Givaudan : 2022 Full Year Results

Company news

Ad hoc announcement pursuant to article 53 LR

Geneva, 25 January 2023

2022 Full year results

Solid business performance in a challenging environment

• Sales of CHF 7.1 billion, an increase of 5.3% on a like-for-like1 basis and 6.5% in Swiss francs
• Strong performance in high growth markets with 9.9% growth on a like-for-like basis
• EBITDA2 of CHF 1,476 million and EBITDA margin of 20.7%, versus 22.2% in 2021
• Comparable EBITDA3 margin of 20.9% compared to 22.5% in 2021
• Net income of CHF 856 million, an increase of 4.2% over 2021
• Free cash flow4 of 6.7% of sales or CHF 479 million
• Proposed dividend of CHF 67.00 per share, up 1.5% year-on-year
• CDP Double A rating for climate and water for the fourth consecutive year

"We are very pleased with our solid performance in 2022, despite the challenging environment that we have faced throughout the year. Once again we have demonstrated our strong focus on supporting the growth of our customers through excellent supply chain performance, whilst at the same time delivering innovative and impactful solutions which are a key part of our 2025 strategy," said CEO Gilles Andrier.

"With the ongoing challenges which the external environment brings, I am extremely grateful to all

Givaudan employees around the world for their continued commitment in supporting us in continuing to

deliver industry leading performance."

Sales performance

Full year Group sales were CHF 7,117 million, an increase of 5.3% on a like-for-like (LFL) basis and 6.5% in Swiss francs when compared to 2021.

In a very challenging operating environment, driven by higher input costs and inbound supply chain disruptions, Givaudan sustained good business momentum whilst maintaining its operations and global outbound supply chain at a high level to support the growth of our customers. The good growth was achieved across product segments and geographies, with the mature markets growing at 1.9% and the high growth markets at 9.9% on an LFL basis. The key strategic growth pillars of the Company's 2025 strategy all contributed positively to the growth.

The Company continues to implement price increases in collaboration with its customers to fully compensate for the increases in input costs.

Fragrance & Beauty sales were CHF 3,256 million, an increase of 5.5% LFL and 5.3% in Swiss francs. The good growth was driven by the sustained strong performance of Fine Fragrances and Fragrance Ingredients combined with the return to good growth momentum in the Consumer Products business in the second half of 2022. In Active Beauty the single-digit growth was achieved against a high double-digit comparable growth in 2021. Across all businesses and customer groups, the good performance was

Givaudan International SA

Chemin de la Parfumerie 5 · 1214 Vernier · Switzerland

Phone [phone] · www.givaudan.com

Ad hoc announcement pursuant to article 53 LR

Geneva, 25 January 2023

supported by the increased impact in the second half of the year of the pricing actions implemented with customers to compensate for the increases in input costs.

On a business unit level Fine Fragrance sales increased by 14.3% LFL, Consumer Products sales increased by 2.0% LFL, and sales of Fragrance Ingredients and Active Beauty delivered growth of 10.2% LFL.

Sales in Taste & Wellbeing were CHF 3,861 million, an increase of 5.2% on a LFL basis and an increase of 7.5% in Swiss francs.

On a regional basis, sales in Asia Pacific increased by 5.3% LFL; in South Asia, Africa and the Middle East, sales increased by 17.6% LFL; in Europe, sales increased by 11.1% LFL; in North America sales decreased by 6.4% LFL; and in Latin America, sales increased by 16.7% LFL basis.

In the key strategic focus areas, solid single-digit sales increases were recorded in plant-based proteins, health & wellness and in Naturals.

Gross margin

The gross profit decreased from CHF 2,855 million in 2021 to CHF 2,762 million in 2022. The gross margin decreased to 38.8% in 2022 compared to 42.7% in 2021 mainly as a result of the dilution effect of the pricing actions to compensate for higher input costs, as well as the higher raw material, energy and freight costs.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)2

The EBITDA2 decreased by 0.4% to CHF 1,476 million in 2022 compared to CHF 1,482 million in 2021, with strong operating cost discipline partially offsetting the lower gross profit level. The EBITDA margin was 20.7% in 2022 compared to 22.2% in 2021, whilst on a comparable basis3, the EBITDA margin was 20.9% in 2022 compared to 22.5% in 2021.

The EBITDA of Fragrance & Beauty increased to CHF 698 million in 2022 compared to CHF 696 million in 2021, whilst the EBITDA margin decreased to 21.4% in 2022 from 22.5% in 2021. On a comparable basis the EBITDA margin of Fragrance & Beauty was 21.6% in 2022 compared to 22.6% in 2021.

The EBITDA of Taste & Wellbeing decreased to CHF 778 million from CHF 786 million in 2021, whilst the EBITDA margin decreased to 20.1% in 2022, from 21.9% in 2021. On a comparable basis the EBITDA margin of Taste & Wellbeing was 20.3% in 2022 compared to 22.4% in 2021.

Operating income

The operating income was CHF 1,112 million compared to CHF 1,089 million, an increase of 2.1% versus 2021. The operating margin was 15.6% in 2022 compared to 16.3% in 2021.

