Givaudan reports personal care growth but free cash flow dips

Givaudan’s share price dropped 6% in morning trade after the company reported Q2 organic sales growth of 5.2%, falling short of analyst expectations of 6.4%. The Swiss ingredient supplier cites currency pressures, particularly the strength of the Swiss franc, as a key challenge.

Givaudan reports its Fragrance & Beauty division delivered CHF 1.95 billion (US$2.63 billion) in sales in H1 2025, up 8.6% like-for-like. Despite headwinds from tariffs and investment-related cash flow delays, the company remains optimistic, reaffirming its five-year growth targets.

The Fragrance & Beauty division includes Fine Fragrance, Consumer Products, Fragrance Ingredients, and Active Beauty.

Givaudan reports strong performances in its Fine Fragrance business, which jumped to 18% like-for-like, compared to 14.9% growth in H1 2024. Sales of Fragrance Ingredients and Active Beauty also grew 5.7% like-for-like.

“Sales remained strong with good growth across all business segments, geographies and customer groups, against very strong prior year comparables,” CEO Gilles Andrier says.

Stable earnings despite pressures

Givaudan’s comparable EBITDA for Fragrance & Beauty rose to CHF 540 million (US$725 million), with a margin of 27.6%, down from 28.1% in 2024.

The company attributes this slight decrease to ongoing cost inflation and global tariffs, which were partially offset through customer price increases. 

“The continued strength of the Swiss franc is a headwind for us,” chief financial officer at Givaudan, Stewart Harris, told Reuters.

“With higher input costs in 2025, including tariffs, the company is implementing price increases in collaboration with its customers to fully compensate,” the company notes in its report.

Despite the industry-wide supply chain challenges, Givaudan reports maintaining a gross profit margin of 44% group-wide, almost unchanged from 44.1% last year.

Additionally, group-wide net income for the first half is CHF 592 million (US$794 million), up slightly from CHF 588 million (US$741.6 million) in 2024.

The continued strength of the Swiss franc is a headwind for Givaudan.However, free cash flow slipped into the negative territory, reaching CHF -16 million (US$-21.4 million), compared to a positive CHF 197 million (US$248.4 million) in 2024. The company attributes this to timing effects related to tax payments and capital investments, which are expected to balance out later in the year.

Operating cash flow also dropped to CHF 248 million (US$332.3 million), down from CHF 427 million (US$538.6 million) in the same period last year.

Personal care outlook

Givaudan says it remains committed to growth in the personal care sector, continuing to invest in active ingredients, sensory innovation, and fine fragrance partnerships.

The company reaffirms its five-year target of 4–5% organic sales growth and says it is “highly likely to exceed” the upper end of the goal, having averaged 7.2% like-for-like growth from 2021 to 2024.

Givaudan’s long-term strategy includes a new 2030 roadmap, set to be unveiled next month. It will focus on sustainable sourcing, diversity and inclusion, and creating products that contribute to healthier lives.

Earlier this month, Givaudan strengthened its North American presence through a partnership with LBB Specialties, granting the distributor exclusive rights to supply Givaudan Active Beauty ingredients across Canada.

The company announced plans last month to acquire a majority stake in Brazilian fragrance house Vollmens Fragrances to expand its presence in Latin America and better serve regional personal care markets.