and Active Beauty sales increased 8% like-for-like, with strong demand for regional specialties [11] Market Performance - High-growth markets grew 20.5% like-for-like, representing 46% of total sales, with strong double-digit growth in China, Southeast Asia, and Latin America [6][9] - Mature markets grew 6% like-for-like, led by Europe and a recovery in North America [7] - Latin America showed the highest growth at 31.5% like-for-like, driven by FX pricing in Argentina [9] Strategy and Industry Competition - The company is focused on expanding its portfolio, customer reach, and market strategies, with recent acquisitions like B kolor in Italy [29][30] - Innovation remains a key driver, with new product launches in Fragrance & Beauty and Taste & Wellbeing, leveraging biotechnology and digitalization [13][14][15] - The company aims for 4-5% like-for-like sales growth and free cash flow above 12% over the 5-year strategic cycle [30] Management Commentary on Operating Environment and Outlook - Management highlighted strong volume growth across all markets and segments, driven by consumer demand and new product wins [3][4] - The company expects minor input cost increases but remains focused on operational excellence and footprint optimization [32] - The outlook for 2024 includes continued growth, with expected costs of CHF 50 million related to the performance improvement program [32] Other Important Information - CFO Tom Hallam will retire, with Stewart Harris taking over effective August 1, 2024 [2] - The company incurred CHF 23 million in costs related to footprint optimization and litigation in the fragrance industry [22] Q&A Session Summary Question: Margin Seasonality and Volume Growth [35] - Margins are typically stronger in H1 due to fewer invoicing days in December, with a historical 100 bps difference between H1 and full-year margins [36] - Fragrance & Beauty margins are strong due to operational leverage and portfolio churn, while Taste & Wellbeing margins are expected to improve over the next 18 months [37][61] - Volume growth is driven by underlying demand, with no significant restocking observed [40][43] Question: Pet Care and Packaged Food Market [49] - The company has potential interest in pet food innovation but no immediate acquisition plans [51] - Packaged food volumes are recovering, with a focus on health and wellness trends, though the market remains challenging [52][53] Question: Taste & Wellbeing Margin and FX Impact [56] - Taste & Wellbeing margins are weaker due to raw material inflation and lower operational leverage, but improvements are expected over the next 18 months [60][61] - FX pricing in Argentina contributed 2.9% to growth in H1, with expectations of 2-2.5% for the full year if the peso remains stable [63] Question: Nonoperating Income and Footprint Optimization [66] - Nonoperating income was CHF 30 million in H1, with expectations of CHF 45 million for the full year, driven by FX gains [67] - The company is optimizing its manufacturing footprint, with more announcements expected in the coming months [68] Question: North America Market and Cost Savings [70] - North America showed positive growth in Taste & Wellbeing, with a focus on retail channels and health-focused products [71][78] - The company expects to achieve a sweet spot of 22-24% EBITDA margin over the next 18 months [79] Question: Raw Material Procurement and Capital Allocation [80] - The company has a diversified raw material procurement strategy, with a focus on building alternative supply chains to mitigate geopolitical risks [81][82] - Capital allocation priorities include returning cash to shareholders, bolt-on acquisitions, and investments in local and regional clients [85][86] Question: Beverages and Consumer Products Growth [89] - Beverages showed double-digit growth, driven by Givaudan's strong positioning and health-focused innovations [91] - Consumer Products growth is supported by increased fragrance dosage levels and technological advancements in fabric care [92][94]

Earnings Estimate Revisions and Zacks Rank - Givaudan SA has been upgraded to a Zacks Rank 1 (Strong Buy), reflecting an upward trend in earnings estimates, which is a powerful force impacting stock prices [1][4] - The Zacks Consensus Estimate for Givaudan has increased by 5.3% over the past three months, indicating steady upward revisions by analysts [6] - The Zacks Rank system, which relies solely on earnings estimate revisions, has a proven track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [12] Givaudan's Earnings Outlook - Givaudan's upgrade to Zacks Rank 1 positions it in the top 5% of Zacks-covered stocks, suggesting potential for near-term stock price appreciation [8] - The company is expected to earn $2.59 per share for the fiscal year ending December 2024, representing a year-over-year change of 19.9% [13] - The positive earnings outlook, as reflected in the Zacks upgrade, could have a favorable impact on Givaudan's stock price [10] Institutional Influence and Stock Price Movement - Changes in earnings estimates are strongly correlated with near-term stock price movements, partly due to the influence of institutional investors who use these estimates to calculate fair value [11] - Institutional investors' bulk investment actions, driven by changes in earnings estimates, lead to price movements for the stock [11]

Givaudan SA (GVDNY) could be a solid choice for investors given its recent upgrade to a Zacks Rank #1 (Strong Buy). This rating change essentially reflects an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.The sole determinant of the Zacks rating is a company's changing earnings picture. The Zacks Consensus Estimate -- the consensus of EPS estimates from the sell-side analysts covering the stock -- for the current and following years is tracked by the system.The ...