Spun off from Roche 26 years ago, the Vernier-based group boasts a well-balanced portfolio, both in terms of business segments - with revenue split evenly between flavors and beauty - and geographical footprint.
Thanks to the lasting strength of the Swiss franc, the inflationary pressures and rising input costs that are penalizing its peers - IFF, DSM-Firmenich, and to a lesser extent, Symrise - have so far miraculously spared Givaudan, which still has the highest margins and profitability in its industry.
The group has seen its cash profit distributable to shareholders - or free cash flow - double over the last decade, from CHF 0.6bn to CHF 1.3bn, even outpacing its revenue growth.
Out of the CHF 9bn generated over the full 10-year cycle, half was directed towards external growth. While the resulting value creation is difficult to estimate with precision, it remains positive and is likely at, or near, double-digit territory in terms of returns.
Alongside this, CHF 6bn was returned to shareholders, predominantly through dividends. As the sum of these two figures significantly exceeds total profits, the difference is reflected in an increase in debt; however, this in no way undermines Givaudan's extremely robust capitalization.
Its valuation is currently trading at 10-year lows, weighed on - by Swiss standards, meaning without dramatic volatility - likely by ongoing antitrust investigations. Givaudan and its peers form an oligopoly currently in the crosshairs of European and American regulators, which suspect price-fixing agreements amongst members.
Transformed by the excellent Gilles Andrier, who led the group for twenty years before handing over to Christian Stammkoetter and assuming the role of board chairman, Givaudan remains the best-in-class player in an ultra-defensive sector.
