22018 Half Year Report
Strong recovery inhigh growth markets

3

Our profile
Givaudan captures the essenceof the moment, bringing you
memorable fragrances andflavours to be enjoyedthroughout the day.
We are proud to be the industry leader, withapproximately 25% of market share of the fragrance
and flavour industry. To stay in front, we challenge
ourselves daily, inspire our partnerships across theglobe, and serve our customers with heart and soul.
Together with our customers in the food, beverage,
consumer goods and fragrance and cosmetics
industries, we create products that delight consumers
the world over. With a passion to understand consumer
preferences and a relentless drive to innovate, we are at
the forefront of creating scents and tastes that touch
consumers’ emotions.

Table of contents

03

Key figures

04

At a glance

05

Business performance

07

Flavour Division

08

Fragrance Division09

Half Year Financial Report3 - Key figures

Key figures
First half of 2018
- Sales of CHF 2,674 million, up 5.6% on a like-for-like basis and 7.7% in Swiss francs- Project pipeline and win rates sustained at a high level- Strategic focus areas and acquired businesses strongly contributing to growth- EBITDA of CHF 601 million in 2018
- EBITDA margin of 22.5%, with solid underlying business performance- Net income of CHF 371 million, down by 3.4% year-on-year- Free cash flow of 4.2% of sales, compared to 5.3% in 2017
- Givaudan Business Solutions delivering first benefits- Naturex acquisition progressing as planned
2018

2017

PercentagechangeGroup Sales

2,674

2,483

7.7%

Fragrance sales

1,223

1,137

7.5%

Flavour sales

1,451

1,346

7.8%

For the six months ended 30 June, in millions of Swiss francs, except for earnings per share data

Like-for-like sales growth

5.6%

2.3%

Gross profit

1,182

1,132

as % of sales

44.2%

45.6%

EBITDA a

601597

as % of sales

22.5%

24.0%

Operating income
as % of sales
Income attributable to equity holders of the parent
as % of sales
Operating cash flow
as % of sales

489

489

18.3%

19.7%

371

384

13.9%

15.5%

269

269

10.1%

10.8%

Free cash flow

113

132

as % of sales

4.2%

5.3%

Earnings per share − basic (CHF)

40.26

41.70

4.4%
0.7%

(3.4%)(14.4%)(3.5%)a)	EBITDA: Earnings Before Interest (and other financial income (expense), net), Tax, Depreciation and Amortisation. This corresponds to operating income before depreciation,amortisation and impairment of long-lived assets.

in millions of Swiss francs, except for employee data

30 June 31 December
2018
2017

Current assets

3,368

Non-current assets

4,688

2,854
4,455

Total assets

8,056

7,309

Current liabilities

2,132

1,525

Non-current liabilities

2,485

2,246

Equity

3,439

3,538

Total liabilities and equity

8,056

7,309

Number of employees

11,71011,170* LFL (Like-for-like) excludes the impact of currency, acquisitions and disposals.

4 - At a glance

At a glance
Key indicators
CHF

2.7billion

Half year Group sales

Group sales

in millions of Swiss francs

22.5%

2018 1,451

1,223

2,674

2017 1,346

1,137

2,483

EBITDA margin

2016 1,202

1,132

2,334

5.6%

2015 1,161

1,023

2,184

2014 1,157

1,034

2,191

Organic sales growth

CHF
CHF

Flavours

371 million

Fragrance

Sales evolution by market

Net Income

in millions of Swiss francs

113 million

Free cash flow

4.2%

January to June 2018

2018

2017

Change %in LFL*

Mature markets

1,531

1,415

4.0%

High growth markets

1,143

1,068

7.8%

* LFL (Like-for-like) excludes the impact of currency, acquisitions and disposals.

Free cash flow
as % of sales

109

Locationsworldwide

46

Production
sites

60

Creation &application centres

11,710

Employees
as of 30 June 2018

5 - Business performance

Business performance
Strong recovery in high growth markets

Business performance

Givaudan Group sales for the first six months of the year were
CHF 2,674 million, an increase of 5.6% on a like-for-like basis
and 7.7% in Swiss francs.
Fragrance Division sales were CHF 1,223 million, an increaseof 6.5% on a like-for-like basis and 7.5% in Swiss francs.
Flavour Division sales were CHF 1,451 million, an increase of
4.9% on a like-for-like basis and 7.8% in Swiss francs.
Givaudan continued the year with good business momentum
and with the project pipeline and win rates being sustained at
a high level. This good growth was achieved across all productsegments and geographies, with our key strategic focus areasof Naturals, Health and well-being, Active Beauty, Integrated
solutions and local and regional customers delivering strong
growth, complemented by the recent acquisitions. The
Company continues to implement price increases incollaboration with its customers to compensate for theincreases in input costs.

Gross profit

The gross profit increased by 4.4% from CHF 1,132 million in 2017
to CHF 1,182 million in 2018. Despite continued productivity
gains and cost discipline, the gross margin declined to 44.2% in2018 compared to 45.6% in 2017, as a result of a lower grossmargin in the Fragrance Division.

Earnings Before Interest, Tax, Depreciation
and Amortisation (EBITDA)

The EBITDA increased by 0.7% to CHF 601 million from
CHF 597 million for the same period in 2017, whilst the EBITDA
margin declined to 22.5% in 2018 from 24.0% in 2017.
In 2018, the Group incurred costs of CHF 25 million linked tothe implementation of the Givaudan Business Solutions
programme, compared with CHF 24 million in 2017.

