Combined sales of CHF 2.68 billion (€1.74bn) for the Swiss group's fragrance and flavours divisions represented a decline of 0.4 per cent in Swiss Francs, compared to CHF 2.71 in 2003. However, the company did point out that the underlying trend was up, with sales from local currencies increasing 4 per cent.
The fragrance division achieved sales of CHF 1.073 billion, a fall of 2.8 per cent on 2003's CHF 1.104 figure. In local currencies this represented a growth of 0.4 per cent.
Givaudan pointed out that sales of fragrance ingredients continued to be impacted by the phasing-out of commodity ingredients, a factor that is consistent with its strategy to focus on the production of high value-added fragrance molecules. Bearing this in mind the figures for the fragrance division look better - representing growth of 4.8 per cent in local currencies and 1.4 per cent in Swiss Francs.
Stronger underlying results for the fragrance division were achieved through what the company termed an 'outstanding' performance in fine fragrances as well as strong gains for the third consecutive year in consumer products.
"In a very competitive environment fine fragrances again grew at a double-digit rate and consumer products continued to show strong gains for the third consecutive year," the company's financial statement stated.
"Sales in Fragrance Ingredients declined as a result of discontinued commodity ingredients consistent with Givaudan's strategy to move to higher value fragrance molecules. Likewise speciality fragrance ingredients achieved double-digit growth."
Capital investments during 2004 for the fragrance division have included the conversion of the former sunscreen filter production capacities in Vernier, Switzerland into multi-purpose units for the production of specialities, as well as increases in capacity for the compounding facilities in both Switzerland and China.
The flavour division reported sales of CHF 1.607 billion, slightly down from CHF 1.611 billion in 2003, but in local currency terms this figure was up 3.5 per cent.
In local currency terms the company reported that all regions and all business segments recorded positive sales growth.
Better news came for the company in the form of its net profit, which was up 20 per cent on the previous year to CHF 350 million.
The improved profitability was bought about by a programme introduced at the beginning of 2004 to improve operating margins in all areas of the business.
"This programme was executed throughout the year and has delivered the expected results with a positive impact on margins and will deliver additional savings in 2005," a company statement said.