09 Oct 2018
Givaudan: Q318 revenue stronger than expected
Revenue comprised of an 8.6% increase in Fragrance sales (6.8% LFL, 3.5% acquisitions, -1.7% FX) to CHF655m and a 10.9% increase in Flavour sales (4.8% LFL, 7.5% acquisitions, -1.3% FX) to CHF744m. On a divisional basis, over the nine-month period within the Fragrance division Fine Fragrances revenue grew 11.9% on a LFL basis while Consumer Products grew 5.2%.
Fragrance Ingredients and Active Beauty revenue grew by 6.9% over the nine month period. Within the Flavour Division, Asia Pacific recorded 5.7% LFL revenue growth and Europe, Africa and Middle East reported 4.3% LFL revenue growth. North America grew 2.1% and Latin America reported strong growth of 13.5%. Management has reiterated the company’s long term ambition to build on its three strategic pillars of “growing with our customers”, “delivering with excellence” and “partnering for shared success”. The aim over the period is to outpace the market with an average 4% to 5% sales growth and a free cash flow of 12-17% of sales over the five-year period to 2020.
Italian Deputy PM slams Europe as equities slump
After receiving a letter from EU Commissioners Moscovici and Dombrovskis in which they pointed out that the proposed Italian budget targets posed a “significant deviation” from the previously proposed fiscal path, Italian Deputy PM, Matteo Salvini went on the offensive. Sharing a podium with the right leaning, Marine Le Pen for added effect, he called the EU Commission and Jean Claude Juncker the “enemies of Europe” as they both swore to storm the Brussels “bunker” in the next EU elections. Italian equity markets slumped on the news with the banking sector worst affected. Several Italian bank share prices were halted as they slid over 5%, the FTSE MIB dropped nearly 2.5% on the day as the index closed below 20,000 for the first time since the spring of 2017. The single currency is also feeling the pressure as it continues its relentless slide lower, the benchmark EUR/USD hit 7 week lows yesterday to close well under the pivotal $1.15 level.
IMF world growth
Overnight the IMF released its latest forecasts in its World Economic Outlook, where it downgraded the outlook for global growth. The IMF now forecasts 2018 global growth at 3.7%, down from its previous estimate of 3.9%. Similarly 2019 is also downgraded 3.7% from 3.9%. Forecasts for advanced market growth was practically unchanged at 2.4% 2018 and 2.1% 2019 (2.4% and 2.2% previously), however emerging market growth was downgraded to 4.7% and 4.7% from the previous estimates of 4.9% and 5.1%. The IMF cited headwinds from trade tensions and the recent turmoil in emerging markets as reasons behind its downgraded outlook. To note our own forecasts for global growth are 3.8% (2018) and 3.7% 2019.
BRC Figures released overnight
The British Retail Consortium reported that retail sales had grown at a softer pace in September. Growth in total sales values softened to 0.7% year-on-year from the 1.3% recorded in August, while on a like-for-like basis they edged back 0.2% to reverse out last month’s 0.2% expansion. Aside from April’s slump - which was distorted by timing of Easter - this was the weakest outturn for both metrics since October 2017. Separately figures from Barclaycard showed credit card spending growth had also eased to 3.9% in September from 4.5% in August, the weakest since April.