Givaudan keeps its nose in front

Andrier says the future looks bright for Givaudan Keystone

As Givaudan consolidates its leading position in the fragrance and flavour industry, its chief executive tells swissinfo he expects another good year in 2006.

Gilles Andrier was speaking after announcing a 21-per-cent increase in net profit to SFr406 million ($310.6 million).

Sales at the company, which is based in Vernier near Geneva, totalled SFr2.778 billion – up 3.6 per cent compared with 2004.

Andrier, who stepped in as chief executive after the 2005 shareholders’ meeting, says innovation is vital in an industry that traditionally serves customers and stays out of the public eye.

swissinfo: How do you view the financial figures for your first year as CEO?

Gilles Andrier: We are quite happy and proud of our results for 2005. You have to consider that 2004 was a very good year so [it was] a pretty difficult benchmark to beat, but we managed to grow our sales versus the previous year [and] we managed to grow our profitability.

Looking ahead to the future, we have a good strategy and a good talent base in place to continue doing well and to beat this latest benchmark.

swissinfo: Where do you consider that your strength lies?

G.A.: In the first instance it is in the quality and consistency of our strategy… This doesn’t mean not changing or adjusting the strategy, but I think consistency is very important.

swissinfo: Could you explain what your strategy is exactly?

G.A.: It is very simple: to grow faster than the market and in a profitable way. Last year is a good reflection of this strategy. We managed to grow faster than the market in both divisions and sustain our profitability.

swissinfo: What have you been doing to defend your leading market position?

G.A.: Even more important than investing in our talent base is what we call our innovation platform. We rebranded ourselves around “Leading Sensory Innovation”. Innovation is basically the cornerstone for the industry and our company, so it’s really about developing those capabilities which enable us to build innovation.

swissinfo: You are also stepping up activities around the world. I’m thinking of China, India and Latin America where there are big populations…

G.A.: In terms of growing our sales we are obviously focusing on developing markets. We have actually grown significantly in Asia/Pacific, eastern Europe and Latin America in 2005 and we will continue to do so. The second point is focusing on high profitability segments such as beverages and fine fragrances, so these are elements of the strategy to grow further.

swissinfo: Are there any weaknesses that you would like to correct?

G.A.: I wouldn’t call them weaknesses but more opportunities or gaps… We claim on the one hand that we are the leader in the industry, which is true in terms of size, but there are a number of places, customers, markets and segments where we are not the leader, and for me those are great opportunities for further growth.

swissinfo: Traditionally companies in your industry keep themselves very much to themselves. We don’t see Givaudan soap or perfume on the market. To what extent are you happy to stay out of the limelight?

G.A.: Givaudan has been operating for the past 200 years and it’s true we have always been behind the scenes to serve our clients. Being in the front line would not necessarily be the right thing to do. Competing with our clients would not be so smart.

But over the past five to eight years some of our clients on the fine fragrance side, instead of hiding the Givaudans of this world behind their bottles of perfumes, have used our own perfumers to help particularly during the launches of fragrances, so it’s changing in a way… But we have no intention of having Givaudan soap or fragrances.

swissinfo-interview: Robert Brookes in Vernier near Geneva

In brief

Givaudan maintains that innovation is the key driver of success. The company aims to be number one in every strategic business to which it is committed.

In 2005 Givaudan fragrances introduced another four new proprietary molecules, developed at its basic research centre in Dübendorf near Zurich.

To reinforce the company’s research programme, a new fragrance research laboratory was opened in Shanghai.

Key facts

Léon Givaudan founded the company in 1898, but it can trace roots back to the French Revolution.
The Roche pharmaceutical company of Basel acquired Givaudan in 1963.
Givaudan was spun off from Roche in June 2000 and is now an independent company, traded on the Swiss Stock Exchange.
In 2002 the company acquired Nestlé’s flavour business FIS.