2019
Governance,
Compensation and
Financial Report2019 Governance, Compensation
and Financial Report
As part of our reporting suite, thisyear we have created a stand-alone
document with the full details of
our governance and compensation
policies as well as a detailed look at
our financials; an overview can befound in the Integrated Annual Report.
Good corporate governance ensuresproper checks and balances andGivaudan is managed and supervised
in a responsible way, with a focus
on value creation. Our compensation
programmes are aligned with ourstrategy and reflect the performanceof the business and of individuals.
Full information on our financial
performance and our focus on
creating value for the Company andall its stakeholders can be foundin this report.

Table of contents
1

Governance report

18

Compensation report

31

Consolidated financial report

100 Statutory financial report
112 Appendix

Governance report 1

GovernancereportIn this section
2

Group structure and shareholders

3

Capital structure

4

Board of Directors

12

Executive Committee

15

Compensation, shareholdings and loans

15

Shareholders’ participation

16

Change of control and defence measures

16

Auditors

17

Information policy

Givaudan – 2019 Governance, Compensation and Financial Report

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Governance report

Corporate governance
Ensuring proper
checks and balances
The Governance report isaligned with international
standards and has been
prepared in accordance with the‘Swiss Code of Obligations’,
the ‘Directive on Information
Relating to Corporate Governance’
issued by the SIX Swiss Exchange
and the ‘Swiss Code of Best
Practice for Corporate Governance’
issued by economiesuisse.

The internal corporate governance framework is based on
Givaudan SA’s Articles of Incorporation. The ‘Board Regulationsof Givaudan SA’, the Company’s organisational regulation,
further clarifies the duties, powers and regulations of thegoverning bodies of the Company.
Except when otherwise provided by law, the Articles ofIncorporation and Givaudan’s Board Regulations, all areas ofmanagement are fully delegated by the Board of Directors, withthe power to sub-delegate to the Chief Executive Officer, theExecutive Committee and its members. The Board Regulationsof Givaudan also specifies the duties and the functioning of its
four Board Committees.
The Articles of Incorporation, Board Regulations of Givaudan
and other documentation regarding Givaudan’s principles ofcorporate governance can be found on our website.
	www.givaudan.com – our company –corporate governance – rules and policies

1. Group structure and shareholders
1.1 Group structure

1.1.1 Description of the issuer’s operational
Group structure
Givaudan SA, the parent company of the Givaudan Group,with its registered corporate headquarters at 5 Chemin de laParfumerie, 1214 Vernier, Switzerland (‘the Company’), is a‘société anonyme’, pursuant to art. 620 et seq. of the Swiss
Code of Obligations. It is listed on the SIX Swiss Exchange
under security number 1064593, ISIN CH0010645932.
The Company is the global leader in the flavour and fragrance
industry, offering its products to global, regional and local
food, beverage, consumer goods, fragrance and cosmetics
companies. The Company operates around the world and has
two principal divisions: Flavour and Fragrance. The Flavour
Division consists of four business units: Beverages, Dairy,
Savoury and Sweet Goods. The Fragrance Division has threebusiness units: Fine Fragrances, Consumer Products, as well
as Fragrance Ingredients and Active Beauty.
Both divisions have a sales and marketing presence in all
major countries and markets as well as Research andDevelopment organisations. They share resources andknowledge in the areas of research and consumer
understanding, where applicable. Corporate functions include
Finance, Procurement, Science and Technology, Legal,
Compliance and Communications, Human Resources (HR)as well as Givaudan Business Solutions (GBS). GBS provides
best-in-class internal processes and services in the areasof Finance, Controlling, HR, Procurement, Supply Chain,
Environment, Health & Safety (EHS), Enterprise DataManagement, Information Management and Technology(IM&T), Sustainability and Continuous Improvement.

1.1.2 Listed companies within the scope of
consolidation
The Company does not have any publicly listed subsidiaries.

1.1.3 Unlisted companies within the scope of
consolidation
The list of principal consolidated companies, their domiciles andthe shareholding is presented on page 89, in note 33 to the 2019

Givaudan – 2019 Governance, Compensation and Financial ReportGovernance report 3

consolidated financial statements. Note 1 to the consolidated
financial statements as well as note 3 to the statutory financial
statements offer more details regarding the structure of theGroup. All unlisted subsidiaries are wholly-owned, unlessotherwise indicated in notes 3 and 5 to the statutory financial
statements mentioned above. The 2019 Financial report is in
English and can be downloaded on the Company website.
	www.givaudan.com – investors – online annual report –download centre – 2019 Governance, Compensation and
Financial report

1.2 Significant shareholders

To the knowledge of the Company, the following shareholders
were the only shareholders holding more than 3% of theshare capital of Givaudan SA as at 31 December 2019 (or as at
the date of their last notification under article 20 of the Stock
Exchange Act):
Significant shareholders
2019

in %

Beneficial owners
William H. Gates III and Melinda French Gates

13.86

BlackRock, Inc.

5.06

MFS Investment Management

5.04

Nominees
Nortrust N ominees Limited*

15.07

Chase Nominees Limited*

7.21

Banque Pictet & Cie SA**

4.45

*	Voting rights for the shares held by Nortrust Nominees Limited and Chase
Nominees Limited need to be exercised in accordance with clients’ instructions.
** The shares held by Banque Pictet & Cie SA bear no voting rights.

The notifications can be viewed on the following site:	www.six-swiss-exchange.com – market data – shares –givaudan – overview – significant shareholders

The Company has not entered into any shareholder agreementswith any of its significant shareholders.

1.3 Cross-shareholdings

The Company does not have any cross-shareholdings withany other company.

2. Capital structure
2.1 Capital on the disclosure deadline

Ordinary share capital
As at 31 December 2019, the Company’s ordinary share capitalamounted to CHF 92,335,860 fully paid in and divided into
9,233,586 registered shares with a par value of CHF 10.00 each.

The market capitalisation of the Company at 31 December 2019
was CHF 27,986,999,166.

2.2 Authorised and conditional capital in particular
Authorised share capital
The Company does not have any authorised share capital.

Conditional share capitalAs per article 3b of the Company’s Articles of Incorporation,
the Company’s share capital can be increased by:–– issuing up to 463,215 shares (CHF 4,632,150) through theexercise of option or conversion rights granted in connection
with bond issues of Givaudan SA or a Group company–– issuing up to 161,820 shares (CHF 1,618,200) through theexercise of option rights granted to employees and/or themembers of the Board of Directors of the Group–– issuing up to 123,163 shares (CHF 1,231,630) throughthe exercise of warrants granted to the shareholders ofGivaudan SA.
The conditional share capital amounts to a maximum of
CHF 7,481,980, which equates to 8.1% of the existing share capital.
The subscription rights of the shareholders are excluded in casesa) and b) above. The Board of Directors is authorised to exclude
the shareholders’ preferential right to subscribe to bonds if the
purpose is to finance acquisitions or to issue convertible bonds or
warrants on the international capital market. In that case, thebonds or warrants must be offered to the public at market
conditions, the deadline for exercising option rights must be notmore than six years and the deadline for exercising conversion
rights must be not more than 15 years from the issue of the bondor warrants and the exercise or conversion price for new sharesmust be at a level corresponding at least to the market
conditions at the time of issue.
The Company’s Articles of Incorporation can be found on
our website.
	www.givaudan.com – our company – corporate governance –rules and policies

The acquisition of shares through the exercise of option orconversion rights and the transfer of such shares are subject torestrictions as described in section 2.4.

2.3 Changes in capital

The information regarding the year 2017 is available in notes
8 and 9 to the statutory financial statements of the 2017
Financial report. Details of the changes in equity for the years
2018 and 2019 are given in notes 8 and 9 to the statutoryfinancial statements of the 2019 Financial report.
	www.givaudan.com – media – publications

Givaudan – 2019 Governance, Compensation and Financial Report

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Governance report

2.4 Shares and participation certificates

The Company has one class of shares only. All shares areregistered shares with a par value of CHF 10.00 each. Subject tothe limitations described below, all shares have the same rights
in all respects. Every share gives the right to one vote and to an
equal dividend.

2.5 Dividend-right certificates

Other than the registered shares, dividend-right certificatesand participation certificates do not exist.

2.6 Limitations on transferability and nominee
registrations

2.6.1 Limitations on transferability for each sharecategory; indication of statutory group clauses andrules for granting exceptions
At the Annual General Meeting of shareholders on
20 March 2014, the previously existing registration and voting
rights restrictions were abolished. Today, the Company nolonger has limitations on transferability of shares.

2.6.2 Reasons for granting exceptions in the year
under review
This is not applicable because the Company has no limitations
on transferability of shares.

2.6.3 Permissibility of nominee registrations;indication of any percent clauses and registration
conditions
Subject to the provisions mentioned in the next paragraph,registration with voting rights in the Company’s shareregister is conditional on shareholders declaring that they
have acquired the shares in their own name and for theirown account.
Based on a regulation of the Board of Directors, nominee
shareholders may be entered with voting rights in the shareregister of the Company for up to 2% of the share capital
without further condition, and for more than 2% if they
undertake to disclose to the Company the name, address,
nationality and number of shares held by the beneficial owners.

2.6.4 Procedure and conditions for cancelling
statutory privileges and limitations on transferability
Limitations on transferability and nominee registrations may
be changed by a positive vote of the absolute majority of theshare votes represented at a shareholders’ meeting.

2.7 Convertible bonds and warrants/options
There are no bonds or warrants outstanding that areconvertible into shares of Givaudan SA.

Givaudan – 2019 Governance, Compensation and Financial Report

3. Board of Directors
According to Givaudan’s Articles of Incorporation, the Boardof Directors may consist of between seven and nine members.
Membership of the Board is composed in such a way as toensure it possesses all the competencies required to execute
its strategic oversight and control over Givaudan.
Given the Company’s business and its current strategy of‘Responsible growth. Shared success.’, the most relevant andimportant required competencies include:–– in-depth knowledge of the flavour and fragrance industry–– international senior business leadership–– strategy setting and implementation and risk management–– financial expertise–– innovation and technology (including digital)–– sales and marketing–– regulatory affairs.
The Board’s knowledge and diversity of experience areimportant assets in leading a company of Givaudan’s size in acomplex and fast-changing environment.
Each of the seven Board members has an in-depth knowledgeof his or her relevant areas of expertise. Together, they ensurethat the Company has all the competencies required.
The Board regularly reviews the list of competencies, including
with the help of external expert advisors, and uses existing andrequired competencies as a basis for its succession planning. In
2019, the Board has evaluated the long-term skill matrix andhas started the search for additional Board members in order toguarantee a smooth transition upon retirement of current
Board members over the next couple of years.
At the Annual General Meeting in March 2019, Calvin Grieder
was re-elected as Chairman. Prof. Dr-Ing Werner Bauer was
re-appointed Vice-Chairman by the Board.

Governance report 5

3.1 Members of the Board of Directors

As of 31 December 2019, the following were membersof the Board of Directors:

Calvin Grieder
Chairman

In 1980, Calvin Grieder started his career as
Marketing Manager with Georg Fischer Ltd
in Switzerland and continued in various
executive positions at Swiss and German
companies including Swiss Industrial
Company (SIG) Ltd and Swisscom
Telecom Ltd, where he served as Headof the Mobile and Internet business andMember of the Executive Board. He was
CEO of the international engineeringgroup Bühler from 2001 to 2016.
Calvin Grieder holds the following
mandate in a company quoted on an›› Engineer
official stock exchange: member of›› Swiss national, born
the Board of SGS SA. He holds thein 1955 in the USA
following mandates in companies that›› Non-executive
are non-quoted: Chairman of the›› First elected in 2014
Boards of Bühler Group and AWK›› Chairman since 2017
Group AG, owner of Carivel7 AG,
member of the Board of ETH Juniors
and the advisory Board of ETH D-MAVT, member of the Boardof Trustees of Avenir Suisse, and member of the Foundation
Board of the Swiss Future Fund (until November 2019).
Calvin Grieder holds a Master of Science from the ETH Zurich
and has completed an Advanced Management Program (AMP)
at Harvard University.

Prof. Dr-Ing. Werner Bauer
Vice-Chairman

Prof. Dr-Ing. Werner Bauer started his career
as a university professor in chemicalengineering at the Technical University
in Hamburg, Germany. After serving
as the Director of the Fraunhofer
Institute for Food Technology &Packaging and as Professor in Food
Bioprocessing Technology at theTechnical University of Munich from1985 to 1990, he joined Nestlé as
Head of the Nestlé Research Centre
in Lausanne in 1990. After heading
commercially Nestlé South andEast Africa he joined general›› Businessman
management as Executive Vice›› German & Swissnational, born in
President in 2002, responsible for1950
technical, production, environment›› Non-executive
and R&D. In 2007 he became Chief›› First elected 2014
Technology Officer and Head of

Innovation, Technology, Research and Development, a position
from which he retired in September 2013.
Prof. Bauer holds the following mandates in companies that arequoted on an official stock exchange: member of the Boards of
Lonza Group AG and SIG Combibloc AG. He holds the following
mandates in companies that are non-quoted: Chairman of theBoard of Trustees of the Bertelsmann Foundation, vicechairman of the Board of Bertelsmann SE & Co. KGaA.
Prof. Dr-Ing. Werner Bauer received a Diploma and a PhD in
Chemical Engineering from the University Erlangen-Nürnberg
in Germany.

Victor Balli
Director

Victor Balli started his professional careerin 1985, working as a Financial Analyst &Business Development Manager with
EniChem International SA in Zurich and
Milan. From 1991 to 1995, he worked as a
Principal with Adinvest AG, a corporate
finance advisory company with offices
in Zurich, San Francisco, New York,and London. Victor Balli held various
positions at Minibar between 1996
and 2005, most recently as Chief
Executive Officer EMEA as of 2005.
From 2007 to 2018 Victor Balli was
Chief Financial Officer and memberof the Executive Committee of Barry›› Businessman
Callebaut AG.
Victor Balli holds the following
mandates in companies that arequoted on an official stock exchange:
member of the Boards of KWS Saat SE,
Ceva Logistics AG and SIKA AG.

›› Swiss national, bornin 1957›› Non-executive›› First elected in 2016

He holds the following mandates in companies that are
non-quoted: Member of the Boards of the Federal Audit
Oversight Authority, Hemro AG and the Supervisory Boardof Louis Dreyfus Company Holding B.V.
Victor Balli has a Masters in Economics from the Universityof St. Gallen and a Masters in Chemical Engineering from the
Swiss Federal Institute of Technology in Zurich.

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Governance report

Lilian Biner

Ingrid Deltenre

Lilian Biner has senior management
experience from retail and consumer
goods companies. These posts have mostrecently included Chief Financial Officer
and Executive Vice President with Axel
Johnson AB in 2007 and Head of Strategic
Pricing for Electrolux Major Appliances
Europe, a company she joined in 2000 ashead of HR and Organisational
Development.

Ingrid Deltenre has held several executive
positions in the press and media including
Director of Publisuisse from 1999 to 2004,
and Director of the leading public TV
broadcaster in German-speaking
Switzerland, Schweizer Fernsehen,from 2004 to 2009. In 2010, shebecame Director General of the
Geneva-based European Broadcasting
Union (EBU), a position she held
until June 2017.

Director

Lilian Biner holds the following
mandates in companies that arequoted on an official stock exchange:
Chairman of the Board of Cloetta AB,
member of the Boards of LE
Lundbergföretagen and Carlsberg A/S.

Director›› Businesswoman›› Swedish national,
born in 1962›› Non-executive›› First elected 2011

She holds the following mandates incompanies that are non-quoted:
member of the Boards of a-connect (group) ag and Scania AB(since May 2019).
Lilian Biner is a graduate of the Stockholm School of Economics.

›› Businesswoman›› Dutch & Swissnational, born in
1960›› Non-executive›› First elected 2015

She also is a member of the board of Agence France Presse, thePresident of the Executive Committee of the Executive MBA of
the University of Zurich and a member of the Foundation Board
Schweizer Berghilfe.
Ingrid Deltenre holds a Master of Arts and a Bachelor ofArts in Journalism and Educational Sciences from the
University of Zurich.

Michael Carlos
Director

Michael Carlos started his career with
Givaudan in 1984 as General Manager
in Hong Kong. He became Head of
the European Creative Centre in
Argenteuil in 1992 where he was incharge of integrating the creative
resources from Givaudan and Roure.
In 1999, he was appointed Global Headof Consumer Products and thenPresident of the Fragrance Divisionin 2004, a position from which heretired in 2014.

She holds the following mandates incompanies that are quoted on an
official stock exchange: member of theBoard of Banque Cantonale Vaudoise,member of the Supervisory Board of
Deutsche Post/DHL, and member ofthe Board of Sunrise.

Thomas Rufer
Director›› Businessman›› French national,
Michael Carlos held the following
born in 1950
mandate in a company quoted on›› Non-executive
an official stock exchange: until›› First elected 2015
February 2019, member of the Boardof Deinove SA. He also holds thefollowing mandates: Chairman of the International Fragrance
Association (IFRA), member of the Boards of Manus Bio Inc.
and Scent Design SA.

Michael Carlos holds an MBA from the Indian Institute ofManagement and a degree in chemical engineering from theIndian Institute of Technology.

Givaudan – 2019 Governance, Compensation and Financial ReportThomas Rufer joined Arthur Andersen
in 1976, where he held several positionsin audit and business consulting(accounting, organisation, internal
control and risk management). He
was Country Managing Partner for
Arthur Andersen Switzerland from1993 to 2001. Since 2002, he has
been an independent consultant inaccounting, corporate governance,risk management and internal control.
He holds the following mandate in a
non-listed company: member of the
Swiss Takeover Board.
Thomas Rufer has a degree inbusiness administration (économiste
d’entreprise HES) and is a Swiss
Certified Public Accountant.

›› Certified Public
Accountant›› Swiss national, bornin 1952›› Non-executive›› First elected 2009

Governance report 7

3.2 Other activities and vested interests

Please refer to the biographies of the Board members describedin section 3.1 for their other activities and vested interests.
Except for those described in section 3.1, no Board member ofGivaudan SA holds any material permanent management or
consultancy functions for significant domestic or foreigninterest groups nor any significant official functions or politicalposts. The Board of Directors assesses the independenceof its members.
As at 31 December 2019, all members of the Board of Directors
were non-executive and, apart from Michael Carlos, all of
the Board members were independent in accordance witharticle 14 of the Swiss Code of Best Practice for Corporate
Governance. None of the Board members has importantbusiness connections with Givaudan SA or any of its affiliates.
Michael Carlos was President of the Fragrance Division of theCompany until the end of 2014.

3.3 Rules in the Articles of Incorporation on thenumber of permitted activities pursuant to Art. 12
para. 1 point 1 of the Ordinance against Excessive
Compensation (OaEC)
Article 32 of the Articles of Incorporation of the Company
permits the following external mandates for members of theBoard of Directors:–– Members of the Board of Directors may not hold more thanfour additional mandates in companies that are quoted on an
official stock exchange and seven additional mandates in
non-quoted companies.
–– The following mandates are not subject to these limitations:›› mandates in companies which are controlled by the
corporation›› mandates held by order and on behalf of the corporation or
any controlled company. No member of the Board of
Directors or of the Executive Committee shall hold morethan ten such mandates›› mandates in associations, foundations, charitableorganisations, trusts, employee welfare foundations andother comparable structures. No member of the Board of
Directors or of the Executive Committee shall hold morethan 15 such mandates.
‘Mandates’ mean mandates in the supreme governing bodyof a legal entity which is required to be registered in the Swisscommercial register or a corresponding foreign register.
Mandates in different legal entities which are under joint
control are deemed one mandate.

3.4 Elections and terms of office

3.4.1 Principles of the election procedure, rules
differing from the statutory legal provisions withregard to the appointment of the Chairman,
the members of the Compensation Committee
and the independent proxy
The Company amended its Articles of Incorporation at theAnnual General Meeting 2014 to align with the requirementsof the OaEC. The rules regarding the appointment of the
Chairman, the members of the Compensation Committee andthe independent proxy do not deviate from the statutory legal
provisions. All Board members, the Chairman, the members of
the Compensation Committee and the independent proxy areelected annually and individually for one year, being the timefrom one ordinary Annual General Meeting to the next one.

3.4.2 For each Board member: date of first election
to Board and attendance of meetings
For the dates of first election to the Board and attendance ofBoard and committee meetings, please refer to the tables on
pages 5-6 and table on page 10.

3.5 Internal organisational structure

3.5.1 Allocation of tasks among the Board members
The Chairman is elected annually at the Annual General Meeting.
He prepares the agenda and chairs meetings of the shareholders,convenes, prepares and chairs the meetings of the Board of
Directors, coordinates the work of the Board committees,
prepares and supervises the implementation of resolutions of theBoard of Directors (to the extent not delegated to a committee),supervises the course of business and the activities of the
Executive Committee, proposes succession candidates forappointment to the Board of Directors or to the Executive
Committee and proposes the global remuneration of the Chief
Executive Officer and other members of the Executive
Committee to the Compensation Committee.
The Chairman receives all invitations and minutes of Committee
meetings and is entitled to attend these meetings. The Chairman
further decides in cases which fall under the tasks and powers of
the Board of Directors, but in which a timely decision of theBoard of Directors cannot be made because of urgency. In suchcases, the Chairman informs the members of the Board of
Directors as quickly as possible and the corresponding resolution
is minuted at the next Board meeting.
If the Chairman is unable to act, the Vice-Chairman exercises
his functions, assuming all his tasks and powers.

	www.givaudan.com – our company – corporate governance –rules and policies – articles of incorporation

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Board committees*

Audit Committee

Compensation Committee– A ssists the Board in its oversight responsibilities with respect
to financial reporting– Ensures effectiveness and efficiency of internal control,risk management and compliance systems– A ssesses and overviews the internal and external
audit processes– Reviews and recommends the compensation policies tothe Board– Approves the remuneration for the Executive Committee– Prepares the Compensation ReportThomas Rufer (Chairman)
Lilian Biner
Victor Balli*

Prof. Dr-Ing. Werner Bauer (Chairman)
Ingrid Deltenre
Victor Balli

Nomination and Governance Committee

Innovation Committee– A ssists the Board in applying principles of good
corporate governance– Prepares appointments to the Board and the
Executive Committee– A ssists the Board in scientific matters relating to the flavours,
fragrances and cosmetics Industry– Identifies opportunities, proposes and screens potential
innovation partners

Calvin Grieder (Chairman)
Ingrid Deltenre
Michael Carlos

Michael Carlos (Chairman)
Calvin Grieder
Prof. Dr-Ing. Werner Bauer

All committee members were part of their respective committee(s) for the entire year of 2019.

3.5.2 For each committee of the Board of Directors:
list of members – tasks – areas of responsibility
The Board of Directors has four established Committees:
an Audit Committee, a Nomination and GovernanceCommittee, a Compensation Committee and an Innovation
Committee. Each committee is led by a Committee Chairman
whose main responsibilities are to organise, lead and minutethe meetings. For the participation of the Board members in
the committees, please refer to the table above.
Audit Committee
The primary function of the Audit Committee is to assist theBoard in fulfilling its oversight responsibilities by reviewing thefinancial information, the systems of internal controls and theaudit process. It carries out certain preparatory work for the
Board of Directors as a whole. The Audit Committee currently
consists of three members of the Board. All of them have therequisite financial experience.

Givaudan – 2019 Governance, Compensation and Financial Report

The Audit Committee ensures that the Company’s risk
management systems are efficient and effective. It promotes
effective communication among the Board, management, theinternal audit function and external audit. It reviews andapproves the compensation of the external auditors for theannual audit.
The Audit Committee held four regular meetings in 2019, eachlasting approximately three to four hours. The Head of Internal
Audit, the Chief Financial Officer, the Corporate Ethics &Compliance Officer and the External Lead Audit Partner
attended all meetings, apart from certain private sessions.
Compensation Committee
The Compensation Committee reviews and recommends thecompensation policies to the Board of Directors. It approves the
remuneration of the Chief Executive Officer and the othermembers of the Executive Committee as well as all
performance-related remuneration instruments and pension
fund policies. Since the Swiss Ordinance against Excessive
Compensation came into force, the Committee prepares theCompensation Report to be established by the Board.

Governance report 9

The Compensation Committee consists of three members of theBoard who are elected annually by the Annual General Meetingof shareholders. The Committee takes advice from external
independent compensation specialists and consults with the
Chairman and the Chief Executive Officer on specific matterswhere appropriate. Since the Annual General Meeting 2014, themembers of the Compensation Committee are elected by theshareholders from the re-elected Board members.
In 2019, the Compensation Committee met four times. The
average duration of each meeting was approximately 1.5 to
2 hours. During these meetings the Committee reviewed,
among other things, the short- and long-term incentive plan
parameters as well as the alignment of Executive Committee
and Board of Directors compensation with the Company’s
principles and policy. The Chairman, the Chief Executive Officer,
the Chief Financial Officer, the Head of Global Human
Resources and/or the Head of Compensation and Benefits
attended relevant sections of the meetings.
	2019 Compensation report, page 19

Nomination and Governance Committee
The Nomination and Governance Committee assists the Board inapplying the principles of good corporate governance. It prepares
appointments to the Board of Directors and the Executive
Committee and advises on the succession planning process of
the Company. It consists of three members of the Board.
The Nomination and Governance Committee met three times
during 2019, to review the independence of Board members
and to review the succession plans of critical leadership
positions as well as the evolution of the board succession. Eachmeeting lasted between one and one and a half hours. The CEO
and the Head of Global Human Resources attended relevant
sections of the meetings.
Innovation Committee
The Innovation Committee advises the Board on scientificmatters relevant to the flavour and fragrance and cosmetics
industry, or other additional fields the Board may request. It
acts as a sounding board to the Board of Directors and research
management, reviewing activities in different fields of research,looking at new opportunities and possible partnerships andreviewing projects on a detailed basis as required. It also serves
as a platform for Board dialogue with the relevant members of
the Executive Committee and the divisional Heads of Scienceand Technology.

The Innovation Committee met twice during 2019. Eachmeeting lasted approximately four to eight hours on average.
The CEO, the Division Heads and the divisional Heads of Scienceand Technology were present. External speakers also attended
the meetings. The Committee reviewed key areas of theInnovation programme, which included naturals, biotechnology
and the microbiome and external innovation collaborations.
More information on the Board of Directors and the roles of
the Committees are described on Givaudan’s website.
	w ww.givaudan.com – our company  – corporate governance   –
board of directors
	

3.5.3 Work methods of the Board and its Committees
Board meetings are held periodically and also when mattersrequire a meeting, or on the written request of one of themembers of the Board. Ordinary Board meetings are held on
average once a quarter plus one additional ordinary Board
meeting to approve the Annual Report. The Chairman, after
consultation with the Chief Executive Officer, sets the agenda
for each Board meeting. Decisions may also be taken by
circulation (in writing, including by PDF sent by e-mail) or
by telecommunication (including telephone and videoconference), provided that none of the Board members
requests a formal meeting.
Meetings of Board Committees are usually held in connection
with Board meetings, with additional meetings scheduled
as required. The Board of Directors receives regular reports
from its Committees and the Chairman, as well as from the
Executive Committee.
Minutes of Committee meetings are prepared by the secretary of
the respective Committee and circulated to all Board members.
In preparation for Board and committee meetings, the Board
members involved receive pertinent information for prereading via a secure electronic document sharing system.
In 2019 the Givaudan Board of Directors held six regularmeetings including one constitutive meeting directly following
the general meeting of shareholders. In addition, the Board held
three extraordinary meetings by telephone. Regular meetings
in Switzerland usually last for one to one and a half days, while
Board meetings at Givaudan locations outside Switzerland lastfor two to three days, including visits to sites and strategic
locations and discussion with the management of the visited
region. Extraordinary meetings are usually shorter.
In October 2019 the Board visited Givaudan sites in the
Netherlands and in November the Board visited Givaudan sites
and other strategic locations in China.

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Governance report

Meetings: attendance 2019
Number of
Board meetings / calls
attended
Board member

regularCalvin Grieder

63

Victor Balli

6

3

Prof. Dr-Ing. Werner Bauer

6

2

Lilian Biner

6

3

Michael Carlos

53Ingrid Deltenre

63Thomas Rufer

5

3

Number of
Audit Committee
meetings attended

Number ofCompensation
Committee meetings
attended44

Number of Nomination and GovernanceCommittee meetings
attendedNumber of Innovation
Committee meetings
attended

32extraord.

4

2

4
3
4

2

3

3

Meetings held in the year

9

4

4

3

2

Average length of meetings

1 – 2 days (regular)

3 to 4 hours

1.5 to 2 hours

1 to 1.5 hour

4 – 8 hours

Apart from the constitutive meeting directly following thegeneral meeting of shareholders and the extraordinary
meetings by telephone, the Company’s operational andfinancial performance was presented by management andreviewed by the Board during each Board meeting. The Board
was also informed about, and discussed, various aspects of theCompany’s future strategy, all major business development andinvestment projects, management succession planning andcompensation and other major business items as well as thefindings of Internal Audit and risk management. Except for theconstitutive meeting and certain closed sessions, the Chief
Executive Officer, the Chief Financial Officer and the presidentsof the two divisions were present at all meetings. The othermembers of the Executive Committee attended four meetings.
Selected senior managers were invited to address specificprojects at regular Board meetings. The Corporate Ethics &Compliance Officer reported once to the Board of Directors.
In 2019 the Board conducted one annual self-assessment andhad continuous discussions of its own succession planning.
The attendance of Board members at Board and Committee
meetings in 2019 as well as the average duration of themeetings can be seen in the table above.

3.6 Definition of areas of responsibility

The Board of Directors is responsible for the ultimate direction,
strategic supervision and control of the management of theCompany, as well as other matters which, by law, are under its
responsibility. This includes the establishment of medium- andlong-term strategies and of directives defining Company
policies and the giving of the necessary instructions in areas
such as acquisitions, major investments and long-term financial
commitments exceeding certain thresholds.
In accordance with Swiss law, the Articles of Incorporation and
the Board Regulations of Givaudan, the duties of the Board of
Directors include the following matters:–– the ultimate management of the Company and, in particular,
the establishment of medium- and long-term strategies andof directives defining Company policies and the giving of thenecessary instructions–– the establishment of the organisation–– the approval of the annual Group budget–– the structuring of the accounting system and of the financial
controlling, as well as the financial planning–– the assessment of the Company’s risk management–– the decision on investments in, or divestments of, fixed andtangible assets of a global amount exceeding the limit set by
the corporate investment guidelines established by the Boardof Directors–– the appointment and removal of the persons entrusted withthe management and representation of the Company, inparticular the Chief Executive Officer and the other membersof the Executive Committee

Givaudan – 2019 Governance, Compensation and Financial ReportGovernance report 11–– the ultimate supervision of the persons entrusted with the
management, in particular with respect to compliance withthe law, the Articles of Incorporation, regulations andinstructions given in any areas relevant to the Company,
such as working conditions, environmental protection,
trade practices, competition rules, insider dealing and ad
hoc publicity–– the preparation of the annual business report, as well as the
preparation of the Annual General Meeting of shareholders
and the implementation of its resolutions–– the notification of the court in case of insolvency–– the decisions regarding the subsequent performance ofcontributions on shares not fully paid in–– the ascertainment of share capital increases to the extent
that these fall under the powers of the Board of Directors
and resulting confirmations and modifications to the Articles
of Incorporation–– the verification of the special professional qualifications of
the auditors.
Except as otherwise provided by Swiss law, the Articles ofIncorporation and the Board Regulations, all other areasof management are fully delegated by the Board of Directors
to the Chief Executive Officer, the Executive Committee andits members.
The Board Regulations can be found on the website.
	www.givaudan.com – our company – corporate governance –rules and policies

3.7 Information and control instruments
vis-à-vis senior management

The Board recognises that in order to be able to carry out its
tasks of ultimate direction of the Company and supervision of
the management, it needs to be fully informed about all
matters that materially impact Givaudan. To ensure this, theBoard has at its disposal an information and control system
which comprises the following instruments:
Management information system
The Board ensures that it has sufficient information for
appropriate decision-making through a management
information system with wide-ranging information rights for
the Board members:–– the Chairman of the Board receives invitations and minutesof Executive Committee meetings on a regular basis and theChief Executive Officer and the Chief Financial Officer report
regularly to the Chairman of the Board of Directors–– the Chief Executive Officer and the Chief Financial Officer arepresent and report at all regular Board meetings and answer
all requests for information by the Board members about any
matter concerning Givaudan that is transacted. Other
members of the Executive Committee and selected senior
managers are regularly invited to address specific projects atregular Board meetings. All members of the Executive
Committee have a duty to provide information at meetings ofthe Board of Directors on request–– the Head of Internal Audit and the Corporate Ethics &Compliance Officer report to the Board once a year. The
Board also receives annual reports on Environment, Healthand Safety, Sustainability and Risk Management–– the Head of Internal Audit and the Corporate Ethics &Compliance Officer are present and report at each meeting of
the Audit Committee. The Chief Financial Officer is alsopresent at all meetings of the Audit Committee, as are theexternal auditors–– the Head of Global Human Resources, the Head ofCompensation & Benefits and the Chief Executive Officer arepresent at each Compensation Committee meeting, except
when questions of compensation for Executive Committee
members are being deliberated. The Chairman also attends
the meetings of the Compensation Committee regularly–– all Board members have access to the full minutes of all
Committee meetings–– the Board of Directors receives summarised monthly reports
from the Executive Committee, which include performanceagainst key performance indicators. All Board members are
immediately informed on extraordinary events. They also havedirect access to the Givaudan intranet where all internal
information on key events, presentations and organisationalchanges are posted. In addition, the Board members receive
relevant information, including media releases and information
to investors and financial analysts–– in preparation for each Board meeting, the Board members
receive information and reports from the Executive
Committee and other members of senior management via asecure electronic document sharing system and other meansof communication–– the Board of Directors visits at least one Givaudan country
operation per year, where Board members meet members ofsenior local management. Additionally, Board members areencouraged to visit country operations when travelling and tomeet local and regional senior management to allow Board
members the opportunity of getting first-hand information on
local and regional developments and interacting directly withmanagement across the globe

Givaudan – 2019 Governance, Compensation and Financial Report12 Governance report–– the Board has regular access to the Chief Executive Officer,
Chief Financial Officer and the other members of the
Executive Committee. Any Board member may request fromthe Chief Executive Officer and other members of the
Executive Committee information concerning the course of
the business.

4. Executive Committee

Risk management
Givaudan has established an internal risk management processthat is based on the Givaudan Enterprise Risk Management
Charter. It focuses on identifying and managing/exploiting risks.

The Chief Executive Officer is appointed by the Board of
Directors upon recommendation of the Nomination
Committee. Subject to the powers attributed to him, he has thetask of achieving the strategic objectives of the Company anddetermining the operational priorities. In addition, he leads,
supervises and coordinates the other members of the Executive
Committee, including convening, preparing and chairing themeetings of the Executive Committee.

The Board of Directors defines the strategic risk management
framework. This process is under the responsibility of the
Executive Committee. The risk management process follows
a structured assessment, review and reporting cycle that iscoordinated by the Corporate Ethics & Compliance Officer toensure a harmonised Group-wide approach.
For each identified strategic top-level Company risk a memberof the Executive Committee is designated as the risk ownerwith the responsibility to manage the risk on a Group-widebasis. Once a year the Executive Committee reports to theBoard on the risk management process, the strategic risks andthe mitigation actions. Corporate Internal Audit provides
assurance on the effectiveness of the risk management process.
2019 Integrated Annual Report, risk management, pages 70–73

Internal audit
The Corporate Internal Audit function is established as anindependent and objective corporate function reporting
directly to the Audit Committee.
Its role is to evaluate and contribute to the continuous
improvement of the Company’s risk management and control
systems. This specifically includes the analysis and evaluation of
the effectiveness of business processes and recommendations
for adjustments where necessary.
Corporate Internal Audit uses a risk-based audit approach
aimed at providing assurance on all relevant business processes
across Givaudan entities. This approach follows a businessprocess audit methodology that provides value to the local
entities and to the Group’s management.
Givaudan corporate strategy, risk management findings,
past audit results, management input, changes in organisation
and Corporate Internal Audit experience are the elements
taken into account to build the annual internal audit plan.
Effective communication and reporting ensure an efficient
implementation of the audit recommendations. For specificaudits of affiliates, the internal audit function is supported
by dedicated staff from EY. The internal audit activity isreported to the full Board of Directors once a year.

Givaudan – 2019 Governance, Compensation and Financial Report

The Executive Committee, under the leadership of the Chief
Executive Officer, is responsible for all areas of operational
management of the Company that are not specifically reservedto the Board of Directors.

The members of the Executive Committee are appointed by the
Board of Directors on recommendation of the Chief Executive
Officer after evaluation by the Nomination Committee. The
Executive Committee is responsible for developing theCompany’s strategic as well as long-term business and financial
plans. Key areas of responsibility also include the management
and supervision of all areas of the business development on an
operational basis, and approving investment decisions.
The tasks and powers of the Executive Committee include theapproval of investments, leasing agreements and divestments
within the corporate investment guidelines. The Executive
Committee approves important business projects, prepares thebusiness plan of the Company and the budgets of the individual
divisions and functions.
In addition, it plays a key role – together with the Human
Resources organisation – in the periodic review of the talentmanagement programme, including succession planning for key
positions. Alliances and partnerships with outside institutions,such as universities, think tanks and other business partners,
are also monitored by the Executive Committee.
The members of the Executive Committee are individually
responsible for the business areas assigned to them.
Sustainability
The Head of Global Procurement and Sustainability, amember of the Executive Committee, heads the Company’ssustainability programme. He is supported by a cross-functional
corporate sustainability steering committee and a sustainability
leadership team made up of internal specialists in corporate
responsibility and sustainability to implement the programme.
The Head of Global Procurement and Sustainability reports
annually to the Board of Directors on sustainability matters.
The Executive Committee meets generally on a monthly basis
to discuss general Company business and strategy. In 2019, theCommittee held twelve meetings at Company sites around theworld, each meeting lasting on average two days.

Governance report 13

These meetings are an opportunity to interact with local
management and to visit Givaudan locations across the globe.
Each major region is visited at least once a year to ensure aclose interaction with all the different business areas.

4.1 Members of the Executive Committee
At 31 December 2019, the following were membersof the Executive Committee

Gilles Andrier

Chief Executive Officer

Gilles Andrier spent the first part of his careerwith Accenture in management consulting
before joining Givaudan in 1993 as Fragrance
Division Controller and Assistant to theChief Executive Officer. He later held
various positions including Head of
Fragrance Operations in the USA andHead of Consumer Products in Europe. He
was appointed Head of Fine Fragrances,
Europe in 2001 before becoming Global
Head of Fine Fragrances in 2003 and thenCEO of Givaudan in 2005.
Other mandates held by Gilles Andrier
are: independent non-executive
Director of Albea SA.

Louie D’Amico

President Flavour Division

Louie D’Amico began his career with
Givaudan in sales as key accountmanager with Fries and Fries. On themerger with Givaudan Roure in 1997,
he became the Head of the North
America Sweet Goods business unit
and later the North America Savourybusiness unit. In 2003, he relocated toEurope as Head of International Key
Account Management and then Headof the Global Beverage business unit.
In 2006, Louie D’Amico became
Commercial Head of EAME. In 2010,
he relocated back to the USA as Headof Flavours Americas. Effective 1 April
2018, he was appointed President of
the Flavour Division and a member ofthe Executive Committee.

›› US national›› Born in 1961›› Appointed in 2018

Louie D’Amico has a BSc in chemistry from Michigan
State University. He has over 30 years of experience in theflavour industry.

›› French national›› Born in 1961›› Appointed in 2005

Gilles Andrier graduated with two Masters in Engineering fromENSEEIH Toulouse.

Tom Hallam

Chief Financial Officer

Tom Hallam began his career in the UK
working in various industries andpositions. He moved to Switzerland in1996 to join Serono in Geneva, where heheld a number of positions of increasing
responsibility including Financial Director
for Manufacturing Operations, and in2001 he was appointed Vice President,
Corporate Finance. Tom Hallam joined
Givaudan in 2008 as Group Controller,
based in Vernier, Switzerland withresponsibility for financial reporting andcompliance, strategic planning and›› British & Swiss
management of Givaudan’s businessnational
development process. He was›› Born in 1966
appointed Chief Financial Officer›› Appointed in 2017
effective 1 January 2017.
Tom Hallam graduated from the University of Manchester, UKwith a BA (Hons) in Accounting and Finance and subsequently
qualified as a member of the Chartered Institute ofManagement Accountants.

Maurizio Volpi

President Fragrance Division

Maurizio Volpi began his career in
consumer goods with P&G and Reckitt
Benckiser in Italy, working in various
marketing roles. In 2000, he joined
Givaudan Italy as Account Manager in
Milan before moving to Argenteuil in2003 as Head of Marketing Consumer
Products Europe. Maurizio Volpi
subsequently took on roles of increasing
responsibility at the global level: Head of
Global Marketing Consumer Products,
Head of Global Marketing and Consumer
Market Research for both Consumer
Products and Fine Fragrances, andWorld Account Manager for Unilever.
›› Italian national
He was appointed Regional Head of›› Born in 1969
Western and Eastern Europe (WEE)›› Appointed in 2015
for the Consumer Products business in2012 and in 2015 became President of theGivaudan Fragrance Division.
Other mandates held are: member of the Boards of Directors ofInternational Fragrance Association and the Research Institutefor Fragrance Materials.
Maurizio Volpi holds a degree in Economics from the Bocconi
University in Milan, Italy.

Givaudan – 2019 Governance, Compensation and Financial Report14 Governance report

Simon Halle-Smith

Anne Tayac

Head of Global Human Resources
and EHS

Head of Givaudan Business Solutions

Simon Halle-Smith began his careerin the pharmaceutical industry in
1991. He worked with Eli Lilly &Company in the UK in Clinical Trial
Project Management, Sales andHuman Resources. In 2004, hejoined Quest as HR Director for
the UK, before being appointed
European HR Director in 2005.
When Quest was acquired by
Givaudan in 2007, he continued as
European HR Director before being
appointed Head of HR for the
Fragrance Division in 2009. In 2015,›› British national
Simon Halle-Smith became Head›› Born in 1966of Global Human Resources and a›› Appointed in 2015
member of the Executive Committee.
He took on the additional responsibility for Environment,
Health and Safety (EHS) as of March 2017.
Simon Halle-Smith has a Bachelors in Biology and Chemistry
and a PhD in Biochemistry from the University of East Anglia
in the UK.