Operating income

The operating income was stable at CHF 489 million, the samelevel as in 2017. When measured in local currency terms, theoperating income decreased by 4.4%. The operating margindecreased to 18.3% in 2018 from 19.7% in 2017.

Financial income and expense

Financing costs were CHF 23 million in the first half of 2018,
versus CHF 21 million for the same period in 2017, with lower
interest rates partially compensating for the increase in net debt
in the Group. Other financial expense, net of income, was
CHF 35 million in 2018 versus CHF 17 million in 2017, largely as aresult of increased foreign currency losses in markets where
currencies could not be hedged, most notably in Argentina.
The interim period income tax expense as a percentage ofincome before taxes was 14% in 2018, compared with 15% for thesame period in 2017.

Net income

The net income for the first six months of 2018 was
CHF 371 million compared to CHF 384 million in 2017, a decreaseof 3.4%, resulting in a net profit margin of 13.9% versus 15.5% in
2017. Basic earnings per share were CHF 40.26 versus CHF 41.70
for the same period in 2017.

Cash flow

Givaudan delivered an operating cash flow of CHF 269 million
for the first six months of 2018, the same level as in 2017.
Working capital was relatively stable at 28.7% of sales
compared to 27.4% in 2017, temporarily impacted by increased
inventory levels.
Total net investments in property, plant and equipment were
CHF 122 million, compared to CHF 96 million incurred in 2017,
largely driven by the Group’s continued investments to support
growth in high growth markets and in the Zurich Innovation
Centre (ZIC) in Switzerland. Intangible asset additions were
CHF 21 million in 2018, compared to CHF 27 million in 2017, as
the Company continues to invest in its IT platform capabilities,
including those to support the introduction of the Givaudan
Business Solutions organisation. Total net investments in6 - Business performance

tangible and intangible assets were 5.3% of sales, compared to
5.0% in 2017.
Operating cash flow after net investments was CHF 126 million,
versus the CHF 146 million recorded in 2017. Free cash flow,
defined as operating cash flow after investments and interest
paid, was CHF 113 million in the first half of 2018, versus
CHF 132 million for the comparable period in 2017. As apercentage of sales, free cash flow in the first six months of2018 was 4.2%, compared to 5.3% in 2017.

Financial position

Group sales
in millions of Swiss francs
2018

2,674

2017

2,483

2016

2,334

2015

2,184

2014

2,191

Group EBITDA
in millions of Swiss francs

Givaudan’s financial position remained strong at the end ofJune 2018. Net debt at June 2018 was CHF 2,394 million, up from
CHF 1,074 million at December 2017, with the increase driven by
the Group’s acquisitions and investment programme, as well as
the payment of the annual dividend of CHF 534 million in thefirst quarter of 2018. The leverage ratio was 38% compared to
21% at the end of 2017.

2018

601

2017

597

2016

638

2015

566

2014

562

Givaudan Business Solutions

Group operating income
in millions of Swiss francs

As announced in July 2016, and in line with the 2020 strategy,
the Company is now in the implementation phase of Givaudan
Business Solutions (GBS), a global organisational unit providing
best-in-class internal processes and services.
GBS will increase internal efficiencies and leverage bestpractices from across the organisation, enabling the Group to
deliver with excellence.
The Company will make an investment of CHF 170 million until
mid-2020, in order to transition to the GBS organisational
structure and way of working. The investment will generateannual recurring savings of CHF 60 million once fully
implemented and will allow Givaudan to continue investing in
growth and innovation.
The progressive implementation of GBS is fully in line with theplan and will deliver the first financial benefits in 2018 of
CHF 20 million.

Naturex
As announced in March 2018 and in June 2018, Givaudan has
acquired 40.5% of the shares of Naturex, a French public
listed company, for EUR 135 per share and a total
consideration of EUR 523 million and has launched amandatory cash tender offer for all remaining outstanding
shares of Naturex at EUR 135 per share. Givaudan has secured
all necessary regulatory approvals and the Board of Directors
and Management of Naturex are fully supportive of thetransaction.
Naturex is an international leader in plant extraction and thedevelopment of natural ingredients and solutions for thefood, health and beauty sectors. Naturex is headquartered in
Avignon, France and reported sales of EUR 405 million in 2017,

Givaudan – 2018 Half Year Report

2018

489

2017

489

2016

500

2015

428

2014

422

operates from 16 production sites around the world andemploys 1,700 people.

2020 guidance:
Responsible growth. Shared success

The Company’s 2020 ambition is to create further value
through profitable, responsible growth. Building on the firsttwo years of this strategic cycle in 2016 and 2017, Givaudan’s2020 ambition is built on the three strategic pillars of‘Growing with our Customers’, ‘Delivering with Excellence’,and ‘Partnering for Shared Success’.
As part of the Company’s 2020 strategy, Givaudan also seeks
to create value through targeted acquisitions, which
complement existing capabilities in providing winningsolutions for its customers. Since 2014 Givaudan has
announced eight acquisitions, which are fully in line with thegrowth pillars within the Company’s 2020 strategy.
Ambitious financial targets are a fundamental part ofGivaudan’s strategy. We aim to outpace the market with
4-5% sales growth and a free cash flow of 12-17% of sales,both measured as an average over the five-year period of ourstrategy cycle. It is Givaudan’s intention to maintain its
current dividend practice as part of this ambition.

