Firmenich reports full-year solid results, fueled by “record increase” in fine fragrances

08 Aug 2022 --- Firmenich is reporting total revenue of CHF 4,723 million (US$4,933 million), up by 11.1% compared to the same period in the previous year, despite the challenging global economy. This is according to the company’s full-year results for the period that ended on June 30, 2022.

The growth was mainly fueled by the Perfumery and Ingredients sector. Most geographical locations had an increase in revenue, with the company’s key regions experiencing momentum, including Europe (18.9%), India (13.1%), China (9.4%) and North America (5.1%).

“Perfumery and Ingredients revenue increased by 11.3%. This was driven by a record increase in Fine Fragrance and Ingredients. At the same time, Consumer Fragrances delivered low single-digit growth, outperforming competitors in the context of industry-wide softness,” Gilbert Ghostine, CEO at Firmenich, tells PersonalCareInsights.

“Perfumery and Ingredients adjusted EBITDA reached CHF588 million (US$617 million), up 7% year-over-year.”

Supply chain issues and inflation
Firmenich also maintained exceptional on time in full-service levels while keeping customer supply in a problematic global raw material and supply chain environment.

Firmenich’s Perfumery and Ingredients revenue increased by 11.3%, driven by an increase in Fine Fragrance.“Firmenich delivered record revenue growth across the business, despite a challenging global environment with accelerating inflation on raw materials, transportation and energy costs as well as global supply chain disruption,” adds Ghostine.

The company benefited from continuing investment in expanding markets and customized services, such as clean and responsible fragrances, e-commerce and digital channels.

“We are seeing the success of our strategy of continued investment in our business, focusing on segments with high profitable growth potential, sharpening our commercial focus and accelerating our digital transformation.”

The company adds that it experienced significant raw material, energy and transportation cost inflation, which intensified in the year’s second half, along with additional COVID-19 waves affecting different regions.

Firmenich took proactive measures to reduce the adverse effects of these difficulties, such as cost control and pricing developed in collaboration with our clients. Gross profit increased by 5% on a reported basis to CHF 1,847 million (US$1,938 million).

Consumer fragrance
Perfumery & Ingredients revenue increase was driven by the growth and market share gains in Fine Fragrance (32.5%) and solid customer demand in Ingredients.

Gilbert Ghostine, CEO at Firmenich.Consumer Fragrances grew by low single-digits against a backdrop of industry-wide softness.

Against this backdrop, Firmenich has outperformed its key competitor in the past four consecutive quarters in Consumer Fragrances due to our customer intimacy, innovation and customer service, Ghostine explains.

“We expect the current supply chain challenges in Consumer Fragrances to continue into next year. We will continue to use all levers at our disposal to continue outperforming our competitors, prioritizing customer service while protecting profitability and cash.”

As more consumers demand natural, sustainable and renewable products, Firmenich unveiled Muguissimo. The latter is a biodegradable lily-of-the-valley ingredient created through green chemistry, which was introduced last year as part of Firmenich’s initiative to develop sustainable new ingredients.

Moves with DSM
In May, Firmenich signed a business combination agreement with DSM to form the “premier partner for innovation” in nutrition, beauty and well-being: DSM-Firmenich.

The merger will combine DSM’s Health and Nutrition portfolio and well-known scientific know-how with Firmenich’s distinctive Perfumery and Taste businesses, research platforms and related co-creation capabilities.

The DSM-Firmenich merger will speed up innovation for the market and create new chances for consumer growth.

By Nicole Kerr

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