Anne Tayac has a Master in Flavours
and Fragrances from Sciences University in Le Havre, France
and in Analytical Control and Quality from Sciences University
in Marseille, France.

4.2 Other activities and vested interests

Please refer to the biographies of the members of the Executive
Committee described in section 4.1 for their other activities andvested interests.

Willem Mutsaerts

Head of Global Procurement andSustainability

Willem Mutsaerts joined Givaudan in
1989, initially with responsibility forsales in Benelux. He moved on to
become Regional Account Manager for
the APAC region in Singapore before
being appointed Head of Global
Purchasing for Fragrances. In 2001,
he took commercial responsibility
for Fragrance consumer products inthe EAME region, and in 2007
was appointed Head of Global
Operations Fragrances.
Willem Mutsaerts became Head of
Global Procurement and a member ofthe Executive Committee in October
2015. As of March 2017, he took on the
additional responsibility of head ofGivaudan’s Sustainability programme.

Anne Tayac began her career as a
Quality Assurance coordinator with
Robertet in Grasse. She joined Givaudan
France in 1996 as Head of Quality
Management before being promoted
to Global Head of Fragrance Quality
Management in 1998. Anne Tayac
relocated to Vernier in 2003 where
she assumed roles of increasing
responsibility in Quality Management,
Customer Care, SAP deployment change
management, Fragrance and Flavour
Supply Chain Excellence and was mostrecently responsible for leading Global
Fragrance Operations. She was›› French national
appointed as Head of Givaudan›› Born in 1968
Business Solutions in August 2016.
›› Appointed in 2016

Except for those described in section 4.1, no member ofthe Executive Committee of Givaudan SA holds any material
permanent management or consultancy functions for
significant domestic or foreign interest groups nor any
significant official functions or political posts.

4.3 Rules in the Articles of Incorporation on thenumber of permitted activities pursuant to Art. 12
para. 1 point 1 OaEC
Article 32 of the Articles of Incorporation of the Company
permits the following external mandates for members of the
Executive Committee:›› Dutch national›› Born in 1962›› Appointed in 2015

Willem Mutsaerts has a degree in international marketingand is the holder of an MBA obtained at Golden Gate University
in Singapore.

Givaudan – 2019 Governance, Compensation and Financial Report–– members of the Executive Committee may, subject toapproval by the Board of Directors, hold up to two mandates
in quoted or non-quoted companies.
–– the following mandates are not subject to these limitations:›› mandates in companies which are controlled by the
corporation›› mandates held by order and on behalf of the corporationor any controlled company. No member of the Board of
Directors or of the Executive Committee shall hold morethan ten such mandates

Governance report 15›› mandates in associations, foundations, charitableorganisations, trusts, employee welfare foundations andother comparable structures. No member of the Board of
Directors or of the Executive Committee shall hold morethan 15 such mandates.
‘Mandates’ mean mandates in the supreme governing bodyof a legal entity which is required to be registered in the Swisscommercial register or a corresponding foreign register.
Mandates in different legal entities which are under joint
control are deemed one mandate.
	www.givaudan.com – our company – corporate governance –rules and policies – articles of incorporation

4.4 Key elements of all management contracts
between the issuer and companies (or natural
persons) not belonging to the GroupThe Company has not entered into any management
contracts with third parties that fall within the scope of
Subsection 4.4 of the SIX Directive on Information Relating
to Corporate Governance.

5. Compensation, shareholdings and loans
In accordance with the Swiss Code of Obligations and the SIX
Directive on Corporate Governance, Givaudan publishes thedetails of the remuneration of its Board of Directors and its
Executive Committee in the Integrated Annual Report as wellas the Compensation report and the Financial report.

6. Shareholders’ participation
6.1 Voting rights and representation restrictions
6.1.1 All voting rights restrictions; indication of any
statutory group clauses and rules on granting
exceptions, particularly in the case of institutional
voting rights representatives

6.1.4 Procedure and conditions for abolishingstatutory voting rights restrictions
Any change in the above rules requires a positive vote of
the absolute majority of the share votes represented at ashareholders’ meeting, as prescribed by Swiss law.

6.1.5 Statutory rules on participation in the general
meeting of shareholders if they differ from applicablelegal provisions
There are no deviations from the Swiss legal provisions.
Any shareholder who, on the day determined by the Board of
Directors, is registered as a shareholder with voting rights has
the right to attend and to vote at the shareholders’ meeting.
Each shareholder may be represented at the shareholders’meeting by another shareholder who is authorised by a writtenproxy, by a legal representative or by the independent voting
rights representative (‘independent proxy’) elected by the
Annual General Meeting of shareholders.

6.1.6 Information on any rules which might be laid
down in the Articles of Incorporation on the issue of
instructions to the independent proxy, and any rulesin the Articles of Incorporation on the electronic
participation in the general meeting of shareholders
Article 10 of the Articles of Incorporation of the Company
states that the Board of Directors establishes the rules onshareholder participation and representation in theshareholders’ meeting, including the rules on proxies andvoting instructions (by electronic means or otherwise).

6.2 Statutory quorums

The Articles of Incorporation of Givaudan SA follow the
majority rules prescribed by Swiss law for decisions of general
meetings of shareholders.

6.3 Convocation of the general meeting ofshareholders

At the Annual General Meeting of shareholders on 20 March
2014, the previously existing registration and voting rights
restrictions were removed. Today, the Company has nolimitations on voting rights for ordinary shareholders.

The convocation of shareholders registered with voting rights
to general shareholders’ meetings is made by publication in the
Swiss official trade journal (SHAB/FOSC) at least 20 days prior
to the day of the meeting. Shareholders representing at least
10% of the share capital may demand in writing that ashareholders’ meeting be convened, setting forth the items to
be included on the agenda and the proposals.

For restrictions on nominee shareholders, see section 2.6.3.

6.4 Agenda

6.1.3 Reasons for granting exceptions in the year
under review
Not applicable as the Company does not have any voting rights
restrictions for ordinary shareholders.

Shareholders representing shares for a nominal value of at least
CHF 1 million may demand in writing at least 45 days before themeeting that an item be included in the agenda, setting forth
the item and the proposal.

Givaudan – 2019 Governance, Compensation and Financial Report

16

Governance report

6.5 Inscriptions into the share register

Shareholders will be registered with a right to vote in the shareregister of Givaudan SA until the record date set by the Board of
Directors for each shareholders’ meeting. The register date forthe ordinary general meeting is specified in the invitation and is
set approximately two weeks before the meeting. Only
shareholders who hold shares registered in the share registerwith a right to vote at a certain date, or their representatives,
are entitled to vote.
Givaudan SA has not granted any exceptions to this rule.

7. Change of control and defence measures
7.1 Duty to make an offer

The Articles of Incorporation of Givaudan SA do not contain any
rules on opting out or opting up under Swiss law.
General Swiss legal provisions apply, which provide that anyone
who acquires more than 33.3% of the voting rights of a listedcompany is required to make a public offer to acquire all listed
securities of the Company that are listed for trading on the SIX
Swiss Exchange.

7.2 Clauses on changes of control

In the event of a change of control, restricted share units (RSUs)
and performance shares granted, as the case may be, by theCompany to members of the Board of Directors and to a total of
485 senior management and employees may vest immediately. Allother defence measures against change of control situations
previously in effect were deleted by the Board of Directors in 2007.

8. Auditors
8.1 Duration of the mandate and term of office ofthe lead auditor

At the Annual General Meeting of shareholders on 26 March
2009, Deloitte SA was first appointed as Group and statutory
auditor of Givaudan SA and its affiliates and has held the audit
mandate since that time. At the Annual General Meeting ofshareholders on 28 March 2019, Deloitte SA was reappointed as
statutory auditor for the business year 2019. The rotation of thelead auditor follows the legally required maximum duration ofseven years in accordance with the art. 730a para. 2 of the Swiss
Code of Obligations. Since March 2016, the responsible lead
auditor for the Givaudan audit at Deloitte has been Ms Karine
Szegedi Pingoud, Partner.
The Audit Committee and the Board reconsider on an annual
basis whether the statutory auditors should be proposed for
re-election to the shareholders’ meeting.

8.2 Auditing fees

The fees of Deloitte for professional services related to theaudit of the Group’s annual accounts for the year 2019 were
CHF 3.4 million. This amount includes fees for the audit ofGivaudan SA, its subsidiaries, and of the consolidated financial
statements.

8.3 Additional fees

In addition, for the year 2019, Deloitte rendered tax andcompliance related services for a total of CHF 0.2 million.

8.4 Informational instruments pertaining to theexternal audit

The external auditor presents the outcome of the audit directly
to the Audit Committee after the end of each reporting year.
The Audit Committee conducts an assessment of the audit
services provided by Deloitte during its regular meetings toevaluate the performance of Deloitte as external auditors.
The Audit Committee meets the external auditor at least fourtimes per year, including private sessions without the presenceof management. For each meeting the external auditors
prepare a report in which they comment on their activities
and are available for particular questions raised by the Audit
Committee. In addition the Board of Directors meets with theexternal auditor as well at least one time per year.
Furthermore, the Audit Committee reviews and approves thecompensation and evaluates and approves other services
provided by the external auditor.
The scope of the audit is defined in an engagement letter
signed by the Chairman of the Audit Committee and theChief Financial Officer.
During 2019 Deloitte attended all four of the Audit
Committee meetings.

Givaudan – 2019 Governance, Compensation and Financial ReportGovernance report 17

9. Information policy
Givaudan’s Principles of Disclosure and Transparency aredescribed in detail at:	www.givaudan.com – our company  –
corporate governance – rules and policies

Givaudan’s Articles of Incorporation can be found at:	www.givaudan.com – our company  –
corporate governance – rules and policies

Hard copies of Company publications such as the Integrated
Annual Report are available on request.
All Corporate publications such as the Integrated Annual
Report, the Half Year Report and the Sustainability GRI Index
can also be downloaded from Givaudan’s website at:	www.givaudan.com  – media – publications

Quarterly sales information and other media releases canbe found at:	www.givaudan.com – media – media releases

All relevant information can also be found at:	www.six-swiss-exchange.com – market data – shares –Givaudan – company details

The complete calendar of events is available at:	www.givaudan.com – investors – investor events –events calendar

For further information please contact:
Givaudan Media and Investor Relations
Chemin de la Parfumerie 5, 1214 Vernier, Switzerland
T +41 22 780 9093
E group.investors@givaudan.com

Givaudan – 2019 Governance, Compensation and Financial ReportCompensation
reportIn this section
19

Compensation governance

20 Compensation principles
21 Compensation of Givaudan executives
25

Compensation of the Executive
Committee

27

Compensation of the Board of Directors

29 Share ownership guidelines
29 Ownership of Givaudan securities
30 Report of the statutory auditor

Compensation report 19

Attract, motivate and retain
Givaudan aims to attract,
motivate and retain a diverse
pool of highly talented people tosustain its leadership position
within the flavour and fragrance
industry. The Company’scompensation policies are an
essential component of thisstrategy, and as such a key driverof organisational performance.
Our compensation programmes are aligned to our strategy andreflect the performance of the business and of individuals. We
have rigorous governance, policies and processes to ensure that
our compensation practices are aligned with our principles ofintegrity, fairness and transparency.
This report on compensation, complementing our integrated
report, has been prepared in compliance with the Ordinanceagainst Excessive Compensation at Listed Stock Companies(OaEC) and with the Directive on Information relating
to Corporate Governance, issued by the SIX Swiss Exchange.
The report also comprises information required under the
Swiss Code of Obligations and takes into account therecommendations set out in the Swiss Code of Best Practicefor Corporate Governance of Economiesuisse.

1. Compensation governance
1.1 Compensation Committee

The Compensation Committee supports the Board of
Directors (Board) in establishing and reviewing compensation
policies. It regularly reviews Company-wide programmes inregard to base salary, pension and benefit plans. The

Compensation Committee also annually reviews and approves
the performance targets and related payouts under theannual incentives and share-based long-term incentives, while
the applicable performance criteria are set by the Board.
The Compensation Committee is also responsible for reviewing
and approving individual compensation and benefits ofeach Executive Committee member as well as recommending
compensation for the Board.
The Compensation Committee consists of three independent
members of the Board and is currently chaired by Prof. Dr-Ing.
Werner Bauer. The Chief Executive Officer is regularly invited
to Compensation Committee meetings. The Head of Global
Human Resources acts as secretary of the Compensation
Committee. The Chairman of the Compensation Committee
may invite other executives as appropriate. However,executives do not participate in discussions regarding theirown compensation.
The Compensation Committee meets four to five times a year
and informs the Board of its deliberations, recommendations andresolutions after each meeting. The minutes of the meetings areavailable to the full Board. The Committee utilises independent
external consultants to benchmark the compensation of senior
management and the Board.
Table I summarises the Compensation Committee standing
agenda items and approvals.

1.2 Specific activities in 2019

In 2019, Givaudan defined its purpose to articulate its sustained
contribution to society and set the foundation for all strategic
choices and business decisions. In relation to this excercise, theCompensation Committee has initiated a review of the Company
compensation plans. Accordingly, aspects of the Performance
Share Plan are under consideration for change, including theperformance criteria. Details of the changes will be provided in
the 2020 Compensation report.
Further, some changes to simplify the annual Incentive Plan andperformance management processes have been implemented.
These changes encourage employees and managers to engage

Givaudan – 2019 Governance, Compensation and Financial Report

20 Compensation report

I. Compensation Committee standing agenda items and approval
Timing

Agenda items

Proposed ¹

Beginningof yearCompensation report

Compensation Committee

Board of Directors ³

Prior year annual incentive achievement

CEO ²

Compensation Committee

Set current year performance targets

CEO ²

Compensation Committee

Long-term incentive award allocation

CEO ²

Compensation Committee

Maximum amounts for shareholder voting on
Executive Committee and Board compensation

Compensation Committee

Board of Directors(preliminary) ³

Long-term incentive achievement
against targets

CEO ²

Compensation Committee

Compensation of the Executive Committee

CEO ²

Compensation Committee

Compensation of the Board of Directors

Compensation Committee

Changes to compensation system (if any)
Preview of key items for next year

Compensation Committee
CEO / Compensation Committee

Mid-year /end of year

1.
2.
3.

Consultation

Approved

Board of Directors
Chairman

Board of Directors–

CEO compensation proposed by Chairman of the Compensation Committee.
Individual concerned does not attend/abstains.
Subject to shareholders’ vote (binding vote on maximum compensation amounts, consultative vote on Compensation report).

in quality conversations focused on performance anddevelopment throughout the year rather than during specified
periods. However, no changes to the nature of incentive metrics
were made.

1.3 Governance rules

The Articles of Incorporation of Givaudan include rules on theprinciples applicable to performance-related pay and to theallocation of equity securities, convertible rights and options(Arts. 23 – 25), additional amounts for payments to Executive
Committee members appointed after the vote on pay at theshareholders’ meeting (Art. 27), loans, credit facilities andpost-employment benefits for the Executive Committee and
Board (Arts. 30 and 31) and the vote on pay at the shareholders’meeting (Art. 26).
Full details on these rules are available on Givaudan’s website.
	www.givaudan.com – our company – corporate governance –rules and policies - articles of incorporation

In line with Givaudan’s Articles of Incorporation, at the 2020
Annual General Meeting the Board will submit the following
maximum aggregate amounts for shareholder approval:–– Compensation of the Board for the period until the 2021
ordinary shareholders’ meeting–– Short-term variable compensation of the Executive
Committee for the 2019 fiscal year (Executive Committee
retrospective vote)–– Fixed and long-term variable compensation of the Executive
Committee for the 2020 fiscal year (Executive Committee
prospective vote)

Givaudan – 2019 Governance, Compensation and Financial Report

The calculation approach to be applied for determining theamounts to be approved by shareholders is aligned with theCompensation report valuation methodologies. Full details of
the amounts to be submitted for approval will be included in
the shareholders’ meeting invitation.
Givaudan will also submit the 2019 Compensation report to a
consultative vote at the 2020 Annual General Meeting.

2. Compensation principles
2.1 Board of Directors

In order to reinforce their independence in exercising theirsupervisory duties, members of the Board receive fixedcompensation only. They are not eligible to any performancebased compensation and are not insured in the Company
pension plans.
The Board compensation is paid in cash and in the form ofRestricted Share Units (RSUs). RSUs are a right to receive sharesof Givaudan after a three-year blocking period. They link thecompensation with the share price evolution of the Company
and strengthen the alignment with shareholders’ interests.

2.2 Executives and employees

The ability to attract, motivate and retain the right talented
employees globally is key to the continued success of Givaudan.
Our competitive remuneration policy supports this ambition
and is based on the following principles:–– Pay for performance: through our variable pay plans,
employees participate in the Company’s overall success andare rewarded for their contribution to business results.

Compensation report 21–– Alignment of interests: Givaudan seeks to align management
and shareholders’ interests by rewarding long-term value
creation through share-based programmes.
–– External competitiveness: overall compensation positioning
should enable Givaudan to attract and retain highly talented
individuals critical to its success.
–– Internal consistency and fairness: internal pay scales reflect
job level, function and geographic market.

–– Performance Share Plan (PSP): this plan links executives
and selected manager compensation to the evolution of theGivaudan share price and long-term business objectives
through the award of Performance Shares. Depending on theachievement of performance criteria, participants may receive
between zero and two Givaudan shares per performance shareat the end of the three-year vesting period.

Givaudan’s total compensation in 2019 is composed of thefollowing elements:–– Benefits (indirect compensation): benefit plans seek to address
current and future security needs of employees. These generally
include retirement, health, death and disability benefits.
Benefits-in-kind such as Company vehicles are offered tocertain employees according to local market practice.

–– Base salary: base salaries are regularly benchmarked in eachlocation and pay scales are reviewed annually according tolocal market evolution. As a general rule, pay scales are built
around market median.

As illustrated in table II, every Givaudan employee’s
remuneration is linked to Company performance throughcash-based and/or share-based variable pay plans and isaligned with Givaudan’s compensation principles.

–– Profit Sharing Plan: non-management employees participate
in the global Profit Sharing Plan. Payouts are based on yearly
evolution of Group EBITDA.

3. Compensation of Givaudan executives–– Annual Incentive Plan: this plan covers all managers andexecutives globally. It rewards participants for theachievement of financial targets and other organisational
and individual objectives. Depending on the achievement of
performance criteria, payouts can vary between 0% and200% of target payout.

The compensation of Givaudan executives, in terms of both
structure and level, is regularly benchmarked against individuals
in similar positions within selected listed Swiss companies(members of the Swiss Leader Index, or SLI) as well as European
companies that are comparable in size and internationalpresence. Comparable European companies included in our

3.1 Compensation benchmarking

II. Givaudan compensation
Compensation

Participants (number of participants)

PayoutLink to compensation principles

Alignment with the business strategy

Base salary

All employees(15,000)

Cash

Attract and retain highly
talented individuals.
Provides internal consistency
and fairness

Nurture a pipeline ofindustry experts and future
leaders to develop skills forsustained successProfit Sharing
Plan

Non-management
employees (10,000)

Cash

Contribution to Groupfinancial objectives

Reward our people toshare in Group profit

Annual Incentive
Plan ¹

Manager andexecutives (5,000)

Cash

Contribution tofinancial objectives

Achieve annual organic
sales growth and EBITDA
target and individual
performance objectives

Performance
Share Plan ¹ (PSP)

Executives and selected
managers (500)Givaudanshares ²

Alignment of managementwith long-term targets andshareholders’ interests

Achieve long-term organic
sales growth and free
cash flow targets

Benefits

All employees (15,000)

Insurances, pension, Protection against risk,
fringe benefits
attract and retain

1.
2.

Same as base salary

The Annual Incentive Plan and PSP plan are described in more detail in the next sections.
Unless local laws prevent allocation of Givaudan shares, in which case payout is in cash.

Givaudan – 2019 Governance, Compensation and Financial Report22Compensation reportbenchmarking may be selected from the following industries(Specific companies used for benchmarking of Executive
Committee positions are disclosed in section 4.1 page 25):

Table IV below illustrates the structure and purpose of the two
incentive schemes.
IV. Variable compensation overview–– Flavour and fragrance–– Consumer products–– Food and beverage–– Speciality chemicals–– Biotechnology–– IngredientsTo the extent that the median size of the peer group ofcompanies differs from Givaudan’s size (taking into accountrevenue and market capitalisation), regression techniques areapplied to adjust raw survey results for strict comparability.

3.2 Compensation mix

The total compensation of Givaudan executives consists ofdirect and indirect compensation components.
–– Direct compensation consists of base salary, annual incentive
and share-based components.
–– Indirect compensation includes retirement coverage, healthbenefits, death and disability protection as well as certain
benefits-in-kind according to local market practice.
Chart III illustrates the direct compensation mix at target for
Givaudan executives in 2019.
III. Direct compensation mix policy guidelines
34%

21%

45%

Executive Committee* 38%

18%

44%

CEO

Divisional Committees 45%
Key Functional Heads

55%

Other Executives

65%

15%

40%
15%

15%

Annual incentive

0

20

40

20%

Performance shares

60

Performance Share Plan

Managers
and executives

Key talentand executives

PurposeTo reward managers
and executives forthe achievement ofannual organisationaltargets and overall
individual performance

To link compensation
to shareholder
value creation andachievement ofbusiness objectives

GrantsAnnual grant

Annual grantVesting

End of each year

3 years

Conditions
for vesting

Achievement ofannual EBITDA andsales growth targets

Achievement relative
sales growth and FCF/
sales targets over 4 years

PayoutCashShares ¹

1.	Unless local laws prevent allocation of Givaudan shares, in which casepayout is in cash.

3.3 Clawback provisions

As part of the Givaudan compensation programme andensuring appropriate risk management, all incentive-based
compensation (Annual Incentive and PSP) is subject toclawback provisions. The respective plan rules provide theCompensation Committee with absolute discretion to cancel
any payouts that would otherwise be due, including for reasons
linked to an individual’s performance or behaviour. With
regard to the PSP, this means that any right to receive Givaudan
shares at the end of the vesting period will lapse if such a
determination is made by the Compensation Committee. In
2019, the Compensation Committee did not exercise clawback
for any current or former Executive Committee members.

3.4 Base salary30%* Excluding CEO
Fixed pay(incl. benefits)

Annual Incentive Plan

Participants

80

100

Base salaries are established on the basis of the scope andresponsibilities of the function, the external value of the roleand the profile of the incumbent in terms of skills, experienceand individual performance. To ensure market competitiveness,base salaries are reviewed annually. Base salary adjustments (ifany) are based primarily on market evolution, taking into
consideration the executive’s performance and contribution toCompany results.

3.5 Annual Incentive Plan

The Annual Incentive Plan is designed to reward managers’
and executives’ individual performance and contribution to
Givaudan annual objectives.

Givaudan – 2019 Governance, Compensation and Financial ReportCompensation report 23

Performance criteria

V. Historical annual incentive achievement

In 2019, the Annual Incentive Plan for Executive Committee
members was based on the following performance criteria:

2019–– Sales growth targets in local currencies: 50%–– EBITDA margin targets: 50%
For the purpose of the Annual Incentive Plan, EBITDA isexpressed as a percentage of sales. Measurement at Group levelis considered, except where divisional level is more appropriate
having regard to the members’ scope of responsibility.

121%
120%

2018

112%
112%

2017

117%
117%

2016

114%
113%
Executive Committee excluding CEO

Givaudan’s compensation system has been designed foralignment with the Company’s vision and strategy and enshrines
the principles of pay for performance. To provide shareholders
the ability to assess this performance link and in line with
Givaudan’s commitment to transparency, the Company discloses
ex-post the overall payout factor under its variable pay plans.
The disclosure approach protects the Company’s commerciallysensitive, forward-looking information. Provision of suchinformation, such as relating to Annual Incentive Plan
performance targets, could otherwise put the Company and its
shareholders at a competitive disadvantage. Details of the
Performance Share Plan threshold, targets and maximum arepresented in the Compensation report.
Annual incentive payouts for managers and executives below
the Executive Committee level are based on a mix oforganisational performance objectives, cascaded from
Givaudan Group objectives, and individual performance, taking
into consideration achievement of personal objectives,
day-to-day job responsibilities and the demonstration of
behaviours in line with the Givaudan core values.

Incentive targets, caps and payouts
Expressed as a percentage of base salary, annual incentives attarget were the following in 2019:–– Chief Executive Officer: 100%–– Chief Financial Officer and Division Presidents: 80%–– Other Executive Committee members: 60%–– Division Management Committee members: 35% – 50%–– Other executives and managers: 10% – 35%
Based on the performance achievements, incentive payouts
may vary between 0% and a cap of 200% of target incentive.
Minimum threshold achievement is required, otherwise noannual incentive is paid.
In 2019, sales growth and EBITDA were above target. This
resulted in 120% of target payout for the Chief Executive Officer,
and an average of 121% for the the other members of the
Executive Committee. Table V summarises historical annual
incentive achievement against target since 2016.

Target 100%

CEO
2015

3.6
2014 Performance Share Plan

Executives and selected management members are eligible to2013
participate
in the Performance Share Plan (PSP). The PSP is
designed to reward executives and key talent who significantly
influence the long-term success of the business.
PSP participants are granted Performance Shares annually.
The total number of Performance Shares granted, and theplan parameters generally, are approved each year by theCompensation Committee. Givaudan applies a policy to cap
the maximum value of PSP allocations. For Executive
Committee members the annual total grant value permember is approximately 2 times annual base salary.
Performance Shares vest three years from grant date based on
the achievement of performance criteria measured over the
performance period. The operation of the PSP is summarised in
the following diagram.

VI. Operation of the PSP Performance criteria

2019

2020

2021

2022

March
Grant date

March
Vesting date

Receiveperformance
shares

Receive 0–2
Givaudan shares
per performance
share, based on
the achievementof performance
criteria

Performance target setting
Performance is measured on the vesting date based on theextent performance criteria have been met over the previous
four years. Measuring performance over an extended four-

Givaudan – 2019 Governance, Compensation and Financial Report

24 Compensation report

year period is consistent with the long-term outlook of thebusiness. The performance criteria that apply to grants are a
combination of:–– Relative average sales growth as compared to the sales
growth of selected peer group companies; andVII. Historical FCF margin vs set target

Reference test
target setting ¹

2015 PSP

2016 PSP

2017 PSP

2018 PSP

11.2%

14.5%

13.6%

12.4%

14%

14%

14%

12%

–– Cumulative Free Cash Flow (FCF) margin, expressed as apercentage of cumulative sales.

Target ²

The structure of performance criteria calculation has been
specifically designed to be challenging.

1. Cumulative FCF margin of the related previous performance period.
2. Four-year target for corresponding PSP.

For average sales growth, the peer group includes companies
from the flavour and fragrance industry that publish sales
in local currency. These companies represent in total
approximately 75% of this market. The peer companies
currently included in the group are Firmenich, Hasegawa, IFF,
Robertet, Sensient, Symrise and Takasago. The performance
range for relative sales growth extends from -1.5% to 2.5%
annualised sales growth versus peer group over the four-year
performance period (2017 and prior: -2% to 2%).
In the case of FCF margin, final achievement is calculated as
the average of the reported FCF margin for each of the four
performance years. This means that Givaudan’s FCF for eachyear of the performance period is summed, and this cumulative
result is divided by the sum of Givaudan’s sales in each year of
the performance period. The assessment over four years
ensures that the performance targets are stringent and reward
sustained Company performance. The performance range
extends from 9% to 17%.
Target setting and testing against targets follows adherence tostrict governance policies. Careful consideration is given to
Givaudan’s performance and its projections. In addition, areference test against historical achievements is conducted.
Targets set for the 2019 PSP remain aligned with our 2020
guidance, and within the overall objectives. In addition to
the factors already mentioned, the assessment and target
setting take into consideration the impact of significant
investments (in particular, recent acquisitions) and ensuring
targets are appropriately challenging.

Share payout caps
Based on the extent that performance criteria are met, theactual number of shares vesting at the end of the performance
period may vary between 0% and 200% of the Performance
Shares initially granted. The level of vesting is dependent on the
combination of performance achievement against both criteria.
A payout of 200% would require an achievement level above
the maximum threshold for both criteria.
An achievement level below the minimum threshold on either
measure results in a 0% payout.
Different combinations of relative sales growth and FCF
achievements within the above ranges lead to payouts
between 0% and 200%, ranked according to their long-term
economic value generation for the Company. The outcome of
the matrix payout approach is that outperformance on one
performance criteria can be counterbalanced in the event ofunderperformance on the other. Accordingly, the weighting of
impact for each performance criteria differs depending on thepositioning within the matrix shown in table VIII.
A 100% payout can be obtained where a target combination of
the performance criteria is met, such as when relative averagesales growth is in line with the peer group and cumulative
FCF margin is 12%. An additional payout cap applies, so that theextent to which outperformance on FCF may counterbalancelower sales growth achievement is restricted. Accordingly, inthe event relative sales growth is below the peer group and FCF
margin targets are achieved or exceed, a cap of at 100% applies.
Participants do not receive any dividends or have any
voting rights in respect of Performance Shares during thevesting period.
In general, Performance Shares lapse on cessation of
employment. In specific circumstances such as death, disabilityor retirement, Performance Shares may vest subject tosatisfaction of the performance criteria. In case of a change ofcontrol, Performance Shares may vest immediately.

Givaudan – 2019 Governance, Compensation and Financial ReportCompensation report 25

4. Compensation of the Executive Committee

VIII. Performance Share Plan payout matrix

Average Sales Growthcompared to peer group

2.5

200%

100%

0

-1.5

0%
9

12

17

Cumulative FCF / Sales
Darker region indicative of target achievement zone for 100% payout.
Note that a cap at 100% applies in the event sales growth is below zero.

Vesting in 2019
The 2016 PSP vested on 31 March 2019 with a 91% payout (2018:98% payout). This reflects slightly below target achievement on
FCF and on relative sales growth.
For reference, Givaudan tests performance against otherbenchmark metrics, including relative total shareholder return(TSR), and we continue to outperform the market in many
regards. For instance, Givaudan’s TSR measured over recent
four year periods has generally been at or above third quartile
compared to local Swiss indices, global chemical indices and ourbenchmark peer group.
IX. 2016 PSP achievement
Criteria

Performance

Average sales growthcompared to peer group-0.1%

Cumulative
FCF / sales *13.3%

Payout 91%
of performance
shares granted ***	Formula = Σ (Free cash flow margin reporting year x sales in reporting
currency in year / Σ Sales in reporting currency in year).
** 2015 PSP achievement: 98% of performance shares granted.

3.7 Benefits

Executive Committee members participate in the benefit plansof the Company, consisting mainly of retirement, insurance andhealth care plans that are designed to provide a reasonable levelof protection for the employees and their dependants in respectof the risks of retirement, ill-health, disability and death.
Executive Committee members are also provided with certain
executive perquisites and benefits in kind according tocompetitive market practice. The aggregate monetary valueof these benefits is evaluated at fair value and disclosed in thecompensation tables.

4.1 Benchmarking of Executive Committee
positions

All benchmarking activity related to Executive Committee
positions is performed by independent consultants. Givaudan’s
executive compensation targets base pay at the market
median. Executive Committee members have the opportunity
to be rewarded with above-median pay for sustained
outstanding performance from a number of variable
compensation components. These variable elements reflectachievements against quantitative targets established by
the Board. Variable compensation, particularly long-term
components, represents a significant portion of an executive’s
total compensation. In general, the weight of variable
compensation increases with executive’s level of responsibility
and the impact of their position on Company results.
In 2019, Executive Committee compensation was reviewed
against a peer group of other Swiss multinational companies.
This peer group consisted of SLI companies, excluding the fivelargest companies and financial services institutions. The
benchmark included 17 companies: Adecco, Alcon, AMS,Clariant, Geberit, Kuehne + Nagel, LafargeHolcim, Logitech,
Lonza, Schindler, SGS, Sika, Sonova, Swatch, Swisscom,
Temenos and Vifor. Consistent with prior external benchmarks,
the review confirmed the positioning against the market
remains appropriate. The findings have been cross-validated
against its listed European company comparator group withthe finding that Givaudan compensation positioning appears
slightly lower versus the European peer group than the SLI peergroup. The European benchmark included 10 companies: Akzo
Nobel, Beiersdorf, Carlsberg, Coca-Cola European Partners,
DSM, Kerry Group, Pernod Ricard, Smith & Nephew, Solvay and
Symrise. The European peer group consists of companies of asimilar size (approximately 0.5x to 2x market cap and turnoverof Givaudan). In addition, the peer group chosen is a competitorgroup of Givaudan considering talent acquisition and retention.
X. Executive compensation benchmark
Below median

Base pay■

Short-term incentive ¹■

MedianLong-term incentive ²
Total compensation
1.
2.

Above median■■

Annual Incentive Plan (please refer to section 3.5).
Performance Share Plan (please refer to section 3.6).

The results confirm that total compensation of the Executive
Committee is overall aligned with the market. The long-term
incentive compensation is positioned above median, whichis in line with Givaudan policy and reflects our continued strong
focus on rewarding outstanding performance over the longterm. In 2019, adjustments to compensation mix have been
implemented and, as a result, the respective compensation
elements are generally closer to median (see section 4.2).

Givaudan – 2019 Governance, Compensation and Financial Report26

Compensation report

In 2019, independent consulting services were contracted with
EY regarding Executive Committee compensation topics,
including benchmarking. EY has additionally provided other tax
and advisory services to the Company.

–– Shareholder voting: the Executive Committee prospective
vote on fixed and long-term variable compensation will not
be increased. Accordingly, reduction in allocation of
Performance Shares has been partially reallocated into basesalary. In parallel, shareholders directly approve the payout
amounts in the Executive Committee retrospective vote on
short-term variable compensation, such that any changes tothe compensation mix that could result in higher annual
incentive on achievement of annual targets will continue tobe submitted for approval by shareholders.

4.2 Changes to compensation mix

As previously disclosed, the Compensation Committee
reviewed Executive Committee compensation in 2018 anddetermined certain adjustments to the compensation mix
would be introduced in 2019. The changes result in arebalancing of long-term variable compensation into fixed andshort-term variable compensation.

4.3 Compensation levels in 2019

Total Executive Committee compensation reported in 2019
remained stable compared to 2018, representing full year
compensation for seven members (including the CEO). Further
details are provided in section 4.8.

The Compensation Committee considered a number of factors,
in particular application of our overriding compensation
principles outlined in section 2.2 and additional factors relevant
to ensuring the overall governance of our compensation
system. Several key factors are as follows:–– External competitiveness: overall Executive Committee
compensation packages have been identified as being market
aligned, knowing that certain elements are above/below
market. Accordingly, any changes should not result in overall
increases in total target compensation.
–– Pay for performance: retaining a significant majority of pay
mix in performance-based compensation remains a priority.
Long-term variable compensation should continue to carrysignificant weight. Rebalancing to increase reward potential
for annual performance is strategically aligned.

Variations in individual compensation components reflect thechanges in compensation mix, resulting in a reallocation of
Performance Shares into short-term compensation as
described in section 4.2, as well as higher annual incentive
achievement in 2019 vs 2018, as detailed in section 3.5.
Executive Committee member compensation has been set inaccordance with our compensation principles, including
consideration of roles and responsibilities and with reference
to our compensation benchmarks.

XI. Executive Committee compensation summary

in Swiss francs

Gilles Andrier
CEO 2019- Base salary

Executive
Executive
Committee
Committee
members
members
Gilles Andrier (excluding CEO) 1 (excluding CEO) 2
CEO 2018
2019
2018

Total
2019

Total
2018

1,167,910

1,058,023

3,191,433

3,194,282

4,359,343

4,252,305- Pension benefits 3

577,527

571,766

1,005,412

947,880

1,582,939

1,519,646- Other benefits 4

141,730

139,048562,795

819,837

704,525

958,885

Total fixed compensation

1,887,167

1,768,837

4,759,640

4,961,999

6,646,807

6,730,836- Annual incentive 5

1,438,925

954,070

2,830,707

1,824,033

4,269,632

2,778,103

1,092

1,446

2,448

3,263

3,540

4,709

- Value at grant 72,500,243

2,882,312

5,604,941

6,504,138

8,105,184

9,386,450

Total variable compensation

3,939,168

3,836,382

8,435,648

8,328,171

12,374,816

12,164,553

Total compensation

5,826,335

5,605,219

13,195,288

13,290,170

19,021,623

18,895,389

471,214453,000

989,482

988,000

1,460,696

1,441,000- Number of performance shares granted 6

Employer social security 8

1.	Represents full year compensation of six Executive Committee members
2.	Represents (a) full year compensation of five Executive Committee members, (b) partial year compensation of two outgoing members and c) partial year compensationof the new Flavour Division President.
3.	Company contributions to broad-based pension and retirement savings plans and annualised expenses accrued for supplementary executive retirement benefit.
4.	Represents annual value of health and welfare plans, international assignment benefits and other benefits in kind.
5.	Annual incentive accrued in reporting period based on performance in the reporting period.
6.	2019 Performance shares vest on 15 April 2022, 2018 Performance Shares vest on 15 April 2021.
7.	Value at grant calculated according to IFRS methodology and based on 100% achievement of performance targets.
8.	2019 estimated social security charges based on 2019 compensation; 2018 estimated social security charges based on 2018 compensation.

Givaudan – 2019 Governance, Compensation and Financial ReportCompensation report 27

4.4 Highest total compensation

The Chief Executive Officer, Gilles Andrier, received the highest
total compensation in 2019. For compensation details, pleaserefer to table XI.

4.5 Other compensation, fees and loans tomembers or former members of the Executive
Committee

No other compensation or fees were accrued for or paid to
any member or former member of the Executive Committee
during the reporting period. No member or former memberof the Executive Committee or related parties had any loan
outstanding as of 31 December 2019.

4.6 Special compensation of Executive
Committee members who left the Company
during the reporting period

Members of the Executive Committee who stepped down during
2019 did not receive any special compensation as a result of theirdeparture from the Company. All compensation is included in thecompensation table XI.

4.7 Employment contract termination clausesof Executive Committee members

Employment contracts of Executive Committee members
comply with the OaEC and our Articles of Incorporation.
Accordingly, contractual entitlements are within the specified
thresholds, in particular the maximum contractual notice
period is six months and any non-compete clause does notexceed 12 months. No additional compensation or benefits areprovided in the case of change in control, except for long-term
incentive awards that may vest immediately.

5. Compensation of the Board of Directors
Compensation of Board members consists of Director fees,
Committee fees and Restricted Share Units (RSUs). Fees arepaid at the end of each year in office completed. RSUs give
participants the right to receive Givaudan shares (or a cash
equivalent in countries where securities laws prevent theoffering of Givaudan securities) at the end of a three-year
blocking period. During this period Board members must hold
RSUs (accordingly are restricted from trading RSUs or theunderlying Givaudan shares), thereby aligning with shareholderinterests over the longer term. Board members are entitled toreceive Givaudan shares regardless of membership status sothat, for example, if re-election does not occur during the
restriction period, awarded RSUs are retained by the respective
Board member. Such practice has been implemented in linewith best practice in support of Givaudan’s commitment toensuring Board independence.
The annual fees for Board membership and additional functions
are summarised in the table XII. The fee structure remained
unchanged versus prior year levels.
XII. Board of Directors fees – Summary
Annual fees
(CHF)

Restricted Shares
Compensation (CHF) ³

Chairman of the Board ¹

400,000

580,000

Vice-Chairman of the Board ¹

100,000

145,000

Board membership

100,000

145,000

Chairman – Audit Committee ²

55,000Chairman – Other Committees ²
Membership – All Committees

40,00025,000All contractual arrangements of Executive Committee
members are approved by the Compensation Committeeof the Board.

1.	Incl. Board membership fees.
2.	Incl. Committee membership fees.
3.	Number of RSUs granted represents the closest match to the values displayed.

4.8 Compensation voting for Executive
Committee members

The Chairman of the Board does not receive any additionalboard membership fees. Similarly, a Committee Chairman does
not receive any additional Committee Membership fees.

The compensation paid is within the amounts approved byshareholders in the respective Annual General Meeting.
The fixed and long term variable compensation approvedfor 2019 was CHF 15,000,000 (2018: CHF 17,000,000).
The annual incentive, short term variable compensation
amount for 2019 was CHF 4,269,632 and will be submitted
for approval at the 2020 Annual General Meeting (2018:
CHF 2,778,103).

Each Board member receives an additional amount of
CHF 10,000 to cover out-of-pocket expenses. This amount is
paid for the coming year in office. The RSUs are also granted forthe same period.
Board fees are aligned with the total Board compensation
approved by shareholders at the 2019 Annual General Meeting
and with market practice. Board member compensation was
benchmarked against a peer group of other Swiss multinational
companies of a size similar to Givaudan, and has been validated
as remaining market aligned. This peer group consisted of Swiss
Leader Index (SLI) companies that disclose board fee policy
information, excluding the five largest companies and financial
services institutions. Considering the constituents of the Index
at that time, the benchmark included 17 companies: Adecco,

Givaudan – 2019 Governance, Compensation and Financial Report

28 Compensation report

XIII. Board of Directors compensation summary
2019
in Swiss francs

CalvinGrieder
Chairman 5

Victor
Balli 5

Prof. Dr-Ing.
WernerBauer 5

LilianBiner 5

MichaelCarlos 5

IngridDeltenre 5

Director fees 2400,000

100,000

100,000

100,000

100,000

100,000

Committee fees 2

65,00050,00065,00025,00065,00050,00055,000375,000

Total fixed (cash)

465,000

150,000

165,000

125,000

165,000

150,000

155,000

1,375,000

Number of RSUs granted 3
Value at grant 4
Total compensation

Total
2019 1

ThomasRufer 5100,000 1,000,000

252

63

63

63

63

63

63

630

576,980

144,245

144,245

144,245

144,245

144,245

144,245

1,442,450

1,041,980 294,245

309,245

269,245309,245294,245299,245 2,817,450

1.	Represents total compensation for the Board of Director paid in respect of the reporting year, reported in accordance with the accrual principle.
2.	Represents Director and Committee fees paid in respect of the reporting year, reported in accordance with the accrual principle.
3.	RSUs blocking period ends on 15 April 2022.
4.	Economic value at grant according to IFRS methodology, with no discount applied for the blocking period.
5.	The function of each member of the Board of Directors is indicated on pages 5-6 in the 2019 Governance report.