7 - Business performance: Flavour Division

Flavour Division
Flavour sales

Flavour Division sales were CHF 1,451 million, an increase of
4.9% on a like-for-like basis and 7.8% in Swiss francs. Including
Vika, acquired in September 2017, and Centroflora Nutra,acquired in May 2018, the growth was 7.4% in local currency.
From a segment perspective, Beverages, Dairy, Sweet Goods
and Snacks were the main contributors to the division’s
growth, with all segments showing positive gains. In our key
strategic focus areas under the 2020 strategy, sales increased
at double-digit levels in Health & well-being and in highsingle-digit in Naturals.
All regions delivered robust growth with a high level of new
wins in the key segments.
The EBITDA increased to CHF 351 million in 2018 from
CHF 321 million for the first six months of 2017, with continued
productivity gains and cost discipline contributing to theincrease. The EBITDA margin was 24.2% in 2018, up from 23.9%
in 2017.
The Operating Income increased to CHF 286 million in 2018from CHF 258 million for the same period in 2017. The
Operating Margin increased to 19.7% in 2018 from 19.2% in 2017.

Asia Pacific
Sales in Asia Pacific grew by 7.0% on a like-for-like basis, with
Singapore, India and China delivering double-digit growth,whilst Indonesia, Thailand and Malaysia delivered goodresults.
In the mature markets growth was driven by double-digit
growth in Singapore and positive performance from Japan.
Local and regional customers continued to grow strongly
across the regions, whilst from a segment perspective, allsegments contributed significantly to the growth led by
Beverages, Dairy, Savoury and Snacks.

Europe, Africa and Middle East
Sales increased 5.0% on a like-for-like basis across all
segments, with good growth in Central and Eastern Europe,
led by Russia, Ukraine and Greece. In Africa and the Middle
East, Egypt and South Africa contributed positively to theregional performance which was partially offset bychallenging market conditions across the Middle East. The
mature markets of Western Europe delivered good results,
with double-digit growth in UK & Ireland, Belgium,
Switzerland and Sweden.

Flavour Division sales
in millions of Swiss francs
2018

1,451

2017

1,346

2016

1,202

2015

1,161

2014

1,157

North America

On a like-for-like basis, sales in North America grew by 1.3%
in 2018, against a strong comparable of 8.9% in 2017. The
performance was a result of new wins and the growth ofexisting business in the area of Beverages and Dairy.

Latin America

Latin America Sales increased by 11.7%, with double-digit
sales growth in Argentina, Mexico, Colombia and Brazil,
where the economic situation is recovering. The strong
growth came from all segments, led by Beverages, Dairy,
Savoury and Snacks.

8 - Business performance: Fragrance Division

Fragrance Division
Fragrance sales

Fragrance Division sales were CHF 1,223 million, an increase of
6.5% on a like-for-like basis and an increase of 7.5% in Swiss francs
over 2017. The sales of the Fragrance Division include one monthof sales from the recently acquired Fragrance company,
Expressions Parfumées.
Total sales for Fragrance Compounds (Fine Fragrances andConsumer Products combined) increased by 6.2% on a like-for-likebasis. In Swiss francs, sales of compounds increased to
CHF 1,057 million from CHF 987 million in 2017.
Fine Fragrance sales strongly increased by 15.6% on a like-for-likebasis against a weaker comparable period in 2017, driven by
double-digit growth in all regions.
Consumer Products sales increased by 3.9% on a like-for-like basiswith balanced growth across all customer groups andgeographies.
Sales of Fragrance Ingredients and Active Beauty increased by
8.2% on a like-for-like basis with a double-digit growth in Active
Beauty and good sales momentum in Fragrance Ingredients.
The EBITDA of the Fragrance Division decreased to
CHF250 million in 2018 compared to CHF 276 million for the firstsix months of 2017. The reduction is largely due to the impact of asingle significant supply disruption of a major supplier of fragrance
ingredients, which has impacted the fragrance industry. In thefirst six months of 2018, the division incurred costs associatedwith the GBS project of CHF 25 million, compared to
CHF 24 million in 2017. The EBITDA margin decreased to 20.4% in2018 from 24.2% in 2017.
The operating income decreased by 11.9% to CHF 203 million in
2018, versus CHF 231 million for the same period in 2017. The
operating margin decreased to 16.6% in 2018 from 20.3% in 2017.

Fine Fragrances
Fine fragrance sales increased 15.6% on a like-for-like basis withdouble-digit growth recorded in all regions. These gains were
driven by sustained high level of new business wins across all
customer groups combined with volume growth on establishedbusiness at key accounts.
On a regional basis, Western Europe was driven by the strong
results of the new business wins. Performance in North America
was led by new launches as well as volume gains on establishedbusiness. In Latin America, the business sustained a positive
momentum with new wins and volume growth at a number ofaccounts driving solid results.

Fragrance Division sales
in millions of Swiss francs
2018

1,223

2017

1,137

2016

1,132

2015

1,023

2014

1,034

Givaudan’s perfumes continued to be recognised at major award
ceremonies in Latin America, the USA and Europe across bothmen’s and women’s categories, recognising the excellence of ourteams in crafting products that consumers love.

Consumer Products

Consumer Products sales increased by 3.9% on a like-for-likebasis. The growth was delivered in both high growth and mature
markets and across all customer groups.
On a regional basis, in Latin America the growth was balanced
across sub-regions, with local and regional customers recording
double-digit growth in Fabric Care and personal care, whilst
international customers reported strong performance in Home
Care. Asia delivered solid growth driven by all customer groups
and across all sub-regions, including double-digit growth in theSouth Asia sub-region and in the product segments of Oral Careand Home Care. In Europe, Africa and the Middle East, the sales
increase was driven by good performance across all sub-regions
and segments, including double-digit growth in Home Care. Sales
in North America decreased largely due to a sales decline withinternational customers in the fabric care segment, although
local and regional customers performed well and recorded
increases in all segments.
On a product segment basis, all segments contributed to thesales growth led by Home Care, Oral Care, Fabric Care andPersonal Care.

