Strong fragrance market continues to boost Givaudan and Inter Parfums earnings

24 Jul 2024 --- The blossoming fragrance market continues to lift earnings for key companies. Givaudan sees earnings rise above expectations in the first half of the year, while Inter Parfums achieves record net sales in its latest quarter.

Givaudan reports a net profit of CHF588 million (US$660.9 million) for the first six months of this year. That is higher than the CHF449 million (US$505.9 million) reported in the same period last year and handily beat analysts’ expectations.

On a conference call with investors and analysts, CEO Gilles Andrier said the strong growth was driven by continued strength in Fine Fragrance and Consumer Products.

“Fine Fragrance continued to grow double digits against the strong comparable of last year with strong contributions from both the existing business and the high level of new wins. The strong like-for-like growth of 17.3% in Consumer Products is driven by volume growth, a strong level of new wins, and achievement across all customer segments and regions. The combined Fragrance Ingredients and Active Beauty sales increased 8% like-for-like with good demand for region specialties and continued solid good growth in Active Beauty.”

The Swiss manufacturer of flavors and fragrances emphasized how R&D activities helped provide its creative and development teams with novel technologies and differentiating ingredients. It pointed to the recent launch of Scentaurus Vanilla, “a long-lasting, high-performing non-colouring vanilla note, specifically designed for liquid detergents” and “game-changing ingredient, Nympheal” for white floral fragrances.

Stock dips on CFO departure
Despite the strong earnings report, shares traded lower after Givaudan announced that its CFO, Tom Hallam, would retire next week and be succeeded by Stewart Harris.

Givaudan achieved higher earnings than expected.Analysts at investment bank Stifel view Hallam’s departure as slightly negative and say Hallam significantly contributed to Givaudan’s operational performance and effectively communicated with capital markets. Stifel warns the departure could impact future company performance and maintains its hold rating on Givaudan shares.

Inter Parfums pushes ahead
French group Inter Parfums reports an 11% jump in second-quarter net sales to US$342 million. A further breakdown shows European-based net sales rising 14% to US$226 million, while net sales in the US climb 8% to US$120 million versus the same period last year.

The Paris-based company develops, manufactures and distributes prestige perfumes and cosmetics for brands including DKNY. Sales were up 14% in the first half of the year, while Jimmy Choo brand sales grew 31%. The company also announced a nine-year Van Cleef and Arpels license renewal and a “blockbuster” new Lacoste fragrance debuting next year.

Chairman and CEO Jean Madar noted, “The fragrance market remains buoyant, and our key brands continue to enjoy strong sell-outs and favorable receptions from both retailers and consumers.”

While Inter Parfums acknowledged continued challenges in Eastern European markets, it maintained its full-year forecast of US$1.45 billion in net sales.

By Anita Sharma