Estimated social security charges based on 2019 compensation amounted to CHF 233,000 (2018: CHF 203,000).
2018
in Swiss francs

CalvinGrieder
Chairman 5

Victor
Balli 5

Prof. Dr-Ing.
WernerBauer 5

LilianBiner 5

MichaelCarlos 5

IngridDeltenre 5

Director fees 2400,000

100,000

100,000

100,000

100,000

100,000

Committee fees 2

65,00050,00065,00025,00065,00050,00055,000375,000

Total fixed (cash)

465,000

150,000

165,000

125,000

165,000

150,000

155,000

1,375,000

Number of RSUs granted 3
Value at grant 4
Total compensation

Total
20181

ThomasRufer 5100,000 1,000,000

292

73

73

73

73

73

73

730

582,044

145,511

145,511

145,511

145,511

145,511

145,511

1,455,110

1,047,044

295,511

310,511

270,511

310,511295,511

300,511 2,830,110

1.	Represents total compensation for the Board of Director paid in respect of the reporting year, reported in accordance with the accrual principle.
2.	Represents Director and Committee fees paid in respect of the reporting year, reported in accordance with the accrual principle.
3.	RSUs blocking period ends on 15 April 2021.
4.	Economic value at grant according to IFRS methodology, with no discount applied for the blocking period.
5.	The function of each member of the Board of Directors is indicated on pages 104-105 in the Governance section of the 2018 Integrated Annual Report.

Alcon, AMS, Clariant, Geberit, Kuehne + Nagel, LafargeHolcim,
Logitech, Lonza, Schindler, SGS, Sika, Sonova, Swatch,
Swisscom, Temenos and Vifor. Consistent with prior externalbenchmarks, the review confirmed the positioning against themarket remains appropriate.
The compensation paid to the Board members for the reporting
period is shown in table XIII.

5.1 Compensation of the Board member with thehighest compensation

The Board member with the highest compensation in 2019 wasCalvin Grieder, Chairman of the Board since 23 March 2017. For
compensation details please refer to table XIII.

5.2 Other compensation, fees and loans tomembers or former members of the Board

No additional compensation or fees were paid to any memberof the Board. No Board member or related parties had any loan
outstanding as of 31 December 2019.

Givaudan – 2019 Governance, Compensation and Financial Report

5.3 Special compensation of members of
the Board who left the Company during thereporting period

No such compensation was incurred during the reporting period.

5.4 Compensation voting for membersof the Board

The compensation paid to the Board members for the period
between the 2018 and 2019 Annual General Meetings(CHF 2,830,139) is again within the amount approved byshareholders at the 2018 Annual General Meeting(CHF 2,950,000). Amounts approved at the 2019 Annual General
Meeting (CHF 2,950,000) will be paid by the end of the year in
office and validated in the 2020 Compensation report. Suchapproved and paid amounts may differ from those shown in the
Board compensation summary table which, according to the
OaEC, must include compensation paid in the reporting year.

Compensation report 29

6. Share ownership guidelines
Under the share ownership guidelines (Guidelines), Executive
Committee members must hold approximately two times
annual base salary in Givaudan shares. In general, theGuidelines should be met within five years from the beginningof the calendar year after joining the Executive Committee.
As the current Guidelines were implemented in September 2017,transitional arrangements to the Guidelines are in place for
Executive Committee members appointed before 2016, suchthat all such members should reach the new Guideline holding
requirement latest 2020.
Ownership of Givaudan shares by Executive Committee
members as per 31 December 2019 is shown in table XIV.

7. Ownership of Givaudan securities
7.1 Executive Committee

The Chief Executive Officer and other members of the
Executive Committee, including persons closely connected tothem, held 5,265 Givaudan shares. For further details, pleaserefer to table XIV showing:–– The shares held individually by each member of the Executive
Committee as per 31 December 2019.
–– The unvested Performance Shares that were granted in2017 – 2019 and were still owned by members of the
Executive Committee as per 31 December 2019.
No member of the Executive Committee held any share options
or option rights as at 31 December 2019 (31 December 2018: nomember of the Executive Committee held any share options or
option rights).

XIV. Executive Committee: ownership of Givaudan securities
2019
in numbers

SharesUnvested
Performance Shares

Gilles Andrier, CEO

3,100

4,315

Tom Hallam

328

1,541

Louie D’Amico

275

1,258

Maurizio Volpi

634

2,156

Simon Halle-Smith

452

1,278

Willem Mutsaerts

351

1,278

Anne Tayac

125

1,247

Total 2019

5,265

13,073

Total 2018

5,097

13,776

7.2 Board of Directors

As per 31 December 2019, the Chairman and other Board
members, including persons closely connected to them held
4,501 Givaudan shares in total. For further details, please referto table XV showing:–– The shares held individually by each Board member as per
31 December 2019.
–– The RSUs that were granted in 2017–2019 and were still
owned by members of the Board as per 31 December 2019.
The Company is not aware of any other ownership of shares,
share options/option rights, RSUs or Performance Shares as
per 31 December 2019 by persons closely connected to membersof the Board.
XV. Board of Directors: ownership of Givaudan securities
2019
in numbers

SharesUnvested RSUs

Calvin Grieder, Chairman

295

904

Victor Balli

85

226

1,265

226

672

226

Michael Carlos

1,097

226

Ingrid Deltenre

202

226

Thomas Rufer

885

226

Total 2019

4,501

2,260

Total 2018

3,906

2,225

Prof. Dr-Ing. Werner Bauer
Lilian Biner

One person closely connected to a member of the Executive
Committee owned 256 unvested Performance Shares as at
31 December 2019.
The Company is not aware of any other ownership of shares,
share options/option rights, RSUs or Performance Shares as per
31 December 2019 by persons closely connected to members of
the Executive Committee.

Givaudan – 2019 Governance, Compensation and Financial Report30

Compensation report

Deloitte SA
Rue du Pré-de-la-Bichette 1
1202 Geneva
Switzerland
Phone: +41 (0)58 279 8000
Fax: +41 (0)58 279 8800
www.deloitte.ch

Report of the statutory auditor
To the General Meeting of GIVAUDAN SA, Vernier
Report of the Statutory Auditor in relation to sections 4 and 5 of the compensation report inaccordance with the Ordinance against Excessive compensation in Stock Exchange Listed Companies(Ordinance)
We have audited the accompanying compensation report of Givaudan SA for the year ended 31 December 2019. Our audit is limited
to the information provided in sections 4 and 5 on page 25 to 28 in accordance with the articles 14 to 16 of the Ordinance against
Excessive compensation in Stock Exchange Listed Companies (Ordinance).

Responsibility of the Board of Directors

The Board of Directors is responsible for the preparation and overall fair presentation of the compensation report in accordancewith Swiss law and the Ordinance against Excessive compensation in Stock Exchange Listed Companies (Ordinance). The Board of
Directors is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor’s Responsibility

Our responsibility is to express an opinion on the compensation report. We conducted our audit in accordance with Swiss AuditingStandards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the compensation report complies with Swiss law and articles 14 – 16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the compensation report with regard
to compensation, loans and credits in accordance with articles 14 – 16 of the Ordinance. The procedures selected depend on theauditor’s judgement, including the assessment of the risks of material misstatements in the compensation report, whether due tofraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components ofremuneration, as well as assessing the overall presentation of the compensation report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

OpinionIn our opinion, sections 4 and 5 of the compensation report of Givaudan SA for the year ended 31 December 2019 comply with
Swiss law and articles 14 – 16 of the Ordinance.

Deloitte SA

Karine Szegedi Pingoud 		Licensed Audit Expert			
Auditor in Charge

Laetitia Cejudo Petit
Licensed Audit Expert

Geneva, 22 January 2020

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report ﻿ 31

Consolidated
financial report
In this section
32

Consolidated financial statements

73

16. Income Taxes

32

Consolidated Income Statement75

17. Earnings per Share33

Consolidated Statement of Comprehensive
Income75

18. Cash and Cash Equivalents

76

19. Accounts Receivable – Trade76

20. Inventories

77

21. Property, Plant and Equipment

78

22. Intangible Assets

34 Consolidated Statement of Financial Position
35

Consolidated Statement of Changes in Equity

36 Consolidated Statement of Cash Flows37

Notes to the consolidated financial
statements

37

1. Group Organisation

37

2. Summary of Significant Accounting Policies

49 3. Critical Accounting Estimatesand Judgments
50 4. Foreign Exchange Rates
50 5. Financial Risk Management
60 6. Acquisitions
63 7. Segment Information
65 8. Employee Benefits
70 9. Share-Based Payments
71

10. Investments in Joint Ventures andAssociates72

11. Other Operating Income72

12. Other Operating Expense72

13. Expenses by Nature

72

14. Financing Costs

73

15. Other Financial (Income) Expense, Net

80 23. Investment Property
80 24. Debt
82 25. Changes in Liabilities Arisingfrom Financing Activities
82 26. Provisions
83 27. Own Equity Instruments
84 28. Equity
84 29. Commitments
85 30. Contingent Liabilities
85 31. Related Parties
86 32. Board of Directors and Executive
Committee Compensation
89 33. List of Principal Group Companies
92 34. D isclosure of the Process of
Risk Assessment
92 35. Other Information
94 Report of the Statutory Auditor
94 Statutory Auditor’s Report on theConsolidated Financial Statements

Givaudan – 2019 Governance, Compensation and Financial Report

32 Consolidated financial report Consolidated financial statements

Consolidated
financial statements
Consolidated Income Statement
For the year ended 31 December
Note

2019

2018

7

6,203

5,527

Cost of sales(3,673)(3,198)Gross profit

2,530

2,329

as % of sales

40.8%

42.1%

Selling, marketing and distribution expenses

(791)

(716)

Research and product development expenses

(528)

(477)

Administration expenses

(221)

(208)

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

Sales

Share of results of joint ventures and associates

10

4

5

Other operating income

11

41

63

Other operating expense

12

(115)

(113)

Operating income
as % of sales

920

883

14.8%

16.0%

Financing costs

14

(79)

(55)

Other financial income (expense), net

15

(33)

(56)

808

772

16

(106)

(109)

702

663

Income before taxes
Income taxes
Income for the period
Attribution
Income attributable to non-controlling interests––

Income attributable to equity holders of the parent

702

663

11.3%

12.0%

as % of sales
Earnings per share − basic (CHF)

17

76.17

71.92

Earnings per share − diluted (CHF)

17

75.59

71.36

The notes on pages 37 to 93 form an integral part of these financial statements.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Consolidated financial statements

33

Consolidated Statement of Comprehensive Income
For the year ended 31 Decemberin millions of Swiss francs

Note

Income for the period

2019

2018

702

663

(56)

(4)

Items that may be reclassified to the income statement
Cash flow hedges
Movement in fair value, net
Gains (losses) removed from equity and recognised in the consolidated income statement
Movement on income tax

16

6

8

4

–

Exchange differences arising on translation of foreign operations
Movement in fair value arising on hedging instruments of the net assets in foreign operations

51

37

Currency translation differences

(99)

(140)

16

(6)

–

Remeasurement gains (losses) of post-employment benefit obligations

8

(91)

162

Movement on income tax

16

(3)

(35)

Movement on income tax
Items that will not be reclassified to the income statement
Defined benefit pension plans

Other comprehensive income for the period

(194)

28

Total comprehensive income for the period

508

691

Attribution
Total comprehensive income attributable to non-controlling interests––

Total comprehensive income attributable to equity holders of the parent

508

691

The notes on pages 37 to 93 form an integral part of these financial statements.

Givaudan – 2019 Governance, Compensation and Financial Report

34

Consolidated financial report Consolidated financial statements

Consolidated Statement of Financial Position
As at 31 Decemberin millions of Swiss francs

Note

2019

2018 aCash and cash equivalents

5, 18

452

423

Derivative financial instruments

5

24

11

Financial assets at fair value through income statement

5

4

4

5, 19

1,365

1,253

Inventories

20

1,149

1,098

Current tax assets

16

50

41

35

53

Accounts receivable - trade

Prepayments
Other current assets

5

Current assets

163

238

3,242

3,121

Derivative financial instruments

5

1

2

Property, plant and equipment

21

2,326

1,759

Intangible assets

22

4,286

4,008

Deferred tax assets

16

211

208

Post-employment benefit plan assets

8

32

22

Financial assets at fair value through income statement

5

177

61

Interests in joint ventures and investments in associates

10

34

33

Investment property

23
87

61

Non-current assets

7,154

6,156

Total assets

10,396

9,277

Other long-term assets

Short-term debt

2

5, 24

335

4

Derivative financial instruments

5

29

12

Accounts payable - trade and others

5

Accrued payroll and payroll taxes

833

719

189

178
95

Current tax liabilities

16

111

Financial liability - own equity instruments

27

108

93

Provisions

26

18

24

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

207

225

1,830

1,350

5

79

43

5, 24

3,796

3,266

Provisions

26

69

73

Post-employment benefit plan liabilities

8

601

490

Deferred tax liabilities

16

280

238

Other non-current liabilities
Non-current liabilities
Total liabilities

82

85

4,907

4,195

6,737

5,545

Share capital

28

92

92

Retained earnings and reserves

28

5,961

5,811

Own equity instruments

(168)

(142)

Other components of equity(2,245)(2,051)Equity attributable to equity holders of the parent

3,640

3,710

Non-controlling interests

27, 2819

22

Total equity

3,659

3,732

Total liabilities and equity

10,3969,277a)	The financial position as at 31 December 2018 has been restated to reflect the Naturex acquisition price allocation adjustment of CHF 9 million explained and detailed innote 6 of these financial statements.
The notes on pages 37 to 93 form an integral part of these financial statements.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Consolidated financial statements

35

Consolidated Statement of Changes in Equity
For the year ended 31 December

2019
in millions of Swiss francs

RetainedShareearnings
Capital and reserves

Own equity
instruments

Note

28

28

27, 28

Balance as at 1 January

92

5,811

(142)

Income for the period

Cash flow
hedgesRemeasurement of post
Currency employmenttranslation
benefitdifferences
obligations

Total comprehensive income
for the period

702

Dividends paid

(552)

Movement on own equity
instruments, net

Noncontrollinginterests

Total
equity

3,710

22

3,732

702

–

702

8
(61)

(1,559)

(431)

702

Other comprehensive income
for the period

Equityattributable
to equity
holders of
the parents

(46)

(54)

(94)

(46)

(54)

(94)

(194)
508

(26)

92

(552)

(26)

5,961

(168)

(26)

RetainedShareearnings
Capital and reserves

Own equity
instruments

Note

28

28

27, 28

Balance as at 1 January

92

5,682

(157)

Income for the period(107)

Cash flow
hedgesTotal comprehensive income
for the period

663

Dividends paid

(534)

(578)

(3)

(581)

19

3,659

Remeasurement of post
Currency employmenttranslation
benefitdifferences
obligations

Equityattributable
to equity
holders of
the parents

Noncontrollinginterests a

Totalequity a8(65)(1,456)

(558)

3,538

4

(103)

127

4

(103)

127

3,538
–

28
691

15

–

(534)

15

5,811

(142)

15

(61)

(1,559)

(431)

691
(534)
15

22

92

663
28

(534)

Non-controlling interests
Net change in other equity
items

(3)

3,640

663

Movement on own equity
instruments, net

Balance as at 31 December

(26)

(525)

(1,613)

663

Other comprehensive income
for the period

508
(552)

(3)

Net change in other equity
items

2018
in millions of Swiss francs

–

(552)

Non-controlling interests

Balance as at 31 December

(194)

22

(519)

22

(497)

3,710

22

3,732

a)	The non-controlling interests as at 31 December 2018 have been restated to reflect the Naturex acquisition price allocation adjustment of CHF 9 million explained anddetailed in note 6 of these financial statements.
The notes on pages 37 to 93 form an integral part of these financial statements.

Givaudan – 2019 Governance, Compensation and Financial Report

36 Consolidated financial report Consolidated financial statements

Consolidated Statement of Cash Flows
For the year ended 31 Decemberin millions of Swiss francs

Income for the period
Income tax expense
Interest expense
Non-operating income and expense
Operating income
Depreciation of property, plant and equipment
Amortisation of intangible assets
Impairment of long-lived assets
Other non-cash items- share-based payments- pension expense- additional and unused provisions, net- other non-cash items
Adjustments for non-cash items(Increase) decrease in inventories(Increase) decrease in accounts receivable(Increase) decrease in other current assets
Increase (decrease) in accounts payable
Increase (decrease) in other current liabilities(Increase) decrease in working capital
Income taxes paid
Pension contributions paid
Provisions used
Purchase and sale of own equity instruments, net
Cash flows from (for) operating activities
Increase in long-term debt
(Decrease) in long-term debt
Increase in short-term debt
(Decrease) in short-term debt
Cash flows from debt, net
Interest paid
Purchase and sale of derivative financial instruments, net
Lease payments
Transactions of non-controlling interests
Other, net
Cash flows from financial liabilities
Distribution to the shareholders paid
Cash flows from (for) financing activities
Acquisition of property, plant and equipment
Acquisition of intangible assets
Acquisition of subsidiaries, net of cash acquired
Proceeds from the disposal of property, plant and equipment
Proceeds from disposal of investment property
Interest received
Dividend received from joint ventures and associates
Purchase and sale of financial assets at fair value through income statement, net
Impact of financial transactions on investing, net
Other, net
Cash flows from (for) investing activities
Net increase (decrease) in cash and cash equivalents
Net effect of currency translation on cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
The notes on pages 37 to 93 form an integral part of these financial statements.

Givaudan – 2019 Governance, Compensation and Financial Report

Note

16
14
14, 1521
22
21, 22

8
26

8
26

25
25
25
25
25
25
25
25
28
21
22
6
21
23

18
18

2019

2018

702
106
68
44
920
193
161
1

663
109
42
69
883
127
125
10

41
38
12
–
446
(28)
(101)
25
108
(19)
(15)
(106)
(37)
(21)
(51)
1,136
660
(184)
2,904
(2,919)
461
(51)
–
(52)
(3)
(7)
348
(552)
(204)
(275)
(45)
(478)
74
2
6
2
(105)
(29)
(43)
(891)
41
(12)
423
452

38
39
(7)
(43)
289
(9)
(72)
(35)
(11)
38
(89)
(73)
(46)
(25)
(23)
916
1,971
(258)
2,345
(2,620)
1,438
(29)
(22)

(5)
1,382
(534)
848
(239)
(55)
(1,694)
110
14
2
4
5
(3)
(3)
(1,859)
(95)
(16)
534
423

Consolidated financial report Notes to the consolidated financial statements

37

Notes to the consolidated
financial statements
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 14,969 people. A list of the principal Group companies isshown in Note 33 to the consolidated financial statements.
The Group is listed on the SIX Swiss Exchange (GIVN).

2. Summary of Significant Accounting Policies
The significant accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated.

2.1 Basis of Preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
as issued by the IASB and Swiss law.
They are prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities atfair value through the income statement, and of own equity instruments classified as derivatives. Historical cost is generally basedon the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sellan asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardlessof whether that price is directly observable or estimated using another valuation technique.
The preparation of the consolidated financial statements requires management to make estimates and assumptions that affectthe reported amounts of assets and liabilities, disclosure of contingent liabilities at the date of the financial statements, andreported amounts of revenues and expenses during the reporting period. It also requires management to exercise its judgmentin the process of applying the Group’s accounting policies. Critical accounting estimates and judgments are disclosed in Note 3.
Givaudan SA’s Board of Directors approved these consolidated financial statements on 22 January 2020.

2.1.1 Changes in Accounting Policies and Disclosures Standards, amendments
and interpretations effective in 2019
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 31 December 2018,as described in the 2018 consolidated financial statements, with the exception of the adoption as of 1 January 2019 of the standards
and interpretations described below:
IFRIC 23 Uncertainty over Income Tax Treatments clarifies the accounting for uncertainties in income taxes. The clarification
confirms the current practices of the Group.

Givaudan – 2019 Governance, Compensation and Financial Report

38 Consolidated financial report Notes to the consolidated financial statements

Amendments to IAS 28: Long-term Interests in Associates and Joint Ventures clarify that an entity must apply IFRS 9
Financial Instruments to long-term interests in an associate or joint venture that form part of the net investment in the associate
or joint venture but to which the equity method is not applied. The adoption of these amendments has no impact on the joint
arrangements currently held by the Group.
Amendments to IFRS 9: Prepayment Features with Negative Compensation address the concerns about how IFRS 9 Financial
Instruments classifies particular prepayable financial assets. These amendments have no impact as the Group does not enter insuch particular instruments.
Annual Improvements to IFRS Standards Cycle 2015 - 2017 set out amendments across four different standards, related basis
for conclusions and guidance, namely amendments to IFRS 3 Business Combinations and IFRS 11 Joint Arrangements, IAS 12 Income
Tax and IAS 23 Borrowing Costs. These amendments are not relevant for the Group, and the adoption therefore has no impact.
Plan Amendment, Curtailment or Settlement: Amendments to IAS 19 state that if a plan amendment, curtailment or settlement
occurs, it is now mandatory that the current service cost and the net interest for the period after the remeasurement are determinedusing the assumptions used for the remeasurement. It also clarifies the effect of a plan amendment, curtailment or settlement on therequirements regarding the asset ceiling. The adoption of the amendments confirms the current practice of the Group.
IFRS 16 Leases provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases andlessors to confirm the continuation of classifying leases as operating or finance. The Group is not a lessor and is impacted by thestandard only for the lessee accounting. The standard replaces IAS 17 Leases, under which operating lease payments were charged
to the income statement on a straight-line basis over the term of the contract.
The related lease accounting policy is in Note 2.16.
The Group applied the standard from its mandatory adoption date of 1 January 2019 and applied the cumulative catch-up approachwithout restating the comparative amounts for the year prior to first adoption. Furthermore, the Group has made use of thepractical expedient available on transition to IFRS 16 not to reassess whether a contract is or contains a lease. At the date of initial
application, the Group excluded initial direct costs from the measurement of the right-of-use asset and used hindsight to assess
the leases’ terms.
On 1 January 2019 the Group recognised right-of-use assets and lease liabilities of CHF 253 million that were previously mainlyclassified as operating leases under IAS 17. The effect of applying the new standard IFRS 16 does not have a material impact on thepresentation of the consolidated income statement and the consolidated statement of cash flows. The lease liability on leases
previously classified as finance leases under IAS 17 and previously presented within other liabilities is now presented in the line
lease liabilities. There has been no change in the liability recognised.
The difference between the non-discounted amount of the minimum commitments under operating leases disclosed at
31 December 2018 and the lease liability recognised at 1 January 2019 is as follows:in millions of Swiss francs

Minimum commitment under operating leases as at 31 December 2018

377

Lease arrangements with commencement date after 1 January 2019 a(208)

Recognition exemption for low-value and short-term leases(7)

Differences between the contractual non-cancellable period and the intended duration of the use of the assets

144

Other

(10)

Undiscounted future lease payments continuing operations as of 1 January 2019296

Effect of discounting(43)

Lease liability recognised as at 1 January 2019253a)	Mainly related to the Zurich Innovation Centre (ZIC).

A weighted average incremental borrowing rate of 3% was applied to calculate the lease liability at 1 January 2019.

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39

2.1.2. IFRSs and IFRICs issued but not yet effective
New and revised standards and interpretations, issued but not yet effective, have been reviewed to identify the nature of the
future changes in accounting policy and to estimate the effect of any necessary changes in the consolidated financial statements
and supporting notes upon their adoption.

a) Issued and effective for 2020
Amendments to IFRS 10 and IAS 28: Sales or Contribution of Assets between an Investor and its Associate or Joint Venture
clarify that in a transaction involving an associate or joint venture the extent of gain or loss recognition depends on whether theassets sold or contributed constitute a business. The adoption of these amendments has no impact on the accounting of the joint
arrangements currently held by the Group.
Definition of Material: Amendments to IAS 1 and IAS 8 align the definition used in the Conceptual Framework and thestandards themselves. The clarification does not impact the current practice of the Group.
Definition of Business: Amendments to IFRS 3 narrow and clarify the definition of a business. They also permit a simplified
assessment of whether an acquired set of activities and assets is a group of assets rather than a business. The amendments do not
impact the current practice of the Group.
Amendments to IFRS 9, IAS 39 and IFRS 7: Interest Rate Benchmark Reform provide certain reliefs in connection with interest
rate benchmark reform. The reliefs relate to hedge accounting and have the effect that IBOR reform should not generally cause
hedge accounting to terminate. The amendments do not impact the current practice of the Group.

b) Issued and effective for 2021
IFRS 17 Insurance Contracts establishes the principles for the recognition, measurement, presentation and disclosure of
insurance contracts. The standard is not relevant for the Group as it does not operate in the insurance business.

2.2 Consolidation
The subsidiaries that are consolidated are those companies controlled, directly or indirectly, by Givaudan SA. The Group controls anentity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability toaffect those returns through its power over the entity. The Group reassesses whether or not it controls an investee if there areindications of a change in facts and circumstances.
Companies acquired during the year are consolidated from the date on which operating control is transferred to the Group, andsubsidiaries to be divested are included up to the date on which control passes to the acquirer.
The acquisition method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured
as the fair value of the assets acquired, shares issued and liabilities undertaken or assumed at the date of acquisition. Identifiable
assets acquired and liabilities and contingent liabilities assumed are measured initially at their fair values at the acquisition date.
Acquisition related costs are expensed as incurred. The excess of the cost of acquisition over the fair value of the Group’s share of
net assets of the subsidiary acquired is recognised as goodwill.
Where necessary, changes are made to the accounting policies of subsidiaries to bring and ensure consistency with the policies
adopted by the Group.
Assets and liabilities, equity, income, expenses and cash flows resulting from inter-company transactions are eliminated in fullon consolidation.

Givaudan – 2019 Governance, Compensation and Financial Report40

Consolidated financial report Notes to the consolidated financial statements

2.3 Investments in Joint Ventures and Associates
A joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which
exists when the strategic, financial and operating decisions relating to the activities of the joint venture require the unanimous
consent of the parties sharing control.
An associate is an entity over which the Group has significant influence and that is neither a subsidiary nor an interest in a joint
venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is notcontrol or joint control over those policies.
The results and assets and liabilities of joint ventures and associates are incorporated in the consolidated financial statements
using the equity method of accounting. Under the equity method, an investment in a joint venture or an associate is initiallyrecognised at cost and adjusted thereafter to recognise the Group’s share of the income statement and the other comprehensive
income of the joint venture or associate. Adjustments are made where necessary to bring the accounting policies in line with thoseadopted by the Group. Unrealised gains and losses on transactions between the Group and a jointly controlled entity or an
associate are eliminated to the extent of the Group’s interest in the joint arrangement or associate.

2.4 Foreign Currency Valuation
2.4.1 Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the functional currency of that entity.
The functional currency is normally the one in which the entity primarily generates and expends cash. The consolidated financial
statements are presented in millions of Swiss francs (CHF), the Swiss franc being the Group’s presentation currency.

2.4.2 Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing on the dates of thetransactions, or using a rate that approximates the exchange rates on the dates of the transactions. Foreign exchange gains andlosses resulting from the settlement of such transactions and from the translation at the reporting period-end rates of monetary
assets and liabilities denominated in foreign currencies are recognised in other financial income (expense), net, except for:–– Exchange differences deferred in equity as qualifying cash flow hedges on certain foreign currency risks and qualifying net
investment hedges;–– Exchange differences on monetary items to a foreign operation for which settlement is neither planned nor likely to occur,
therefore forming part of the net investment in the foreign operation, which are recognised initially in other comprehensive
income and reclassified from equity to the income statement on disposal of the net investment or on partial disposal when there
is a loss of control of subsidiary or a loss of joint control over a jointly controlled entity; and–– Exchange differences on foreign currency borrowings relating to assets under construction which are included in the cost of
those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.
Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.

2.4.3 Translation of the financial statements of foreign subsidiaries
For the purpose of presenting consolidated financial statements, the assets and liabilities of Group companies reporting incurrencies other than Swiss francs (foreign operations) are translated into Swiss francs using exchange rates prevailing at the endof the reporting period. Cash flows, income and expenses items of Group companies are translated each month independently at
the average exchange rates for the period when it is considered a reasonable approximation of the underlying transaction rate.
All resulting exchange differences are recognised in other comprehensive income and accumulated in equity.

2.4.4 Hyperinflationary economies
Restatement of financial statements is required for subsidiaries whose functional currencies have experienced a cumulative
inflation rate of more than 100% over the past three years. The gain or loss on the net monetary position as well as the gain or loss

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41

incurred upon adjusting the carrying amounts of non-monetary assets and liabilities for inflation are recognised in the
consolidated income statement and then translated into Swiss francs. Restatement to current units of currency is made using thechange in a general price index.

2.5 Segment Reporting
The operating segments are identified on the basis of internal reports that are regularly reviewed by the Executive Committee,
the members of the Executive Committee being the chief operating decision makers, in order to allocate resources to thesegments and to assess their performance. The internal financial reporting is consistently prepared along the lines of the two
operating divisions: Fragrances and Flavours.
The business units of each division, respectively Fine Fragrances, Consumer Products, and Fragrance Ingredients and Active Beauty
for the Fragrance Division and Beverages, Dairy, Savoury, Sweet Goods and Natural Ingredients for the Flavour Division, are notconsidered as separately reportable operating segments as decision making about the allocation of resources and the assessmentof performance are not made at this level.
Inter-segment transfers or transactions are set on an arm’s length basis.
Information about geographical areas is determined based on the Group’s operations; Switzerland, Europe, Africa and Middle East;
North America; Latin America and Asia Pacific. Revenues from external customers are shown by destination and by segment.

2.6 Revenue from Contracts with Customers
The Group manufactures and sells manufactured products and molecules of fragrance and flavour to the agreed upon
specifications and may contain additional performance obligations for certain clients such as the assignment of specific application
technologies, joint market research and particular stock conditions. Most of these additional performance obligations are notdistinct because they are highly dependent on the delivery of manufactured products and molecules of fragrance and flavour.
Sales are recognised when control of the goods has transferred, being when the goods are delivered to the customer, the customer
has full discretion over the channel and price to sell the goods, and there is no unfulfilled obligation that could affect the customer’s
acceptance of the goods. Delivery occurs when the customer has accepted the goods in accordance with the sales contract, theacceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied.
The goods are often sold with volume discounts based on aggregate sales over a 12 months period. Revenue from these sales isrecognised based on the price specified in the contract, net of the estimated volume discounts provided that it is highly probablethat a significant reversal will not occur. No element of financing is deemed present as the sales are made with credit terms thatare consistent with market practice.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because
only the passage of time is required before the payment is due.

2.7 Research and Product Development
The Group is active in research and in formulas, technologies and product developments. In addition to its internal scientificefforts, the Group collaborates with outside partners.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
Internal developments or developments obtained through agreements on formula, technology and product costs are capitalised
as intangible assets when there is an identifiable asset that will generate probable economic benefits and when the cost can bemeasured reliably. When the conditions for recognition of an intangible asset are not met, development expenditureis recognised in the income statement in the period in which it is incurred.

2.8 Employee Benefit Costs
Wages, salaries, social security contributions, annual leave and paid sick leave, bonuses and non-monetary benefits are expensed
in the year in which the associated services are rendered by the Group’s employees.

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Consolidated financial report Notes to the consolidated financial statements

2.8.1 Pension obligations
A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement,
principally dependent on an employee’s years of service and remuneration at retirement. Plans are usually funded by paymentsfrom the Group and employees to financially independent trusts. The liability recognised in the statement of financial positionis the aggregate of the present value of the defined benefit obligation at the statement of financial position date less the fairvalue of plan assets. Where a plan is unfunded, only a liability representing the present value of the defined benefit obligation isrecognised in the statement of financial position. The present value of the defined benefit obligation is calculated by independentactuaries using the projected unit credit method twice a year, at interim and annual publication. This reflects the discounted
expected future payment required to settle the obligation resulting from employee service in the current and prior periods. The
future cash outflows incorporate actuarial assumptions primarily regarding the projected rates of remuneration growth, andlong-term indexation rates. Discount rates, used to determine the present value of the defined benefit obligation, are based on
the market yields of high quality corporate bonds in the country concerned. Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period
in which they arise. Past service costs are recognised immediately in the income statement. Pension assets and liabilities indifferent defined benefit schemes are not offset unless the Group has a legally enforceable right to use the surplus in one plan
to settle obligations in another plan.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into publicly or privately
administrated funds. The Group has no further payment obligations once the contributions have been made. The contributions arecharged to the income statement in the year to which they relate.

2.8.2 Other post-retirement obligations
Some Group companies provide certain post-retirement healthcare and life insurance benefits to their retirees, the entitlement
to which is usually based on the employee remaining in service up to retirement age and completing a minimum service period.
The expected costs of these benefits are accrued over the periods in which employees render service to the Group.

2.9 Share-Based Payments
The Group has established a performance share plan to align the long-term interests of key executives and members of the Boardof Directors with the interests of the shareholders.
Key executives are awarded a portion of their performance-related compensation in equity-settled share-based paymenttransactions. The costs are recorded in each relevant functions part of the employees’ remuneration as personnel expenses witha corresponding entry in equity in own equity instruments for equity-settled share-based payment transactions. The different
share-based payments are described below:

2.9.1 Performance Share Plan
Key executives are awarded a portion of their performance-related compensation in equity-settled share-based paymenttransactions in the form of a performance share plan.
The performance share plan is established with Givaudan registered shares and a vesting period of three years. The Group has at
its disposal either treasury shares or conditional share capital.
The cost of equity-settled instruments is expensed as employee remuneration over the vesting period, together with acorresponding increase in equity in own equity instruments. The cost is determined by reference to the fair value of the shares
expected to be delivered at the date of vesting. Performance conditions are included in the assumptions in which the number ofshares varies. No market conditions are involved.
The fair value is determined as the market price at grant date reduced by the present value of dividends expected or any otherexpected distribution to the shareholders to be paid during the vesting period, as participants are not entitled to receive dividends
or any other distribution to the shareholders during the vesting period.
At each statement of financial position date the Group revises its estimates of the number of shares that are expected to bedelivered. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation.

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43

2.9.2 Restricted Share Plan he members of the Board of Directors receive a portion of their compensation in equity-settled share-based payment
Ttransactions in the form of restricted share units.
Restricted shares are set generally with a vesting period of three years, during which the restricted shares cannot be settled ortransferred. The Group has at its disposal treasury shares for the delivery of the restricted shares.
The cost of these equity-settled instruments to be expensed, together with a corresponding increase in equity, over the vesting
period, is determined by reference to the fair value of the restricted shares granted at the date of the grant. Service conditions areincluded in the assumptions about the number of restricted shares that are expected to become deliverable. No performance
conditions are included.
The fair value is determined as the market price at grant date reduced by the present value of dividends expected or any otherexpected distribution to the shareholders to be paid during the vesting period, as participants are not entitled to receive dividends
or any other distribution to the shareholders during the vesting period.
At each statement of financial position date the Group revises its estimates of the number of restricted shares that are expected to
be delivered. Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation.

2.10 Taxation
Income taxes include all taxes based upon the taxable profits of the Group, including withholding taxes payable on the distributionof retained earnings within the Group. Other taxes not based on income, such as property and capital taxes, are included either inoperating expenses or in financial expenses according to their nature. The Group’s liability for current income tax is calculatedusing tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are provided based on the full liability method, under which deferred tax consequences are recognised for
temporary differences between the tax bases of assets and liabilities and their carrying values. Deferred tax liabilities are generally
recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary
differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profit will be available against
which those items can be utilised. Management considers that these tax benefits are probable on the basis of business projections
on the relevant entities.
Such deferred tax assets and liabilities are not recognised if the temporary difference arises from initial recognition of an asset or
liability in a transaction other than a business combination that at the time of the transaction affects neither the accounting nor
the taxable income.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset isrealised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and interests in jointly controlled
entities, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that thetemporary difference will not reverse in the foreseeable future. Current tax assets and liabilities are offset and deferred income tax
assets and liabilities are offset when the income taxes are levied by the same taxation authority and when there is a legally
enforceable right to offset them.
Current and deferred tax are recognised as an expense or income in the income statement, except when they relate to items thatare recognised outside the income statement, in which case the tax is also recognised outside the income statement.

2.11 Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand and demand deposits with banks and similar institutions. Cash equivalents areheld for the purpose of meeting short-term cash commitments (maturity of three months or less from the date of acquisition) andare subject to an insignificant risk of changes in value.

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44 Consolidated financial report Notes to the consolidated financial statements

2.12 Financial Assets
Financial assets are classified as financial assets at fair value through the income statement except for trade receivables which areclassified at amortised cost. The classification depends on the nature and purpose of the financial assets and is determined at thetime of initial recognition.
Regular way purchases or sales of financial assets require delivery of assets within the time frame established by regulation orconvention in the marketplace. All regular way purchases or sales of financial assets are recognised and derecognised at thesettlement date (i.e. the date that the asset is delivered to or by the Group). Financial assets are classified as current assets, unlessthey are expected to be realised beyond twelve months of the statement of financial position date.
The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers
the financial asset and substantially all the risks and rewards of ownership of the asset to another party. On derecognition of afinancial asset in its entirety, the following amounts are recognised in the income statement: (i) the difference between the asset’s
carrying amount and the sum of the consideration received and receivable; (ii) the cumulative gain or loss that had beenrecognised in other comprehensive income and accumulated in equity.
Dividend income from investments is recognised in other financial income (expense), net when the right to receive payment has been
established. Interest income is accrued on a time basis and included in other financial income (expense), net.

2.12.1 Financial assets at fair value through the income statement
Financial assets such as debt instruments, equity securities, investment funds and derivatives not designated as effective hedging
instruments are classified in this category.
Debt instruments are held with the objective to manage cash flows by both collecting their contractual cash flows and sellingthem at market price when needed. The main purpose of such instruments is to fund obligations related to employees. They aredesignated as financial assets measured at fair value through the income statement to avoid recognition inconsistency resulting
from changes in fair values of the financial assets and the obligations.
Other financial assets which are not debt instruments are held with the main objectives to participate in long-term partnerships,
to hedge certain financial risks, and to fund obligations related to employees. Their designation as financial assets measured at fairvalue through the income statement is in line with management intentions to hold such assets.
These financial assets are initially measured at fair value whereas directly attributable transaction costs are expensed in theincome statement. At the end of each period, the carrying value is adjusted to the fair value with a corresponding entry in theincome statement until the investment is derecognised.
The subsidiaries in the United States of America entered over the years into various life insurance contracts called corporate
owned life insurance (COLI) to fund long-term obligations related to employees. For both the COLI contracts and the associatedlong-term obligations, adjustments to the fair value, gains and losses, are recognised in the income statement.
For quoted equity instruments, the fair value is the market value, being calculated by reference to share exchange quoted selling
prices at close of business on the statement of financial position date. Non-quoted financial assets are valued at fair value based on
observable market transactions or if not available based on prices given by reputable financial institutions or on the price of thelatest transaction.

2.12.2 Financial assets at amortised cost
Trade receivables are the only financial assets classified as subsequently measured at amortised cost. They reach the objective ofcollecting contractual cash flows over their life.
Trade receivables are carried at amortised cost less allowances for loss. They generally do not contain a significant financing
component. The allowance loss measurement is then determined by applying a simplified approach equalling the lifetime expectedcredit losses. Under this approach the tracking of changes in credit risk is not required but instead the base lifetime expected credit
loss at all times is applied. An allowance for loss is made for potentially impaired receivables during the year in which they are

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45

identified based on a periodic review of all outstanding amounts. Losses are recorded within selling, marketing and distribution
expenses in the income statement. Trade receivables are deemed as impaired when there is an indication of significant financial
difficulties of the debtor (delinquency in or default on payments occurs, probability of bankruptcy or need for financial reorganisation).
Trade receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.

2.13 Derivative Financial Instruments and Hedging Activities
Most derivative instruments are entered into to provide economic hedges. They are initially recognised at fair value on the date aderivative contract is entered into and are subsequently measured at their fair value. The method to recognise the resulting gain orloss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
The Group documents, at the inception of the transaction, the relationship between hedging instruments and hedged items,
as well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also
documents its assessment, both at hedge inception and on an ongoing basis, as to whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.
Movements on the hedging reserve in shareholders’ equity are shown in the statement of changes in equity. These derivatives arepresented as current or non-current on the basis of their settlement dates.

2.13.1 Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in
the cash flow hedge reserve within other comprehensive income, limited to the cumulative change in fair value of the hedged item
on a present value basis from the inception of the hedge. The gain or loss relating to the ineffective portion is immediately
recognised in financing costs in the income statement.
Amounts accumulated in equity are reclassified to the income statement in the periods when the hedged transaction affects theincome statement, in the same line as the recognised hedged item. However, when the hedged forecast transaction results in therecognition of a non-financial asset or liability, the amounts are transferred from equity and included in the initial measurement of
the cost of the non-financial asset or liability.
When forward contracts are used to hedge forecast transactions such as future debt issuance, management assumes that thesources of hedge effectiveness in regards of the characteristics of the hedging relationship is sufficiently immaterial to exclusively
perform a qualitative assessment.
When the hedging instrument expires or is sold, terminated or exercised, or the hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the ultimate
forecast transaction occurs. If the forecast transaction is no longer expected to occur, any cumulative gain or loss existing in equity
is immediately taken to the income statement.

2.13.2 Derivatives at fair value through the income statement
Certain derivative instruments do not qualify for hedge accounting and are accounted for at fair value through the income
statement. At each statement of financial position date these derivative instruments are valued at fair value based on quoted
market prices, with the unrealised gain or loss recognised in the income statement. They are derecognised when the Group has
lost control of the contractual rights of the derivatives, at which time a realised gain or loss is recognised in the income statement.