Fragrance Ingredients and Active Beauty

Sales of Fragrance Ingredients and Active Beauty increased by
8.2% on a like-for-like basis. Active Beauty sales delivered adouble-digit growth driven mainly by the strong performance of
local and regional customers. Fragrance Ingredients experienced
good growth in the first six months compared to 2017.

9 - Financial statements

2018 Half Year
Financial Report

Table of contents:

Givaudan – 2018 Half Year Report

10Interim condensed consolidated
financial statements

15

Notes to the interim condensed
consolidated financial statements

10 - Financial statements

Interim condensed consolidated financial
statements (unaudited)
Condensed consolidated income statement
For the six months ended 30 June

2018

2017

Sales

2,674

2,483

Cost of sales(1,492)(1,351)Gross profit

1,182

1,132

as % of sales

44.2%

45.6%

in millions of Swiss francs, except for earnings per share data

Note

Selling, marketing and distribution expenses

(342)

(320)

Research and product development expenses

(224)

(206)

Administration expenses

(95)

(81)

Share of (loss) profit of jointly controlled entities
Other operating income

7

Other operating expense

8

Operating income
as % of sales

6

–

9

10

(47)

(46)

489

489

18.3%

19.7%

Financing costs

9

(23)

(21)

Other financial income (expense), net

10

(35)

(17)

Income before taxes

431

451

Income taxes

(60)

(67)

Income for the period

371

384

Attribution
Income attributable to equity holders of the parent
as % of sales

371

384

13.9%

15.5%

Earnings per share − basic (CHF)

11

40.26

41.70

Earnings per share − diluted (CHF)

11

39.84

41.37

The notes on pages 15 to 22 form an integral part of these interim condensed financial statements (unaudited).

Givaudan – 2018 Half Year Report11 - Financial statements

Condensed consolidated statement of comprehensive income
For the six months ended 30 Junein millions of Swiss francs

2018

2017

Income for the period

371

384

Movement in fair value, net

44

Gains (losses) removed from equity and recognised in the consolidated income statement

32Movement on income tax

–

–

(31)

(69)

–

–

Items that may be reclassified to the income statement
Cash flow hedges

Exchange differences arising on translation of foreign operations
Change in currency translation
Movement on income tax
Items that will not be reclassified to the income statement
Defined benefit pension plans
Remeasurement gains (losses) of post employment benefit obligations

131

37

Movement on income tax

(29)

(8)

Other comprehensive income for the period

78

(34)

Total comprehensive income for the period

449

350

449

350

Attribution
Total comprehensive income attributable to equity holders of the parent
The notes on pages 15 to 22 form an integral part of these interim condensed financial statements (unaudited).

Givaudan – 2018 Half Year Report12 - Financial statements

Condensed consolidated statement of financial position
At period ended

Note 30 June 201831 December
2017

Cash and cash equivalents

231

534

Derivative financial instruments

12

16

in millions of Swiss francs

Financial assets at fair value through income statement

4, 5

612

2

Accounts receivable - trade

1,226

1,147

Inventories

1,075

902

Current tax assets

3532

Prepayments

61

123

Other current assets
Current assets
Derivative financial instruments

116

98

3,368

2,854

3

1

Property, plant and equipment

1,611

1,579

Intangible assets

2,694

2,482

Deferred tax assets

192

207

Post-employment benefit plan assets

24

21

Financial assets at fair value through income statement

64

63

Jointly controlled entities

39

33

Investment property

2

16

Other long-term assets

59

53

4,688

4,455

8,056

7,309

970

308

Non-current assets
Total assets
Short-term debt

12

Derivative financial instruments

8

12

Accounts payable - trade and others

640

662

Accrued payroll and payroll taxes

124

149

Current tax liabilities

55

49

Financial liability: own equity instruments

114

93

Provisions

47

57

Other current liabilities
Current liabilities
Derivative financial instruments
Long-term debt

12

174

195

2,132

1,525

42

60

1,655

1,300

Provisions

67

67

Post-employment benefit plan liabilities

521

644

Deferred tax liabilities

127

99

Other non-current liabilities

73

76

2,485

2,246

4,617

3,771

Non-current liabilities
Total liabilities
Share capital

13

92

92

Retained earnings and reserves

13

5,519

5,682

Own equity instruments

14

(171)

(157)

Other components of equity(2,001)(2,079)Equity attributable to equity holders of the parent

3,439

3,538

Total equity

3,439

3,538

Total liabilities and equity

8,056

7,309

The notes on pages 15 to 22 form an integral part of these interim condensed financial statements (unaudited).

Givaudan – 2018 Half Year Report13 - Financial statements

Condensed consolidated statement of changes in equity
For the six months ended 30 June2018
in millions of Swiss francs

Balance as at 1 January

Share
CapitalOwn equity
instruments

Cash flow
hedgesCurrencytranslationdifferences

92

5,682

(157)

(65)

(1,456)

(558)

7

(31)

102

78

7

(31)

102

449

Income for the period371

Total comprehensive income for the period

371

Dividends paid

(534)

Movement on own equity instruments, net

Balance as at 1 January

(534)
(14)

(14)

(534)

(14)

(548)

92

5,519

(171)

Share
CapitalRetainedearnings
and reserves

92

5,477

Net change in other equity items

2017
in millions of Swiss francs

Income for the period(58)(1,487)

Own equity
instruments

Cash flow
hedgesCurrencytranslationdifferences

Total comprehensive income for the period

384

Dividends paid

(515)

Movement on own equity instruments, net
Net change in other equity items

(109)

(73)

(1,519)

(575)

3,293

6

(69)

29

(34)

92

3,439

6

(69)

29

Remeasurement of post
employment
benefitobligations Total equity

384
350
(515)
(68)

(68)

(515)

(68)

(583)

5,346

(177)

The notes on pages 15 to 22 form an integral part of these interim condensed financial statements (unaudited).

