2018 Annual Report Highlights

2018 HighlightsDelivering with excellence Table of contents1Key figures2Givaudan at a glance4Chairman’s introduction6Chief Executive Officer’s review10Performance review12Value creation at Givaudan14Our unique positioning16Our 2020 strategy18Acquisitions20A Sense of Tomorrow22Mega trends24Corporate governance and compensation25Corporate governance: highlights28Compensation: highlights31Financial statements32Consolidated financial statements2018 HighlightsDelivering with excellence We strive for excellence at every touch point with our customers, and in today’s competitive and fast- moving market, this demands that we are agile and efficient. We focus our investments on areas that bring most value to our customers while seeking to enhance our operational excellence and efficiency across the organisation to further streamline our costs and deliver a strong financial performance. Givaudan – 2018 Highlights Givaudan – 2018 Highlights Key figures 1Key figuresStrong business momentum – investing for the future page 10, Performance review page 31, Financial statementsPerformance reviewFor the year ended 31 December, in millions of Swiss francs, except for capital markets and employee data20182017Percentage changeSales and resultsGroup Sales5,527 5,051 9.4%Like-for-like sales growth5.6%4.9%Gross profit 2,329 2,250 3.5%as % of sales42.1%44.5%EBITDA ¹ 1,145 1,089 5.2%as % of sales20.7%21.6%Operating income 883 869 1.7%as % of sales16.0%1 7. 2 %Income attributable to equity holders of the parent 663 720 ( 7. 9 %)as % of sales12.0%14.2%Balance sheet and cash flowsOperating cash flow 916 861 6.4%as % of sales16.6%1 7. 0 %Free cash flow 703 594 18.4%as % of sales12.7%11.8%Net debt2,8471 ,074165.1%Leverage ratio41%21%Capital MarketsMarket capitalisation21,01620,7941.1%Share price as of last trading day of December2,2762,2521.1%Cash dividend ²60583.4%Earnings per share − basic (CHF) 71.92 78.18 (8.0%)EmployeesNumber of employees as at 31 December 13,598 11,170 21.7%Lost time injury rate 0.25 0.33 (24.2%)1. EBITDA: Earnings Before Interest (and other financial income (expense), net), Tax, Depreciation and Amortisation. This corresponds to operating income before depreciation, amortisation and impairment of long-lived assets.2. 2018 dividend subject to shareholder approval at the AGM on 28 March 2019. Note: Like-for-like excludes the impact of currency, acquisitions and disposals. Givaudan – 2018 Highlights2 Givaudan at a glanceEAMEAsia PacificNorth AmericaLatin AmericaFlavourTotal 54%BeveragesSavourySweet goodsDairyFine FragrancesConsumer ProductsFragrance Ingredientsand Active BeautyFragranceTotal 46%EAMEAsia PacificNorth AmericaLatin AmericaEAMEAsia PacificNorth AmericaLatin AmericaFlavourTotal 54%BeveragesSavourySweet goodsDairyFine FragrancesConsumer ProductsFragrance Ingredientsand Active BeautyFragranceTotal 46%EAMEAsia PacificNorth AmericaLatin America60.00Proposed dividend per share (in CHF)Givaudan at a glanceGlobal industry leader in flavours and fragrancesFlavour DivisionWe make life taste deliciousWe are dedicated to expanding the world’s expression through flavours by bringing moments of delight with delicious flavour and taste experiences. Our customers – global, international, regional and local – are in the food and beverage industry and span key segments including beverages, sweet goods, savoury, snacks and dairy. We explore the globe for ingredients, innovate to bring our customers unique propositions, and delight millions of consumers around the world. Fragrance DivisionWe live to perfume lifeThe artistry of our perfumers encompasses a myriad of scented stories for brands everywhere. Our customers – global, international, regional and local – serve end-consumer markets with fragrances for personal, home and laundry care brands as well as prestige perfumes, creating memorable scents and fragrances used daily the world over. And for nature-derived beauty performance, our Active Beauty business offers an extensive portfolio of award-winning active cosmetic ingredients designed by teams that harness the power of nature for cutting-edge cosmetics. Markets57% of annual sales in mature markets, 43% of sales in high growth markets. We are a global company with subsidiaries and branches in 50 countries. High growth markets continue to be an important contributor to our future growth, with sales driven by the growing population and expanding middle class. In both these markets, increasing demand for health and well-being products – examples of which include lower salt and fat in food and anti-ageing effects in cosmetics – is a stimulating potential for growth. 477 millionR&D spend (in CHF)5,527 millionGroup sales (in CHF)21,016 millionMarket capitalisation (in CHF)Sales by divisionCREDIT RATINGGivaudan has received the first credit ratings in 2018: A- credit rating, with a stable outloo