2.14 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using a weighted average cost formula.
The cost of finished goods and work in process comprises raw materials, direct labour, other direct costs and related production
overheads but excludes borrowing costs. Cost of sales includes the corresponding direct production costs of goods manufactured
and services rendered as well as related production overheads. Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs necessary to make the sale.

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46 Consolidated financial report Notes to the consolidated financial statements

2.15 Property, Plant and Equipment
Property, plant and equipment are initially recognised at cost of purchase or construction and subsequently at cost lessaccumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment
includes expenditure that is attributable to the purchase or construction. It includes, for qualifying assets, borrowing costsin accordance with the Group’s accounting policy (Note 2.19), and cost of its dismantlement, removal or restoration, related
to the obligation for which an entity incurs as a consequence of installing the asset.
The assets are depreciated on a straight-line basis, except for land, which is not depreciated. Estimated useful lives of majorclasses of depreciable assets are as follows:–– Buildings and land improvements–– Machinery and equipment–– Office equipment–– Motor vehicles

40 years5 – 15 years
3 years
5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.
The carrying values of plant and equipment are written down to their recoverable amount when the carrying value is greater thantheir estimated recoverable amount (Note 2.18).
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount with gains being recognised
within other operating income and losses being recognised within other operating expense within the income statement.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it isprobable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured
reliably. Subsequent costs such as repairs and maintenance are recognised as expenses as incurred.

2.16 Leases
For all agreements containing a lease, a right-of-use asset and a corresponding lease liability are recognised, except for low-value
assets and short-term leases, defined as leases with a lease term of 12 months or less. Those are recognised as an expense on astraight-line basis in the consolidated income statement. The Group accounts for contracts containing both lease and non-lease
components as a single lease component.
The lease liability is initially measured at the present value of the future lease payments, as from commencement date of the lease
until the expected termination date. In determining the lease term, management considers all facts and circumstances that create
an economic incentive to exercise an extension option, or not exercise a termination option. Extension options are only included in
the lease term if the lease is reasonably certain to be extended. The lease term is reassessed if an option is, or not, actually
exercised or the Group becomes obliged, or not, to exercise it. The assessment of reasonable certainty is only revised if a significant
event or a significant change in circumstances occurs, which affects this assessment, and that is within the control of the lessee.
The lease payments are discounted by using the interest rate implicit in the contract or, if not available, the incremental borrowing
rate, which is defined as the interest rate that the Group would have to pay to borrow, over a similar term and with a similar
security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The
lease liability is subsequently measured to reflect interest, lease payments and any lease modifications. The lease liability ispresented under the lines short-term debt and long-term debt in the consolidated statement of financial position. The interest
expense is presented in the line financing costs in the consolidated income statement.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before thecommencement date, initial direct costs and estimates of cost to put the underlying asset in the appropriate condition. Right-of-use
assets are subsequently measured at cost less accumulated depreciation and impairment losses, adjusted for any remeasurement of
the lease liability. They are depreciated over the shorter period of the lease term and the useful life of the underlying asset. Right-ofuse-assets are presented in the consolidated statement of financial position under the line property, plant and equipment.
All lease payments on leases are presented as part of cash flows from financing activities, except for the short-term and low-value
leases cash flows which are booked under operating activities.

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47

2.17 Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the acquired
subsidiary at the date of acquisition. Goodwill on acquisitions is recognised in the statement of financial position as an intangible
asset. Goodwill is tested annually for impairment or more frequently when there are indications of impairment, and carried at costless accumulated impairment losses. Impairment charges on goodwill are not reversed. Any goodwill or fair value adjustments to thecarrying amounts of assets and liabilities arising on the acquisition of a foreign operation are recognised in the local currency at theeffective date of the transaction and translated at year-end exchange rates. For the purpose of impairment testing, goodwill isallocated to the cash-generating units being the Group’s reportable operating segments: Flavour Division and Fragrance Division,
which itself includes two lower levels of cash-generating units related to Expressions Parfumées and Fragrance Oils.
Intangible assets acquired in a business combination are identified and recognised separately from goodwill when they satisfy thedefinition of an intangible asset and their fair values can be measured reliably.
Internal developments are capitalised as intangible assets when there is an identifiable asset that will generate probable economic
benefits and when the cost can be measured reliably. Costs include all costs directly attributable to preparing the asset for use.
Development costs previously recognised as an expense are not recognised as an asset in subsequent periods.
Separately acquired intangible assets are capitalised when the identifiable asset will generate probable economic benefits andwhen its cost can be measured reliably.
Intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is on astraight-line basis over the estimated economic useful life of the asset. Useful life is determined based on the character of the asset
and may be indefinite. In that case, the asset is not amortised but annually tested for impairment. Estimated definite useful life ofmajor classes of amortisable assets are as follows:–– Name and product brands–– Software/ERP system–– Process-oriented technology–– Client relationships–– Supplier relationships

2 – 10 years
3 – 7 years
5 – 20 years
15 – 23 years
3 years

Gains or losses arising on the disposal of intangible assets are measured as the difference between the net disposal proceeds andthe carrying amount with gains being recognised within other operating income and losses being recognised in other operating
expense within the income statement.

2.18 Impairment of Long-Lived Assets
Non-financial assets that are subject to depreciation or amortisation are reviewed for impairment whenever events or changes incircumstances indicate that the carrying amount may not be recoverable. When the recoverable amount of a non-financial asset,
being the higher of its fair value less cost to sell and its value in use, is less than its carrying amount, then the carrying amount isreduced to the asset’s recoverable value. This reduction is recognised as an impairment loss within other operating expense within
the income statement. Value in use is determined by using pre-tax cash-flow projections over a five-year period and a terminal
value. These are discounted using a pre-tax discount rate that reflects current market conditions of the time value of money andthe risks specific to the asset.
Intangible assets with indefinite useful life are tested for impairment annually, and whenever there is an indication that the asset
may be impaired.
An impairment loss is reversed if there has been a change in the circumstances used to determine the recoverable amount. A
previously recognised impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Givaudan – 2019 Governance, Compensation and Financial Report

48 Consolidated financial report Notes to the consolidated financial statements

2.19 Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets thatnecessarily take a substantial period of time to prepare for their intended use, are added to the cost of those assets, until such timeas the assets are substantially ready for their intended use.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets isdeducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in the income statement in
the period in which they are incurred.

2.20 Accounts Payable – Trade and Others
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business fromsuppliers and are carried at amortised cost.

2.21 Debt
The proceeds of straight bonds, of private placements and of debt issued are recognised as the proceeds received, net oftransaction costs incurred. Any discount arising from the coupon rate, represented by the difference between the net proceeds andthe redemption value, is amortised using the effective interest rate method and charged to interest expense over the life of thebonds or the private placements. Debt is derecognised at redemption date.
Debt is classified within current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least
twelve months after the statement of financial position date.

2.22 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, for which it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation, and for which areliable estimate of the amount of the obligation can be made. Provisions are reviewed regularly and are adjusted where necessary
to reflect the current best estimates of the obligation.

2.23 Own Equity Instruments
Own equity instruments are own shares and derivatives on own shares. Purchases and sales are accounted for at the settlement date.
Purchases of own shares are recognised at acquisition cost including transaction costs as a deduction from equity. The original
cost of acquisition, results from resale and other movements are recognised as changes in equity, net. Treasury shares acquired by
the execution of own equity derivatives are recognised at the execution date market price.
The settlement and the contract for derivatives on own shares determine the categorisation of each instrument. When thecontract assumes the settlement is made by exchanging a fixed amount of cash for a fixed number of treasury shares, the contract
is recognised in equity except for a forward contract to buy and write put options which is recognised as a financial liability. Whenthe contract assumes the settlement either net in cash or net in treasury shares or in the case of option of settlement, thecontract is recognised as a derivative. Instruments recognised in equity are recognised at acquisition cost including transaction
costs. Instruments recognised as financial liabilities are recognised at the net present value of the strike price of the derivative on
own shares with the interest charge recognised over the life of the derivative in the line Financing costs of the income statement.
They are derecognised when the Group has lost control of the contractual rights of the derivative, with the realised gain or loss
recognised in equity.
At each statement of financial position date instruments recognised as derivatives are valued at fair value based on quoted market
prices, with any unrealised gain or loss recognised in the line Other financial income (expense), net in the income statement. They are
derecognised when the Group has lost control of the contractual rights of the derivatives, with any realised gain or loss recognised.

2.24 Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown inequity as a deduction, net of tax, from the proceeds.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements49

2.25 Statement of Cash Flows
Cash flows from operating activities arise from the principal activities of the Group in the Fragrance and Flavour businesses.
The indirect method is used whereby the operating income is adjusted for the transactions of a non-cash nature in order to derive
the cash generated from operations. It includes income tax paid on all activities.
Cash flows from financing activities are primarily the proceeds from the issue and repayment of the debt instruments, the dividend
payment to shareholders and interest paid. Cash flows from long-term and short-term borrowings are reported separately ofgross cash receipts and gross cash payments.
Cash flows from investing activities arise principally from the investments in property, plant and equipment and intangible assets,from the acquisition of subsidiaries, and from the transactions with jointly controlled entities.

2.26 Distribution to the Shareholders
Dividend distributions or distributions out of statutory capital reserves from ‘capital contributions – additional paid-in capital’ arerecognised in the period in which they are approved by the Group’s shareholders.

3. Critical Accounting Estimates and Judgments
The estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical experience and otherfactors, including expectation of future events that are believed to be reasonable under the circumstances.

3.1 Critical Accounting Estimates and Assumptions
The key assumptions concerning the future, and other key sources of estimation uncertainty at the statement of financial position
date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year, are for the most part related to:–– In a business combination, the determination of the fair value of the identifiable assets acquired, particularly intangibles, and theliability requiring estimations which are based on all available information and in some cases on assumptions with respect to thetiming and amount of future revenues and expenses associated with an asset. The purchase price is allocated to the underlying
acquired assets and liabilities based on their estimated fair value at the time of acquisition. The excess is reported as goodwill. As
a result, the purchase price allocation impacts reported assets and liabilities, future net earnings due to the impact on future
depreciation and amortisation expense and impairment charges (Note 6);–– The impairment of goodwill requiring estimates of the value in use of the cash-generating units to which goodwill
is allocated (Note 22);–– The impairment of long-lived assets requiring estimates to measure the recoverable amount of an asset or group of assets(Note 21 and 22);–– The calculation of the present value of defined benefit obligations requiring financial and demographic assumptions(Note 8);–– The determination and provision for income taxes requiring estimated calculations for which the ultimate tax determination is
uncertain (Note 16);–– The provisions requiring assumptions to determine reliable best estimates (Note 26); and–– The contingent liabilities assessment (Note 30).
If, in the future, estimates and assumptions, which are based on management’s best judgment at the date of the financial
statements, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in theyear in which the circumstances change.

Givaudan – 2019 Governance, Compensation and Financial Report50

Consolidated financial report Notes to the consolidated financial statements

3.2 Critical Judgments in Applying the Entity’s Accounting Policies
In the process of applying the Group’s accounting policies, management has made the following judgments, apart from those
involving estimates, which have the most significant effect on the amounts recognised in the consolidated financial statements:–– Computer software and Enterprise Resource Planning: Computer software is internally developed programmes or modifications
that result in new or in substantial improvements of existing IT systems and applications (Note 22); and–– Internal developments on formulas, technologies and products: The outcome of these developments depends on their final
assemblage and application, which varies to meet customer needs, and consequently the future economic benefits of thesedevelopments are not certain. Thus the criteria for the recognition as an asset of the internal developments on formulas,technologies and products are generally not met. The expenditures on these activities are recognised as expense in the period
in which they are incurred.

4. Foreign Exchange Rates
ISO code

Units

31 Dec 2019

Average 2019

US dollar

USD

1

0.97

0.99

0.98

0.98

0.97

0.98

Euro

EUR

1

1.09

1.11

1.13

1.15

1.17

1.11

Pound

GBP

1

1.28

1.27

1.25

1.30

1.32

1.27

Yen

JPY

100

0.89

0.91

0.90

0.88

0.86

0.88

Singapore dollar

SGD

1

0.72

0.73

0.72

0.72

0.73

0.71

Real

BRL

1

0.24

0.25

0.25

0.27

0.30

0.31

Foreign currency to Swiss francs exchange rates

31 Dec 2018 Average 201831 Dec 2017 Average 2017

Renminbi

CNY

1

0.14

0.14

0.14

0.15

0.15

0.15

Mexican peso

MXN

100

5.13

5.13

5.01

5.08

4.96

5.20

RupiahIDR

10,000

0.70

0.70

0.68

0.69

0.72

0.73

5. Financial Risk Management
5.1 Capital Management
The objective of the Group when managing capital is to maintain the ability to continue as a going concern whilst maximising
shareholder value through an optimal balance of debt and equity.
In order to maintain or adjust the capital structure, management may increase or decrease leverage by issuing or reimbursing
debt, and may propose to adjust the amounts distributed to the shareholders, return capital to shareholders, issue new shares andcancel shares through share buyback programmes.
The Group monitors its capital structure on the basis of a leverage ratio, defined as net debt divided by the equity plus net debt.
Net debt is calculated as the total of the consolidated short-term and long-term debt, less cash and cash equivalents.
Equity is calculated as the total equity attributable to equity holders of the parent excluding the defined benefit pension plans
remeasurement elements.
The Group has entered into several private placements which contain various covenants with externally imposed capitalrequirements. The Group was in compliance with these requirements as at 31 December 2019 and 2018.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

51

The leverage ratio as at 31 December was as follows:
Note

2019

Short-term debt

24

335

4

Long-term debt

24

3,796

3,266

Less: cash and cash equivalents

18

in millions of Swiss francs

Net debt
Total equity attributable to equity holders of the parent
Remeasurement of post-employment benefit obligations

8

2018

(452)

(423)

3,679

2,847

3,640

3,710

525

431

Equity

4,165

4,141

Net debt and equity

7,844

6,988

Leverage ratio

47%

41%

The Group is committed to maintaining an investment grade credit profile, as defined by external ratings agencies. The net debt
was CHF 3,679 million at December 2019 up from CHF 2,847 million as at December 2018, following the recent acquisitions and theadoption of IFRS 16.

5.2 Financial Risk Management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk and price risk),credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets
and seeks to minimise potential adverse effects on the Group’s financial performance. The Group generally enters into financial
derivative transactions to hedge underlying business related exposures.
Risk management is carried out by a team within the central treasury department (hereafter ‘Group Treasury’) under the risk
management policies approved by the Board of Directors. The Board of Directors provides written principles for overall risk
management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk and credit risk,
use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
Group Treasury monitors and manages financial risks relating to the operations of the Group through internal risk reports
which analyse exposures by degree and magnitude of risk. To manage the interest rate and currency risk arising from theGroup’s operations and its sources of finance, the Group enters into derivative transactions, primarily interest rate swaps,
forward currency contracts and options. Compliance with policies and exposure limits is reviewed by the treasury controllingon a continuous basis. Group Treasury issues monthly reports for the Chief Financial Officer and quarterly reports for the
Audit Committee.

Givaudan – 2019 Governance, Compensation and Financial Report

52

Consolidated financial report Notes to the consolidated financial statements

Categories of financial instruments
The accounting policies for financial instruments have been applied to the line items below:

2019
in millions of Swiss francs

At amortised
Note
cost

At fair value
through theincomestatement

Derivatives
used forhedge
accounting

Otherfinancialliabilities

Total

Current financial assets
Cash and cash equivalents

18

Derivative financial instruments

5.3

24

Financial assets at fair value through income statement

5.3

4

Accounts receivable – trade19

Other current assets a

452

452
24
4

1,365

1,365

163

163

Non-current financial assets
Derivative financial instruments

5.3

Financial assets at fair value through income statement

5.3

Total financial assets as at 31 December

1

1

177
1,980

177

205

1

10

19

2,186

Current financial liabilities
Short-term debt

24

Derivative financial instruments

5.3

42b

Accounts payable

293

335

833

833

3,397

3,796

29

Non-current financial liabilities
Derivative financial instruments

5.3

Long-term debt

24

Total financial liabilities as at 31 December

79
399b

79

441

10

98

4,523

5,072

At amortised
Note
cost

At fair value
through theincomestatement

Derivatives
used forhedge
accounting

Otherfinancialliabilities

Totala) Other current assets consist of other receivables non trade.
b) Lease liabilities.

2018
in millions of Swiss francs

Current financial assets
Cash and cash equivalents

18

Derivative financial instruments

5.3

11

Financial assets at fair value through income statement

5.3

4

Accounts receivable – trade19

Other current assets a

423

423
11
4

1,253

1,253

238

238

Non-current financial assets
Derivative financial instruments b

5.3

Financial assets at fair value through income statement

5.3

Total financial assets as at 31 December

2

2

61
1,914

61

76

2

1,992

Current financial liabilities
Short-term debt

24

Derivative financial instruments

5.3

4

4

12

12

Accounts payable

719

719

3,266

3,266

3,989

4,044

Non-current financial liabilities
Derivative financial instruments b

5.3

Long-term debt

24

Total financial liabilities as at 31 December

43
12

43

43

a)	Other current assets consist of other receivables non trade.
b)	Derivatives qualified as hedge accounting on non-current transactions are classified and presented as non-current liabilities (Note 2.13).

The carrying amount of each class of financial assets and liabilities disclosed in the previous tables approximates the fair value.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

53

The fair value of each class of financial assets and liabilities, except financial assets and liabilities at amortised cost, is determinedby reference to published price quotations and is estimated based on valuation techniques using the quoted market prices. Given
the nature of the Group’s accounts receivable trade items, the carrying value is considered as equivalent to the fair value.

5.2.1 Market Risk
The Group’s activities primarily expose it to the financial risks of changes in foreign currency exchange rates, interest rates andcommodity prices. The Group enters into a number of derivative financial instruments to manage its exposure to foreign currency
risk and interest rate risk, including:–– Currency derivatives, mainly forward foreign exchange contracts, to hedge the exchange rate risk arising from recordedtransactions; and–– Interest rate swaps and other instruments to mitigate the risk of interest rate increases and/or to optimally manage interest
rate costs depending on the prevailing interest rate environment.
Market risk exposures are measured using sensitivity analysis. There has been no change during the year in the structure of theGroup’s exposure to market risks or the manner in which these risks are managed.
5.2.1.1 Foreign Exchange Risk
The Group operates across the world and is exposed to movements in foreign currencies affecting its net income and financial
position. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities, and net investments
in foreign operations.
It is the Group’s policy to enter into derivative transactions to hedge current, forecasted foreign currency transactions, andtranslation risk arising from certain investments in foreign operations with a functional currency different from the Group’s
presentation currency.
In 2018 the Group applied hedge accounting on the net investment in foreign currency in Naturex SA with the aim of being
protected from the foreign currency risk on the translation of the investment in Naturex (i.e. EUR) into the Group’s
presentation currency (i.e. CHF). In total EUR 1,292 million of Euro straight bonds were designated as hedge instruments,
corresponding to the net investment in Naturex. This resulted in a gain of CHF 51 million (2018: CHF 37 million), recognised incurrency translation differences in equity.
In 2018 and 2019 the Group applied hedge accounting on the foreign currency risk related to the Euro straight bonds coupons, andto the acquisitions of Albert Vieille SAS, drom and the cosmetic business of Indena.
Group Treasury centrally manages foreign exchange risk management activities against the functional currency of each subsidiary,and is required to hedge, whenever cost-effective, their largest exposures.
The measurement of the foreign currency risk expresses the total exposure by currency, which is in the opinion of Group Treasury arepresentative manner to monitor the risk. It measures the cumulative foreign exchange risk of all subsidiaries of recognised assets
and liabilities that are denominated in a currency (e.g. USD) that is not the subsidiary’s functional currency (e.g. other than USD).

Givaudan – 2019 Governance, Compensation and Financial Report

54 Consolidated financial report Notes to the consolidated financial statements

The following table summarises the significant exposures to the foreign currency risk at the date of the consolidated statement offinancial position:
Currency exposure 2019in millions of Swiss francs

USD

EUR

CHF

GBP

SGD

Currency exposure without hedge a

477

(159)

43

(149)

148

Hedged amount

(468)

83

(38)

156

(162)

9b

(76)

5

7

(14)

Currency exposure including hedgea) + long position; - short position.
b) Mainly due to unhedged positions in countries where hedging is not cost-effective.
Currency exposure 2018
in millions of Swiss francs

USD

EUR

CHF

GBP

SGD

Currency exposure without hedge a

484

(334)

12

(152)

155

Hedged amount

(458)

327

9

151

(162)

26b

(7)

21

(1)

(7)

Currency exposure including hedgea)	+ long position; - short position.
b)	Mainly due to unhedged positions in countries where hedging is not cost-effective.

In the exposure calculations the intra-Group positions, except those related to net investments in foreign operations, are included.
The Euro straight bonds designated as hedge instrument for an amount of EUR 1,292 million corresponding to the net investmentin the holding of Naturex has been excluded from the EUR exposure to align the currency risk.
The following table summarises the sensitivity to transactional currency exposures of the main currencies as at 31 December:
Currency risks 2019in millions of Swiss francs

USD

EUR

CHF

GBP

SGD

Reasonable shift

13%

6%

6%

8%

6%

Impact on income statement if the currency strengthens against all other currencies

1

(4)

1

1

(1)

Impact on income statement if the currency weakens against all other currencies

(1)

4

(1)

(1)

1

Currency risks 2018
in millions of Swiss francs

USD

EUR

CHF

GBP

SGD

Reasonable shift

9%

14%

7%

8%

7%

Impact on income statement if the currency strengthens against all other currencies

2

(6)

1

–

(1)

Impact on income statement if the currency weakens against all other currencies

(2)

6

(1)

–

1

The sensitivity is based on the exposure at the date of the consolidated statement of financial position and based on assumptions
deemed reasonable by management, showing the impact on income before tax. Management uses historical volatilities of thesignificant currencies contributing to the exposure to determine the reasonable change.
Argentina became hyperinflationary effective 1 July 2018, requiring retroactive implementation of hyperinflation accounting as of
1 January 2018. The impact of the restatement of the non-monetary assets and liabilities of the subsidiaries in Argentina with thegeneral price index at the beginning of the period is recorded in the opening equity. In the current year the subsequent loss
resulting from the restatement of non-monetary assets of CHF 8 million (2018: CHF 1 million gain) is recorded in other financial
income (expense), net.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

55

5.2.1.2 Interest Rate Risk
The Group is exposed to interest rate risk because entities in the Group borrow funds at both fixed and floating interest rates,
and invests in debt financial instruments. Borrowings issued at variable rates expose the Group to cash flow interest rate risk
which is partially counterbalanced by cash held at variable rates. Borrowings issued at fixed rates expose the Group to fair valueinterest rate risk.
Group Treasury manages interest rate risk centrally by simulating various scenarios on liabilities taking into consideration
refinancing, renewal of existing positions and hedging. Hedging strategies are applied by either positioning the liabilities orprotecting interest expense through different interest cycles. Hedging activities are regularly evaluated to align interest rateviews and define risk limits. Group Treasury manages interest rate risk mainly by the use of interest rate swap contracts.
The following table shows the sensitivity to interest rate changes:
As at 31 December 2019in millions of Swiss francs

150 basis points increase

Impact on income statement

–

126

(25)

150 basis points increase

25 basis points decrease

Impact on equity
As at 31 December 2018
in millions of Swiss francs

25 basis points decrease–

Impact on income statement––

Impact on equity

57

(11)

The sensitivity is based on exposure on net liabilities at the date of the consolidated statement of financial position using
assumptions which have been deemed reasonable by management showing the impact on the income before tax.
Cash flow hedges
Inception
date

Hedged items

Hedge instruments

Objectives

Comments

2011/
2012

Highly probable future
debt issuances in 2014.

Several forward starting interest rate
swaps commencing in 2014, totalling
CHF 250 million with an average rateof 1.54% and a 5 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

In March 2014, the Group issued a 1.00%
6.5 year public bond with a nominal valueof CHF 100 million; and a 1.75% 10 year publicbond with a nominal value of CHF 150 million.
Correspondingly, hedge positions assigned
to this bond issuance have been closed.
The amortisation of the realised loss of
CHF 15 million was recognised in Financing
costs over 5 years until 19 March 2019.

2012

Highly probable future
debt issuances in 2016.

Several forward starting interest rate
swaps commencing in 2016, totalling
CHF 75 million with an average rateof 1.63% and a 5 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

In December 2016, the Group issued a 0.000%
6 year public bond with a nominal value of
CHF 100 million; and a 0.625% 15 year publicbond with a nominal value of CHF 200 million.
Correspondingly, hedge positions assigned
to this bond issuance have been closed.
The amortisation of the realised loss of
CHF 8 million is recognised in Financing
costs over 5 years until 7 December 2021.

2012

Highly probablefuture private
placements issuancein the USA in 2013.

Several derivatives instruments fixing
the interest rate at 1.80% on average fora total amount of USD 100 million.

Protection against
short-term increases in
USD interest rates andto fix the interest rates.

The cash flow hedges were effective during
the period. The amount of USD 1 million(equivalent to CHF 1 million) deferred in
hedging reserve in other comprehensive
income is recycled over the next 10 years
as Financing cost from 6 February 2013, thedate when the proceeds were received.

2012/
2014

Highly probable future
debt issuances in 2018.

Several forward starting interest rate
swaps commencing in 2018, totalling
CHF 150 million with an average rateof 1.90% and a 5 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

In April 2018, the Group issued a 2 year
floating rate public bond with a nominal valueof CHF 150 million; and a 7 year 0.375% fixed
rate public bond with a nominal value of
CHF 200 million. Correspondingly, hedge
positions assigned to this bond issuance havebeen closed. The amortisation of the realised
loss of CHF 15 million is recognised in Financing
costs over 5 years until April 2023.

Givaudan – 2019 Governance, Compensation and Financial Report

56 Consolidated financial report Notes to the consolidated financial statements

Inception
date

Hedged items

Hedge instruments

Objectives

Comments

2014/
2015

Highly probable future
debt issuances in 2020.

Several forward starting interest rate
swaps commencing in 2020, totalling
CHF 75 million with an average rateof 2.12% and a 10 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2014/
2015

Highly probable future
debt issuances in 2021.

Several forward starting interest rate
swaps commencing in 2021, totalling
CHF 125 million with an average rateof 2.05% and a 10 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2014/
2015

Highly probable future
debt issuances in 2024.

Several forward starting interest rate
swaps commencing in 2024, totalling
CHF 100 million with an average rateof 2.35% and a 10 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2016/
2017

Highly probable future
debt issuances in 2031.

Several forward starting interest rate
swaps commencing in 2031, totalling
CHF 100 million with an average rateof 0.92% and a 10 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2018/
2019

Highly probable future
debt issuance in 2020.

Several forward starting interest rate
swaps commencing in 2020, totalling
CHF 50 million with an average rateof 0.27% and a 5 year maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2018

Highly probable future
debt issuance in 2025.

One forward starting interest rate swap
commencing in 2025, totalling CHF 25 million
with an average rate of 1.28% and a 5 year
maturity.

Protection against
future increases in
CHF interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

June 2018

Highly probable future
debt issuance inDecember 2018.

Several forward starting interest rate
swaps commencing in December 2018
totalling EUR 400 million with an averagerate of 1.05% and respectively 7 and10 year maturities.

Protection against
future increase in
EUR interest rates andto fix the interest rates

In September 2018, the Group issued a dual
tranche placement of Euro bond, totalling
EUR 1,300 million, respectively of EUR 500 million
at a rate of 1.125% for 7 years and EUR 800 million
at the rate of 2.000% for 12 years. Correspondingly, hedge positions assigned to this bond issuance
have been closed. The amortisation of therealised loss is recognised in Financing costs for
CHF 1 million over 7 years until September 2025,
and CHF 5 million over 10 years until
September 2028.

2019

Highly probable future
debt issuance in 2024.

One forward starting interest rate swap
commencing in 2024, totalling EUR 50 million
with an average rate of 1.68% and a 7 year
maturity.

Protection against
future increases in
EUR interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2019

Highly probable future
debt issuance in 2025.

Several forward starting interest rate swaps
commencing in 2025, totalling EUR 200 million
with an average rate of 1.50% and a 7 year
maturity.

Protection against
future increases in
EUR interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

2019

Highly probable future
debt issuance in 2030.

Several forward starting interest rate swaps
commencing in 2030, totalling EUR 275 million
with an average rate of 1.39% and a 10 year
maturity.

Protection against
future increases in
EUR interest rates andto fix the interest rates.

The cash flow hedges were effective
during the year.

The carrying amount of the total cash flow hedges at 31 December 2019 is CHF 97 million (2018: CHF 41 million).

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

57

5.2.1.3 Price Risk
The Group is exposed to equity price risk arising from equity investments held classified at fair value through income statement.
The Group manages its price risk through a diversification of portfolios within the limits approved by the Board of Directors.
The Group holds its own shares to meet future expected obligations under the various share-based payment schemes.
Sensitivity analysis
The Group’s equity portfolio is composed of US and EUR shares. The benchmark for the reasonable change is an average ofhistorical volatility of US indexes (16% for the last three years) and of CAC PME index (18% for the last three years).
The sensitivity analysis has been determined based on the exposure to equity price risks at the end of the reporting period:
2019
in millions of Swiss francs

Equity priceincrease

Equity pricedecrease26(26)

Equity priceincrease

Equity pricedecrease

5(5)Impact on income statement
2018 − reasonable shifts: 16% US
in millions of Swiss francs

Impact on income statement

5.2.2 Credit Risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group.
Commercial credit risk is managed by the Group’s subsidiaries and monitored on a Group basis whilst counterparty risk related tofinancial institutions is centrally managed within the Group Treasury function.
Trade receivables are subject to a policy of active risk management which focuses on the assessment of country risk, credit
limits, ongoing credit evaluation and account monitoring procedures. Generally, there is no significant concentration of tradereceivables or commercial counterparty credit risk, due to the large number of customers that the Group deals with and theirwide geographical spread with the exception of one single external customer that generates revenues, mainly attributable to the
Fragrance Division, of approximately CHF 581 million (2018: CHF 573 million). Countries, credit limits and exposures arecontinuously monitored.
The credit risk on liquid funds, derivatives and other monetary financial assets is limited because the counterparties are financial
institutions with investment grade ratings.
The following table presents the credit risk exposure to individual financial institutions:
2019
Total
in Mio CHF

Max. with any
individual bankin Mio CHF

Numberof banks

AAA − range

6

6

1

AA − range

6

4

4

A − range

136

95

10

BBB − range

271

132

7

2018
Max. with any
individual bankin Mio CHF

Numberof banks

2

2

1

75

74

2

102

72

11

232

128

7

Total
in Mio CHF

The carrying amount of financial assets recognised in the consolidated financial statements, which is net of impairment losses,
represents the Group’s maximum exposure to credit risk.

Givaudan – 2019 Governance, Compensation and Financial Report

58 Consolidated financial report Notes to the consolidated financial statements

5.2.3 Liquidity Risk
The Group manages liquidity risk by maintaining sufficient cash, marketable securities, availability of funds through an adequate
amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying
businesses, Group Treasury maintains flexibility in funding by maintaining availability under committed and uncommitted credit lines.
Group Treasury monitors and manages cash at the Group level and defines the maximum cash level at subsidiary level. Cashsurpluses held by subsidiaries over and above amounts required for working capital management are transferred to the central
treasury centre. The surplus of cash is generally invested in interest bearing current accounts, time deposits, money market
deposits and funds. When necessary, intercompany loans are granted by the Group to subsidiaries to meet their non-recurrent
payment obligations.
The following table analyses the Group’s remaining contractual maturity for financial liabilities and derivative financial
instruments. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest dateon which the Group is obliged to pay. The table includes both interest and principal cash flows:2019
in millions of Swiss francs

Up to 6months6 − 12monthsShort-term debt (excluding bank overdrafts)

(192)

(101)

Accounts payable(833)

Net settled derivative financial instruments

1−5
years

Over 5
years

Total

(293)
(833)

–

(1)

Gross settled derivative financial instruments − outflows(2,143)(429)

Gross settled derivative financial instruments − inflows

2,155

431

(15)

(33)

(1,709)(1,993)(3,750)

Balance as at 31 December(1,028)(133)(1,728)(2,072)(4,961)2018
in millions of Swiss francs

Up to 6months6 − 12months1−5
yearsOver 5
years

Total

(11)

(30)

Long-term debt

(19)

(79)

(99)
(2,572)
2,586

Short-term debt (excluding bank overdrafts)
Accounts payable

(719)

(719)

Net settled derivative financial instruments(1,435)Gross settled derivative financial instruments − inflows

1,435

419

(14)

(32)

(1,137)(2,459)(3,642)

(733)

(33)

(1,148)(2,489)(4,403)Long-term debt
Balance as at 31 December

(420)

(41)

Gross settled derivative financial instruments − outflows(1,855)
1,854

The undiscounted cash flows related to lease liabilities are CHF 47 million within 1 year, CHF 92 million within 1 to 5 years and
CHF 357 million thereafter.

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59

5.3 Fair Value Measurements
The following tables present the Group’s assets and liabilities that are measured subsequent to initial recognition at fair value,grouped into levels 1 to 3 based on the degree to which the fair value is measured:–– Level 1 inputs to measure fair value are those derived from quoted prices (unadjusted) in active markets for identicalassets or liabilities;–– Level 2 inputs to measure fair value are those derived from inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and–– Level 3 inputs to measure fair value are those derived from valuation techniques that include inputs for the asset or liability
that are not based on observable market data (unobservable inputs).
2019in millions of Swiss francs

Level 1

Level 2

Level 3

Total

Financial assets at fair value through income statement
Forward foreign exchange contracts

24

Swaps (hedge accounting)1

1

Corporate owned life insurance

36

36

16

128

Equity securities

112

Debt securities
Total assets

112

24

17

17

94

206

Financial liabilities at fair value through income statement
Forward foreign exchange contracts

10

10

Swaps (hedge accounting)98

98

Swaps (no hedge accounting)Total liabilities
2018
in millions of Swiss francs

Level 1

–

–

108

108

Level 2

Level 3

Total

Financial assets at fair value through income statement
Forward foreign exchange contracts

11

Swaps (hedge accounting)2

2

Corporate owned life insurance

31

31

13

15

Equity securities

2

Debt securities

11

19

19

76

78

Forward foreign exchange contracts

12

12

Swaps (hedge accounting)

43

43

55

55

Total assets

2

Financial liabilities at fair value through income statement

Swaps (no hedge accounting)Total liabilities

Financial assets and liabilities at fair value through income statement are measured with Level 1 and Level 2 inputs. They mainly
consist of marketable securities quoted on financial market, of forward foreign exchange contracts that are measured using
quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts, ofinterest swaps that are measured using quoted interest rates and yield curves derived from quoted interest rates matching
maturities of the contracts, and of corporate owned life insurance (COLI) that are measured on quoted instruments with similar
credit ratings and terms in a mix of money market, fixed income and equity funds managed by unrelated fund managers.
There was no transfer between the level categories in the period.

Givaudan – 2019 Governance, Compensation and Financial Report60

Consolidated financial report Notes to the consolidated financial statements

6. Acquisitions
Acquisitions 2019
During the year 2019 Givaudan made five acquisitions, AMSilk, Albert Vieille, Fragrance Oils, Golden Frog and drom.

AMSilk
On 25 April 2019 Givaudan acquired the cosmetics business of AMSilk GmbH for a purchase price of CHF 7 million. AMSilk is theworld’s first industrial supplier of vegan silk biopolymers and has its headquarters near Munich, Germany. AMSilk offers a range ofhigh-performance biosourced polypeptides with unique functional properties in the field of cosmetics. These vegan biopolymers
offer a broad range of applications across categories such as hair care and skin care with benefits like silk touch, anti-pollution or
colour protection of the hair. Over the last 9 years, they have filed 10 patents for the use of biopolymers in cosmetic applications.
From 25 April 2019, the acquisition contributed CHF 0.4 million of sales to the Group’s consolidated results.
The identifiable assets and liabilities of the cosmetics business of AMSilk acquired are recorded at fair value at the date ofacquisition and no goodwill has been recognised. 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.

Albert VieilleOn 3 May 2019 Givaudan acquired 100% of the share capital of Albert Vieille SAS and its affiliates for a purchase price of
CHF 54 million. Albert Vieille has unique know-how in the realm of aromatic plants and specialises in 100% pure essential oils andspeciality natural ingredients. The natural ingredients are used for the formulation of perfumes and aromatherapy products.
With its origins dating back to 1920, and with more than 60 employees, Albert Vieille is based close to Grasse, in France, and has amanufacturing facility in Spain, with its products sold globally through a network of distributors. They source their raw materials
across the world, where fragrant crops are harvested and have developed over many years strong capabilities in natural ingredientssourcing and processing. From 3 May 2019, the acquisition contributed CHF 15 million of sales to the Group’s consolidated results.
The goodwill of CHF 27 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 ofAlbert Vieille 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.

Fragrance Oils
On 21 August 2019 Givaudan acquired 100% of the share capital of Fragrance Oils Limited and its affiliates for a purchase price of
CHF 244 million. Founded in 1967, Fragrance Oils is a leading British-based manufacturer and marketer of innovative speciality
fragrances for fine fragrances, personal and home care applications. Their state-of-the-art manufacturing facility in Radcliffe,
UK, employs over 250 employees and sells its products in more than 90 countries, in particular in high growth markets. From
21 August 2019, the acquisition contributed CHF 22 million of sales to the Group’s consolidated results.
The identifiable assets and liabilities of Fragrance Oils acquired are recorded at fair value at the date of acquisition. Total net assets
acquired of CHF 139 million consist of cash (CHF 25 million), working capital (CHF 21 million), fixed assets (CHF 24 million), intangible
assets which are comprised of process knowledge, client relationships and brand name (CHF 91 million), deferred tax liabilities(CHF 17 million) and other liabilities (CHF 5 million). The total purchase price of CHF 244 million was settled in cash, resulting in
goodwill of CHF 105 million which relates mainly to the value of the qualified workforce and expected synergies that do not meetthe criteria for recognition as separable intangible assets.
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.

Golden FrogOn 30 August 2019 Givaudan acquired 100% of the share capital of Golden Frog Flavor-Fragrance Manufacture Corporation, aVietnamese flavour company, for a purchase price of CHF 30 million. Golden Frog manufactures natural flavours, extracts andGivaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

61

essential oils for the food and beverage industry. It offers a wide range of natural ingredients including herbs, spices, fruit andvegetable extracts and essential oils from the great biodiversity of Vietnam. With headquarters and manufacturing facilities in the
Ho Chi Minh area, Golden Frog employs 156 people and caters to the needs of the South East Asian markets. From 30 August 2019,the acquisition contributed CHF 4 million of sales to the Group’s consolidated results.
The goodwill of CHF 11 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 ofGolden Frog 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.

drom
On 6 September 2019 Givaudan acquired 100% of the share capital of drom fragrances GmbH & Co. KG and its affiliates for apurchase price of CHF 180 million. Founded in 1911, drom is a global perfume house creating fragrances for consumer products
and fine fragrance customers across the world. Headquartered near Munich, in Germany, drom has manufacturing
facilities in Germany, China, the USA and Brazil. The company employs 489 people globally. From 6 September 2019, the acquisition
contributed CHF 44 million of sales to the Group’s consolidated results.
The identifiable assets and liabilities of drom acquired are recorded at fair value at the date of acquisition. Total net assets
acquired of CHF 98 million consist of cash (CHF 11 million), working capital (CHF 40 million), fixed assets (CHF 28 million), intangible
assets which are comprised of process knowledge, client relationships and brand name (CHF 98 million), deferred tax liabilities(CHF 27 million), short-term loans (CHF 25 million) and other liabilities (CHF 27 million). The total purchase price of CHF 180 million
was settled in cash, resulting in goodwill of CHF 82 million which relates mainly to the value of the qualified workforce andexpected synergies that do not meet the criteria for recognition as separable intangible assets.
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.

Acquisitions 2018
During the year 2018 Givaudan made three acquisitions, Naturex, Expressions Parfumées and Centroflora Nutra.

Naturex
On 5 June 2018 Givaudan acquired 40.5% of the shares of Naturex for a price of EUR 135 per share and a total consideration of
EUR 523 million, equivalent to CHF 606 million, and subsequently launched a mandatory public cash tender offer for the remaining
shares on 28 June 2018. On 9 August 2018, following the primary tender offer period, Givaudan held 97.24% of the shares of Naturex
and has taken effective control of the company. Following the completion of a second tender offer period on 13 September 2018,
Givaudan held 98.06% of the shares of Naturex and achieved 100% share ownership on 18 September 2018, following completion ofthe ‘squeeze out’ process of the remaining shares. The total consideration paid for the completed acquisition amounts to
EUR 1,292 million, equivalent to CHF 1,489 million.
Naturex is an international leader in plant extraction and the development of natural ingredients and solutions for the food, healthand beauty sectors. Naturex is headquartered in Avignon, France and reported sales of EUR 405 million in 2017. It operates from16 production sites around the world and employs 1,700 people.
Givaudan classified its initial investment in Naturex as a financial instrument, as it did not control or exert significant influence
over Naturex, demonstrated by the absence of Givaudan representatives in the Board of Directors or Executive Management of
Naturex. As of the acquisition date Naturex has been fully consolidated into the Givaudan Group. Immediately prior to theacquisition date the fair value of the initial investment remained unchanged at EUR 523 million (CHF 606 million), therefore no gainor loss has been recognised in the statement of comprehensive income.