Givaudan – 2018 Half Year Report

(456)

384

Other comprehensive income for the period

Balance as at 30 June

3,538
371

Other comprehensive income for the period

Balance as at 30 June

Remeasurement of post
employment
benefitobligations Total equity

Retainedearnings
and reserves(67)(1,588)

(546)

3,060

14 - Financial statements

Consolidated statement of cash flows
For the six months ended 30 June

2018

2017

Income for the period

371

384

Income tax expense

60

67Interest expense

17

15

in millions of Swiss francs

Note

Non-operating income and expense

41

23

Operating income

489

489

58

56

52

52

Depreciation of property, plant and equipment
Amortisation of intangible assets

6

Impairment of long-lived assets

2

Other non-cash items- share-based payments

19

15- pension expense

19

16- additional and unused provisions, net–

5- other non-cash items

4

(31)

Adjustments for non-cash items

154

113

(Increase) decrease in inventories

(178)

(114)

(Increase) decrease in accounts receivable

(80)

(103)

(Increase) decrease in other current assets

28

1Increase (decrease) in accounts payable

1243

Increase (decrease) in other current liabilities

(54)

(37)

(Increase) decrease in working capital

(272)

(210)

Income taxes paid

(61)

(55)

Pension contributions paid

(20)

(32)

Provisions used

(9)

(3)

Purchase and sale of own equity instruments, net

(12)

(33)

269

269

Cash flows from (for) operating activities
Increase in long-term debt

12

350

–

(Decrease) in long-term debt

12

(9)

(10)

Increase in short-term debt

12

1,091

544

(Decrease) in short-term debt

12

(435)

(149)

Cash flows from debt, net

997

385

Interest paid

(13)

(14)

Purchase and sale of derivative financial instruments, net

(20)

–

Others, net

(3)

(2)

Cash flows from financial liabilities
Distribution to the shareholders paid

13

961

369

(534)

(515)

(146)

Cash flows from (for) financing activities

427

Acquisition of property, plant and equipment

(129)

(97)

Acquisition of intangible assets

(21)

(27)

Acquisition of subsidiary, net of cash acquired

(247)

(111)

Proceeds from the disposal of property, plant and equipment

7

1

Proceeds from disposal of investment property

14Interest received
Purchase and sale of financial assets at fair value through income statement, net
Impact of financial transactions on investing, net
Others, net

1
(605)
(5)
(6)

5

Cash flows from (for) investing activities

(991)

(229)

Net increase (decrease) in cash and cash equivalents

(295)

(106)

Net effect of currency translation on cash and cash equivalents

(8)

(2)

Cash and cash equivalents at the beginning of the period

534

328

Cash and cash equivalents at the end of the period

231

220

The notes on pages 15 to 22 form an integral part of these interim condensed financial statements (unaudited).

Givaudan – 2018 Half Year Report15 - Financial statements

Notes to the interim condensed consolidated
financial statements (unaudited)
1. Group organisation

Givaudan SA and its subsidiaries (hereafter ‘‘the Group’’) operate under the name Givaudan. Givaudan SA is a limited liability
company incorporated and domiciled in Switzerland. The Group is headquartered in Vernier, near Geneva, Switzerland.
Givaudan is a leading supplier of creative fragrance and flavour products to the consumer goods industry. It operates in over 100
countries and has subsidiaries and branches in more than 40 countries. Worldwide, it employs 11,710 people.
The Group is listed on the SIX Swiss Exchange (GIVN).

2. Basis of financial statements

These financial statements are the unaudited interim condensed consolidated financial statements (hereafter ‘‘the interim
financial statements’’) of the Group for the six months period ended 30 June 2018 (hereafter ‘the interim period’). They have been
prepared in accordance with International Accounting Standard 34 ‘Interim Financial Reporting’.
The interim financial statements include the operations of Givaudan SA and its controlled subsidiaries where control is defined as
the power to govern the financial and operating policies of an enterprise so as to obtain benefits from its activities.
These interim financial statements should be read in conjunction with the 2017 consolidated financial statements as they provide
an update of the most recent financial information available.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
The Group operates in markets where no significant seasonal or cyclical variations in sales are experienced during the financialyear.
The 31 December 2017 statement of financial position has been derived from the audited 2017 consolidated financial statements.
Givaudan SA’s Board of Directors approved these interim financial statements on 17 July 2018.

3. Accounting policies

The accounting policies adopted are consistent with those of the annual financial statements for the year ended
31 December 2017, as described in the 2017 consolidated financial statements with the exception of the adoption as of
1 January 2018 of the standards and interpretation described below:•

IFRS 15 Revenue from Contracts with Customers•

Clarifications to IFRS 15 Revenue from Contracts with Customers

The Group derives revenue from the transfer of goods and services at a time and at point in time in the two divisions Fragrancesand Flavours as presented. The performance obligations being primarily the delivery of manufactured products and molecules offragrance and flavour to the agreed specifications are generally satisfied upon shipments or delivery depending on contractual
terms.
• Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions•

Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts•

Amendments to IAS 40: Transfers of Investment Property•

Annual Improvements to IFRS Standards 2014-2016 Cycle•

IFRIC 22: Foreign Currency Transactions and Advance Consideration

The Group assessed that the adoption of the above standards and interpretation does not affect the information already disclosedby the Group.