The operating income for Fragrance & Beauty increased to CHF 558 million in 2022, versus CHF 547 million in 2021. The operating margin decreased to 17.1% in 2022 from 17.7% in 2021.

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Ad hoc announcement pursuant to article 53 LR

Geneva, 25 January 2023

In Taste & Wellbeing, the operating income increased to CHF 554 million in 2022 from CHF 542 million in 2021. The operating margin decreased to 14.4% in 2022 compared to 15.1% in 2021.

Financial performance

Financing costs in 2022 were CHF 100 million versus CHF 94 million in 2021. Other financial expense, net of income, was CHF 84 million in 2022 compared with CHF 30 million in 2021, with the increase related to mark-to-market adjustments on marketable securities and increased foreign exchange losses.

The income tax expense as a percentage of income before taxes was 8%, compared to 15% in 2021, with the reduction largely due to the one-time tax effects of internal post acquisition entity restructuring. Excluding these one-time effects, the income tax expense as a percentage of sales before tax would have been 15%.

Net income

The net income was CHF 856 million in 2022 compared to CHF 821 million in 2021, an increase of 4.2%, resulting in a net profit margin of 12.0% versus 12.3% in 2021. Basic earnings per share were CHF 92.83 compared to CHF 89.03 for the same period in 2021.

Cash flow

Givaudan delivered an operating cash flow of CHF 948 million in 2022, compared to CHF 1,288 million in 2021.

Net working capital as a percentage of sales was 26.8%, compared to 24.0% in 2021.

Total net investments in property, plant and equipment were CHF 211 million, compared to CHF 177 million in 2021, with the easing of COVID-19 restrictions around the world supporting a higher level of project activity in 2022.

Intangible asset additions were CHF 78 million in 2022, compared to CHF 70 million in 2021 as the Company continued to invest in its digital roadmap and in bringing all acquired entities on to the Givaudan operating platform.

Total net investments in tangible and intangible assets were 4.1% of sales in 2022, compared to 3.7% in 2021.

Operating cash flow after net investments was CHF 659 million in 2022, versus CHF 1,041 million in

2021. Free cash flow4 was CHF 479 million in 2022, versus CHF 843 million for the comparable period in

2021. As a percentage of sales, free cash flow in 2022 was 6.7%, compared to 12.6% in 2021.

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Ad hoc announcement pursuant to article 53 LR

Geneva, 25 January 2023

Financial position

Givaudan's financial position remained solid at the end of the year. Net debt at December 2022 was

CHF 4,530 million, compared to CHF 4,394 million at December 2021. The net debt to EBITDA ratio5 was 3.07, compared to 2.97 at December 2021.

Dividend proposal

At the Annual General Meeting on 23 March 2023, Givaudan's Board of Directors will propose a cash dividend of CHF 67.00 per share for the financial year 2022, an increase of 1.5% versus 2021. This is the twenty-second consecutive dividend increase following Givaudan's listing at the Swiss stock exchange in 2000.

Our mid and long term ambition

Our 2025 strategy, 'Committed to Growth, with Purpose', is our intention to deliver growth in partnership with our customers, through creating inspiring products for happier, healthier lives and having a positive impact on nature, people and communities.

Ambitious targets are an integral part of this strategy, with the Company aiming to achieve organic sales growth of 4-5% on a like-for-like1 basis and free cash flow4 of at least 12%, both measured as an average over the five-year period strategy cycle. In addition, we aim to deliver on key non-financial targets around sustainability, diversity and safety, linked to Givaudan's purpose.

Our bold and ambitious long-term purpose goals are defined in four domains: creations, nature, people and communities. Our ambitions include doubling our business through creations that contribute to happier, healthier lives by 2030, becoming climate positive before 2050, becoming a leading employer for inclusion before 2025 and sourcing all materials and services in a way that protects the environment and people by 2030.

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Ad hoc announcement pursuant to article 53 LR

Geneva, 25 January 2023

Further information

At the Annual General Meeting on 23 March 2023, Prof. Dr-Ing. Werner Bauer, Lilian Biner and Michael Carlos will retire from the Board of Directors, with all other Board members standing for re-election. In addition, the Board of Directors will propose to the Annual General Meeting of shareholders on 23 March 2023 to elect Roberto Guidetti as a new Board member, with effect as of the date of the Annual General Meeting of shareholders. All Board members will be elected for a term of office ending at the Annual General Meeting.

The 2022 Full Year Report can be downloaded on www.givaudan.com: 2022 Integrated Annual Report, 2022 Governance, Compensation and Financial Report.

Further information and reconciliations of the Group's Alternative Performance Measures can be found in the Appendix of the 2022 Financial Report.

A conference call will be broadcast on www.givaudan.com on Wednesday 25 January 2023 at 15:00 CET.

Upcoming Company Events

AGM - 23 March 2023

First quarter sales and annual investor conference - 13 April 2023

Half year results - 20 July 2023

Half year conference - 30 August 2023

Nine month sales - 12 October 2023

Investor day - 19 October 2023

Full year results - 25 January 2024

Contact

Pierre Bénaich, Head of Investor and Media Relations

T [phone]

1. [e-mail]

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