Givaudan – 2019 Governance, Compensation and Financial Report

62 Consolidated financial report Notes to the consolidated financial statements

In accordance with IFRS 3, the Group has completed the acquisition price allocation in the twelve months following the acquisition
date. The identifiable assets and liabilities of Naturex acquired are recorded at fair value (at the date of acquisition) and are as follows:in millions of Swiss francs

Acquisition price allocation
adjustment

Provisional fair value

Final fair value at the dateof acquisition

Cash and cash equivalents

20

Accounts receivable

85

20
85

Inventories

186

186

Other current assets

28

28

Property, plant and equipment

203

203

- Client relationships

285- Supplier relationships

42

285
42

- Process-oriented technology and other

111

111

- Name and product brands

57

57- Software / ERP system

33

Total identified intangible assets

498

Other non-current assets

28

498
28

Accounts payable

(52)

(52)

Other payables

(32)

(32)

Provisions

(13)

(13)

Debt

(248)

(248)

Deferred tax liabilities

(117)

(117)

Net assets acquired

586

586

Cash consideration

1,448

1,448

Non-controlling interest

54

9

63

Goodwill

916

9

925

An acquisition price allocation adjustment was recorded in order to account for CHF 9 million additional non-controlling intereststhat relate to 60,295 vested equity-settled share based instruments, not recognised in the provisional acquisition price allocation.
Following this adjustment, the goodwill arising on the acquisition increased to CHF 925 million (EUR 802 million) and relates
mainly to the value of the qualified workforce and expected synergies that do not meet the criteria for recognition as separable
intangible assets. The total amount of goodwill that is expected to be deductible for tax purposes is nil.
The acquired receivables are fair valued at CHF 85 million. The gross contractual amounts of the receivables acquired are
CHF 86 million. The best estimation at the acquisition date of the contractual cash flows not to be collected amounts to CHF 1 million.
The non-controlling interest at the date of acquisition consists of a non-controlling interest of 2.76% of the shares of Naturex
valued at EUR 135 per share for a total amount of CHF 41 million (EUR 35 million). The non-controlling interest also includes
142,005 vested equity-settled share based instruments for an amount of CHF 22 million (EUR 19 million). At the point in time in the
future when the vested equity-settled shared based instruments will be exercised, Givaudan has the right to purchase the sharesback at a price of EUR 135 per share.

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) andDubai (United Arab Emirates), employing globally 200 people.
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

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

63

liabilities (CHF 16 million) and other liabilities (CHF 27 million). The total purchase price of CHF 199 million was settled in cash,
resulting in goodwill of CHF 145 million that relates mainly to the value of the qualified workforce and expected synergies that do
not meet the criteria for recognition as separable intangible assets. The allocation of the acquisition price has been finalised and no
adjustments were made to the acquisition values.

Centroflora Nutra
On 14 May 2018 Givaudan acquired 100% of the share capital of Centroflora Nutra, the Nutrition Division of Centroflora Group,
for a purchase price of CHF 55 million. The company manufactures botanical extracts and dehydrated fruits for the food, beverageand consumer 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.
The goodwill of CHF 39 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 ofCentroflora Nutra acquired are recorded at fair value at the date of acquisition. The allocation of the acquisition price has been
finalised in the twelve months following the acquisition date. The allocation of the acquisition price has been updated and an
additional CHF 2 million has been allocated to the goodwill.

7. Segment Information
Management has determined the operating segments based on the reports reviewed by the Executive Committee that are used toallocate resources to the segments and to assess their performance. The Executive Committee considers the business from adivisional perspective:
Fragrances	Manufacture and sale of fragrances into three global business units: Fine Fragrances, Consumer Products
and, Fragrance Ingredients and Active Beauty. Expressions Parfumées and Fragrance Oils are both included inFine Fragrances and Consumer Products; andFlavours		Manufacture and sale of flavours into five business units: Beverages, Dairy, Savoury, Sweet Goods andNatural Ingredients. The information of these business units are reviewed by the Executive Committee
primarily by region.
The performance of the operating segments is based on EBITDA as a percentage of sales.

Business segments
Fragrancesin millions of Swiss francs

Note

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

Flavours

Group

2019

2018

2019

2018

2019

2018

2,799

2,525

3,410

3,009

6,209

5,534

–

–

(6)

(7)

(6)

(7)

2,799

2,525

3,404

3,002

6,203

5,527

555

508

720

637

1,275

1,145

19.8%

20.1%

21.1%

21.2%

20.6%

20.7%

Depreciation

21

(73)

(51)

(120)

(76)

(193)

(127)

Amortisation

22

(49)

(44)

(112)

(81)

(161)

(125)

Impairment of long-lived assets

21, 22

–

–

(1)

(10)

(1)

(10)

Additions to Property, plant and equipment

21

160

84

330

174

490

258

Acquisitions of Property, plant and equipment

6, 21

59

30

5

201

64

231

22

27

26

26

29

53

55

6, 22

210

47

13

513

223

560

456

187

374

917

830

1,104

Additions to Intangible assets
Acquisitions of Intangible assets (excluding goodwill)
Total gross investmentsa)	Transfer prices for inter-divisional sales are set on an arm’s length basis.

Givaudan – 2019 Governance, Compensation and Financial Report

64 Consolidated financial report Notes to the consolidated financial statements

The amounts by division provided to the Executive Committee are measured in a consistent manner in terms of accounting policies
with the consolidated financial statements.

Reconciliation table to Group’s operating income
Fragrances

FlavoursGroupin millions of Swiss francs

2019

2018

2019

2018

2019

2018

EBITDA

555

508

720

637

1,275

1,145

Depreciation

(73)

(51)

(120)

(76)

(193)

(127)

Amortisation

(49)

(44)

(112)

(81)

(161)

(125)
(10)

Impairment of long-lived assets
Operating income
as % of sales

–

–

(1)

(10)

(1)

433

413

487

470

920

883

15.5%

16.4%

14.3%

15.7%

14.8%

16.0%

Financing costs

(79)

(55)

Other financial income (expense), net

(33)

(56)

Income before taxes
as % of sales

808

772

13.0%

14.0%

2019

2018

2,427

2,199

372

326

Entity-wide disclosures
The breakdown of sales from the major group of similar products is as follows:in millions of Swiss francs

Fragrance Division
Fragrance Compounds
Fragrance Ingredients and Active Beauty
Flavour Division
Flavour Compounds

3,404

3,002

Total sales

6,203

5,527

The Group operates in five geographical areas: Switzerland (country of domicile); Europe, Africa and Middle-East;
North America; Latin America; and Asia Pacific.
Fragrances Segment sales ain millions of Swiss francs

2019

2018

Flavours Segment sales a
2019

2018

Group Segment sales a
2019Group Non-current assets b

2018

2019

2018 cSwitzerland

34

37

26

22

60

59

1,546

1,417

Europe

859

773

841

750

1,700

1,523

2,470

2,042

Africa and Middle-East

226

184

247

216

473

400

92

72

North America

559

491

1,082

950

1,641

1,441

1,409

1,365

Latin America

346

332

353

297

699

629

251

216

Asia Pacific

775

708

855

767

1,630

1,475

878

688

2,799

2,525

3,404

3,002

6,203

5,527

6,646

5,800

Total geographical segmentsa)	Segment sales are revenues from external customers and are shown by destination.
b)	Non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets. They consist of property, plant and equipment, intangible
assets and investments in jointly controlled entities.
c)	The Group non-current assets balance as at 31 December 2018 has been restated to reflect the Naturex acquisition price allocation adjustment of CHF 9 million
explained and detailed in note 6.

Revenues of approximately CHF 581 million (2018: CHF 573 million) are derived from a single external customer. These revenues aremainly attributable to the Fragrance Division.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

65

8. Employee Benefits
The following amounts related to employee remuneration and benefits are included in determining operating income:in millions of Swiss francs

2019

2018

Wages and salaries

1,019

934

Social security costs

156

140

Post-employment benefits: defined benefit plans

38

39

Post-employment benefits: defined contribution plans

37

35

Equity-settled instruments

41

38

Change in fair value on own equity instruments

2

Other employee benefits
Total employees’ remuneration

112

103

1,405

1,289

Retirement Benefit Plans
The Group operates a number of defined benefit and defined contribution plans throughout the world, the assets of which are generally
held in separate trustee-administered funds. The pension plans are generally funded by payments from employees and by the relevantGroup companies, taking account of the recommendations of independent qualified actuaries. The most significant plans are held in
Switzerland, United States of America and United Kingdom (further information by country is disclosed at the end of this note).
In December 2018 the benefits of the UK pension schemes were equalised for the inequality of Guaranteed Minimum Pensions
between men and women. The change resulted in past service cost of CHF 1 million recognised in other operating income/(expense) in the consolidated income statement.
Non-pension plans consist primarily of post-retirement healthcare and life insurance schemes, principally in the United Statesof America.
The amounts recognised in the consolidated income statement are as follows:2019
in millions of Swiss francs

Pension Non-pension
Plans
Plans

Current service cost

37

1

Total

38

Loss (gain) arising from settlement

2018
Pension Non-pension
Plans
Plans

37

38

38

1

39

1

Total included in employees’ remuneration

38

Total

1

1

37

1

Net interest cost included in financing costs

7

2

9

8

2

10

Total components of defined benefit cost

44

3

47

46

3

49

Of which arising from:
Funded obligations

40

3

43

42

3

45

Unfunded obligations

4

–

4

4

–

4

The amounts recognised in other comprehensive income are as follows:2019
in millions of Swiss francs

Pension Non-pension
Plans
Plans

Total

2018
Pension Non-pension
Plans
Plans

Total

(Gains) losses from change in demographic assumptions

(7)

3

(4)

(61)

–

(61)

(Gains) losses from change in financial assumptions

262

5

267

(104)

(2)

(106)

Experience (gains) losses

–

(5)

(5)

(12)

(1)

(13)

(167)

–

(167)

18

–

18

88

3

91

(159)

(3)

(162)

Funded obligations

78

2

80

(155)

(3)

(158)

Unfunded obligations

10

1

11

(4)

–

(4)

Return on plan assets less interest on plan assets
Remeasurement (gains) losses of post-employment benefit
obligations
Of which arising from:

Givaudan – 2019 Governance, Compensation and Financial Report

66

Consolidated financial report Notes to the consolidated financial statements

The amounts recognised in the statement of financial position are as follows:2019
in millions of Swiss francs

Pension Non-pension
Plans
Plans

Total

2018
Pension Non-pension
Plans
Plans

Total

Funded obligations
Present value of funded obligations(2,206)(61)(2,267)(1,958)(53)(2,011)

Fair value of plan assets

1,783

–

1,783

1,618

–

1,618

Recognised asset (liability) for funded obligations, net

(423)

(61)

(484)

(340)

(53)

(393)

Unfunded obligations
Present value of unfunded obligations

(84)

(8)

(92)

(71)

(11)

(82)

Recognised asset (liability) for unfunded obligations

(84)

(8)

(92)

(71)

(11)

(82)

Total defined benefit asset (liability)

(507)

(69)

(576)

(411)

(64)

(475)

Deficit recognised as liabilities for post-employment benefits

(539)

(69)

(608)

(433)

(64)

(497)

32

22

(576)

(411)

(64)

(475)

Surplus recognised as part of the other long-term assets
Total net asset (liability) recognised

32
(507)

(69)

22

Amounts recognised in the statement of financial position for post-employment defined benefit plans are predominantly noncurrent. The non-current portion is reported as non-current assets and non-current liabilities. The current portion is reported as
current liabilities within other current liabilities.
Changes in the present value of the defined benefit obligations are as follows:
2019

2018

in millions of Swiss francs

Pension Non-pension
Plans
Plans

Balance as at 1 January

2,029

64

2,093

Current service cost

37

1

Interest cost

39

2

(Gains) losses from change in demographic assumptions

(7)

3

(4)

(61)

–

(61)

(Gains) losses from change in financial assumptions

262

5

267

(104)

(2)

(106)

(1)

(13)

(3)

(82)

Total

Pension Non-pension
Plans
Plans

Total

2,202

67

2,269

38

37

1

38

41

38

2

40

Amounts recognised in the income statement

Amounts recognised in the other comprehensive income

Experience (gains) losses

(5)

(5)

(12)

Employee contributions

14

–

14

14

Benefit payments

(82)

(3)

(85)

(79)

Settlements
Acquisitions

(21)
8

(21)

8

33

33
(18)

Currency translation effects

(10)

2

(8)

(18)

Balance as at 31 December

2,290

69

2,359

2,029

Givaudan – 2019 Governance, Compensation and Financial Report

14

64

2,093

Consolidated financial report Notes to the consolidated financial statements

67

Changes in the fair value of the plan assets are as follows:
2019

2018

in millions of Swiss francs

Pension Non-pension
Plans
Plans

Balance as at 1 January

1,618

1,618

1,640

1,640

32

32

30

30

Total

Pension Non-pension
Plans
Plans

Total

Amounts recognised in the income statement
Interest income
Amounts recognised in the other comprehensive income
Return on plan assets less interest on plan assets

167

167

(18)

Employer contributions

34

3

37

43

Employee contributions

14

–

14

14

Benefit payments

(82)

(3)

(85)

(79)

Settlements

(18)
3

46

(3)

(82)

14

(22)

Acquisitions

1

Currency translation effects(1)

Balance as at 31 December

1,783

(22)

1

26

26

(1)

(16)

(16)

1,783

1,618

1,618

Debt

560

31%

Equity309

Property

245

Insurances policies and other–

Plan assets are comprised as follows:2019

in millions of Swiss francs

Total

2018

518

32%

17%

511

32%

14%

222

13%

669

38%

367

23%

1,783

100%

1,618

100%

The investment strategies are diversified within the respective statutory requirements of each country providing long-term
returns with an acceptable level of risk. The plan assets are primarily quoted in an active market with exception of the property
and insurance policies.
The plan assets do not include Givaudan registered shares. They do not include any property occupied by, or other assets used by,
the Group.
The Group operates defined benefit plans in many countries for which the actuarial assumptions vary based on local economic andsocial conditions. The assumptions used in the actuarial valuations of the most significant defined benefit plans, in countries withstable currencies and interest rates, are as follows:
Weighted percentage

2019

2018

Discount rates

1.2%

2.1%

Projected rates of remuneration growth

1.2%

1.2%

Future pension increases

0.5%

0.5%

Healthcare cost trend rate

1.1%

1.2%

The overall discount rate and the overall projected rates of remuneration growth are calculated by weighting the individual rates
in accordance with the defined benefit obligation of the plans.

Givaudan – 2019 Governance, Compensation and Financial Report

68 Consolidated financial report Notes to the consolidated financial statements

Sensitivity analysis
The defined benefit obligations are calculated on the basis of various financial and demographic assumptions. The below
information quantifies the consequences of a change in some key assumptions.
The effects ((gain)/loss) of the change in assumptions are as follows:in millions of Swiss francs

Change inassumption

Discount rate

0.5%

Salary increases

0.5%

Pension increases

0.5%

Medical cost trend

1.0%Life expectancy

1 yearEffects of the change

Increase inassumption

Decrease inassumption

on the current service cost

(6)

7

on the defined benefit obligation

(193)

216

on the current service cost2

(2)

on the defined benefit obligation

13

(12)

on the current service cost4–on the defined benefit obligation

149

(39)

on the current service cost––on the defined benefit obligation

4(3)

on the current service cost1

(1)

on the defined benefit obligation

82

(83)

Information by country
Switzerland
According to the Swiss Federal Law on Occupational Retirement, Survivors and Disability (LPP/BVG), the pension plan is managed
by an independent, legally autonomous entity which has the legal structure of a foundation. The plan was amended during thesecond half of 2017 principally by reducing the conversion rate used to convert the retirement savings capital into a pension and byincreasing savings contributions from both the employee and employer.
The Board of Trustees of the foundation is composed of equal numbers of employee and employer representatives. Each year the
Board of Trustees decides the level of interest, if any, to apply to the retirement accounts in accordance with the pension policy. It
is also responsible for the investment of the assets defining the investment strategy for long-term returns with an acceptable levelof risk. The foundation provides benefits on a defined contribution basis.
The majority of the employees are participants to the plan and are insured against the financial consequences of old age,disability and death. The employer and employees pay contributions to the pension plan at rates set out in the foundation rules
based on a percentage of salary. The amount of the retirement account can be taken by the employee at retirement in theform of pension or capital.
Under IAS 19 employee benefits, the pension plan is classified as defined benefit plan due to the promises and underlying benefits
guarantees. Consequently the pension obligation is calculated by using the projected unit credit method.
The Group expects to contribute CHF 25 million to these plans during 2020.

United States of America
The main US pension plan is qualified under and is managed in accordance with the requirements of US federal law. In accordancewith federal law the assets of the plan are legally separate from the employer and are held in a pension trust. The plan was frozen
in 2016 and consequently no further accrual of benefits will continue as at the date of enforcement of the plan change.
The law requires minimum and maximum amounts that can be contributed to the trust, together with limitations on the amountof benefits that may be provided under the plan. There are named fiduciaries that are responsible for ensuring the plan is managedin accordance with the law. The fiduciaries are responsible for the investment of the assets defining the investment strategy forlong-term returns with an acceptable level of risk. The plan provides benefits on a defined benefit basis.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

69

The accrued benefits based on service to the plan freeze are payable at retirement and on death in service. With exceptions for
optional lump sum amounts for certain sections of the plan, the benefits are paid out as annuities.
Under IAS 19 employee benefits, the pension obligations are calculated by using the projected unit credit method.
The Group expects to contribute CHF 5 million to these plans during 2020.

United Kingdom
The two occupational pension schemes (Quest UK Pension Scheme and Givaudan UK Pension Plan) are arranged under theapplicable UK Pension Schemes and Pensions Acts and managed as legally autonomous pension trusts by the Boards ofTrustees. The plans were frozen during 2016 and consequently no further accrual benefits will continue as at the date ofenforcement of the plan change.
The Boards of Trustees are composed of two employee representatives and four employer representatives, for the Quest UK
Pension Scheme, and three employee representatives, three employer representatives plus two pensioner representatives for
the Givaudan UK Pension Plan. The Boards of Trustees are responsible for the investment of the assets defining the investment
strategy for long-term returns with an acceptable level of risk. In their respective sections, both trusts provide benefits on adefined benefit basis and are now frozen to future accruals and members.
The accrued benefits based on service to the plan freeze are payable at retirement and on death in service. With exceptions fortrivial amounts, transfer values, lump sum death benefits and tax free lump sums, the benefits are paid out as annuities.
Under IAS 19 employee benefits, the pension obligations in the defined benefit sections of both the Quest UK Pension Schemeand the Givaudan UK Pension Plan are calculated by using the projected unit credit method.
The Group expects to contribute CHF 7 million to these plans during 2020.

Rest of the world
The Group operates other retirement plans classified either as defined benefit or defined contribution plans in some othercountries. No individual plan other than those described above is considered material to the Group.
The Group expects to contribute CHF 3 million to these plans in 2020.
The funding position of the funded defined benefit plans are as follows:
As at 31 December 2019in millions of Swiss francs

Switzerland

United Statesof America

United Kingdom

Other countries

Total

1,306

450

361

89

2,206

Fair value of plan asset

957

393

392

41

1,783

Deficit / (surplus)

349

57

(31)

48

423

73.3%

87.3%

108.6%

46.1%

80.8%

Switzerland

United Statesof America

United Kingdom

Other countries

Total

1,161

404

317

76

1,958

Fair value of plan asset

894

348

337

39

1,618

Deficit / (surplus)

267

56

(20)

37

340

77.0%

86.1%

106.3%

51.3%

82.6%

Present value of defined benefit obligation

Funding ratio
As at 31 December 2018
in millions of Swiss francs

Present value of defined benefit obligation

Funding ratio

Givaudan – 2019 Governance, Compensation and Financial Report

70 Consolidated financial report Notes to the consolidated financial statements

Key assumptions
2019
in percentage

Switzerland

United Statesof America

UnitedKingdom

Discount rate

0.15

3.22

2.00

Future salary increases

1.99

n/a

n/a

Future pension increases

0.00

0.00

2.74

Future average life expectancy for a pensioner retiring at age 65

22.8

21.2

23.3

Switzerland

United Statesof America

UnitedKingdom

Discount rate

0.80

4.28

2.90

Future salary increases

1.99

n/a

n/a

Future pension increases

0.00

0.00

3.03

Future average life expectancy for a pensioner retiring at age 65

22.8

21.7

23.9

2018
in percentage

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with published statistics andexperience in each territory. Mortality assumptions for the most important countries are based on the following tables:–– Switzerland: BVG2015–– United States of America: Pri-2012–– United Kingdom: S2PA
Allowance for future improvements in mortality have been allowed for as appropriate in each country. In Switzerland thegenerational rates have been used adopting the CMI (2016) approach with a 1.50% long term rate of improvement. In the
United States of America the published rates have been adjusted and projected in accordance with the MP-2019 scale. In the
United Kingdom the rates reflect the latest (2018) CMI projections with a 1.25% long term rate of improvement.

9. Share-Based Payments
Performance share plan
Performance shares are granted on a yearly basis. The performance shares are converted into tradable and transferable shares ofGivaudan SA after the vesting period, subject to performance conditions. The performance metric is a combination of the averagesales growth of selected peer companies and the cumulative free cash flow margin. There is no market vesting condition involved
and participation in this plan is mandatory.
Year of grantCommencing date

Vesting date

Number of shares expected
to be delivered at vesting date

Fair value
at grant date (CHF)

1,621.6

2017

31 Mar 201715 Apr 2020

21,7132018

31 Mar 201815 Apr 2021

21,234

1,993.3

2019

31 Mar 201915 Apr 2022

17,2372,289.6

The cost of the equity-settled instruments of CHF 40 million (2018: CHF 36 million) has been expensed in the consolidated income
statement. A marginal portion of the number of shares expected to be delivered can be settled in cash in the jurisdictions where aphysical delivery is not permitted.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

71

Equity-settled instruments related to restricted shares
Restricted shares shown in the table below have been granted on a yearly basis. These shares are tradable and transferable after
the vesting period. Participation in these plans is mandatory.
Restricted shares outstanding at the end of the year have the following terms:

Year of grantCommencing date

Vesting date

Restricted shareat grant date
(CHF)

Number of
restricted
share 2019

Number of
restricted
share 20182016

31 Mar 201615 Apr 2019

1,709.4

2017

31 Mar 201715 Apr 2020

1,621.6

900

900

935

2018

31 Mar 201815 Apr 2021

1,993.3

730

730

2019

31 Mar 201915 Apr 2022

2,289.6630

Of the 2,260 outstanding restricted shares (2018: 2,565), no share (2018: none) was deliverable. The cost of these equity-settled
instruments of CHF 1 million (2018: CHF 2 million) has been expensed in the consolidated income statement.
Movements in the number of restricted shares outstanding are as follows:
Number of restricted shares

As at 1 January

2019

2018

2,565

2,927

Granted630

730

Delivered/sold(935)(1,092)As at 31 December

2,260

2,565

Country ofincorporation

Ownership
interest

For these plans, the Group has at its disposal treasury shares.

10. Investments in Joint Ventures and Associates
Year ofincorporation

Name of Joint ventures

2014

BGN Tech LLC

Innovative natural ingredients

USA

49%

2015

Natural Extracts International Ltd

Natural ingredient derivatives production

Mauritius

49%

2016

Vanilla International Ltd

Natural ingredient collection and extract

Mauritius

49%

Principal activity

Summarised financial information in respect of the Group’s joint ventures is set out below. The following net assets represent 100%of the jointly controlled entities:
As at 31 Decemberin millions of Swiss francs

Current assets

2019

2018

94

118

Non-current assets

740

Current liabilities

(37)

(49)

Non-current liabilities

(12)

(37)

Total net assets of joint ventures

52

72

2019

2018

As at 31 Decemberin millions of Swiss francs

Income17

29

Expenses

(16)

(28)

Jiangsu Xinrui Aromatics Ltd, manufacturing fragrance ingredients in China, became an associate in 2019 in accordance with the
new terms and conditions set in the arrangement. The Group’s ownership interest is 49%. As at 31 December 2019, the total assets
were CHF 55 million (2018: CHF 67 million) with a total liabilities of CHF 36 million (2018: CHF 46 million) resulting in a total net
assets of CHF 19 million (2018: CHF 21 million).

Givaudan – 2019 Governance, Compensation and Financial Report

72 Consolidated financial report Notes to the consolidated financial statements

11. Other Operating Income
2019

2018

Gains on disposal of fixed assets

1

26

Other income

40

37

Total other operating income

41

63

in millions of Swiss francs

The other income in 2019 includes CHF 10 million of insurance income recoverable in relation to the provision that the Group hasrecorded for the Passaic river environmental matter (Note 26). Included in the gains on disposal of fixed assets in 2018, is a gain of
CHF 25 million realised on the sale of the Zurich Innovation Centre (ZIC) (Note 21). For the year ended 31 December 2018 the Group
received CHF 20 million of insurance proceeds in relation to prior year environmental litigation costs.

12. Other Operating Expense
2019

in millions of Swiss francs

2018

Project related expenses a

34

41

Amortisation of intangible assets

1210

Impairment of long-lived assets

1

10Losses on disposal of fixed assets

55Environmental provisions–

2

Business taxes

20

14

Acquisition and integration related expenses

29

19

Other expenses

14

12

Total other operating expense

115

113

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

13. Expenses by Naturein millions of Swiss francs

2019

2018

2,714

2,374

8

1,405

1,289

21, 22

355

262

Note

Raw materials and consumables used
Total employee remuneration
Depreciation, amortisation and impairment charges
Transportation expenses

61

53

Freight expenses

131

112

Consulting and service expenses

146

151

Energies

7864

IT related costs

63

53

Other expenses

330

286

5,283

4,644

2019

2018

Total operating expenses by nature

14. Financing Costs
in millions of Swiss francs

NoteInterest expense a
Net interest related to defined benefit pension plans
Derivative interest (gains) losses

8

68

42

9

10

1

Amortisation of debt discounts

1

3

Total financing costs

7955a) 	Out of which CHF 9 million are interest expenses on lease liabilities.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

73

15. Other Financial (Income) Expense, Net
2019

2018

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

20

23

Exchange (gains) losses, net

516

in millions of Swiss francs

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

(12)

4

Interest (income)

(5)

(3)

Capital taxes and other non-business taxes

11

10

Other (income) expense, net

14

6

Total other financial (income) expense, net

3356

16. Income Taxes
Amounts charged to (credited in) the consolidated statement of comprehensive income are as follows:2019

in millions of Swiss francs

Other
Income comprehensive
statement
incomeOwn equity
instruments

Total

2018
Other
Income comprehensive
statement
incomeOwn equity
instruments

Total

Current taxes- in respect of current year140

- in respect of prior years

(9)

(5)

135

129

(9)

–

2

(32)

(17)

33

–

–

131
–

Deferred taxes- in respect of current year

(21)

(11)

- reclassified from equity to income statement- in respect of prior years

(4)

21

17

(3)

Total income tax expense

106

5

111

109

16
–
(3)

35

144

Since the Group operates globally, it is subject to income taxes in many different tax jurisdictions. As such, in determining theprovision for income taxes, judgment is required as there are transactions for which the ultimate tax determination is uncertain at
the time of preparing the financial statements. As a result, any differences between the final tax outcome and the amounts thatwere initially recorded impact the current and deferred taxes in the period in which such final determinations are made.
The Group calculates on the basis of the income statement its average applicable tax rate as a weighted average of the tax
rates in the tax jurisdictions in which the Group operates, including research tax credits and withholding tax on dividends, interest
and royalties.
The Group’s average applicable tax rate differs from the Group’s effective tax rate as follows:
2019

2018

14%

15%

Income not taxable

(4%)

(2%)

Expenses not deductible

4%

1%

Group’s average applicable tax rate
Tax effect ofChange in tax rate
Other adjustments of income taxes of prior years
Other differences
Group’s effective tax rate

–

–

(2%)

(1%)

1%

1%

13%

14%

The variation in the Group’s average applicable tax rate arises due to changes in the composition of the Group’s profitability within
the Group’s subsidiaries, in accordance with the Group’s business profile in terms of geographical presence, product mix andcustomer portfolio, as well as external factors related to changes in local statutory tax rates.

Givaudan – 2019 Governance, Compensation and Financial Report

74

Consolidated financial report Notes to the consolidated financial statements

The Group has assessed the impact of the Swiss Tax Reform that will be effective as from 1 January 2020 and has revalued thedeferred tax balances applicable in Switzerland.
In December 2017 the United States of America introduced a new tax law with an effective date of 1 January 2018. The newlaw contains a Corporate Tax rate of 21% compared to 35% under the previous tax law. The revised rate has been applied to thetemporary differences recognised in the 2018 statement of financial position of the Group’s United States subsidiaries.

Income tax assets and liabilities
Amounts recognised in the statement of financial position related to income taxes are as follows:
As at 31 Decemberin millions of Swiss francs

2019

2018

Current income tax assets

50

41

Current income tax liabilities

(111)

(95)

Total net current income tax asset (liability)

(61)

(54)

Other
differences

Total

Property,plant &
equipment

Intangible
assets

(140)

(178)

112

17

159

(30)

Acquisition

(7)

(47)

1

–

1

(52)

(Credited) debited to consolidated income statement

18

15

5

12

(25)

25

(7)

(10)

2019
in millions of Swiss francs

Net deferred tax asset (liability) as at 1 January(Credited) debited to other comprehensive income

Pension Tax loss carryplans
forward(3)(Credited) debited to own equity instruments
Currency translation effects
Net deferred tax asset (liability) as at 31 December

–

–

1

3

(2)

–

(4)

(2)

(128)

(207)

113

29

124

(69)

Deferred tax assets

211

Deferred tax liabilities(280)

Net deferred tax asset (liability) as at 31 December(69)
Property,plant &
equipment

Intangible
assetsNet deferred tax asset (liability) as at 1 January

(87)

(59)

144

6

104

108

Acquisition

(13)

(120)

1

12

3

(117)

8

3

3

(1)

7

20

2

(33)

2018
in millions of Swiss francs(Credited) debited to consolidated income statement(Credited) debited to other comprehensive income

Pension Tax loss carryplans
forward(35)(Credited) debited to own equity instruments
Currency translation effects
Net deferred tax asset (liability) as at 31 December

Other
differences

Total

–

–

(3)

(2)

(1)

–

(2)

(8)

(95)

(178)

112

17

114

(30)

Deferred tax assets

208

Deferred tax liabilities(238)

Net deferred tax asset (liability) as at 31 December(30)

Amounts recognised in the statement of financial position for deferred taxes are reported as non-current assets andnon-current liabilities. The current portion will be charged or credited to the consolidated income statement during 2020.
Deferred tax assets on loss carry forwards of CHF 29 million (2018: CHF 21 million) have been recognised principally in thesubsidiaries in France and in the USA, the majority of which expires after 2022. The management considers that there will be
future taxable profit available against which these tax losses can be recovered. Deferred tax assets on unused tax losses of
CHF 17 million (2018: CHF 16 million) which have not been recognised are mainly located in subsidiaries in Spain and India.
Deferred tax assets on tax credits of CHF 71 million (2018: CHF 74 million) have been recognised.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

75

A deferred tax liability of CHF 26 million has been recognised in 2019 (2018: CHF 28 million) for certain foreign subsidiaries
which have undistributed earnings subject to withholding tax when paid out as dividend as the parent entity is in a position toforecast the timing of distributions expected in the foreseeable future, whereas no deferred tax liability could be recognised for
undistributed earnings of CHF 534 million (2018: CHF 492 million).

17. Earnings per Share
Basic earnings per share
Basic earnings per share is calculated by dividing the income for the period attributable to shareholders by the weighted average
number of shares outstanding:
2019

2018

702

663

Ordinary shares

9,233,586

9,233,586

Treasury shares(17,354)(14,812)

Income attributable to equity holder of the parent (in millions of Swiss francs)
Weighted average number of shares outstanding

Net weighted average number of shares outstanding

9,216,232 9,218,774

Basic earnings per share (CHF)

76.17

71.92

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:
Income attributable to equity holder of the parent (in millions of Swiss francs)
Weighted average number of shares outstanding for diluted earnings per share of 70,619 (2018: 72,781)
Diluted earnings per share (CHF)

2019

2018

702

663

9,286,851 9,291,555
75.59

71.36

18. Cash and Cash Equivalents
in millions of Swiss francs

2019

2018

Cash on hand and balances with banks

379

267

Short-term investments

73

156

Balance as at 31 December

452

423

Givaudan – 2019 Governance, Compensation and Financial Report

76 Consolidated financial report Notes to the consolidated financial statements

19. Accounts Receivable – Tradein millions of Swiss francs

2019

2018

Accounts receivable

1,384

1,271

Notes receivable
Less: allowance for doubtful accounts
Balance as at 31 December

1

3

(20)

(21)

1,365

1,253

Ageing list:
2019

2018

1,269

1,154

Less than 30 days

78

77

30 − 60 days

17

17

60 − 90 days

7

6

Above 90 days

14

20

in millions of Swiss francs

Neither past due nor impaired

Less: allowance for doubtful accounts
Balance as at 31 December

(20)

(21)

1,365

1,253

Movement in the allowance for doubtful accounts:in millions of Swiss francs

2019

2018

Balance as at 1 January

(21)

(16)

Increase in allowance for doubtful accounts recognised in consolidated income statement

(4)

(7)

Amounts written off as uncollectible

1–

Reversal of allowance for doubtful accounts

3

1

Currency translation effects

1

1Balance as at 31 December

(20)

(21)

No significant impairment charge has been recognised in the consolidated income statement in 2019 or in 2018. Past due andimpaired receivables are still considered recoverable. The carrying amount of accounts receivable – trade is considered tocorrespond to the fair value.

20. Inventories
in millions of Swiss francs

2019

2018

Raw materials and supplies

438

425

Work in process

2630Intermediate and finished goods

747

706

Less: allowance for slow moving and obsolete inventories
Balance as at 31 December

(62)

(63)

1,149

1,098

In 2019 the amount of write-down of inventories was CHF 40 million (2018: CHF 36 million). At 31 December 2019 and 2018 nosignificant inventory was valued at net realisable value.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

77

21. Property, Plant and Equipment
Acquired Property, Plant & Equipment

Right-of-Use Assets

Total
Acquired
PP&E

Buildings,
landand
improvements

Land

Buildings
and land
improvements

131

821

592

205

1,749

246

17

263

2,012

1

7

270

278

198

14

212

490

29

10

2

44

19

1

20

64

Disposals

(3)

(3)

(3)

(3)

(9)

Transfers

116

134

Impairment

(1)

–

(1)

Depreciation

(46)

(101)

(147)

(39)

(7)

(46)

(193)

2019
in millions of Swiss francs

Machinery,equipment Construction
and vehicles
in progress

Machinery,Total
equipment Right-of-Useand vehicles
Assets

Total
Property,
Plant &
Equipment

Net book value
Balance as at 1 January
Additions
Acquisitions

3

Reclassified as assets held for
sale

(1)

(2)

Currency translation effects

(2)

(14)

Balance as at 31 December

131

901

Cost

131

1,449
(535)

(1,214)

(13)

(10)

901

631

Accumulated depreciation
Accumulated impairment
Balance as at 31 December

131

(6)
(250)

(1)

(3)
(8)

(3)

(5)

(29)

(5)

–

(5)

(34)

631

222

1,885

419

22

441

2,326

1,855

222

3,657

457

29

486

4,143

(1,749)

(38)

(7)

(45)

(1,794)

419

22

441

2,326

(23)
222

1,885

(23)

The expense related to the low-value and short-term leases amounts to CHF 1 million and CHF 6 million respectively.
The Group leases various offices, warehouses, machinery and equipment. Rental contracts are typically made for fixed
periods of 1 to 30 years, but may have extension and termination options, used to maximise operational flexibility in terms ofmanaging the assets used in the Group’s operations. The majority of extension and termination options held are exercisable
only by the Group and not by the respective lessor. During the current financial year, no significant financial effect was triggeredby revision of lease terms.
Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The leaseagreements do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Leased
assets may not be used as security for borrowing purposes.

2018
in millions of Swiss francs

Land

Buildings
and land
improvements

Machinery,equipment andvehiclesConstruction inprogress

Total

Net book value
109

738

535

197

1,579

Additions

Balance as at 1 January

–

4

10

244

258

Acquisitions

24

112

73

22

Disposals

(7)

(135)

(3)

Transfers

10

155

84

Impairment
Depreciation

231
(145)

(249)

(8)

(8)

(38)

(89)

(127)

Reclassified as investment property
Currency translation effects

(2)

(8)

(10)

(9)

(29)

Balance as at 31 December

134

828

592

205

1,759

Cost

134

1,334

1,750

205

(491)

(1,146)

(15)

(12)

828

592

Accumulated depreciation
Accumulated impairment
Balance as at 31 December

134

3,423
(1,637)
(27)

205

1,759

Givaudan – 2019 Governance, Compensation and Financial Report

78 Consolidated financial report Notes to the consolidated financial statements

At 31 December 2019 and 2018 no significant capitalised borrowing costs were accounted for.
In 2018 the Group sold and leased back the Zurich Innovation Centre (ZIC) for an amount of CHF 173 million. CHF 100 million wasreceived in 2018 and the remainder was received at completion of the centre in 2019. The gain realised on the sale of CHF 25 million
was recognised in other operating income in 2018.

22. Intangible Assets
2019
in millions of Swiss francs

Goodwill

Process-oriented
technology
and other

Clientrelationships

Supplier
relationships

Name andproduct brands

Software/ERP
system

Total

2,968

287

511

37

57

148

4,008

Net book value
Balance as at 1 January
Additions
Acquisitions

225

Amortisation

61

152

2

53

53

7

1

448
(161)

(52)

(52)

(14)

(5)

(38)

Currency translation effects

(47)

(6)

(7)

–

(2)

–

(62)

Balance as at 31 December

3,146

290

604

25

57

164

4,286

Cost

3,146

1,059

931

44

69

774

6,023

(763)

(327)

(19)

(12)

(610)

(1,731)

Accumulated amortisation
Accumulated impairment(6)

Balance as at 31 December

2018
in millions of Swiss francs

(6)

3,146

290

604

25

57

164

4,286

Goodwill a

Process-oriented
technology
and other

Clientrelationships

Supplier
relationships

Name andproduct brands

Software/ERP
systemTotal a

1,912

190

243

4

133

2,482

Net book value
Balance as at 1 January
Additions
Acquisitions

7
1,109

142

Disposals(2)

Impairment(2)

Amortisation

(42)

313

42

58

48

55

5

1,669
(2)
(2)

(36)

(5)

(4)

(38)

(125)

Currency translation effects

(53)

(6)

(9)

Balance as at 31 December

2,968

287

511

Cost

2,968

1,004

787

42

64

720

5,585

(711)

(276)

(5)

(7)

(572)

(1,571)

511

37

57

148

4,008

Fragrances

Flavours

Total

Accumulated amortisation
Accumulated impairment
Balance as at 31 December

37

(1)

–

(69)

57

148

4,008

(6)
2,968

287

(6)

a) 	The goodwill balance as at 31 December 2018 has been restated to reflect the Naturex acquisition price allocation adjustmentof CHF 9 million explained and detailed in note 6.

Classification of amortisation expenses is as follows:2019
in millions of Swiss francs

2018

Fragrances

Flavours

Total

Cost of sales

8

10

18

5

10

15

Selling, marketing and distribution expenses

21

24

45

16

24

40

Research and product development expenses

11

58

69

15

33

48

Administration expenses

4

13

17

4

8

12

Other operating expenses

5

7

12

4

6

10

Total

49

112

161

44

81

125

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

79

Impairment test for goodwill
Goodwill is allocated to the Group’s cash-generating units (CGUs), which are defined as the Flavour Division and the Fragrance
Division, which itself includes two lower levels of cash-generating units related to Expressions Parfumées and Fragrance Oils.
Goodwill allocated to these CGUs was CHF 2,214 million (2018: CHF 2,245 million) to the Flavour Division, CHF 685 million (2018:
CHF 574 million) to the Fragrance Division, CHF 135 million (2018: CHF 140 million) to Expressions Parfumées, and CHF 112 million(2018: none) to Fragrance Oils.
The recoverable amount of each CGU has been determined based on value in use calculations. These calculations use pre-tax cash
flow projections based on financial business plans and budgets approved by management covering a five year period, as well asa terminal value. The basis of the key assumptions is market growth adjusted for estimated market share gains. The terminal value
assumes the long-term inflation rate for growth beyond the five year period. The discount rate used to discount the estimatedfuture cash flows has a number of components which are derived from capital market information where the cost of equity
corresponds to the return expected by the shareholders by benchmarking with comparable companies in the fragrance and flavour
industry, and where the cost of debt is based on the conditions on which companies with similar credit rating can obtain financing.
A discount rate of 8.9% (2018: 10.9%) was applied to cash flow projections of the Fragrance Division, 8.9% (2018: 10.7%) was applied
to cash flow projections of the Flavour Division, 8.5% (2018: 11.8%) was applied to cash flow projections of Expressions Parfumées
and 10.8% (2018: none) was applied to cash flow projections of Fragrance Oils. These discount rates are pre-tax.
No impairment loss in any of the CGUs resulted from the impairment tests for goodwill. The Group has conducted an analysis of
the sensitivity of the impairment test to changes in the cash flows and in the discount rate in the periods presented. Management
believes that any reasonable change in the assumptions would not cause the carrying amount to exceed the recoverable amountof each CGU.

Process-oriented technology and other
This consists mainly of process-oriented technology, formulas, molecules, delivery systems as well as process knowledge andresearch expertise in innovative cosmetic solutions, acquired when the Group purchased Food Ingredients Specialties (FIS),
International Bioflavors (IBF), Quest International, Soliance, Induchem, Spicetec, Activ International, Vika, Centroflora Nutra,
Expressions Parfumées, Naturex, Albert Vieille, AMSilk, Golden Frog, drom and Fragrance Oils.

Client relationships
As part of the acquisition of Quest International, Induchem, Spicetec, Activ International, Vika, Centroflora Nutra, Expressions
Parfumées, Naturex, Albert Vieille, Golden Frog, drom and Fragrance Oils, the Group acquired client relationships in the Flavour
and Fragrance Divisions, mainly consisting of client relationships with key customers.

Supplier relationships
As part of the acquisition of Naturex and Albert Vieille, the Group acquired supplier relationships in the Flavour and Fragrance
Divisions, mainly consisting of relationships with key suppliers.