Givaudan – 2018 Half Year Report16 - Financial statements

4. Financial risk management
Interest rate risk
In April 2018, hedge positions assigned to a previously forecasted debt transaction were closed following the issuance of
CHF 350 million of debt in the form of two straight bonds in the domestic market, respectively a two year floating rate public bondwith a nominal value of CHF 150 million and a seven year 0.375 % fixed rate public bond with a nominal value of CHF 200 million.
The amortisation of the realised loss totalling CHF 15 million is being recycled in the income statement over the next 5 years until
April 2023.
In June 2018, the Group entered into several forward starting interest rate swaps with the aim of being protected against future
increases of CHF interest rates and to fix the interest rates of highly probable debt issuance for the replacement of the straightbonds CHF 350 million issued in April 2018. The swaps, with 5 year maturity and totalling CHF 50 million, are commencing
respectively in April 2020 and 2025 with an average fixed rate of 0.896%.
In June 2018, the Group entered into several forward starting interest rate swaps with the aim of being protected against future
increases of the current EUR interest rates and to fix the interest rates of highly probable debt issuance mainly related to the
Naturex acquisition (see Note 5). The swaps, with 10 year maturity and totalling EUR 400 million, are commencing in December
2018 with an average fixed rate of 1.046%.
Fair value measurements recognised in the statement of financial position
Financial assets consisting of equity and debt securities of CHF 6 million (31 December 2017: CHF 2 million) were measured with
Level 1 inputs whereas CHF 32 million (31 December 2017: CHF 31 million) were measured with Level 2 inputs and CHF 606 million(31 December 2017: nil) were measured with Level 3 inputs. Corporate owned life insurance of CHF 32 million (31 December 2017:
CHF 32 million) were measured with Level 2 inputs. The initial investment representing 40.5% of the shares in Naturex of
CHF 606 million (EUR 523 million) was measured with Level 3 inputs since there is very little market activity arising from the launchof the Givaudan tender offer at EUR 135 per share.
Derivative assets of CHF 15 million (31 December 2017: CHF 17 million) and derivative liabilities of CHF 50 million(31 December 2017: CHF 72 million) were measured with Level 2 inputs. Derivative assets and liabilities consist of forward foreignexchange contracts that are measured using quoted forward exchange rates and yield curves derived from quoted interest rates
matching maturities of the contracts, and of interest swaps that are measured using quoted interest rates and yield curves derived
from quoted interest rates matching maturities of the contracts.
There was no transfer between the level categories in the period.

5. Acquisitions
Centroflora Nutra
On 14 May 2018 Givaudan acquired 100% of the share capital of Centroflora Nutra, the Nutrition Division of Centroflora Group, for apurchase price of CHF 55 million. The company manufactures botanical extracts and dehydrated fruits for the food, beverage andconsumer goods sectors and offers a wide variety of plant extracts from various regions of the world, with a particular focus on
those from the great biodiversity of Brazil. With headquarters and a manufacturing facility in Botucatu, Brazil, Centroflora Nutra
employs 116 people and exports products globally. From 14 May 2018, the acquisition contributed CHF 1 million of sales to theGroup’s consolidated results.
The goodwill of CHF 37 million arising on the acquisition relates mainly to the value of the qualified workforce and expectedsynergies that do not meet the criteria for recognition as separable intangible assets.

Givaudan – 2018 Half Year Report17 - Financial statements

The identifiable assets and liabilities of Centroflora Nutra acquired are recorded at fair value at the date of acquisition.
In compliance with IFRS 3, these values determined are provisional and the Group has twelve months from the date of acquisition
to finalise the allocation of the acquisition price.
Expressions Parfumées
On 4 June 2018 Givaudan acquired 100% of the share capital of Expressions Parfumées and its affiliates for a purchase price of
CHF 199 million. Expressions Parfumées, a French fragrance creation house, strengthens the access to local and regional customers
and expands naturals capabilities in the fragrance business. With headquarters in Grasse, France, the historic area of perfumery,
Expressions Parfumées operates throughout Europe, Africa and the Middle East from locations in Grasse (France), Milan (Italy) andDubaï (United Arab Emirates), employing globally 200 people. From 4 June 2018, the acquisition contributed CHF 6 million of sales
to the Group’s consolidated results.
The goodwill of CHF 145 million arising on the acquisition relates mainly to the value of the qualified workforce and expectedsynergies that do not meet the criteria for recognition as separable intangible assets.
The identifiable assets and liabilities of Expressions Parfumées acquired are recorded at fair value at the date of acquisition. Total
net assets acquired of CHF 54 million consist of cash (CHF 7 million), working capital (CHF 18 million), fixed assets (CHF 26 million),
intangible assets which are comprised of process knowledge, client relationships, name brand (CHF 46 million), deferred tax
liabilities (CHF 16 million) and other liabilities (CHF 27 million). The total purchase price of CHF 199 million was settled in cash,
resulting in a goodwill of CHF 145 million.
In compliance with IFRS 3, these values determined are provisional and the Group has twelve months from the date of acquisition
to finalise the allocation of the acquisition price.
Naturex
On 5 June 2018 Givaudan acquired 40.5% of the shares of Naturex for EUR 135 per share for a total consideration of
EUR 523 million, equivalent CHF 606 million, and subsequently launched a mandatory tender offer for the remaining shares on
28 June 2018. Naturex is an international leader in plant extraction and the development of natural ingredients and solutions forthe food, health and beauty sectors. Naturex is headquartered in Avignon, France and reported sales of EUR 405 million in 2017. It
operates from 16 production sites around the world and employs 1,700 people.
Givaudan has classified its initial investment in Naturex as a financial instrument, as it does not currently control or exert
significant influence over Naturex, demonstrated by the absence of Givaudan representatives in the Board of Directors or
Executive Management of Naturex.

