Givaudan sales hit by emerging market currency slide

Reuters

* Q3 sales 1.09 bln Sfr vs 1.14 in Reuters poll

* Reiterated mid-term target sales growth of up to 5.5 pct

* Does not see slowdown in emerging markets - spokesman

ZURICH, Oct 10 (Reuters) - Sales at Swiss fragrance andflavour maker Givaudan fell unexpectedly in the thirdquarter hit by a weaker U.S. dollar and sliding currencies insome key emerging markets.

The company, which makes fragrances for Dior andPrada perfumes, said sales fell 1.1 percent to 1.09billion Swiss francs ($1.2 billion) compared to 1.1 billion ayear ago.

This fell short of the average analyst forecast for a 3.3percent rise to 1.14 billion in a Reuters poll.

A spokesman for the company said the fall was attributed toa weaker U.S. dollar as well as the depreciation of someemerging market currencies, such as the Indonesian rupiah and the Brazilian real

The rupiah is down almost 20 percent against the dollar sofar this year, while Brazilian real has shed 8 percent of itsvalue.

Givaudan and its peers have benefited from the growingprosperity of emerging markets consumers, including in Africaand Latin America, who are able to afford ready-to-eat meals,cosmetics and detergents that use their scents and flavours.

But earlier this month Unilever - acustomer of Givaudan - warned that a slowdown in emergingmarkets had accelerated and would drag on sales growth in thethird quarter.

The spokesman said Givaudan, which will soon make more thanhalf of its sales in emerging markets where the fast-growingmiddle classes are driving demand, had not noticed any slowdown.

The company said volume growth in all markets was consistentwith levels seen in the first six months of the year, whenstrong demand in Europe, North America and emerging marketspushed first-half sales up 5.7 percent on a like-for-like basis.

The Geneva-based firm confirmed its mid-term guidance ofbetween 4.5 and 5.5 percent underlying annual sales growth,against average growth of about 2 to 3 percent for the market asa whole.

Givaudan, which competes with Germany's Symrise,American International Flavors & Fragrances, alsoconfirmed its goal to return over 60 percent of its free cashflow to shareholders once it has met its target for a leverageratio of 25 percent.

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