Name and product brands
In connection with the acquisition of Induchem, Spicetec, Activ International, Vika, Centroflora Nutra, Expressions Parfumées,
Naturex, Albert Vieille, Golden Frog, drom and Fragrance Oils the Group acquired name and product brands in active beauty and innatural flavour businesses.

Software/ERP system
This consists of internally generated intangible assets associated with the development of identifiable software products and
ERP systems.

Givaudan – 2019 Governance, Compensation and Financial Report80

Consolidated financial report Notes to the consolidated financial statements

The residual useful lives of the acquired intangible assets carried at cost, being their fair value at acquisition date, aredetermined in accordance with the principles set out in Note 2.17. Remaining useful lives of major classes of amortisable
intangible assets are as follows:–– Software		–– Name and product brands 			–– Process-oriented technology and other–– Client relationships 			–– Supplier relationships			

2.8 years
14.7 years
6.3 years
14.9 years
1.7 years

23. Investment Property
In 2017 the Group entered into an agreement to develop real estate at its facility in Kemptthal with a third party. As theagreement met the criteria of IAS 40, the value of land and buildings was transferred to Investment property. During
the year 2018 most of the asset was sold at cost price. The remaining asset of CHF 2 million was sold in 2019.

24. Debt

BankborrowingsBankfacilityBank
overdrafts

Publicbonds

Privateplacements

Total
short-termandlong-term
debt

Balance as at 1 January

11

169

3

2,505

582

3,270

260

3,530

Cash flows

31

431

(1)

461

(52)

409

2019
in millions of Swiss francs

Total leaseliabilities

Total debt

Non-cash changes- Amortisation of debt discount1- Acquisition / Divestment31

1- Currency effects

(5)

(1)

(53)

(15)

1

9

10

32

20

52

(2)

(76)

(74)

- Lease liabilities
Balance as at 31 December

68

Within 1 year2

Within 1 to 3 years

18

Within 3 to 5 years

40

Thereafter

8

Balance as at 31 December

68

2018
in millions of Swiss francs

Balance as at 1 January
Cash flowsBankborrowings

600

600

250

39

293

42

249

108

375

49

424

150

362

1,152

35

1,187

1,804

58

1,870

315

2,185

2,453

567

3,690

441

4,131

Publicbonds

Privateplacements

Total
short-termandlong-term
debt

593

1,608

Bank
overdrafts

7

998

169

(5)

1,503

1,438

Non-cash changes- Amortisation of debt discount2

1- Acquisition / Divestment259- Currency effects

(31)

–

Balance as at 31 December

11

169

Within 1 year

1

Within 1 to 3 years

5

Within 3 to 5 years

4

Thereafter

1

Balance as at 31 December

11

Givaudan – 2019 Governance, Compensation and Financial Report

–

1
3

169
3

3
260

3

(11)

(39)

2,505

582

3,270

400

39

444

3

169

335

2

Bank
facility

10
(229)

206
4,131

2,453

2

3,690

441

2

600

567

206

4
100

259

532

2,005

284

2,290

2,505

582

3,270

Consolidated financial report Notes to the consolidated financial statements

81

The Group entered into the following debt transactions:Issuer

Issue
date

Type
of debt

Givaudan SA

2011

Public bonds

Givaudan UnitedStates, Inc.

2012

Privateplacements a

2014
Public bonds
2016

Givaudan SA

2017

2018

2018
2019

Privateplacements

Public bonds

Group bankcredit facility

2018
Other entities

2019

Other local
borrowings

2019

2018

Currencyofprincipal

Principal
amount in
millions

Redeemable

Interest
rate

CHF

150

07 Dec 2021

2.125%

149

USD

40

06 Feb 2020

2.740%

39

39

USD

150

06 Feb 2023

3.300%

145

147

USD

60

06 Feb 2025

3.450%

CHF

100

18 Sep 2020

1.000%

CHF

150

19 Mar 2024

1.750%

150

150

CHF

100

07 Dec 2022

0.000%

100

100

0.625%

200

200

CHF

200

05 Dec 2031

EUR

100

20 Dec 2022

EUR

200

20 Dec 2024

1.331%

CHF

150

09 Apr 2020

CHF

200

09 Apr 2025

0.375%

EUR

500

17 Sep 2025

1.125%

EUR

800

17 Sep 2030

2.000%

EUR

150

CHF

600

EUR

10

EUR

7

CNY

426

other

Fixed

1.18%

149

58

59

100

100

108

112

Fixed

217

225

Fixed

Floating
1.20%

in millions of Swiss francs

Floating
Floating

26 Jun 2023

Variousmaturities

Type ofinterest

Fixed
Floating

Total short-term and long-term debt as at 31 December

150

151

200

200

540

559

864

896
169

600
11
8
59
3

3

3,690

3,270

a)	There are various covenants contained in these transactions covering conditions on net worth, indebtedness and EBITDA ratio to net interest expense of Givaudan
United States, Inc. The company is and has been in full compliance with the covenants set.

The weighted average effective interest rates at the statement of financial position date were as follows:
Private placements (USD)

2019

2018

3.2%

3.2%

Private placements (EUR)

1.1%

1.1%

Straight bond (EUR)

1.7%

1.7%

Straight bond (CHF)

0.8%

0.8%

Bank facility

0.9%

0.5%

Weighted average effective interest rate on gross debt

1.3%

1.4%

Givaudan – 2019 Governance, Compensation and Financial Report82 Consolidated financial report Notes to the consolidated financial statements

25. Changes in Liabilities Arising from Financing Activities
Cash impact

2019
in millions of Swiss francs

Total short-term and long-term debt

Balance as
at 1 January

3,270

461

Interest on liabilities

13

(51)

Derivative financial instruments

43

Lease liabilities

260

(52)

Others, net

17

(7)

3,603

351

Total liabilities from financing activities

Non-cash changes

Amortisation of debt
discount /Cash flows
premium
Fair values
Inflow and interest Acquisition / changes and(Outflow)
expense Divestment
Others1

9Total short-term and long-term debt

Balance as
at 1 January

Cash flows
Inflow(Outflow)

1,608

1,438

Interest on liabilities

8

(29)

Derivative financial instruments

60

(22)

Total liabilities from financing activities

52

Balance as
at 31
December

(74)

3,690

51

–

13

55

–

98

206

(2)

441

9

–

19

321

(76)

4,261

Currency
effects

Balance as
at 31
DecemberNon-cash changes
Amortisation of debt
Fair values
discount / Acquisition / changes andpremium Divestment
Others

(39)

3,270

34

–

13

2

3

–

43

–

7

–

–

7

13

(5)

1

8

–

17

1,689

1,382

270

45

(39)

3,350

Lease liabilities
Others, net

20

10Cash impact

2018
in millions of Swiss francs

32

Currency
effects

3

260

3

26. Provisions
2019
in millions of Swiss francs

Balance as at 1 January

Restructuring

Claims andlitigation

Environmental

Others

Total

25

12

26

34

97

3

3

9

15

(1)

(3)

Additional provisions
Unused amounts reversed

(2)

–

–

Utilised during the year

(9)

(5)

(2)

(5)

(21)

Currency translation effects

–

–

–

(1)

(1)

Balance as at 31 December

14

10

27

36

87

Current liabilities

10

2

3

3

18

Non-current liabilities

4

8

24

33

69

Balance as at 31 December

14

10

27

36

87

Restructuring

Claims andlitigation

Environmental

Others

Total

58

10

24

32

124

2018
in millions of Swiss francs

Balance as at 1 January
Acquisitions
Additional provisions

4
9

2

Unused amounts reversed

(24)

(1)

Utilised during the year

(18)

(3)

3
(1)

1

5

5

19

(1)

(26)

(3)

(25)

Currency translation effects

–

–

–

–

–

Balance as at 31 December

25

12

26

34

97

Current liabilities

17

2

4

1

24

Non-current liabilities

8

10

22

33

73

Balance as at 31 December

25

12

26

34

97

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

83

Significant judgment is required in determining the various provisions. A range of possible outcomes is determined to make reliable
estimates of the obligation that is sufficient for the recognition of a provision. Differences between the final obligations andthe amounts that were initially recognised impact the income statement in the period in which such determination is made.

Restructuring provisions
Restructuring provisions arise from reorganisations of the Group’s operations and management structure primarily related toGivaudan Business Solutions (GBS) and from reorganisations in the Flavour division. During the year 2018, CHF 24 million, that was
initially related to the provision for GBS, was reversed due to the fact that the number of personnel eligible for severance waslower than originally estimated.

Claims and litigation
These provisions are made in respect of legal claims brought against the Group and potential litigations. Related estimated legal
fees are also included in these provisions.

Environmental
Givaudan’s affiliate, Givaudan Fragrances Corporation, is one of approximately 100 companies identified by the US Environmental
Protection Agency (‘EPA’) as ‘Potentially Responsible Parties’ (‘PRP’) for alleged contamination of the Passaic River. The EPA released a
Focused Feasibility Study (‘FFS’) covering only the lower 8 miles of the River in 2014. In March 2016, the EPA issued its Record ofDecision (‘ROD’) to confirm the remediation solution related to the FFS. The chosen solution entails a bank-to-bank dredge of theRiver, and the installation of an engineered cap, with an estimated cost of CHF 1.4 billion. One PRP agreed in 2016 to conduct thedetailed remediation design, which is expected to take up to four years to complete. The EPA has also selected an expert to work with
the PRP’s on the allocation of the remediation costs, which is expected to take approximately two years to conclude.
The Cooperating Parties Group (‘CPG’), of which Givaudan had been a member, issued a draft Remedial Investigation/Feasibility
Study (‘RI/FS’) in April 2014, which proposed a Sustainable Remedy for the entire lower 17 miles of the River. The CPG is still
responding to EPA comments on the RI/FS, which remains in draft form today.
At this time, there are many uncertainties associated with the final remediation plan and the Company’s share of the costs, if any.
However, in accordance with accounting guidance, the Group has recorded a reserve which it believes can reasonably be expected
to cover the Company’s obligation, if any, given the information currently available.
The other material components of the environmental provisions consist of costs to sufficiently clean and refurbish contaminatedsites and to treat where necessary.

Other provisions
These consist largely of provisions related to long-term deferred compensation plan and to restoring expenses related to leased facilities.

27. Own Equity Instruments
Details of own equity instruments are as follows:
As at 31 December 2019

Settlement

Registered shares

Category

Maturity

Strike price(CHF)

in equivalentsharesFair value
in millions of Swiss
francs15,541

36

Purchased calls

Gross shares

Equity2020 - 2021 1,704.0 - 2,884.0

49,000

37

Written puts

Gross shares Financial liability

2020 - 2021 1,704.0 - 2,794.0

49,0001

Strike price(CHF)

in equivalentsharesFair value
in millions of Swiss
francs11,90627

2019 1,753.5 - 2,232.0

53,00017

201947,0002

As at 31 December 2018

EquitySettlement

Registered shares

Category

Maturity

EquityPurchased calls

Gross shares

EquityWritten puts

Gross shares Financial liability

1,753.5 - 2,192.0

Givaudan – 2019 Governance, Compensation and Financial Report

84

Consolidated financial report Notes to the consolidated financial statements

28. Equity
Share capital
As at 31 December 2019 the share capital amounts to CHF 92,335,860, divided into 9,233,586 fully paid-up registered shares,
with a nominal value of CHF 10.00 each. Every share gives the right to one vote.
The Board of Directors has at its disposal conditional capital of a maximum aggregate amount of CHF 7,481,980 that may be issued
through a maximum of 748,198 registered shares, of which a maximum of CHF 1,618,200 can be used for executive share option plans.
At the Annual General Meeting held on 28 March 2019 the distribution of an ordinary dividend of CHF 60.00 per share(2018: CHF 58.00 per share) was approved. The dividend payment has been paid out of available retained earnings.
Movements in own equity instruments are as follows:
Price in Swiss francs
2019

NumberBalance as at 1 January

11,906

Purchases at cost
Sales and transfers

Total inmillions of
Swiss francs

High

AverageLow

26,0002,154.0

1,968.3

1,800.051(22,365)

1,858.0

1,858.0

1,858.0(42)

142(Gains) losses, net recognised in equity
Movement on registered shares, net

9Movement on derivatives on own shares, net

17

Income taxes
Balance as at 31 December

15,541

2018

NumberBalance as at 1 January

23,838Purchases at cost
Sales and transfers

168
Price in Swiss francs

Total inmillions of
Swiss francs

High

AverageLow

12,312

1,959.0

1,877.2

1,791.023(24,244)

1,844.0

1,844.0

1,844.0(45)

157(Gains) losses, net recognised in equity
Movement on registered shares, net(22)

Movement on derivatives on own shares, net

7

Income taxes
Balance as at 31 December

11,906142

29. Commitments
As at 31 December 2018 the Group had operating lease commitments mainly related to buildings. Future minimum payments under
non-cancellable operating leases in 2018 were as follows:in millions of Swiss francs

2018Within one year

46

Within two to five years

125

Thereafter

206

Total minimum payments

377

The total minimum operating lease commitments in 2018 include the lease back commitment of CHF 184 million of the Zurich
Innovation Centre (ZIC) that was sold in December 2018 (Note 21).
From 1 January 2019, as in accordance with IFRS 16, the Group has recognised right-of-use assets and lease liabilities for thesecommitments, except for short-term and low-value leases (Note 2.1.1).
The charge in the consolidated income statement for all operating leases was CHF 14 million (2018: CHF 48 million).

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

85

The Group has capital commitments for the purchase or construction of property, plant and equipment totalling CHF 28 million(2018: CHF 111 million).

30. Contingent Liabilities
From time to time and in varying degrees, Group operations and earnings continue to be affected by political, legislative, fiscal andregulatory 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 and raw chemical supply companies. The plaintiffs alleged that they sustained pulmonary injuries due todiacetyl-containing butter flavours manufactured by one or more of the flavour and raw chemical supply 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 is entitled to under the terms of its insurance policies.

31. Related Parties
Transactions between Givaudan SA and its subsidiaries, which are related parties of Givaudan SA, have been eliminated on
consolidation and are not disclosed in this note.

Compensation of key management personnel
The compensation of the Board of Directors and the Executive Committee during the year was as follows:
2019

2018

Salaries and other short-term benefits

12

11

Post-employment benefits

11

Share-based payments

11

13

Total compensation

24

25

in millions of Swiss francs

No other related party transactions have taken place during 2019 (2018: nil) between the Group and the key management personnel.

Reconciliation table to the Swiss code of obligations
IFRS

Adjustments a

Swiss CO (Art. 663bbis)

2019

2018

2019

2018

2019

2018

Salaries and other short-term benefits

12

11

(4)

(4)

8

7

Post-employment benefits

1

1

1

1

2

2

Share-based payments

11

13

(1)

(2)

10

11

Total compensation

24

25

(4)

(5)

20

20

in millions of Swiss francsa)	IFRS information is adjusted mainly to the recognition of the share-based payments, IFRS 2 versus economic value at grant date. IFRS information
also includes security costs.

There are no other significant related party transactions including in the jointly controlled entities.

Givaudan – 2019 Governance, Compensation and Financial Report

86 Consolidated financial report Notes to the consolidated financial statements

32. Board of Directors and Executive Committee Compensation
Compensation of members of the Board of Directors
Compensation of Board members consists of Director fees, Committee fees and Restricted Share Units (RSUs). Fees are paid at theend of each year in office completed. RSUs give participants the right to receive Givaudan shares (or a cash equivalent in countries
where securities laws prevent the offering of Givaudan securities) at the end of a three-year blocking period.
The Chairman of the Board does not receive any additional Board Membership fees. Similarly, a Committee Chairman does notreceive any additional Committee Membership fees. Each Board member receives an additional amount of CHF 10,000 to coverout-of-pocket expenses. This amount is paid for the coming year in office. The RSUs are also granted for the same period. The
compensation paid to the Board members for the reporting period is shown in the table below:
2019
in Swiss francs

CalvinGrieder
Chairman e

Victor
Balli eProf. Dr-Ing.
WernerBauer eLilianBiner eMichaelCarlos e

IngridDeltenre e

Director fees b

400,000

100,000

100,000

100,000

100,000

100,000

Committee fees b

65,00050,00065,00025,00065,00050,00055,000375,000

Total fixed (cash)

465,000

150,000

165,000

125,000

165,000

150,000

155,000

1,375,000

Number of RSUs granted c
Value at grant d
Total compensation

Total
2019a

ThomasRufer e100,000 1,000,000

252

63

63

63

63

63

63

630

576,980

144,245

144,245

144,245

144,245

144,245

144,245

1,442,450

1,041,980 294,245

309,245

269,245309,245294,245299,245 2,817,450a)	Represents total compensation for the Board of Director paid in respect of the reporting year, reported in accordance with the accrual principle.
b)	Represents Director and Committee fees paid in respect of the reporting year, reported in accordance with the accrual principle.
c)	RSUs blocking period ends on 15 April 2022.
d)	Economic value at grant according to IFRS methodology, with no discount applied for the blocking period.
e)	The function of each member of the Board of Directors is indicated on pages 5-6 in the 2019 Governance report.

Estimated social security charges based on 2019 compensation amounted to CHF 233,000 (2018: CHF 203,000).
2018
in Swiss francs

CalvinGrieder
Chairman e

Victor
Balli eProf. Dr-Ing.
WernerBauer eLilianBiner eMichaelCarlos e

IngridDeltenre e

Director fees b

400,000

100,000

100,000

100,000

100,000

100,000

Committee fees b

65,00050,00065,00025,00065,00050,00055,000Total fixed (cash)

465,000

150,000

165,000

125,000

165,000

150,000

155,000 1,375,000

Number of RSUs granted c
Value at grant d
Total compensation

Total
2018 aThomasRufer e100,000 1,000,000
375,000

292

73

73

73

73

73

582,044

145,511

145,511

145,511

145,511

145,511

145,511 1,455,110

73

1,047,044

295,511

310,511

270,511

310,511295,511

300,511 2,830,110a)	Represents total compensation for the Board of Director paid in respect of the reporting year, reported in accordance with the accrual principle.
b)	Represents Director and Committee fees paid in respect of the reporting year, reported in accordance with the accrual principle.
c)	RSUs blocking period ends on 15 April 2021.
d)	Economic value at grant according to IFRS methodology, with no discount applied for the blocking period.
e)	The function of each member of the Board of Directors is indicated on pages 104-105 in the Governance section of the 2018 Integrated Annual Report.

Other compensation, fees and loans to members or former members of the Board
No additional compensation or fees were paid to any member of the Board. No Board member or related parties had any loan
outstanding as of 31 December 2019.

Special compensation of members of the Board who left the company during the reporting period
No such compensation was incurred during the reporting period.

Givaudan – 2019 Governance, Compensation and Financial Report730

Consolidated financial report Notes to the consolidated financial statements

87

Compensation of members of the Executive Committee
The compensation of the Executive Committee during the year was as follows:in Swiss francs

Gilles Andrier
CEO 2019- Base salary

Executive
Executive
Committee
Committee
members
members
Gilles Andrier (excluding CEO) a (excluding CEO) b
CEO 2018
2019
2018

Total
2019

Total
2018

1,167,910

1,058,023

3,191,433

3,194,282

4,359,343

4,252,305- Pension benefits c

577,527

571,766

1,005,412

947,880

1,582,939

1,519,646- Other benefits d

141,730

139,048562,795

819,837

704,525

958,885

Total fixed compensation

1,887,167

1,768,837

4,759,640

4,961,999

6,646,807

6,730,836- Annual incentive e

1,438,925

954,070

2,830,707

1,824,033

4,269,632

2,778,103

1,092

1,446

2,448

3,263

3,540

4,709

- Value at grant g

2,500,243

2,882,312

5,604,941

6,504,138

8,105,184

9,386,450

Total variable compensation

3,939,168

3,836,382

8,435,648

8,328,171

12,374,816

12,164,553

Total compensation

5,826,335

5,605,219

13,195,288

13,290,170

19,021,623

18,895,389

471,214453,000

989,482

988,000

1,460,696

1,441,000- Number of performance shares granted f

Employer social security ha)	Represents full year compensation of six Executive Committee members.
b)	Represents (a) full year compensation of five Executive Committee members, (b) partial year compensation of two outgoing members and c) partial year compensationof the new Flavour Division President.
c)	Company contributions to broad-based pension and retirement savings plans and annualised expenses accrued for supplementary executive retirement benefit.
d)	Represents annual value of health and welfare plans, international assignment benefits and other benefits in kind.
e)	Annual incentive accrued in reporting period based on performance in the reporting period.
f)	2019 Performance shares vest on 15 April 2022, 2018 Performance Shares vest on 15 April 2021.
g)	Value at grant calculated according to IFRS methodology and based on 100% achievement of performance targets.
h)	2019 estimated social security charges based on 2019 compensation; 2018 estimated social security charges based on 2018 compensation.

Other compensation, fees and loans to members or former members of the Executive Committee
No other compensation or fees were accrued for or paid to any member or former member of the Executive Committee during thereporting period. No member or former member of the Executive Committee or related parties had any loan outstanding as of
31 December 2019.

Special compensation of Executive Committee members who left the company during
the reporting period
Members of the Executive Committee that stepped down during 2019 did not receive any special compensation as a result of theirdeparture from the Company.

Givaudan – 2019 Governance, Compensation and Financial Report

88 Consolidated financial report Notes to the consolidated financial statements

Ownership of shares and unvested share rights
Details on the Givaudan share based payment plans are described in Note 9.
As per 31 December 2019, the Chairman and other Board members including persons closely connected to them held
4,501 Givaudan shares in total. For further details, please refer to the following table on the next page showing:–– The shares held individually by each Board member as per 31 December 2019.
–– The RSUs that were granted in 2016 – 2018 and were still owned by members of the Board as per 31 December 2019.
2019
in numbers

SharesUnvested
RSUs

Calvin Grieder, Chairman

295

904

Victor Balli

85

226

1,265

226

672

226

Michael Carlos

1,097

226

Ingrid Deltenre

202

226

Thomas Rufer

885

226

Total 2019

4,501

2,260

Total 2018

3,906

2,225

Prof. Dr-Ing. Werner Bauer
Lilian Biner

The company is not aware of any other ownership of shares, share options/option rights, RSUs or performance shares as per
31 December 2019 by persons closely connected to members of the Board.
The Chief Executive Officer and other members of the Executive Committee, including persons closely connected to them,held 5,265 Givaudan shares. For further details, please refer to the table below showing:–– The shares held individually by each member of the Executive Committee as per 31 December 2019.
–– The unvested performance shares that were granted in 2016-2018 and were still owned by members of the Executive
Committee as per 31 December 2019.
2019
in numbers

SharesUnvested
Performance
SharesGilles Andrier, CEO

3,100

4,315

Tom Hallam

328

1,541

Louie D’Amico

275

1,258

Maurizio Volpi

634

2,156

Simon Halle-Smith

452

1,278

Willem Mutsaerts

351

1,278

Anne Tayac

125

1,247

Total 2019

5,265

13,073

Total 2018

5,097

13,776

No member of the Executive Committee held any share options or option rights as at 31 December 2019 (31 December 2018:
no member of the Executive Committee held any share options or option rights).
One person closely connected to a member of the Executive Committee owned 256 unvested Performance Shares as at
31 December 2019.
The company is not aware of any other ownership of shares, share options/option rights, RSUs or performance shares as
per 31 December 2019 by persons closely connected to members of the Executive Committee.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

89

33. List of Principal Group Companies
The following are the principal companies fully owned by the Group. Share capital is shown in thousands of currency units:
Switzerland

Givaudan SA

CHF

92,336

Givaudan Suisse SA

CHF

4,000

Givaudan Finance SA

CHF

100,000

Givaudan International SA

CHF

100

Vamara Holding SA

CHF

100

Givaudan Treasury International SA

CHF

1,000

Naturex AG

CHF

15,288

Fondation Givaudan--

Givaudan Argentina SA

ARS

30,000Givaudan Argentina Servicios SA

ARS

8,000

Givaudan Australia Pty Ltd

AUD

93,703Naturex Australia Pty Ltd

AUD

0.003

drom International Pty Ltd

AUD

50

Austria

Givaudan Austria GmbH

EUR

40

BelgiumNaturex SPRL

EUR

1,000

BermudaFF Holdings (Bermuda) Ltd

USD

12

Givaudan International Ltd

USD

12

FF Insurance Ltd

CHF

170

Givaudan do Brasil Ltda

BRL

345,381

G Nutra Ind Com Prod Alim e Nutricionais Ltda

BRL

31,219Naturex Ingredientes Naturais Ltda

BRL

7,035

drom Internacional Fragrâncias Indústria e Comércio Ltda.

BRL

14,388Givaudan Canada Co

CAD

12,901Naturex Inc (Canada)

CAD

500

Givaudan Chile Ltda

CLP

5,000

Chile Botanics SA

CLP

1,837,205

Naturex Chile SA

CLP

1,731,600

Givaudan Fragrances (Shanghai) Ltd

USD

7,750

Givaudan Flavors (Shanghai) Ltd

USD

10,783

Givaudan Specialty Products (Shanghai) Ltd

USD

12,000Givaudan Hong Kong Ltd

HKD

7,374

Givaudan Flavors (Nantong) Ltd

USD

39,000Naturex Trading Shanghai Co Ltd

CNY

5,608

drom Fragrances International (Guangzhou) Co Ltd

CNY

14,058

Colombia

Givaudan Colombia SA

COP

6,965,925

Czech Republic

Givaudan CR, s.r.o.

CZK

200

Egypt

Givaudan Egypt SAE

USD

21,360Givaudan Egypt Fragrances LLC

EGP

50

Givaudan France SAS

EUR

5,006

Expressions Parfumées SAS

EUR

3,548

Naturex SA

EUR

14,435SCI Les Broquetons

EUR

495

Albert Vieille SAS

EUR

908

drom International SARL

EUR

1,011

Argentina
Australia

BrazilCanada
Chile

China

FranceGivaudan – 2019 Governance, Compensation and Financial Report90

Consolidated financial report Notes to the consolidated financial statements

Germany

Givaudan Deutschland GmbH

EUR

4,100

Naturex GmbH

EUR

150

drom fragrances GmbH & Co. KG

EUR

48,063drom Holding GmbH

EUR

4,747

drom Verwaltungsgesellschaft mbH

EUR

25

Dr.rer.nat.Storp Vermögensverwaltungs-GmbH

EUR

2,773

drom Perfume Trade GmbH

EUR

44,276

Hong Kongdrom Asia Pacific Ltd.

HKD

10

Hungary

Givaudan Hungary Kft

EUR

15

Givaudan Business Solutions Kft

EUR

12

Givaudan (India) Private Ltd

INR

87,330Naturex India Private Ltd

INR

64,416

Valentine Foods Private Ltd

INR

100

P.T. Givaudan Indonesia

IDR

2,608,000

P.T. drom Fragrances Indonesia

IDR

3,462,600

P.T. Fragrance Oils Indonesia

USD

30

Givaudan Italia SpA

EUR

520

Expressions Parfumées SRLA

EUR

10

Naturex SpA

EUR

1,200

drom International Italia S.r.l.

EUR

26

Ivory CoastNaturex Ivory Coast Abidjan Purchasing

XOF

6,000

Japan

Givaudan Japan K.K.

JPY

1,000,000

Naturex K.K.

JPY

5,000

Givaudan Korea Ltd

KRW

550,020Naturex Korea Seoul sales officeKRW

284,000

Givaudan Business Solutions Asia Pacific Sdn.Bhd

MYR

2,000

Givaudan Flavours & Fragrances Malaysia Sdn.Bhd

MYR

3,981

Fragrance Oils (Malaysia) Sdn.Bhd

MYR-

MoroccoNaturex Morocco Casablanca

MAD

24,640

MexicoGivaudan de Mexico SA de CV

MXN

53,611Naturex Ingredientes Naturales SA de CV

MXN

62,768Givaudan Nederland B.V.

EUR

402

Vika B.V.

EUR

20

Virgula B.V.

EUR

20

Naturex Coöperatief UA

EUR

1

New ZealandGivaudan NZ Ltd

NZD

71

Nigeria

Givaudan (Nigeria) Ltd

NGN

10,000Fragrance Oils (West Africa) Ltd

NGN

15,000Givaudan Peru SAC

PEN

1,303

Activ International SAC

PEN

14,043

Givaudan Polska Sp. Z.o.o.

PLN

50

Naturex Polska Sp. Z.o.o.

PLN

2,000

Givaudan Rus LLC

RUB

9,000

Naturex LLC

RUB

1,500

Givaudan Singapore Pte Ltd

SGD

24,000Naturex Holdings Singapore Private Ltd

SGD

160

Fragrance Oils (Far East) Pte Ltd

GBP

5South Africa

Givaudan South Africa (Pty) Ltd

ZAR

360,002

Spain

Givaudan Iberica, SA

EUR

8,020

Naturex Iberian Partners, SL

EUR

13,497

Aromasur S.L.U.

EUR

1,320

Tierra Aromatical del Sur SL

EUR

3drom Spain SL

EUR

10

India

Indonesia

Italy

Korea
Malaysia

Netherlands

Peru
PolandRussiaSingapore

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

SwedenGivaudan North Europe AB

SEK

120

Swedish Oat Fiber AB

SEK

1,000

ThailandGivaudan (Thailand) Ltd

THB

100,000

TurkeyGivaudan Aroma Ve Esans Sanayi Ve Ticaret Limited Sirketi

TRY

34

United Kingdom

Givaudan UK Ltd

GBP

70

Major International Ltd

GBP

50

Givaudan Holdings UK Ltd

GBP

317,348Naturex Ltd

GBP

1,006

drom International UK Limited

GBP

30

Fragrance Oils Limited

GBP

80

Fragrance Oils (International) Limited

GBP

16

Fragrance Oils (Purchasing) Limited

GBP

1

Givaudan Middle East & Africa FZE

AED

1,000

Expression Parfumées LLC

AED

300

Givaudan United States, Inc.

USD

0.05

Givaudan Flavors Corporation

USD

0.1

Givaudan Fragrances Corporation

USD

0.1

Givaudan Flavors and Fragrances, Inc.

USD

0.1

Naturex Holdings, Inc.

USD

0.1

Naturex, Inc.

USD

1Vegetable Juices, Inc.

USD-

drom International, Inc.

USD

20

Venezuela

Givaudan Venezuela SA

VES

4.5

VietnamGolden Frog Flavor-Fragrance Manufacture Corporation

USD

3,279

United Arab Emirates
United States of America

91

Givaudan – 2019 Governance, Compensation and Financial Report92 Consolidated financial report Notes to the consolidated financial statements

34. Disclosure of the Process of Risk Assessment
Risk management in Givaudan is an integral part of the business. It is a structured and continuous process of identifying, assessing
and deciding on responses to risks. The reporting of the opportunities and threats that these risks create and how they might
hinder the business in achieving its objectives is also part of managing risks.
Risk management is the responsibility of the Board of Directors, which delegates to the Executive Committee the management of
the overall company risk management process. The Group actively promotes the continuous monitoring and management of risks
at the operational management level.
The Givaudan Enterprise Risk Management Charter describes the principles, framework and process of the Givaudan Enterprise
Risk Management, which ensure that material risks are identified, managed and reported. It defines the associated roles andresponsibilities which are reflected in the delegated authorities. Enterprise Risk Management encompasses both the Fragranceand Flavour businesses, as well as Givaudan Group functions. It includes all types of risks in terms of their nature, their source or
their consequences.
The process aims to be comprehensive, organised and documented in order to improve compliance with corporate governanceregulations, guidelines and good practices; better understand the risk profile of the business; and provide additional risk-based
management information for decision making.
The objectives of the Risk Management process are to continuously ensure and improve compliance with good corporate
governance guidelines and practices as well as laws and regulations, where applicable; facilitate disclosure to key stakeholders ofpotential risks and the company’s philosophy for dealing with them. At the same time, the process creates the awareness of all key
executives of the magnitude of risks; provides risk-based management information for effective decision-making; and safeguard
the values of the company and its assets, and protect the interests of shareholders.
Givaudan’s management, at all levels, is accountable for ensuring the appropriateness, timeliness and adequacy of the risk analysis.
Mitigation decisions are taken at individual and combined levels. This management is also responsible for implementing, tracking
and reporting the risk mitigation directives of the Executive Committee, including periodic reporting to the Board.  The assessment
is performed in collaboration between the Executive Committee, divisional and functional management teams and the Corporate
Compliance Officer.
The Board of Directors’ Audit Committee also promotes the effective communication between the Board, Givaudan’s Executive
Committee, other senior corporate functions and Corporate Internal Audit in order to foster openness and accountability.
Givaudan has carried out its annual review of internal controls over accounting and financial reporting. A risk assessment isperformed throughout the Internal Control System for those identified risks which may arise from the accounting and financial
reporting. Then, relevant financial reporting controls are defined for each risk.

35. Other Information
In November 2019 the Group reached an agreement to acquire Ungerer & Company which will strengthen the Group’s specialty
ingredient capabilities and leadership in the fast growing local and regional customer segment. Headquartered in New Jersey, USA,
Ungerer is a leading independent company in the flavour and fragrance specialty ingredients business, most notably in essential
oils, which provides a rich palette of predominantly natural ingredients for flavour and fragrance creation, as well as for end
customers of such specialties. Founded more than 125 years ago, Ungerer has developed a strong market position in all segments
and a high quality reputation with its customer base. With a presence in more than 60 countries, a total of eight manufacturing
facilities and six R&D centres, Ungerer’s capabilities and its 650 employees will further extend Givaudan’s market leadership in its
core flavour and fragrance activities.
The closing of the acquisition is expected to take place in 2020. These negotiations have therefore no impact on the 2019financial statements.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Notes to the consolidated financial statements

93

As part of the Group’s 2020 strategy to expand the capabilities of its Active Beauty business, Givaudan reached an agreement toacquire the cosmetics business of Indena. Headquartered in Milan, Italy, Indena is a world leading company dedicated to theidentification, development and production of high quality active ingredients derived from plants, for use in the pharmaceutical,
health-food and personal care industries. With almost a century of botanical experience, Indena has developed an extensive
breadth of expertise in this field, while ensuring bio-diversity and protecting the ecosystem from uncontrolled harvesting.
Givaudan and Indena will also sign a long-term partnership agreement under which Indena will continue to manufacture
ingredients for Givaudan, as well as providing innovation capabilities and other supporting services. This partnership will allow
both companies to enhance their capabilities and to focus on their respective core competencies, a win-win strategy to the benefitof customers and consumers.
The closing of the acquisition and the signing of the long-term partnership agreement are expected to take place in 2020. These
negotiations have therefore no impact on the 2019 financial statements.

Givaudan – 2019 Governance, Compensation and Financial Report94 Consolidated financial report Statutory auditor’s report on the consolidated financial statements

Deloitte SA
Rue du Pré-de-la-Bichette 1
1202 Geneva
Switzerland
Phone: +41 (0)58 279 8000
Fax: +41 (0)58 279 8800
www.deloitte.ch

Statutory Auditor’s Report
To the General Meeting of GIVAUDAN SA, Vernier
Report on the Audit of the Consolidated Financial Statements
OpinionWe have audited the consolidated financial statements of Givaudan SA and its subsidiaries (the Group), which comprise theconsolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position,
consolidated statement of changes in equity, consolidated statement of cash flows for the year ended 31 December 2019, and notes tothe consolidated financial statements, including a summary of significant accounting policies.
In our opinion the consolidated financial statements, presented on pages 32 to 93, give a true and fair view of the consolidated
Financial Position of the Group as at 31 December 2019, its consolidated financial performance and its consolidated cash flows for theyear then ended in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.

Basis for Opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Auditing Standards.
Our responsibilities under those provisions and standards are further described in the Auditor’s Responsibilities for the audit of theconsolidated financial statements section of our report. We are independent of the Group in accordance with the provisions of
Swiss law and the requirements of the Swiss audit profession, as well as the IESBA Code of Ethics for Professional Accountants, andwe have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our Audit Approach
Summary
Key audit matters

Based on our audit scoping, we identified the following key audit matters:–– Acquisition accounting;–– Carrying value of intangible assets; and–– Taxation.

Materiality

Based on our professional judgement we determined materiality for the Group
as a whole to be CHF 56 million.

Scoping

Based on our understanding of Givaudan’s operations, we have defined 16 component operations in 11 countries thatare in scope for group reporting purposes. We have requested from the auditors in these countries to perform audit
procedures to address the risks identified in our risk assessment phase. Coverages as a ratio of group sales,
operating income and total assets are disclosed below.

Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated
financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Statutory auditor’s report on the consolidated financial statements

95

Acquisition accounting
Key audit matter

How the scope of our audit responded to the key audit matter

As described in the Critical Accounting Estimates and Judgements in
Note 3, significant judgement is required in determining the fair value ofthe identifiable assets acquired, particularly intangibles, and the liabilities
assumed. Such judgements require estimates that are not only based on
available information but as well on assumptions with respect to thetiming and amount of future revenues and expenses associated with anasset and a liability. In addition, judgement is required to allocate thepurchase price to the underlying acquired assets and liabilities based on
their estimated fair value.

We obtained legal documents such as sale and purchase agreements toevaluate the key terms and conditions, and confirming our understandingof the transactions by conducting inquiries with management.

As described in Note 6 to the consolidated financial statements, the Group
completed the following five acquisitions during 2019:–– Acquisition of the AMSilk cosmetics business on 25 April 2019 for apurchase price of CHF 7 million; with no recognition of goodwill.
–– Acquisition of 100% of the share capital of Albert Vieille on 3 May 2019
for a total consideration of CHF 54 million. The acquisition resulted in
the recognition of goodwill of CHF 27 million.
–– Acquisition of 100% of the share capital of Fragrance Oils Limited andits subsidiaries on 21 August 2019 for a total purchase price of
CHF 244 million. The acquisition resulted in the recognition of goodwillof CHF 105 million.
–– Acquisition of 100% of the share capital of Golden Frog on
30 August 2019 for a total purchase price of CHF 30 million, resulting
in CHF 11 million of goodwill recognition.
–– Acquisition of 100% of the share capital of drom fragrances Gmbh & CO.
KG. and its subsidiaries on 6 September 2019 for consideration of
CHF 180 million. The acquisition resulted in the recognition of goodwillof CHF 82 million.
These transactions are considered as business combinations as definedby IFRS 3 Business Combinations which requires management to performa purchase price allocation. The purchase price allocation apportions theconsideration paid against the net assets acquired and fair valued andagainst goodwill. This requires exercise of judgements over the accounting
and disclosure for the transactions.

We have tested the payments of considerations by tracing them to thebank statements evidencing the payments of the funds.
We challenged management on the identification and valuation of tangible
and intangible assets acquired and liabilities identified in the acquisition
accounting against the terms of the sale and purchase agreements.
We reviewed and assessed the work performed by management’s
external valuation experts including valuation methodology for eachcategory of intangible assets, along with the key judgements made in
determining the fair values including any fair value adjustments. We have
involved our own valuation specialists to test the reasonableness of the
discount rates used in the valuation of intangible assets.
We performed procedures to assess the compliance with IFRS 13 Fair Value
Measurement of the methods used by the management’s valuation expert.
We considered and challenged the reasonableness of the assumptions.
In particular, we challenged sales forecasts with historical data and market
trends. Using previous acquisitions and available market data, webenchmarked the assumptions used in determining the attrition and royalty
rate as well as the contributory asset charges (‘CAC’) used in the valuation.
We also challenged the duration estimated by management for theamortisation of the intangible assets acquired, comparing them to current
Group accounting policies and other recent acquisitions.
We validated the appropriateness and completeness of the related
disclosures in Note 3 and Note 6 to the consolidated financial statements.
Based on the procedures performed above, we found the assumptions to
be within an acceptable range and we considered the estimates used in
the measurement of the acquired assets and liabilities to be reasonable.

The accounting for the acquisition of assets and liabilities of these entities,
including the valuation of intangible assets identified, requires a numberof complex accounting judgements sensitive to key assumptions such as
discount rate, growth rate and other assumptions used in the business plan,internal rate of return, attrition rate and royalty rate.
In addition, the amortisation period retained for intangibles acquiredalso requires judgement and constitutes a significant estimate that affects
current and future financial periods.
We focused on this area because of the complexity of acquisition
accounting, the level of judgement relating to the identification andvaluation of intangible assets and the liabilities assumed and thesignificance of considerations paid in 2019.

Givaudan – 2019 Governance, Compensation and Financial Report

96 Consolidated financial report Statutory auditor’s report on the consolidated financial statements

Carrying value of intangible assets
Key audit matter

How the scope of our audit responded to the key audit matter

As of 31 December 2019, Givaudan has recognised intangible assetsof CHF 4,286 million of which goodwill of CHF 3,146 million and otherintangible assets of CHF 1,140 million.

We gained an understanding of management’s process for identifying
indicators of impairment and for performing the impairment assessment.

The goodwill has been allocated to the following Cash Generating Units(CGUs) as follows:–– Flavour Division: CHF 2,214 million,–– Fragrance Division: CHF 685 million,–– Expressions Parfumées: CHF 135 million,–– Fragrance Oils: CHF 112 million.
Furthermore, Givaudan holds intangible assets that were recognisedfrom acquisitions amounting to CHF 976 million. These assets are mainly
technology-related, customer and suppliers’ relationships and brandnames. These assets have been recognised from the initial purchaseprice allocations in accordance with IFRS 3 Business Combination. The
valuation of software is not part of our Key Audit Matter consideration
as Software and ERP system assets have not been recognized frompurchase accounting.
As stated in Note 2.17 to the consolidated financial statements, the carrying
value of goodwill is tested for impairment annually or more frequently if
impairment indicators are present. Management has not identified any
indicators of impairment in the period. However, for Goodwill, Management
has proceeded to an evaluation of the recoverable amount by comparing
the recoverable value of the assets with their carrying values. Management
performed its annual impairment test of goodwill in the fourth quarter of2019 and has calculated the value in use in order to estimate therecoverable value of the assets. Management has prepared discounted cash
flows models to derive the value in use of the assets attributable to the
CGUs. The key inputs that require judgement are:–– The identification of the relevant CGUs;–– The estimate of the future cash flows the entity expects to derive fromeach of the CGUs; and–– The long-term growth and discount rates applied to the cash flows.
Management concluded that in all cases, value-in-use formed the basis of
the impairment conclusions and that no impairment should be recognisedon that basis. A sensitivity analysis considering changes in assumptions in
the cash flows and in the discount rates does not give rise to any material
impairment.
Further details in relation to management impairment considerations
have been provided in Note 22, with details regarding the discount rates
used for each of the CGUs.
Intangible assets with definite useful life are carried at cost lessaccumulated amortisation and accumulated impairment losses. In
addition to the amortisation booked on a straight-line basis overthe estimated economic useful life of the asset, management assessed
impairment indicators on a regular basis.
Due to the significance of the carrying values for goodwill and acquisitionrelated intangible assets and the judgements involved in performing theimpairment test, this matter was considered significant to our audit.