Givaudan – 2018 Half Year Report18 - Financial statements

6. Segment information
Business segments
Fragrances
For the six months ended 30 June, in millions of Swiss francs

Segment sales
Less inter segment sales a
Segment sales to third parties
EBITDA
as % of sales

Flavours

Group

2018

2017

2018

2017

2018

2017

1,223

1,137

1,457

1,351

2,680

2,488

–

–

(6)

(5)

(6)

(5)

1,223

1,137

1,451

1,346

2,674

2,483

250

276

351

321

601

597

20.4%

24.2%

24.2%

23.9%

22.5%

24.0%

Depreciation

(25)

(24)

(33)

(32)

(58)

(56)

Amortisation

(21)

(21)

(31)

(31)

(52)

(52)

Impairment of long-lived assets(1)

Additions to Property, plant and equipment

27

Acquisitions of Property, plant and equipment

26

Additions to Intangible assets

13

Acquisitions of Intangible assets

46

Total Gross Investments

112

(1)
25
12
37

(2)

55

40

82

65

2

16

28

16
22

13

10

26

14

32

60

32

84

98

196

135

a)	Transfer prices for inter-divisional sales are set on an arm's length basis.

Reconciliation table to Group’s operating income
Fragrances

Flavours

Group

For the six months ended 30 June, in millions of Swiss francs

2018

2017

2018

2017

2018

2017

EBITDA

250

276

351

321

601

597

Depreciation

(25)

(24)

(33)

(32)

(58)

(56)

Amortisation

(21)

(21)

(31)

(31)

(52)

(52)

Impairment of long-lived assets(1)

Operating income

203

231

286

258

489

489

16.6%

20.3%

19.7%

19.2%

18.3%

19.7%

as % of sales

(1)

(2)

Financing costs

(23)

(21)

Other financial income (expense), net

(35)

(17)

Income before taxes

431

451

16.1%

18.2%

as % of sales

Classification of amortisation expenses is as follows:
Fragrances

Flavours

Group

2018

2017

2018

2017

2018

Cost of sales

2

5

5

4

7

9

Selling, marketing and distribution expenses

8

7

12

11

20

18
15

For the six months ended 30 June, in millions of Swiss francs

2017

Research and product development expenses

7

4

10

11

17

Administration expenses

2

2

2

1

4

3

Other operating expenses

2

3

2

4

4

7

Total

21

21

31

31

52

52

Givaudan – 2018 Half Year Report19 - Financial statements

7. Other operating income
2018

2017

Gains on disposal of fixed assets–

1

Other income

99Total other operating income

910

For the six months ended 30 June, in millions of Swiss francs

8. Other operating expense
2018

2017

Project Related expenses a

25

24

Amortisation of intangible assets

57

Impairment of long-lived assets

2–

Losses on disposal of fixed assets

3

1

Business taxes

68

Acquisition and integration related expenses

1–

For the six months ended 30 June, in millions of Swiss francs

Other expenses

5

6

Total other operating expense

4746a)	Primarily relates to Givaudan Business Solutions (GBS).

9. Financing costs
2018

2017

Interest expense

1715

Net interest related to defined benefit pension plans

5

6

Amortisation of debt discounts

1–

Total financing costs

23

21

For the six months ended 30 June, in millions of Swiss francs

10. Other financial (income) expense, net
2018

2017

Fair value and realised (gains) losses from derivatives instruments, net (at fair value through income statement)

4

(37)

Exchange (gains) losses, net

2149

Unrealised (gains) losses from financial instruments measured at fair value through income statement–(4)

For the six months ended 30 June, in millions of Swiss francs

Interest (income) expense

(1)

(1)

Capital taxes and other non business taxes

7

5

Other (income) expense, net

45

Total other financial (income) expense, net

35

17

Givaudan – 2018 Half Year Report20 - Financial statements

11. Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the net income attributable to shareholders by the weighted average number ofshares outstanding:
For the six months ended 30 June

2018

2017

Income attributable to equity holder of the parent (in millions of Swiss francs)

371

384

Ordinary shares

9,233,586

9,233,586

Treasury shares(18,397)(25,098)

Weighted average number of shares outstanding

Net weighted average number of shares outstanding
Basic earnings per share (CHF)

9,215,189 9,208,488
40.26

41.70

Diluted earnings per share
For the calculation of diluted earnings per share, the weighted average number of shares outstanding is adjusted to assume
conversion of all potentially dilutive shares:
For the six months ended 30 June

2018

2017

Income attributable to equity holder of the parent (in millions of Swiss francs)

371

384

Weighted average number of shares outstanding for diluted earnings per share of 96'640 (2017: 74,015)
Diluted earnings per share (CHF)

Givaudan – 2018 Half Year Report

9,311,829 9,282,503
39.84

41.37

21 - Financial statements

12. Debt
Floating rate debt
2018
in millions of Swiss francs

Balance as at 1 January
Cash flows

Total
short-termandlong-term
debt

Fixed rate debt

BankborrowingsBank
overdrafts

Straight
Privatebonds placements

1

7

117

960

(4)

151

Bank
borrowings

Total

Straight
Privatebonds placements

125

9

998

1,107

(9)

(101)

476

Total

1,483

1,608

(110)

997

Non-cash changes- Amortisation of debt
discount–––- Acquisition / Divestment- Currency effects