Givaudan – 2019 Governance, Compensation and Financial Report

We assessed internal processes in relation to the identification of
impairment indicators and challenged independently the results. We
reviewed the appropriateness of the amortisation method and related
charges for intangible assets with definite useful life.
We assessed the design and implementation of the relevant controls
relating to the projected financial information process and approval, thepreparation and review of the weighted average cost of capital andpreparation and review of the asset impairment models for Goodwill andintangible assets with indefinite useful life.
We evaluated and challenged the key assumptions and inputs into theimpairment models by independently estimating a range of acceptableoutcome and performing sensitivity analyses in order to evaluate theimpact of selecting alternative assumptions.
In challenging the assumptions, we have:–– Considered the appropriateness of the judgement that Expressions
Parfumées and Fragrance Oils constitute individual CGUs and that theother acquisitions are to be included in the Fragrance and Flavour CGUs;–– Assessed the discount rates applied. In doing so, we involved
our internal valuation specialists to assess the appropriatenessof management’s key assumptions used in deriving the discountrates. This included benchmarking these rates against available
market views;–– Evaluated the appropriateness of the long term growth rates
applied to derive the terminal value by tracing them back to aprominent source of macroeconomic projections;–– Tested the extent to which projected financial information can bereliably prepared by management by performing retrospective
review to compare prior period forecasts with actual results andreviewed any budget revision;–– Confirmed that forecasted cash flows were consistent with Board
approved forecasts and analysed reasonably possible downside
sensitivities;–– Evaluated the sensitivity in the valuation resulting from changes to
the key assumptions applied.
We audited the integrity of the impairment models and cash flow
forecasts to test their arithmetical accuracy. We considered thecompliance of management’s impairment models with the requirementsof IAS 36 ‘Impairment of Assets’.
We have also compared management estimates of Economic Useful Life
with the actual usage of the assets.

Consolidated financial report Statutory auditor’s report on the consolidated financial statements

97

Carrying value of intangible assets
Key audit matter

How the scope of our audit responded to the key audit matter
We have inquired with management the presence of impairment
indicators for the intangible assets that have been recognized fromcurrent and past business combinations. We have corroborated the resultsof our inquiries with review of the financial performance of the underlying
markets as well as inquiries with personnel outside the finance function.
We have validated the appropriateness and completeness of the related
disclosures in Note 22 to the consolidated financial statements.
Based on the procedures performed, we obtained sufficient appropriate
audit evidence to corroborate management’s judgements and estimates
regarding carrying values for intangibles assets.

Taxation
Key audit matter

How the scope of our audit responded to the key audit matter

The Group operates in a large number of different jurisdictions and istherefore subject to many tax regimes with differing rules and regulations.
As described in the Summary of Significant Accounting Policies in Note 2
and in Note 3 on Critical Accounting Estimates and Judgements,
significant judgement is required in determining provision for income
taxes, both current and deferred, as well as the assessment of provisions
for uncertain tax positions including estimates of interest and penalties
where appropriate.

We evaluated management’s implementation of Group policies andcontrols regarding current and deferred tax, as well as the reporting of
uncertain tax positions.

The effective tax rate of the group decreased from 14% in 2018 to 13% in
2019. The consolidated statement of financial position includes current tax
assets of CHF 50 million, current tax liabilities of CHF 111 million, together
with deferred tax assets of CHF 211 million and deferred tax liabilities of
CHF 280 million. The tax expense recognised in the consolidated income
statement amounts to CHF 106 million. Details of all current and deferred
tax balances are disclosed in Note 16 to the consolidated financial
statements.
Due to their significance to the financial statements as a whole, combinedwith the level of judgement and estimation required to determine theirvalues and the geographical spread with different jurisdictions, theevaluation of current and deferred tax balances including the assessmentof provisions for uncertain tax positions is considered a key audit matter.

We assessed the design and implementation of controls in respect toprovisions for current tax and the recognition and recoverability ofdeferred tax assets.
We examined the procedures in place for the current and deferred tax
calculations for completeness and valuation and audited the related
tax computations and estimates in the light of our knowledge ofthe tax circumstances. Our work was conducted with the support ofour tax specialists.
We performed an assessment of the material components affecting theGroup’s tax expense, balances and exposures. With the support of our tax
specialists, we reviewed and challenged the information reported bycomponents including the information related to deferred tax assets onloss carry forwards. With the support of our tax specialists, we verified theconsolidation and analysis of tax balances.
We considered management’s assessment of the validity and adequacy ofprovisions for uncertain tax positions, evaluating the basis of assessment
and reviewing relevant correspondence and legal advice where available
including any information regarding similar cases with the relevant tax
authorities. We reviewed that Givaudan has adopted the requirements of
IFRIC 23 - Uncertainty over Income Tax Treatments.
For the deferred tax assets and liabilities, we assessed the appropriatenessof management’s assumptions and estimates.
We validated the appropriateness and completeness of the related
disclosures in Note 16 to the consolidated financial statements.
Based on the procedures performed, we obtained sufficient appropriate
audit evidence to corroborate management’s judgement and estimates
regarding current and deferred tax balances including provisions for
uncertain tax positions.

Givaudan – 2019 Governance, Compensation and Financial Report

98 Consolidated financial report Statutory auditor’s report on the consolidated financial statements

Our application of materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic
decisions of a reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of
our audit work and in evaluating the results of our work.
Based on our professional judgement we determined materiality for the Group as a whole to be CHF 56 million, based on a calculationof 7% of Group income before taxes, adjusted for non-recurring transactions. We selected Group income before taxes as the basis
for determining our materiality because, in our view, this measure represents the performance of the Group and is one of theindicators against which Givaudan is commonly assessed and is a generally accepted benchmark.
The materiality applied by the component auditors ranged from CHF 42.0 million to CHF 16.8 million depending on the scale of thecomponent’s operations, the component’s contribution to Group sales, Group income before taxes, Group total assets and ourassessment of risks specific to each location.
We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of CHF 2.8 million,
as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also reported to the
Audit Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.

An overview of the scope of our audit
We designed our audit by obtaining an understanding of the Group and its environment, including Group-wide controls, determining
materiality and assessing the risks of material misstatement in the consolidated financial statements.
Based on our understanding of Givaudan’s operations, we have defined 16 component operations in 11 countries that are in scope
for the group reporting purposes. We have requested these countries to perform audit procedures to address the risks identified inour risk assessment phase.
These countries are spread across all regions, reflecting Givaudan’s operations. We obtain assurance over these countries through a
combination of audit procedures performed locally, within the Givaudan shared service centres and centrally at the Head office.
In aggregate, these components represented scope coverage of:
Revenue

73%

Audits for group reporting purposes

Gross profit

27%

83%

Review at group level

Total assets

17%

76%

24%

All other wholly owned and joint venture businesses were subject to analytical review procedures for the purpose of the Groupaudit. Annual statutory audits are conducted by Deloitte at the majority of the Group’s affiliates, although these are predominantly
completed subsequent to our audit report on the consolidated financial statements.
At the parent entity level we tested the consolidation process and carried out analytical procedures to confirm our conclusion that
there were no significant risks of material misstatement of the aggregated financial information of the remaining components not
subject to a full scope audit.
The group audit team visited some countries in scope as defined at planning stage. We are defining our visits based on
significance of the affiliates and main events occurred during the year. All component audit partners were included in our teambriefing, we discussed their risk assessment and reviewed documentation of the findings from their work.

Givaudan – 2019 Governance, Compensation and Financial ReportConsolidated financial report Statutory auditor’s report on the consolidated financial statements

99

Other Information in the Annual Report
The Board of Directors is responsible for the other information in the annual report. The other information comprises all information
included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements of
the Company and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in the annual report and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information in theannual report and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work wehave performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.

Responsibility of the Board of Directors for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view inaccordance with IFRS and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary toenable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s ability to continue asa going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISAs and Swiss
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions ofusers taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the website of EXPERTsuisse:
http://expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on Other Legal and Regulatory Requirements
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control system
exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Boardof Directors.
We recommend that the consolidated financial statements submitted to you be approved.

Deloitte SA

Karine Szegedi Pingoud

Laetitia Cejudo Petit

Licensed Audit Expert		
Auditor in Charge

Licensed Audit Expert

Geneva 22 January 2020

Givaudan – 2019 Governance, Compensation and Financial Report

100

Statutory financial report ﻿

StatutoryfinancialreportIn this section
101

101

Statutory financial statementsof Givaudan SA (Group Holding
Company)
Income Statement

102 Statement of Financial Position
103 Notes to the statutory financial
statements
103 1. General Information
103 2. Summary of Accounting Principles
Adopted104 3. Subsidiaries
105 4. Investments in Joint Ventures andAssociates
105 5. Debt

Givaudan – 2019 Governance, Compensation and Financial Report

106 6. Indirect Taxes
106 7. Equity
107 8. Own Shares
107 9. Board of Directors and Executive
Committee Compensation
107 10. Other Information
108 Appropriation of available earnings
108 Proposal of the Board of Directors to theGeneral Meeting of Shareholders
109 Report of the Statutory Auditor
109 Statutory Auditor’s Report on the
Financial Statements

Statutory financial report Statutory financial statements of Givaudan SA 101

Statutory financial
statements of Givaudan SA(Group Holding Company)
Income Statement
For the year ended 31 Decemberin millions of Swiss francs

Income from investments in Group companies

Note

2019

2018

3

286

205

997

973

1

1

Royalties from Group companies
Other operating income
Share of results of joint ventures and associates

4

2

3

Total Operating income

1,286

1,182

Research and development expenses to Group companies

(331)

(331)

Other operating expenses

(60)

(62)

Amortisation and impairment of intangible assets

(61)

(60)

Total Operating expenses

(452)

(453)

Operating income

834

729

Financial expenses

(294)

(257)

Financial income

165

196

Non-operating expenses

(93)

(91)

Income before taxes

612

577

Income taxes

(27)

(31)

Net income

585

546

Givaudan – 2019 Governance, Compensation and Financial Report102 Statutory financial report Statutory financial statements of Givaudan SA

Statement of Financial Position
31 December
2019

31 December
2018

Cash and cash equivalents

10

143

Marketable securities

108

Accounts receivable from Group companies

186

218

Other current assets

41

20

Accrued income and prepaid expenses

2

1

Current assets

347

382

Loans to Group companies

150

150

Other long-term assets

11

12

in millions of Swiss francs

Note

Investments in Group companies

3

5,253

4,666

Interests in joint ventures and investments in associates

4

32

32

Other financial assets

15

10Intangible assets

222

230

Non-current assets

5,683

5,100

Total assets

6,030

5,482

Short-term debt

5290

Accounts payable to Group companies

78

Other current liabilities

89

51

Deferred income and accrued expenses

79

15

Current liabilities
Long-term debt

5

Other non-current liabilities
Non-current liabilities
Total liabilities

99

536

165

3,128

3,010

79

44

3,207

3,054

3,743

3,219

Share capital

7

92

92

Statutory retained earnings

7

18

18

Statutory capital reserves from capital contributions - additional paid-in capital

7

3

3

Voluntary retained earnings

7

1,542

1,542

7, 8

(31)

(22)

Own shares
Available retained earnings- Balance brought forward from previous year

78

84

- Net (loss) income for the year

585

546

Equity

2,287

2,263

Total liabilities and equity

6,030

5,482

Givaudan – 2019 Governance, Compensation and Financial ReportStatutory financial report Notes to the statutory financial statements 103

Notes to the statutoryfinancial statements
1. General Information
1.1. Structure and description of the activity
Givaudan SA is a holding company based in Vernier, near Geneva, whose main goal is to manage its investments in subsidiaries.
More specifically Givaudan SA invests in companies whose aim is to manufacture and commercialise natural and synthetic
aromatic or fragrance raw materials as well as other related products. In addition, Givaudan SA invests in research anddevelopment and supplies services for the use of these products. Givaudan SA develops, registers and makes use of all trademarks,
patents, licenses, manufacturing processes and formulas.

1.2. Employees
The average number of employees during the year was less than ten (2018: less than ten).

2. Summary of Accounting Principles Adopted
The financial statements at 31 December 2019 are prepared in accordance with Swiss law.
The company is classified as a large entity as it meets the criteria to present group accounts under the definition of art. 961d al. 1of the Swiss Code of Obligations. As Givaudan prepares and reports comprehensive consolidated financial statements underInternational Financial Reporting Standards (IFRS) including a cash flow statement, accompanying notes and a management
report, Givaudan SA is exempt from preparing this information.

Valuation Methods and Translation of Foreign Currencies
Investments in, and loans to, Group companies are stated at cost less appropriate write-downs. Marketable securities are shownat the lower of cost and market value. Derivatives are recorded at fair value.
The currency in which Givaudan SA operates is Swiss francs (CHF) and the accounts are presented in Swiss francs. In the statementof financial position, foreign currency assets and liabilities are remeasured at year-end exchange rates with the exception of
investments in Group companies which are valued at historical exchange rates. In the income statement, expenses and income inforeign currencies are converted in Swiss francs using the daily exchange rate of the transaction date. Foreign currency gains andlosses are recognised in the income statement as they occur with the exception of unrealised gains which are deferred.

Givaudan – 2019 Governance, Compensation and Financial Report104 Statutory financial report Notes to the statutory financial statements

3. Subsidiaries
List of the direct subsidiaries of the company, which are wholly-owned unless otherwise indicated (percentage of voting rights):
Switzerland

Givaudan Suisse SA
Givaudan Finance SA
Prodiga AG
Givaudan International SA
Vamara Holding SA
Kemptthal Immobilien Nord AG
Givaudan Treasury International SA

Argentina

Givaudan Argentina SA
Givaudan Argentina Servicios SA

Australia

Givaudan Australia Pty Ltd

Austria

Givaudan Austria GmbH

BermudaGivaudan Capital Transactions Ltd

BrazilGivaudan do Brasil Ltda
Naturex Ingredientes Naturais Ltda

CanadaGivaudan Canada Co

Chile

Givaudan Chile Ltda

China

Givaudan Fragrances (Shanghai) Ltd
Givaudan Flavors (Shanghai) Ltd
Givaudan Specialty Products (Shanghai) Ltd
Givaudan Hong Kong Ltd
Givaudan Flavors (Nantong) Ltd
Givaudan Management Consulting (Shanghai) Ltd
Givaudan Fragrances (Changzhou) Ltd

Colombia

Givaudan Colombia SA

Czech Republic

Givaudan CR, s.r.o.

Egypt

Givaudan Egypt SAE
Givaudan Egypt Fragrances LLC

FranceGivaudan France SAS
Activ International SAS
Naturex SA
Albert Vieille SAS

Germany

Givaudan Deutschland GmbHdrom fragrances GmbH & Co. KG
drom Verwaltungsgesellschaft mbH
Dr. rer.nat. Storp Vermögensverwaltungs-GmbH

GuatemalaGivaudan Guatemala SA

Hungary

Givaudan Hungary Kft
Givaudan Finance Services Kft

India

Givaudan (India) Private Ltd

Indonesia

P.T. Givaudan Indonesia
P.T. Givaudan Flavours and Fragrances Indonesia

Italy

Givaudan Italia SpA

Japan

Givaudan Japan K.K.

Korea

Givaudan Korea Ltd

Malaysia

Givaudan Malaysia Sdn.Bhd
Givaudan Flavours & Fragrances Malaysia Sdn.Bhd

MexicoGivaudan de Mexico SA de CV
Grupo Givaudan SA de CV

Netherlands

Givaudan Nederland B.V.
Virgula B.V.

Nigeria

Givaudan (Nigeria) Ltd

Peru

Givaudan Peru SAC

PolandGivaudan Polska Sp. Z.o.o.

RussiaGivaudan Rus LLC

Singapore

Givaudan Singapore Pte Ltd

South Africa

Givaudan South Africa (Pty) Ltd

Givaudan – 2019 Governance, Compensation and Financial ReportStatutory financial report Notes to the statutory financial statements 105

Spain

Givaudan Iberica, SA

SwedenGivaudan North Europe AB

ThailandGivaudan (Thailand) Ltd

TurkeyGivaudan Aroma Ve Esans Sanayi Ve Ticaret Limited Sirketi

United Kingdom

Givaudan Holdings UK Ltd
Fragrance Oils Limited

United Arab Emirates

Givaudan Middle East & Africa FZE

United States of America

Givaudan United States, Inc.

Venezuela

Givaudan Venezuela SA

VietnamGolden Frog Flavor-Fragrance Manufacture Corporation

In 2019 Givaudan SA increased its investments in Givaudan Argentina SA and Givaudan Australia Pty Ltd. Furthermore Givaudan SA
incorporated Naturex Ingredientes Naturais Ltda, drom fragrances GmbH & Co.KG, drom Verwaltungsgesellschaft mbH, Dr. rer.nat.
Storp Vermögensverwaltungs-GmbH, Fragrance Oils Limited and Golden Flavor-Fragrance Manufacture Corporation. Oressences
SAS has been merged into Expressions Parfumées SAS and SAS SGD into Naturex SA during 2019.

4. Investments in Joint Ventures and Associates
Name of joint ventures

Principal activity

BGN Tech LLC

Country of incorporation

Ownership interest /Voting rights

Innovative natural ingredients

USA

49%

Natural Extracts International Ltd

Natural ingredient derivatives production

Mauritius

49%

Vanilla International Ltd

Natural ingredient collection and extract

Mauritius

49%

Jiangsu Xinrui Aromatics Ltd, manufacturing fragrance ingredients in China, became in 2019 an associate in accordance with the
new terms and conditions set in the arrangement. The Givaudan SA’s ownership interest is 49%.

5. Debt
Givaudan SA entered into the following debt transactions:Issue date

Type of debt

2011
2014

Public bonds

2016

2017

2018

2018
2019

Private placements

Public bonds

Group bank credit
facility

Total debt as at 31 December

Currency of Principal amountprincipal
in millions

Redeemable

Interest
rate

Type ofinterest

2019

2018

in millions of Swiss francs

CHF

150

07 Dec 2021

2.125%

149

149

CHF

100

18 Sep 2020

1.000%

100

100

CHF

150

19 Mar 2024

1.750%CHF

100

07 Dec 2022

0.000%
0.625%CHF

200

05 Dec 2031

EUR

100

20 Dec 2022

EUR

200

20 Dec 2024

CHF

150

09 Apr 2020

150

150

100

100

200

200

108

112

Fixed

217

225

Floating

150

151

200

200

540

559

864

896

Floating
1.331%

CHF

200

09 Apr 2025

0.375%

EUR

500

17 Sep 2025

1.125%

EUR

800

17 Sep 2030

2.000%

EUR

150

CHF

600

26 Jun 2023

Fixed

Fixed

Floating

169
600
3,378

3,010

Givaudan – 2019 Governance, Compensation and Financial Report106 Statutory financial report Notes to the statutory financial statements

As at 31 December 2019, short term debt include an overdraft of CHF 40 million related to the cash pooling agreementswith a Group company. In 2018 an amount of CHF 133 million related to the cash pooling agreements was included in cash
and cash equivalents.

6. Indirect Taxes
The company is part of a Group for VAT purposes with two other affiliates of the Group in Switzerland. The company is jointly
and severally liable towards the tax authorities for current and future VAT payables of the VAT Group to which it belongs.

7. Equity
As at 31 December 2019 the share capital amounts to CHF 92,335,860, divided into 9,233,586 fully paid-up registered shares,
with a nominal value of CHF 10.00 each. Every share gives the right to one vote.
The Board of Directors has at its disposal conditional capital of a maximum aggregate amount of CHF 7,481,980 that may be
issued through a maximum of 748,198 registered shares, of which a maximum of CHF 1,618,200 can be used for executive shareoption plans.
At the Annual General Meeting held on 28 March 2019 the distribution of an ordinary dividend of CHF 60.00 per share(2018: CHF 58.00 per share) was approved. The dividend payment has been made out of available retained earnings.
The movements in equity are as follows:2019
in millions of Swiss francs

Balance as at 1 January

Share
CapitalStatutoryretainedearnings

Additional
paid-in
capitalVoluntary
retainedearnings

92

18

3

1,542

Available
retainedearnings Own shares

630

Total

(22)

2,263

(9)

(9)

Registered shares
Issuance of shares

Movement of shares
Appropriation of available earnings

Distribution to the shareholders paid relating to 2018

(552)

Net profit for the year

585

Balance as at 31 December

2018
in millions of Swiss francs

Balance as at 1 January

92

18

3

1,542

Share
CapitalStatutoryretainedearnings

Additional
paid-in
capitalVoluntary
retainedearnings

92

18

3

1,542

663

(552)
585
(31)

Available
retainedearnings Own shares

618

2,287

Total

(43)

2,230

21

21

Registered shares
Issuance of shares

Movement of shares
Appropriation of available earnings

Distribution to the shareholders paid relating to 2017(534)

Net profit for the year

546

Balance as at 31 December

92

18

3

1,542

630

(534)
546
(22)

2,263

Statutory capital reserves from capital contributions – additional paid-in capital are presented separately in equity. Any payments
made out of these reserves are not subject to Swiss withholding tax, nor subject to income tax on individual shareholders who areresident in Switzerland.

Givaudan – 2019 Governance, Compensation and Financial ReportStatutory financial report Notes to the statutory financial statements 107

8. Own Shares
The movements in own shares are as follows:
Price in Swiss francs
2019

NumberBalance as at 1 January

11,906

Purchases at cost

Total inmillions of
Swiss francs

High

AverageLow

26,0002,154.0

1,968.3

1,800.051

Sales and transfers at cost

(22,365)

1,857.9

1,857.9

1,857.9(42)

Balance as at 31 December

15,54122

31
Price in Swiss francs

2018

NumberBalance as at 1 January

23,838Purchases at cost

Total inmillions of
Swiss francs

High

AverageLow

12,312

1,959.0

1,909.0

1,791.0

24

Sales and transfers at cost

(24,244)

1,843.5

1,843.5

1,843.5(45)

Balance as at 31 December

11,90643

22

As at 31 December 2019 and 2018, there were no other companies controlled by Givaudan SA that held Givaudan SA shares.
As at 31 December 2019, William H. Gates III (13.86%), BlackRock Inc. (5.06%), MFS Investment Management (5.04%), Nortrust
Nominees Ltd (nominee; 15.07%), Chase Nominees Ltd (nominee; 7.21%) and Banque Pictet & Cie SA (nominee; 4.45%) were the only
shareholders holding more than 3% of total voting rights.

9. Board of Directors and Executive Committee Compensation
Information required by Swiss law, as per art. 663b bis CO, on the Board of Directors and Executive Committee compensation aredisclosed in the Givaudan consolidated financial statements, Note 32.

10. Other Information
In November 2019 the Group reached an agreement to acquire Ungerer & Company which will strengthen the Group’s specialty
ingredient capabilities and leadership in the fast growing local and regional customer segment. Headquartered in New Jersey, USA,
Ungerer is a leading independent company in the flavour and fragrance specialty ingredients business, most notably in essential
oils, which provides a rich palette of predominantly natural ingredients for flavour and fragrance creation, as well as for end
customers of such specialties. Founded more than 125 years ago, Ungerer has developed a strong market position in all segments
and a high quality reputation with its customer base. With a presence in more than 60 countries, a total of eight manufacturing
facilities and six R&D centres, Ungerer’s capabilities and its 650 employees will further extend Givaudan’s market leadership in its
core flavour and fragrance activities. The closing of the acquisition is expected to take place in 2020. These negotiations havetherefore no impact on the 2019 financial statements.
As part of the Group’s 2020 strategy to expand the capabilities of its Active Beauty business, Givaudan reached an agreement
to acquire the cosmetics business of Indena. Headquartered in Milan, Italy, Indena is a world leading company dedicated tothe identification, development and production of high quality active ingredients derived from plants, for use in thepharmaceutical, health-food and personal care industries. With almost a century of botanical experience, Indena has developed
an extensive breadth of expertise in this field, while ensuring bio-diversity and protecting the ecosystem from uncontrolled
harvesting. The closing of the acquisition is expected to take place in 2020. These negotiations have therefore no impact on the2019 financial statements.

Givaudan – 2019 Governance, Compensation and Financial Report108 Statutory financial report Appropriation of available earnings

Appropriation of available
earnings and distribution fromthe statutory capital reserves
from contributions – additional
paid-in capital of Givaudan SA
Proposal of the Board of Directors to the General Meeting of Shareholders
Available earnings
2019

2018

584,670,019

545,997,253

in Swiss francs

Net income for the year
Balance brought forward from previous year
Total available earnings

77,650,373

84,113,920

662,320,392

630,111,173

2018 distribution proposal of CHF 60.00 gross per share

554,015,160

2019 distribution proposal of CHF 62.00 gross per share572,482,332

Total appropriation of available earnings

572,482,332

554,015,160

89,838,060

77,650,373

Distribution not paid on Treasury shares held by the Group
Amount to be carried forward

1,554,360

Statutory capital reserves from capital contributions – additional paid-in capital
2019

2018

Balance brought forward from previous year

3,322,955

3,322,955

Total additional paid-in capital

3,322,955

3,322,955

Amount to be carried forward

3,322,955

3,322,955

in Swiss francs

Givaudan – 2019 Governance, Compensation and Financial ReportStatutory financial report Statutory auditor’s report on the financial statements

109

Deloitte SA
Rue du Pré-de-la-Bichette 1
1202 Geneva
Switzerland
Phone: +41 (0)58 279 8000
Fax: +41 (0)58 279 8800
www.deloitte.ch

Statutory Auditor’s Report
To the General Meeting of GIVAUDAN SA, Vernier
Report on the Audit of the Financial Statements
OpinionWe have audited the financial statements of Givaudan SA, which comprise the income statement, the statement of financial
position for the year ended 31 December 2019, and notes, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements as at 31 December 2019, presented on pages 101 to 108, comply with Swisslaw and the company’s articles of incorporation.

Basis for Opinion
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities under those provisions
and standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the entity in accordance with the provisions of Swiss law and the requirements of the Swiss audit
profession and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole,and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Givaudan – 2019 Governance, Compensation and Financial Report110

Statutory financial report Statutory auditor’s report on the financial statements

Valuation of Investments in Group companies
Key audit matter

How the scope of our audit responded to the Key Audit Matter

As described in Note 3 to the financial statements, the Company holds
investments in Givaudan Group companies with a carrying value of
CHF 5,253 million as of 31 December 2019, representing 87% of total
assets.

We evaluated management’s implementation of accounting policies
and controls regarding the valuation of investments in Group
companies.

In accordance with Article 960 CO, each investment held is valued
individually and reviewed annually for impairment indicators. Eachinvestment showing another than temporary impairment indicator
must be tested for impairment and an impairment would need to berecorded if the recoverable amount is lower than the carrying amount.

We evaluated the design and implementation of controls around thevaluation of investments to determine whether appropriate controls
are in place.
We challenged the assessment of the existence of impairment
indicators done by the Company.

The impairment test performed by Givaudan management is subject
to judgement around the valuation method, key assumptions used andthe susceptibility to the expected future market developments that
could affect the profitability and positive cash flows of these entities.

We tested the valuations by critically assessing the methodology
applied and the reasonableness of the underlying assumptions andjudgements. We assessed the impairment testing models andcalculations by:Accordingly, for the purposes of our audit, we identified judgement
and estimates applied by management on the valuation of theseinvestments as representing a key audit matter.

–– checking the arithmetical accuracy of the impairment models andthe extraction of inputs from source documents; and–– challenging the significant inputs and assumptions used in
impairment testing for investments in Givaudan Group companies,
such as the ability of the Group companies to generate positive cash
flows in the future.
We validated the appropriateness and completeness of the related
disclosures in Note 3 to the financial statements.
Based on the procedures performed, we consider judgement andestimates applied by management on the valuation of investments inGroup companies to be reasonable.

Givaudan – 2019 Governance, Compensation and Financial ReportStatutory financial report Statutory auditor’s report on the financial statements

111

Responsibility of the Board of Directors for the Financial Statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law
and the company’s articles of incorporation, and for such internal control as the Board of Directors determines is necessary toenable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless theBoard of Directors either intends to liquidate the entity or to cease operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is ahigh level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and Swiss Auditing Standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users takenon the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the website of EXPERTsuisse:
http://expertsuisse.ch/en/audit-report-for-public-companies. This description forms part of our auditor’s report.

Report on Other Legal and Regulatory Requirements
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that an internal control
system exists, which has been designed for the preparation of financial statements according to the instructions of theBoard of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles ofincorporation. We recommend that the financial statements submitted to you be approved.

Deloitte SA

Karine Szegedi Pingoud

Laetitia Cejudo Petit

Licensed Audit Expert		
Auditor in Charge

Licensed Audit Expert

Geneva 22 January 2020

Givaudan – 2019 Governance, Compensation and Financial Report

112

Appendix ﻿Appendix

In this section
113

Alternative performance measures

115

Givaudan registered offices

120 Givaudan sites worldwide
127 Our reporting suite

Givaudan – 2019 Governance, Compensation and Financial ReportAppendix Alternative performance measures 113

Alternative
performance measures
Appendix to the2019 Full Year Results
Introduction
On 1 January 2019 the Directive Alternative Performance Measures (DAPM), issued by the SIX Exchange Regulation, came into force
with the purpose to promote the clear and transparent use of alternative performance measures.
The Directive prescribes that clear and comprehensible definitions must be disclosed for all alternative performance measuresused. Also, for alternative performance measures that are based on a measure included in the financial statements prepared inaccordance with recognised accounting standards and which have been adjusted by adding or omitting specific items, areconciliation statement must be disclosed to a comparable measure in the financial statement according to the recognised
accounting standard. Significant reconciliation items must be explained.

Givaudan’s Alternative Performance Measures
In the 2019 Full Year Results Media Release and on pages 31 to 35 of the 2019 Integrated Annual Report, the Group uses a numberof Alternative Performance Measures that are listed and defined below.

Like-for-Like (LFL)
LFL is defined as: (a) sales calculated using the invoicing exchange rates of the prior year, and (b) excluding sales of businesses
acquired from the acquisition date until the period end date, up to 12 months from the acquisition date.
Reconciliation tables of the LFL sales to the reported sales in accordance with IFRS have been included in the 2019 Full Year Results
Media Release.

EBITDAEBITDA defined as Earnings Before Interest (and other financial income (expense), net), Tax, Depreciation and Amortisation,corresponds to operating income before depreciation, amortisation and impairment of long-lived assets.
in millions of Swiss francs

2019

2018

Income for the period

702

663

Interest and other financial (income) expense, net

112

111

Income taxes

106

109

Operating income

920

883

Depreciation

193

127

Amortisation

161

125

Impairment
EBITDA*

1

10

1,275

1,145

* The adoption of IFRS 16 Leases resulted in an increase in EBITDA of CHF 34 million, or 0.6% in 2019. The Group has not restated the comparable 2018 EBITDA figures,
as permitted by IFRS 16.

Givaudan – 2019 Governance, Compensation and Financial Report

114

Appendix Alternative performance measures

Comparable EBITDA
Comparable EBITDA is the reported EBITDA, as adjusted for significant items of a non-recurring nature which have an impact
on the understanding of the underlying normal operating activities.
A reconciliation table of the published EBITDA to the Comparable EBITDA (EBITDA as defined in the section EBITDA above)
has been included in the 2019 Full Year Results Media Release. In that reconciliation table, all significant one-off items havebeen explained.

Free Cash Flow (FCF)
FCF refers to operating cash flow after net investments, interest paid and lease payments.
2019

2018

Cash flows from (for) operating activities

1,136

916

Acquisition of property, plant and equipment

(275)

(239)

in millions of Swiss francs

Proceeds from the disposal of property, plant and equipment

74

110

Acquisition of intangible assets

(45)

(55)

Interest paid

(51)

(29)

Lease payments*(52)

Proceeds from the disposal of intangible assets

Free cash flow (FCF)

787

703

Sales

6,203

5,527

Free cash flow (FCF) as a % of sales

12.7%

12.7%

* Lease payments became part of the reconciliation in 2019, as a consequence of the adoption of IFRS 16. This was not applicable in 2018 as lease payments were included
in Cash Flows from (for) operating activities.

Leverage Ratio
Leverage ratio is defined as net debt divided by the sum of net debt and equity (as defined for leverage ratio in the table below).
In millions of Swiss francs

31 December 201931 December 2018

Short-term debt

335

4Long-term debt

3,796

3,266

Less: cash and cash equivalents

(452)

(423)

Net debt*

3,679

2,847

Total equity attributable to equity holders of the parent

3,640

3,710

Remeasurement of post-employment benefit obligations

525

431

Equity (as defined for leverage ratio)

4,165

4,141

Net debt and equity (as defined for leverage ratio)

7,844

6,988

Leverage ratio*

47%

41%

* As a consequence of the adoption of IFRS 16 the net debt increased by CHF 441 million. Excluding the impact of IFRS 16, the leverage ratio would have been 44%.

Givaudan – 2019 Governance, Compensation and Financial ReportAppendix Givaudan registered offices

115

Givaudan registered offices

Country

Legal Entity name

Address

Algeria

Givaudan International SA (Suisse)
Bureau de Liaison Algérie

Tour A – 4ème Etage, Business Centre Dar El Madina, Micro Zoned’activité Hydra Lot No. 20, 16035 Algers

Argentina

Givaudan Argentina SA

Nicolàs Rodriguez Peña 1568, 5 ° B, 1021, C.A.B.A.

Givaudan Argentina Servicios SA

Rodriguez Peña 1568, piso 5, oficina B, Ciudad Autónoma de
Buenos Aires

Givaudan Australia Pty Ltd

12 – 14 Britton Street, Smithfield, Sydney NSW 2164

drom International Pty. Ltd.

Parkview Business Centre, suite 2/1, 1 Maitland Place, Baulkham
HIlls, Sydney, NSW 2153

Naturex Australia Pty Ltd

9 Garling Road, Kings Park NSW 2148

Austria

Givaudan Austria GmbH

Twin Tower Vienna, Wienerbergstrasse 11, 1109 Vienna

BermudaGivaudan International Ltd

Hamilton

FF Holdings (Bermuda) Ltd

Hamilton

FF Insurance Ltd

Hamilton

Naska Ingredients NV

Lausbedstraat 4, 3630 Maasmechelen

Naturex SPRL

Val d’Or, Gulledelle, 96 – 5th Floor, 1200 Brussels

Givaudan do Brasil Ltda

Avenida Engenheiro Billings 2185, Jaguaré, São PauloSP – 05321-010

Australia

BelgiumBrazilG. Nutra Industria e Comércio de Produtos. Alimenticios e Rodovia Eduardo Zucari, Km 21,5 - Zona Rural - CEP 18603-970,
Nutricionais Ltda
Botucatu/ São Paulo

CanadaChiledrom Internacional Fragrâncias Ind. e Com. Ltda.

Via Natalino Verdi 120, 120 Bairro Bela Vista, 13515-000
Charqueada, São PauloNaturex Ingredients Naturais Ltda

Avenida Buriti no. 5.391, Distrito Industrial, city of Manaus, stateof Amazonas, Zip Code: 69075-000

Givaudan Canada Co.

2400 Matheson Blvd. East, Mississauga, Ontario L4W 5G9Naturex Inc (Canada)

44 Chipman Hill, Suite 1000 – Saint John, New Brunswick E2L 2A9

Givaudan Chile Ltda

Avda Del Valle 869, oficina 203, Ciudad Empresarial, Comuna deHuechuraba, Santiago de Chile

Naturex CHILE SPA

Avenida Apoquindo 3001, piso 9, Las Condes, Santiago de Chile

Chile Botanics SPA

Panamericana Sur, Kilómetro 297, Comuna de Linares

Givaudan – 2019 Governance, Compensation and Financial Report116 Appendix

Givaudan registered offices

Country

Legal Entity name

Address

China

Givaudan Flavors (Shanghai) Ltd Beijing Branch

15F Tower 2, Kun Sha Center, No. 16 Xin Yuan Li Road,
Chao Yang District, Beijing 100027

Givaudan Fragrances (Shanghai) Ltd Beijing Branch

15F Tower 2, Kun Sha Center, No. 16 Xin Yuan Li Road,
Chao Yang District, Beijing 100027

Givaudan Flavors (Shanghai) Ltd

668 Jing Ye Road, Jin Qiao Export Area, Pu Dong New Area,
Shanghai 201201

Givaudan Fragrances (Shanghai) Ltd

298 Li Shi Zhen Road, pilote Free Trade Zone, Shanghai 201303

Givaudan Flavors (Shanghai) Ltd Guangzhou Branch

15F The Centrepoint, No 374 – 2 Beijing Road, Yue Xiu District,
Guangzhou 510030

Givaudan Fragrances (Shanghai) Ltd Guangzhou Branch

15F The Centrepoint, No 374 – 2 Beijing Road, Yue Xiu District,
Guangzhou 510030

Givaudan Flavors (Shanghai) Ltd Chengdu Branch

Room 2001, 2 Fu Nian Plaza, Ji Tai Road, Gao Xin District, Chengdu
610041, Sichuan Province

Givaudan Flavors (Nantong) Ltd

No. 7 Jiang Hai Road, Nantong Economic and Technology
Development Area, Nantong, Jiangsu Province 226017

Givaudan Flavors (Shanghai) Ltd Zhengzhou Branch

Room A1301, Bldg 2, no. 80 Jin Shui Road (East), New Green City,
Zhengzhou, He Nan Province

Givaudan Fragrances (Changzhou) Ltd

Room 232, no. 238 Chunjiang Zhongyang, Huayuan, Xinbei
District, Changzhou 213034, Jiangsu Province

Givaudan Specialty Products (Shanghai) Ltd

222, Jiangtian East Road, Songjiang District, 201600 Shanghai

Givaudan Management Consulting (Shanghai) Ltd

3rd floor, no. 5 building, 298 Lishizhen Road, Zhangjiang High-Tech
Park, Pudong New Area, 201203 Shanghai

Givaudan Hong Kong Ltd

6th Floor Alexandra House, 18 Chater Road, Central , Hong Kongdrom Fragrances International (Guangzhou) Co., Ltd.

no. 66, Hongjing Road East Section of GETDD, 510760 Guangzhou

drom Asia Pacific Ltd.

8 Sham Shing Road, Cheung Sha Wan, new Kowloon, Hong Kong

Naturex Trading Shanghai Co. Ltd

6th Floor, Building 4, no. 333 Gui Ping Rd, Xuhui DST, Shanghai,
200233

Givaudan Colombia SAS

Carrera 98 no. 25 G – 40, 151196 Bogotá D.C.

Colombia

Czech Republic Givaudan CR, s.r.o.

Klimentská 10, Praha 110 00

Egypt

Givaudan Egypt SAE

Piece 37, Industrial Zone 3, 6th of October City

Givaudan Egypt Fragrances LLC

46 El Thawra st., 3rd floor, Appt 304, Heliopolis

Finland

Givaudan International SA, Branch in Finland

Niemenkatu 73, 15140 Lahti

FranceGivaudan France SAS

55 Rue de la Voie des Bans, CS500024, 95102 Argenteuil Cedex

Expressions Parfumées

136 Chemin de Saint-Marc, 06130 Grasse

Albert Vieille SAS

629 Route de Grasse, 6220 Vallauris

drom International S.A.R.L.

4 et 6 rue Curie, 92150 Suresnes, Paris

Naturex SA

250 rue Pierre Bayle – BP 81218, 84911 Avignon Cedex 9

Givaudan Deutschland GmbH

Giselherstrasse 11, 44319 Dortmund

drom fragrances GmbH & Co. KG

Oberdiller str. 18, 82065 Baierbrunn

drom Holding GmbH

Oberdiller str. 18, 82065 Baierbrunn

drom perfume trade GmbH

Oberdiller str. 18, 82065 Baierbrunn

drom Verwaltungsgesellschaft mbH

Oberdiller str. 18, 82065 Baierbrunn

Naturex GmbHIm Zollhafen 24, Kranhaus Süd, 50678 Köln

GuatemalaGivaudan Guatemala SA

Boulevar Los Proceres 18, Calle 24 – 69 Zona 10, Empresarial Zona
Pradera, Torre 1, Oficiana 1201-01010

Hungary

Givaudan Hungary Kft

Királyhegyesi út 3, 6900 Makó

Givaudan Business Solutions Kft

Bence utca 1. , Váci Greens B, 1138 Budapest

Germany

Givaudan – 2019 Governance, Compensation and Financial ReportAppendix Givaudan registered offices 117

Country

Legal Entity name

Address

India

Givaudan (India) Pvt Ltd

Plot no. 26, 2nd Cross Jigani Industrial Area, Anekal Taluk, Jigani,
Bangalore, Karnataka 560 105

Naturex India Pty Ltd(ex. Valentine Agro Private Ltd)302, Bldge no. 2, Star Hub. Next to ITC Grand Maratha Hotel,
Sahar Road, Andheri (East) Mumbai – 400 059

PT. Givaudan Indonesia

Jl. Raya Jakarta-Bogor Km 35, Cimanggis Depok, 16951
West JavaPT drom fragrances Indonesia

German Center Building, 6th floor, suites 6120-6130, Jl. Kapt.
Subijanto Dj., 15321 South Tangerang City, Banten

PT Fragrance Oils Indonesia

Rukan Permata Senayan blok B-22. Jalan Tentara Pelajar, Senayan,
12210 Jakarta

Iran

Givaudan International SA, Iran Branch

P.O. Box 15175/534 – No.202 – 204, Gol Bld., Gol Alley, After Park
Saei, Vali Asr, Tehran

Italy

Givaudan Italia SpA

Via Borgogne 5, 20121 Milano

drom International Italia Srl

Via Valassina 24, 20159 Milano

Expressions Parfumées Srl

Via Varesina 162, 20156 Milano

Naturex SPA

Caronno Pertusella, Via Galileo Ferraris, 44,21042 Caronno Pertusella (VA)

Givaudan International. SA Côte d’Ivoire

Immeuble RMO, 5ème étage, Rue du Docteur Blanchard
Zone 4C, Abidjan

ITRAD

Abidjan Yopougon, Chaumière du Banco, 04 BP 1682 Abidjan

Givaudan Japan K.K.

6-6 Osaki 3-chome, Shinagawa-ku, Tokyo 141-0032

Indonesia

Ivory CoastJapan

Naturex K.K

6-6 Osaki 3-chome, Shinagawa-ku, Tokyo 141-0032

Kenya

Givaudan MEA FZE - Kenya Branch

Vienna Court, Ground floor, West Wing Building, State House
Crescent Road (P.O. Box 44168-00100) Nairobi

Malaysia

Givaudan Flavours & Fragrances Malaysia Sdn. Bhd

48 Jalan Kota Laksamana 2/15, Taman Kota Laksamana, Seksyen
2, 75200 Melaka

Givaudan Business Solutions Asia Pacific Sdn. Bhd

1 First Avenue, Banda Utama, level 12, Bandar Utama, PJU 6,
47800 Petaling Jaya, Selangor

Fragrance Oils (Malaysia) Sdn Bhd

Suite 733, Block B2, Level 7, Leisure Commerce Square, 9, Jalan PJS
8/9, 46150 Petaling Jaya, Selangor

Givaudan de México SA de CV

Av. Eje Norte-Sur no. 11 Civac, 62578 Jiutepec Morelos

Grupo Givaudan SA de CV

Av. Eje Norte-Sur no. 11 Civac, 62578 Jiutepec Morelos

Naturex Ingredientes Naturales SA de CV

Av. Paseo de la Reforma 483, Piso 21 Col. Cuauhtémoc , Ciudad de
México - 06500

MexicoMoroccoGivaudan MEA FZE Morocco Branch

8 Rue Ibnou Binna Aladdadi, Bourgogne, 20053 Casablanca

Naturex Maroc SA

Technopole ONDA – BP 42 20240 Nouasser, Casablanca

MyanmarGivaudan Singapore Pte Ltd (Myanmar Branch)

46A – 2C Excellent Condo, Pantra Street, Dagon Township,
YangonNetherlands

Givaudan Nederland B.V.

Huizerstraatweg 28, 1411 GP Naarden

Givaudan Finance Europe BV

Huizerstraatweg 28, 1411 GP Naarden

Vika B.V.

Nizolaan 4, 6718 ZC Ede

Virgula B.V.

Nizolaan 4, 6718 ZC Ede

Vika Nutrition B.V.

Nizolaan 4, 6718 ZC Ede

G.A.L.M International B.V.

Nizolaan 4, 6718 ZC Ede

Naturex Coöperatief U.A

Strawinskylaan 3127, 1077 ZX Amsterdam

Givaudan NZ Ltd

Level 1 The Lane, Botany Town Center, Te Irirangi Drive,
Botany 2010

Cuisine Resources NZ limited

15 Crosbie Road, Pukekohe 2120

Givaudan (Nigeria) Limited

Plot 2 and 4, Block D, Amuwo Odofin Industrial scheme,
Apapa/Oshodi Expressway, Lagos

Fragrance Oils (West Africa) Limited

A2 Billings Way, Oregun, Lagos

New ZealandNigeria

Givaudan – 2019 Governance, Compensation and Financial Report

118

Appendix

Givaudan registered offices

Country

Legal Entity name

Address

Pakistan

Givaudan International SA Pakistan

25th Floor, The Ocean Tower, Block – 9, Clifton,
Karachi – 75600

Peru

Givaudan Peru SAC

Av. Victor Andrés Belaúnde 147, Centro Empresarial Real,
Torre Real 1, Piso 11, San Isidro 27, Lima

Activ International SAC

Ambrosio Vucetich, 200 Parque Industrial Mz K – Lt 3,Arequipa

Philippines

Givaudan Singapore Pte Ltd,Regional Operating Headquarter

37/F Robinsons Equitable Tower, ADB Avenue corner Poveda
Street, Ortigas Center, Pasig City 1605

PolandGivaudan Polska Sp. z o.o.

Ul. Puławska 182, IO-1 Building, 02-670 Warszawa

Naturex Polska Sp. z.o.o.

Ul. K.K. Baczyńskiego 29, 38-200 Jaslo

Givaudan Rus LLC

Riverside Towers Business Centre, Kosmodamianskaya
Naberezhnaya 52/5, 115054 Moscow

Naturex LLC (Russia)

Shuhova Str, 14, building 9, Office 201, 115162 Moscow

Givaudan Singapore Pte Ltd

1 Woodland Avenue 8, Singapore 738972

Fragrance Oils (Far East) Pte. Ltd

510 Thomson Rd, #04-01 SLF Building, 298135 Singapore

RussianFederation
Singapore

Naturex Holdings Singapore Private Ldt

20 Changi Business Park Central 2, #05-04A, Singapore 486031

South
AfricaGivaudan South Africa (Pty) Ltd

9 – 11 Brunei Road, Tulisa Park, Johannesburg 2197

Naturex (Pty) Ltd

Granger Bay Court Building, Block B-Ground Floor, V&A,
Waterfront, Cape Town, 8002

South Korea

Givaudan Korea Ltd

11 – 12/F Trus Tower Building, 60 Mabang-Ro, Seocho-Gu, Seoul

Naturex (Korea)

Room 503, Leaders Bldg, 14, Hwangsaeul-Ro 311 beon-gil,
Bundang-gu, SeongNam-si, GyeongGi-do, 13590

Givaudan Ibérica, SA

Pla d’en Batllé s/n, 8470 Sant Celoni, Barcelona

Aromasur SL

Carretera De Santa Olalla, S/n, 41240 Almaden de la Plata, Sevilladrom spain S.L.

Sant Cugat Business Park, Edificio B2, Planta 5a, Of. Núm. 15, av.
via Augusta 15-25, 8174 Sant Cugat Del Vallès, Barcelona

Naturex Iberian Partners S.L.U

Autovía A3, salida 343. Camino de Torrent s/n
46930 Quart de Poblet

Tierras Aromaticas del Sur SL

Carretera De Santa Olalla, Km 1, 41240 Almaden de la Plata,
SevillaGivaudan North Europe AB

Hyllie Vattenparksgata 12, 215 32 Malmö

Swedish Oat Fiber ABBåtafjordsvägen 12, 432 63 BUAGivaudan SA

Chemin de la Parfumerie 5, 1214 Vernier

Givaudan Finance SA

Chemin de la Parfumerie 5, 1214 Vernier

Givaudan Suisse SA

Chemin de la Parfumerie 5, 1214 Vernier

Givaudan International SA

Chemin de la Parfumerie 5, 1214 Vernier

Givaudan Treasury International SA

Chemin de la Parfumerie 5, 1214 Vernier

Vamara Holding SA

Mettlenweg 17, 2504 Bienne

Spain

SwedenSwitzerland

Naturex AG

Industriestrasse 8, 9220 Bischofszell

Taiwan,Republic of
China

Givaudan Singapore Pte Ltd,
Taiwan Branch

7/F No 303, Hsin Yi Road, Sec 4, Taipei City Taiwan 106

ThailandGivaudan (Thailand) Ltd

719 KPN Tower, Floor 16 & 25, Rama 9 Road, Bangkapi
Huaykwang, Bangkok 10310

TurkeyGivaudan Aroma ve Esans Sanayi ve Ticaret Ltd. Sirketi

Akat mahallesi, Bilge sokak, Park Maya Sitesi Barclay 19 no. 1 daire
6/7 Besiktas, Istanbul

Expressions Parfumées, Turkey Liason Office

Edin&Suner Plaza, Meydan sok n°14/2B, 34335 Akatlar Istanbul

Givaudan – 2019 Governance, Compensation and Financial ReportAppendix Givaudan registered offices

119Country

Legal Entity name

Address

UAE

Givaudan Gulf Trading LLC

Concord Tower, Floor 20 & 36 , Media City, Dubai

Givaudan Middle East & Africa FZEFree Zone Establishment, Jafza View 19, First floor, office no. 129,
Jebel Ali Free Zone, Dubai

Expressions Parfumées LLC

Hamsah-A Bldg, Office 210, Khalid Bin Al Waleed St., Dubai

Naturex S.A (Middle East)

Building P6 Office #132, Sharjah Airport International Free Zone
(SAIF Zone), P.O. Box 121873, SHARJAH

Givaudan UK Ltd

Kennington Road, Ashford, Kent TN24 0LT

Givaudan Holdings UK Ltd

Kennington Road, Ashford, Kent TN24 0LT

drom International UK Ltd.

Northline Business Consultants Ltd, 3-4 Wharfside, The Boatyard,
M28 2WN Worseley, Manchester

Major International Limited

Higham Business Park, Bury Close, Higham Ferrers,
Rushden NN10 8HQ

Naturex Ltd

Park Road, Overseal, Swadlincote, Derbyshire DE12 6JX

Fragrance Oils Limited

Eton Hill Industrial Estate, Eton Hill road, Radcliffe, Manchester,M26 2FR

Fragrance Oils (International) Limited

Eton Hill Industrial Estate, Eton Hill road, Radcliffe, Manchester,M26 2FR

Fragrance Oils (Purchasing) Limited

Eton Hill Industrial Estate, Eton Hill road, Radcliffe, Manchester,M26 2FRNorthern Aromatics (Sales) LImited

Eton Hill Industrial Estate, Eton Hill road, Radcliffe, Manchester,M26 2FR

Odouraze LImited

Eton Hill Industrial Estate, Eton Hill road, Radcliffe, Manchester,M26 2FR

UkraineGivaudan International SA,
Representative OfficePimonenko Str. 13 6B/18, 04050 Kiev

UnitedStates ofAmerica

Givaudan Flavors Corporation

1199 Edison Drive, Cincinnati, OH 45216

Givaudan Fragrances Corporation

1199 Edison Drive, Cincinnati, OH 45216

Givaudan Flavors and Fragrances Inc.

1199 Edison Drive, Cincinnati, OH 45216

Givaudan United States Inc.

15 East North Street, Dover, DE 19901

drom International Inc.

5 Jacksonville Road, Towaco, NJ 7082

Naturex Inc

251 Little Falls Drive, Wilmington, DE 19808

Naturex Holdings Inc

c/o Corporation Service Company, 251 Little Falls Drive,
Wilmington, DE 19808

Vegetable Juices Inc

c/o Illinois Corporation Service Company
801 Adlai Stevenson Drive – Springfield, IL 62703

Naturex Cooperative LLC

801 Adlai Stevenson Drive – Springfield, IL 62703

Givaudan Singapore Pte Ltd,
Vietnam Representative Office

Giay Viet Plaza 5th Fl., 180 – 182 Ly Chinh Thang Street,
District 3, Ho Chi Minh City

Golden Frog Flavour-Fragrance Manufacture Company
Ltd

31 Road No.8, Vietnam-Singapore Industrial Park , Binh Dang
Quarter, Binh Hoa Ward , Thuan An Town, Binh Duong Province

UnitedKingdom

VietnamGolden Frog Flavor-Fragrance Manufacture Corporation - VSIP II-A, Road no 31, Vietnam-Singapore II-A Industrial Zone,
Vinh Tan Commune, Tan U yenTown, Binh Duong Province
Branch 3
Branch of Golden Frog Flavor- Fragrance Manufacture
Corporation

Tan Hoa Hamlet , Tan Hoi Dong Commune Chau Thanh District ,Tien Giang Province

Givaudan – 2019 Governance, Compensation and Financial ReportTour A – 4 étage, Business Centre Dar El Madina, Micro Zoned’activité Hydra Lot No. 20, 16035 Algers

Givaudan International SA (Suisse)
Bureau de Liaison Algérie

Argentina

San Lorenzo 4759, Esquina Ave Mitre, Munro, Prov.
Buenos Aires B 1605 EIO

Givaudan Argentina SA

Ruta 9 Panamericana Km 36.5, Partido Malvinas Argentinas,
Buenos Aires B1667KOV

Givaudan Argentina SA

Tronador 4890, 8° piso, Buenos Aires C 1430 DNN CABA

Givaudan Argentina Servicios SA

12 – 14 Britton Street, Smithfield, Sydney NSW 2164

Givaudan Australia Pty Ltd

Unit 36, 5 Inglewood Place, Baulkham Hills, Sydney NSW 2153

Givaudan Australia Pty Ltd

Suite West 11A, ground fl., 215 Bell Street, Preston VIC 3072

Givaudan Australia Pty Ltd

9 Garling Road, Kings Park, NSW2148,
PO Box 4165, Marayong NSW 2148, Sydney

Naturex Australia Pty Ltd.

Parkview business centre suite 2, 1 Maitland place, Baulkham
HIlls, Sydney, NSW 2153

drom international Pty Ltd.

Austria

Twin Tower Vienna, Wienerbergstrasse 11, 1109 Vienna

Givaudan Austria GmbH

Belgium

Lausbedstraat 4, 3630 Maasmechelen

Naska Ingredients NV

Val d’Or, Gulledelle, 96 BE-1200 Woluwe Saint Lambert, Brussels Naturex SPRL
BrazilAvenida Engenheiro Billings 2185, Jaguaré, São Paulo, 05321-010 Givaudan do Brasil Ltda

P

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Avenida Engenheiro Billings 1653 & 1729, Jaguaré, São Paulo,
05321-010

Givaudan do Brasil Ltda

Rodovia Eduardo Zuccari, Km 21,5, Chácara Recreio Vista
Alegre, Botucatu, São Paulo, 18603-970

G Nutra (Givaudan)

Av. Buriti, no. 5391, Distrito Industrial, CEP: 69.075-000,
ManausNaturex Ingredientes Naturais Ltda

Rua George Ohm, 230, Conj. 22 (Torre B), 04576-020 Brooklin
Novo, São PauloNaturex Ingredientes Naturais Ltda

Via Natalino Verdi 120, 13515-000 Charqueada, São Paulodrom internacional Fragrâncias ind.
e com. ltda.

P

Maj. Gustavo Adolfo Storch 125, 13209-080 Vila Virginia,
undiaí, São Paulodrom internacional Fragrâncias ind.
e com. ltda.

P

Canada2400 Matheson Blvd. East, Mississauga, Ontario L4W 5G9

Givaudan Canada Co.

Chile

Avda Del Valle 869, oficina 202, Ciudad Empresarial, Comuna deHuechuraba, Santiago de Chile

Givaudan Chile Ltda

Avenida Suecia 0142 – oficina 303, Providencia, Santiago de
Chile

Chile Botanics SA

Panamericana sur Kilometro 297, Linares

Naturex Chile SPA

Givaudan – 2019 Governance, Compensation and Financial Report

GBS Centre

Algeria

Australia

Legal Entity nameèmeGRI Scope ¹

Address

Production

Country

Sales or Rep
officeCreation/
Application

Givaudan sites worldwide

Flavours

Appendix Givaudan sites worldwide

Fragrances

120

P

P

P

P

PP
P
PP
PP
PPP
PP
P

P

Country

Address

Legal Entity name

China

15F, Tower 2, Kun Sha Center, no. 16 Xin Yuan Li Road,
Chao Yang District, 100027 Beijing

Givaudan Flavors (Shanghai) Ltd
Beijing Branch

15F, Tower 2, Kun Sha Center, no. 16 Xin Yuan Li Road,
Chao Yang District, 100027 Beijing

Givaudan Fragrances (Shanghai)
Ltd Beijing Branch

668 Jing Ye Road, Jin Qiao Export Area, Pu Dong New Area,
201201 Shanghai

Givaudan Flavors (Shanghai) Ltd

298 Li Shi Zhen Road, Zhangjiang High-Tech Park, Pudong
New Area, 201203 Shanghai

Givaudan Fragrances (Shanghai)LtdP

222, Jiang Tian East Road, Songjiang Development Zone,
201600 Shanghai

Givaudan Specialty Products(Shanghai) Ltd

PP

PP

No. 7 Jianghai Road, Nantong Economic and Technological
Development Area, 226017 Nantong, Jiangsu Province

Givaudan Flavours (Nantong) LtdPPPUnit 5, 15F Shuion Center, no. 374 – 2 Beijing Road, Yue Xiu
District, 510030 Guangzhou

Givaudan Flavors (Shanghai) Ltd
Guangzhou Branch

Unit 6 – 7, 15F Shuion Center, no. 374 – 2 Beijing Road, Yue Xiu
District, 510030 Guangzhou

Givaudan Fragrances (Shanghai)
Ltd Guangzhou Branch

Room 2001, 20F Funian Plaza-2, no. 666 Jitai Road, Gaoxin
District, 610041 Chengdu, Sichuan Province

Givaudan Flavors (Shanghai) Ltd
Chengdu Branch

PP 

Room A1301, Bldg 2, no. 80 Jin Shui Road (East), New Green
City, Zhengzhou, He Nan Province

Givaudan Flavors (Shanghai) Ltd
Zhengzhou Branch

PP

Shanghai Juke Biotech Park, 6 Floor, Bdg 4, no.333 Guiping
Road, Xuhui District, 200233 Shanghai

Naturex Trading Shanghai Co, Ltd

Unit 1001, 10 F Miramar Tower, 132 Nathan Road,
Tsim Sha Tsui

Givaudan Hong Kong Ltd

8 Sham Shing Road, Cheung Sha Wan, new Kowloon

drom Hong Kong

Room.237, building 7, Zhong Tian Hi-Tech Park , 787 Kangqiao
road, Pudong New Area, 201315 Shanghai

drom Shanghai

no. 66, Hongjing Road, 510760 Guangdong

drom fragrances international(Guangzhou) Ltd.

thColombia

Carrera 98 no. 25 G – 40, 151196 Bogotá D.C.

Czech
Republic

Klimentská 10, Praha 110 00

Egypt

Piece 37, Industrial Zone 3, 6th of October City
46 El Thawra st., 3rd floor, Appt 304, Heliopolis

Finland

Niemenkatu 73, 15140 Lahti

PP 

R

P

R

P

121

GBS Centre

GRI Scope ¹

Production

Sales or Rep
officeCreation/
Application

Flavours

Fragrances

Appendix Givaudan sites worldwide

PPPPP

P

PPPP

PP 

R

P

R

PP
PPP
P P
P PP

P PPP
Givaudan Colombia SAS
PPPP R
Givaudan CR, s.r.o.
PP
Givaudan Egypt SAE
PPPPP
Givaudan Egypt Fragrances LLCR
P P
Givaudan International SA, Branch
PP
in Finland

Givaudan – 2019 Governance, Compensation and Financial Report

46 avenue Kléber, 75116 Paris

Givaudan France SAS

4 rue Lord Byron, 75008 Paris

Expressions Parfumées

4 Rue Lord Byron, 75008 Paris

Expressions Parfumées

4 et 6 rue Curie, 92150 Surenes, Paris

drom international S.A.R.L.

55 rue de la Voie des Bans, 95102 Argenteuil Cedex

Givaudan France SAS

19 – 23 rue de la Voie des Bans, 95102 Argenteuil Cedex

Givaudan France SAS

16 rue Henri Becquerel, BP 525 – ZI Mitry Compans,
77295 Mitry Mory

Activ International SAS

Route de Bazancourt, 51110 Pomacle

Givaudan France SAS

Anse du Pors Gelin, 22560 Pleumeur Bodou

Givaudan France SAS

3 Rue des Satellites, 31400 Toulouse

Givaudan France SAS

136 Chemin de Saint-Marc, 06130 Grasse

Expressions Parfumées

250 rue Pierre Bayle – BP 81218 – 84911 Avignon Cedex 9

Naturex SA

Actiparc de Pont de Vaux /Les Chapelles Sud –01190 Reyssouze

Naturex SA

St Jean Baptiste 629 Route de Grasse, 6220 Vallauris

Albert Vieille SAS

Giselherstrasse 11, 44319 Dortmund

Givaudan Deutschland GmbH

Lehmweg 17, 20251 Hamburg

Givaudan Deutschland GmbHIm Zollhafen 24, Kranhaus Süd, 50678 Köln

Naturex GmbHAm Klopferspitz 19 im IZB, 82152 Planegg, Munich

AMSilk GmbHGermany

Oberdiller str. 18, 82065 Baierbrunn

drom fragrances GmbH & Co. KG

Guatemala

Boulevar Los Proceres 18, Calle 24 – 69 Zona 10, Empresarial
Zona Pradera, Torre 1, Oficiana 1201-01010

Givaudan Guatemala SA

Hungary

Királyhegyesi út 3, 6900 Makó

Givaudan Hungary Kft

Bence utca 1. , Váci Greens B, 1138 Budapest

Givaudan Business Solutions Kft

Plot No. 30, Survey no. 168, Dabhel Industrial Estate,
Daman 396210

Givaudan (India) Pvt Ltd

Survey no. 57/3 (2) & 3, Village Dunetha, Daman 396 210

Givaudan (India) Pvt Ltd

Plot no. 26, 2nd Cross Jigani Industrial Area, Anekal Taluk, Jigani,
Bangalore, Karnataka 560 105

Givaudan (India) Pvt Ltd

13 Floor Prestige Meridian 1, 29 MG Road, Bangalore, 560001

Givaudan (India) Pvt Ltd

401 Akruti Centre Point, 4th Floor, MIDC Central Road,
MIDC, Andheri (East), Mumbai 400093

Givaudan (India) Pvt Ltd

406 – 410, 4th Floor, JMD Pacific Square, Sector 15, Part II,
Gurgaon 122001, Haryana

Givaudan (India) Pvt Ltd

H-2 Ranjangaon Industrial Area Phase II, Pune 412209

Givaudan (India) Pvt Ltd

Star Hub, Building no. 02, 3rd Floor,302, Sahar Airport Road,
Near ITC Grand Maratha, Andheri (E), 400 059 Mumbai

Naturex India Pty Ltd

Plot no. 15/2, Dhatav, Roha, District, Raigad, 402116 Mumbai

Naturex SA

Jl. Raya Jakarta-Bogor Km 35, Cimanggis Depok, 16951
West Java

PT. Givaudan Indonesia

Capital Place, 9th floor, Jl. Jend. Gatot Subroto Kav. 18,
12710 Jakarta

PT. Givaudan Indonesia

Rukan Permata Senayan blok B-22. Jalan Tentara Pelajar,
Senayan, 12210 Jakarta

PT Fragrance Oils Indonesia

German Center Building, 6th floor, suites 6120-6130, jl. kapt.
subijanto dj., 15321 South Tangerang City, Banten

PT drom fragrances Indonesia

India

th

Indonesia

Givaudan – 2019 Governance, Compensation and Financial Report

GBS Centre

FranceGRI Scope ¹

Legal Entity nameProduction

Address

Sales or Rep
officeCreation/
Application

Country

Flavours

Appendix Givaudan sites worldwide

Fragrances

122

P
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Givaudan International SA, Iran
BranchItaly

Via XI Febbraio 99, 20090 Vimodrone (MI)Givaudan Italia SpA

Via Galileo Ferraris, 44, 21042 Caronno Pertusella (VA)

Naturex SpA

Via Valassina 24, 2015 Milan

drom international Italia S.R.L.

Via Varesina 162, 20156 Milan

Expressions Parfumées

Immeuble RMO, 5ème étage, rue du Docteur Blanchard
Zone 4C, Abidjan

Givaudan International. SA Côte
d’Ivoire

Abidjan Yopougon, Chaumière du Banco, 04 BP 1682, Abidjan

ITRAD3014 – 1 Shinohara-cho, Yokohama-shi, Kanagawa 222-0026

Givaudan Japan K.K.

3056 Kuno, Fukuroi-shi, Shizuoka 437-0061

Givaudan Japan K.K.

3 – 6 – 6 Tokiwa New Building, Osaki, Sinagawa-Ku, Tokyo
141-0032

Givaudan Japan K.K.

NBC MITA Building 7F, 5 – 29 – 18, Shiba, Minato-ku, Tokyo
108-0014

Naturex KK

Vienna Court, Ground floor, West Wing Building, State House
Crescent Road, P.O. Box 44168-00100 Nairobi

Givaudan MEA FZE - Kenya

Ivory Coast

Japan

Kenya

Korea
11/F Trust Tower Bldg, 60 Mabang-ro, Seocho-Gu,(Republic of) Seoul 06775
12/F Trust Tower Bldg, 60 Mabang-ro, Seocho-Gu,
Seoul 06775

Malaysia

MexicoMoroccoMyanmarGivaudan Korea Ltd

PPP
PPP 
PP P
P P
P P
PPP
P P
P PP R
P PP
PPP R
PP
PP
P

Givaudan Korea Ltd

P 
PP 

Room 503, 14, Hwangsaeul-ro 311beon-gil, Bundang-gu,
Seongnam-si, Gyeonggi-do 13590

Naturex (Korea)

A-901 Menara 1, Kelana Brem Towers, Jalan SS 7/15 (Jalan
Stadium), 47301 Petaling Jaya Selangor Darul Ehsan

Givaudan Flavours & Fragrances
Malaysia Sdn. Bhd

PPPP

No. 121, Jalan Usaha 10, Kawasan Perindustrian Ayer Keroh,
75450 Malacca

Givaudan Flavours & Fragrances
Malaysia Sdn. Bhd

PP

1 First Avenue, Banda Utama, level 12, Bandar Utama, PJU 6,
47800 Petaling Jaya, Selangor

Givaudan Business Solutions Asia
Pacific Sdn Bhd

Suite 733, Block B2, Level 7, Leisure Commerce Square 9,
Jalan PJS 8/9, 46150 Petaling Jaya, Selangor

Fragrance Oils (Malaysia) Sdn Bhd

Camino a Quintanares Km. 1.5, Pedro Escobedo,
76700 Querétaro

Givaudan de México SA de CV

Av. Eje Norte-Sur No. 11 Civac, 62578 Jiutepec Morelos

Givaudan de México SA de CV

Av. Paseo de la Reforma #2620, piso 12 Edificio Reforma Plus,
Col. Lomas Altas, 11950 Mexico, D.F

Givaudan de México SA de CV

Lago Alberto 319, Piso 12, Col. Granada, 11520 Del. M. Hidalgo,Ciudad de México

Givaudan de México SA de CV

Avenida Paseo de la Reforma 483 Piso 21,
2101 Colonia Cuauhtémoc Delegación Cuauhtémoc
Ciudad de México, CP 06500

Naturex Ingredientes Naturales
SA de CV

8 rue Ibnou Binna Aladdadi, Bourgogne, 20053 Casablanca

Givaudan MEA FZE Morocco
BranchTechnopole ONDA – BP 42 – 20240 Nouasser – Casablanca

Naturex Maroc SA

46A – 2C Excellent Condo, Pantra Street, Dagon Township,
YangonGivaudan Singapore Pte Ltd(Myanmar Branch)

Netherlands Huizerstraatweg 28, 1411 GP Naarden

Givaudan Nederland B.V.

Nijverheidsweg 60, 3771 ME Barneveld

Givaudan Nederland B.V.

Nizolaan 4, 6718 ZC Ede

Vika B.V.

123

GBS Centre

P.O. Box 15175/534 – no.202 – 204, Gol Bld., Gol Alley,
After Park Saei, Vali Asr, Tehran

GRI Scope ¹

Iran

Production

Legal Entity nameSales or Rep
officeCreation/
Application

Address

Flavours

Country

Fragrances

Appendix Givaudan sites worldwide

PP
PP
P
P

P

P

PP
PPPPP
PP

P

PP
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PPP
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Givaudan – 2019 Governance, Compensation and Financial Report

New
Zealand

Level 1, The Lane, Botany Town Center, Te Irirangi Drive,
Botany 2010

Givaudan NZ Ltd

15 Crosbie Road, Pukekohe 2120

Cuisine Resources NZ limited

Plot 2 and 4, Block D, Amuwo Odofin Industrial scheme, Apapa/
Oshodi Expressway, Lagos

Givaudan (Nigeria) Limited

Suite 4, 7th floor, Nestoil tower, 41-42 Akin Adesola Street,
Victoria Island, Lagoas

Givaudan (Nigeria) Limited

A2 Billings Way, Oregun, Lagos

Fragrance Oils (West Africa)
LimitedPakistan

25 floor, Ocean Tower, Block 9, Clifton,
Karachi - 75600

Givaudan International SA Pakistan

Peru

Av. Victor Andrés Belaúnde 147, Centro Empresarial Real,
Torre Real 1 Piso 11, San Isidro 27, Lima

Givaudan Peru SAC

Ambrosio Vucetich, 200 Parque Industrial Mz K – Lt 3,
Arequipa

Activ International SAC

Philippines

37/F Robinsons Equitable Tower, ADB Avenue corner Poveda
Street, Ortigas Center, Pasig City 1605

Givaudan Singapore Pte Ltd,Regional Operating Headquarter

PolandUl. Puławska 182, IO-1 Building, 02-670 Warszawa

Givaudan Polska Sp. z o.o.

Ul. Postępu 17A, 06-676 Warszawa

Naturex Polska Sp. z o.o Biuro
Handlowe

Ul. K.K. Baczyńskiego 29, 38-200 Jasło

Naturex Polska Sp. z o.o.

Riverside Towers Business Centre, Kosmodamianskaya
Naberezhnaya 52/5, 115054 Moscow

Givaudan Rus LLC

Delovoy dom B-5, floor 9, Botanicheskiy pereulok 5,
129090 Moscow

Givaudan Rus LLC

Shuhova Str, 14, building 9, Office 201, 115162 Moscow

Naturex LLC

Korpus 2, office 201, Dmitriya Ulianova str. 16, 117292 Moscow

drom fragrances GmbH & Co. KG

1 Woodlands Avenue 8, Singapore 738972

Givaudan Singapore Pte Ltd

1 Pioneer Turn, Singapore 627576

Givaudan Singapore Pte Ltd

19 Chin Bee Road, Singapore 619833

Givaudan Singapore Pte Ltd

Nigeria

RussianFederation

Singaporeth

510 Thomson Rd, #04-01 SLF Building, Singapore 198135

Fragrance Oils (Far East) Pte.Ltd

South
Africa9 – 11 Brunel Road, Tulisa Park, Johannesburg 2197

Givaudan South Africa (Pty) Ltd

51A Galaxy Avenue, Linbro Business Park,Frankenwald,
Sandton 2065

Givaudan South Africa (Pty) Ltd

Spain

Pla d’en Batllé s/n, 8470 Sant Celoni, Barcelona

Givaudan Ibérica, SA

Edificio Géminis, Bloque B 1° 2a, Parque de Negocios Mas
Blau, 8820 El Prat de Llobregat, Barcelona

Givaudan Ibérica, SA

Sant Cugat Bbusiness Park, Planta 5a, office 15; av. via Augusta,
15-25, 8174 Sant cugat del vallès, Barcelona

drom spain S.L.

Plaça Europa 9-11; Plta 17, Torre Inbisa, 8908 L’hospilalet de
Llobregat

Expressions Parfumées Iberica

Autovía A3, salida 343. Camino de Torrent s/n –46930 Quart de Poblet

Naturex Iberian Partners, S.L.U

Carretera Santa Olalla, KM 1; 41240 Almaden de la Plata, SevilleAromasurHyllie Vattenparksgata 12, 215 32 Malmö

Givaudan North Europe ABBåtafjordsvägen 12, 432 63 Bua

Swedish Oat Fiber AB

SwedenGivaudan – 2019 Governance, Compensation and Financial Report

R
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P

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GBS Centre

Legal Entity name

GRI Scope ¹

Address

Production

Country

Sales or Rep
officeCreation/
Application

Givaudan sites worldwide

Flavours

Appendix

Fragrances124

Switzerland c/o Python, Baarerstrasse 21, 6300 Zug

Givaudan SA

Zweigniederlassung Dübendorf 138, Neugutstrasse 46 ,
8600 Dübendorf

Givaudan Schweiz AG

Zweigniederlassung Dübendorf 138, Neugutstrasse 46 ,
8600 Dübendorf

Givaudan International AG

Kemptpark 50, 8310 Kemptthal

Givaudan Schweiz AG

Kemptpark 50, 8310 Kemptthal

Givaudan International AG

Chemin de la Parfumerie 5, 1214 Vernier

Givaudan Suisse SA

Chemin de la Parfumerie 5, 1214 Vernier

Givaudan International SA

Industriestrasse 8A, 8604 Volketswil

Givaudan Suisse AG

Kirchbergstrasse 211, 3400 Burgdorf

Naturex AG

Industriestrasse 8, 9220 Bischofszell

Naturex AG

Taiwan, PR
China

7/F, no. 303, Hsin Yi Road, Sec 4, Taipei City, Taiwan 106

Givaudan Singapore Pte Ltd,
Taiwan Branch

Thailand719 KPN Tower, floor 16 & 25, Rama 9 Road, Bangkapi
Huaykwang, Bangkok 10310

Givaudan (Thailand) Ltd

Bangkok Business Centre Building, 19 floor, Unit 1903, 29
Sukhumvit 63 Road, Klongton Nua,Wattana, Bangkok 10110

Naturex AG

25 Bangkok Insurance Building, 23rd Floor, Sathon Tai Road,
Kwang Thung Maha Mek, Khet Sathon, Bangkok 10120

Expressions Parfumées

Ebulula Cad. Lale Sok., Park Maya Sitesi Barclay 19A Daire 6 – 7,
Akatlar, Besiktas / Istanbul 34335

Givaudan Aroma ve Esans Sanayi ve
Ticaret Ltd. Sirketi

Büyükdere Cad. Telpa Plaza., no. 195 K.3, Levent,
Istanbul 34394

Givaudan Aroma ve Esans Sanayi ve
Ticaret Ltd. Sirketi

ms. cise osmanoglu, Istanbul

drom fragrances GmbH & Co. KG

thTurkeyEdin&Suner Plaza, Meydan sok n°14/2B, 34335 Akatlar Istanbul
UAE

Concord Tower, floor 20 & 36, Media City, Dubai
Jafza Views 18, Office NO LB180502, PO Box 33170, Jebel Ali,
Dubai
Building P6 – 132, Post Box – 121873, SAIF Zone, Sharjah
Hamsa-A Bldg, Office 210, Khalid Bin Al Waleed St., Dubai

UnitedKingdom

Magna House, 76 – 80 Church Street, Staines, Middx.
TW18 4XR
Chippenham Drive, Kingston, Milton Keynes MK10 OAE
Kennington Road, Ashford, Kent TN24 0LT
Atria, Spa Road, Bolton, Greater Manchester BI1 4AG

Ukraine

PPP
P

125

GBS Centre

GRI Scope ¹

Production

Legal Entity nameSales or Rep
officeCreation/
Application

Address

Flavours

Country

Fragrances

Appendix Givaudan sites worldwide

PP

PPP P
 P P
P
r
P
P
P
PP
P P
P
P
PPP
P
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P
P
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PPP 
PP
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P

P

P

PPP
P P
Expressions Parfumées, Turkey
P P
Liason Office
Givaudan Gulf Trading LLC
PPPP R
Givaudan Middle East & Africa FZER
PPPNaturex S.A (Middle East)PP
Expressions Parfumées
P P
Givaudan UK Ltd
P PGivaudan UK Ltd
PPP R
Givaudan UK Ltd
P PPPP
drom fragrances international UK
P P
Ltd.

Eton Hill Industrial Estate, Eton Hill Road, Radcliffe, Greater
Manchester M26 2FR

Fragrance Oils (International) Ltd

Higham Business Park, Bury Close, Higham Ferrers,
Rushden NN10 8HQ

Major International Limited

Park Road, Overseal, Swadlincote, Derbyshire DE12 6JXNaturex Ltd

Pimonenko Str. 13 6B/18, 04050 Kiev

Givaudan International SA,
Representative Office

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PPP
P
PP
PP

P
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R

Givaudan – 2019 Governance, Compensation and Financial ReportUnitedStates ofAmerica

880 West Thorndale Avenue, Itasca, IL 60143

Givaudan Flavors Corporation

580 Tollgate Road, Suite A, Elgin, IL 60123

Givaudan Flavors Corporation

Léman Luxury Building, 6th Floor, 117 Nguyen Dinh Chieu St.,
Dist. 3,, Ho Chi Minh City

P
PP
PPP
Givaudan Flavors Corporation
PPP P
Givaudan Flavors Corporation
PPPPP
Givaudan Flavors Corporation
P
PP
Givaudan Flavors Corporation
PP PP
Givaudan Flavors Corporation
P
PP
Givaudan Flavors Corporation
P
PP
Givaudan Flavors Corporation
P
PP
Givaudan Flavors Corporation
P
P
Givaudan Flavors CorporationPP
Naturex USA California
PP
Naturex DBS
PPNaturex Inc.
PP P
Vegetable Juices Inc
P
P
Activ International
P P
Givaudan Fragrances Corporation
P
PP
Givaudan Fragrances Corporation P P P P
RGivaudan Fragrances Corporation P
PP R
Fine Fragrance Studio - dromPPPfragrances, Inc. USA
drom fragrances, Inc. USA
P PPGivaudan Singapore Pte Ltd,PPP 
Vietnam Representative Office

31 Road No.8, Vietnam-Singapore Industrial Park , Binh Dang
Quarter, Binh Hoa Ward , Thuan An Town, Binh Duong Province

Golden Frog Flavour-Fragrance
Manufacture Company LtdPVSIP II-A, Road no 31, Vietnam-Singapore II-A Industrial Zone,
Vinh Tan Commune, Tan U yenTown, Binh Duong Province

Golden Frog Flavor-Fragrance
Manufacture Corporation Branch 3

PP

Tan Hoa Hamlet , Tan Hoi Dong Commune Chau Thanh District,Tien Giang Province

Branch of Golden Frog FlavorFragrance Manufacture
Corporation

P

1199 Edison Drive 1 – 2, Cincinnati, OH 45216
245 Merry Lane, East Hanover, NJ 07936
9500 Sam Neace Drive, Florence, KY 41042
4705 U.S. Highway 92 East, Lakeland, FL 33801-3255
100 East 69th Street, Cincinnati, OH 45216
195 Alexandra Way, Carol Stream, IL 60188
6 Santa Fe Way, Cranbury, NJ 08512
256 Lackland Drive East, Middlesex, NJ 08846
808 ConAgra Drive, Omaha, NE 68102
895 Dove Street, Newport Beach, CA 92660
39 Pleasant Street – Sagamore, MA 02561
375 Huyler Street, South Hackensack, NJ 07606
7400 S Narragansett Ave, Bedford Park, IL 60638
10000 Highway 55, Minneapolis, MN 55441
International Trade Center, 300 Waterloo Valley Road,
Mount Olive, NJ 07828
40 West 57th St. 11th and 17th floors, New York, NY 10019
717 Ridgedale Avenue, East Hanover, NJ 07936
5 Jacksonville Road, Towaco, New Jersey 7082
144 Duane Street, NewYork, New York 10013
Vietnam

1.	Locations taken into account for

R health & safety performance or Penvironment, health & safety indicators.

Icons within the category Creation/Application indicate the following: 

Givaudan – 2019 Governance, Compensation and Financial Report

Application onlyr

Creation onlyPP

GBS Centre

Legal Entity name

GRI Scope ¹

Address

Production

Country

Sales or Rep
officeCreation/
Application

Givaudan sites worldwide

Flavours

Appendix

Fragrances

126

Appendix Our reporting suite 127

Our reporting suite
The 2019 Integrated Annual Reportoffers a holistic explanation of ourvalue creation, financial and nonfinancial capitals and performance.
The full Governance, Compensation
and Financial reports are available in
one separate PDF.

2019 Governance, Compensation
and Financial Report
Available in English
PDF from 24 January 2020www.givaudan.com –media – publications

The 2019 Sustainability Highlights
offers case studies and data
for the three focus areas of oursustainability approach as well as
eco-efficiency targets versus progress.

Our website hosts the online
Integrated Annual Report andthe full Sustainability GRI Index.
Readers are advised to consult
our entire reporting suite to get
a complete overview.

Our Sustainability Approach
Available in English
PDF from 24 January 2020www.givaudan.com –sustainability – publications

2019
Governance,
Compensation and
Financial Report

Online version
Available in English
2019 Integrated Annual Report
Available in English
PDF from 24 January 2020
Print from 25 March 2020www.givaudan.com – media – publications

Integrated Annual Report
and Sustainability GRI Index *Available from 24 January 2020www.givaudan.com – investors –online annual report2019 Company Highlights
Available in English,
French and German
PDF and print from 25 March 2020www.givaudan.com –media – publications

2019 2019
Company
Highlights

Sustainability
Highlights

2019 Sustainability Highlights
Available in English
PDF from 25 March 2020www.givaudan.com –sustainability – publications

To order publications: www.givaudan.com – media – publications
The full suite can be found on www.givaudan.com – investors – online annual report – download centre* Sustainability GRI Index will be updated in March 2020 with full-year 2019 environmental data and external assurance statement.

Givaudan – 2019 Governance, Compensation and Financial Report

128

Appendix

Our reporting suite

Givaudan SA
Chemin de la Parfumerie 51214 Vernier, Switzerland

General information
T + 41 22 780 91 11

Media and investor relations
T + 41 22 780 90 53

Share registry
Computershare Schweiz AG
Postfach
4601 Olten, Switzerland
T + 41 62 205 77 00

Share information
Symbol: GIVN
Security number: 1064593
ISIN: CH0010645932

Concept, design, consulting and realisation:
PETRANIX Corporate and Financial Communications AG
www.PETRANIX.com
The Givaudan 2019 Governance, Compensation and Financial Report is published in English.
All trademarks mentioned enjoy legal protection.
This report may contain forward-looking information. Such information is subject toa variety of significant uncertainties, including scientific, business, economic andfinancial factors. Therefore actual results may differ significantly from those presented
in such forward looking statements. Investors must not rely on this information forinvestment decisions.
© Givaudan SA, 2020

Givaudan – 2019 Governance, Compensation and Financial Reportwww.givaudan.com