6

Balance as at 30 June

967

3

Within 1 year967

3

Within 1 to 3 years

151

(1)

5

116

1,237
151

116
967

3

Balance as at 1 January
Cash flows

Bank
overdrafts

151

116

2

2

7

478

1,388

2,625

1

100

40

141

292

249

148

397

513

11

549

290

850

850

12

898

478

1,388

2,625

970

1,237

(3)

- Acquisition / Divestment

13

3- Currency effects

30

Balance as at 31 December

1

Total
short-termandlong-term
debt

Fixed rate debt

Straight
Privatebonds placements

7
(42)

1
12

898

Floating rate debt
Bankborrowings

1
12

12

116

Thereafter2017
in millions of Swiss francs

–

970
151

Within 3 to 5 years
Balance as at 30 June

1
12

Bank
borrowings

Total

7
116

Straight
Privatebonds placements

997

71

(5)

16

14

Total

254

1,251

1,258

232

227

298

Non-cash changes- Amortisation of debt
discount

1

Within 1 year
Within 1 to 3 years

7

1

31

117

125

7

7

1

300

2

100

117

117

2

249

117

125

Thereafter
Balance as at 31 December

1

7

998

1

1

Within 3 to 5 years

9

1

1

14

30

(10)

(10)

21

476

1,483

1,608

301

308

39

141

142

251

368

4

349

437

790

790

9

998

476

1,483

1,608

Givaudan repaid CHF 10 million of debt acquired as part of the 2017 acquisition of Vika B.V. during the first six months of 2018.
On 26 March 2018 Givaudan SA entered into a floating rate short-term loan of CHF 130 million which was repaid on 10 April 2018.
On 27 June 2018 the Group drew down an additional CHF 40 million of bank borrowings maturing on 11 July 2018. The proceeds ofboth financing events were used for general corporate purposes.
On 9 April 2018 the Group issued a two year floating rate public bond with a nominal value of CHF 150 million and a seven year
0.375 % fixed rate public bond with a nominal value of CHF 200 million. These bonds were issued by Givaudan SA. The proceeds of
CHF 350 million were used mainly to repay the 2.5 % seven year public bond with a nominal value of CHF 300 million which wasredeemed on 15 June 2018.

Givaudan – 2018 Half Year Report22 - Financial statements

In June 2018 the Group entered into short-term loans for a total amount of EUR 800 million (equivalent to CHF 921 million) with anannual interest rate of 0.27% ,with the proceeds used to finance the acquisition of the 40.5% shareholding of Naturex and theacquisition of Expressions Parfumées.
With the acquisition of Expressions Parfumées on 4 June 2018, the Group has assumed CHF 12 million of debt.

13. Equity

At the Annual General Meeting held on 22 March 2018 the distribution of an ordinary dividend of CHF 58.00 per share(2017: ordinary dividend of CHF 56.00 per share) was approved. The dividend payment has been paid out of available retained
earnings. At 30 June 2018, the share capital amounts to CHF 92,335,860, divided into 9,233,586 fully paid-up registered shares witha nominal value of CHF 10.00 each. Each share gives the right to one vote.

14. Own equity instruments

The Group holds own equity instruments and derivatives on own shares mainly to cover the anticipated obligations related to the
executive share plans. At 30 June 2018, the Group held 5,906 own shares (2017: 17,588), as well as derivatives on own shares
equating to a total long position of 59,000 (2017: 56,562).

15. Contingent liabilities

From time to time and in varying degrees, Group operations and earnings continue to be affected by political, fiscal and regulatory
developments, including those relating to environmental protection, in the countries in which it operates.
The activities in which the Group is engaged are also subject to physical risks of various kinds. The nature and frequency of thesedevelopments and events, not all of which are covered by insurance, as well as their effect on the future operations and earnings
are not predictable.
Givaudan Group companies are involved in various legal and regulatory proceedings of a nature considered typical of its business,
including contractual disputes and employment litigation.
One of the Group’s US affiliates, Givaudan Flavors Corporation was named as a defendant in several lawsuits brought against it
and other flavour companies and raw diacetyl suppliers. The plaintiffs alleged that they sustained pulmonary injuries due todiacetyl containing butter flavours manufactured by one or more of the flavour company defendants. The majority of the cases
filed against Givaudan Flavors Corporation have been settled. The Group has already recovered or will recover amounts it isentitled to under the terms of its insurance policies.

Givaudan – 2018 Half Year Report23 - Financial statements

Givaudan SA
Chemin de la Parfumerie 51214 Vernier, Switzerland

General information
T + 41 22 780 91 11
F + 41 22 780 91 50

Media and investor relations
T + 41 22 780 90 53
F + 41 22 780 90 90

Share registry

SAG SEGA Aktienregister AG
Postfach
4601 Olten, Switzerland
T + 41 62 205 36 95
F + 41 62 205 39 66

Investor Calendar

Half year conference, Zurich: 30 August 2017
Nine month sales results: 10 October 2017
Full year results: 26 January 2018
Annual General Meeting: 22 March 2018
Dates may be subject to change, please consult the calendar on the Givaudan
website: www.givaudan.com/investors/shareholder-information/investor-calendar

All trademarks mentioned enjoy legal protection.
This Half Year Report and Financial statements may contain forward-looking information.
Such information is subject to a variety of significant uncertainties, including
scientific, business, economic and financial factors. Therefore actual results
may differ significantly from those presented in such forward looking statements.
Investors must not rely on this information for investment decisions.
© Givaudan SA, 2018www.givaudan.com

Givaudan – 2018 Half Year Report