Chairman's letter

Dear shareholders,

In the second year of our new five-year strategy cycle ‘Committed to Growth, with Purpose’, I am pleased to share that overall we delivered a solid business performance, despite the external challenges; from supply chain constraints, inflationary pressures and the impact of the war in Ukraine leading to higher energy prices. Rising interest rates, as a worldwide response to high inflation, also impacted our share price. I am proud of how our teams around the world navigated this difficult external environment, and I’d like to express my thanks to our colleagues, customers, partners and suppliers for their continued commitment and great collaboration.

In 2022 we delivered solid topline growth of 6.5% in Swiss francs, stable profitability and a free cash flow generation of 6.7% of sales. We were able to compensate for many of the input costs and inflationary effects and could expand our business organically.

On the basis of Givaudan’s performance in 2022 and its continued solid business position, the Board of Directors will propose an increase in the dividend to CHF 67 at the Annual General Meeting on 23 March 2023. This is the twenty-second consecutive dividend increase following Givaudan’s listing at the Swiss stock exchange in 2000.

Looking back at 2022, while the pandemic receded in most parts of the world, new challenges emerged in the external environment. Across the industry and beyond, we experienced large raw materials cost increases, supply chain disruptions leading to rising costs of transport and freight, and higher energy costs. For 2023, we anticipate the external environment to remain challenging, but our focus will remain on being the creative partner of choice for our customers and on further progressing towards our 2025 strategic objectives. The broader global macro trends and themes that we identified for our 2025 strategy, that include health and wellbeing, naturals, plant-based proteins, will continue to drive our business and offer opportunities for more profitable growth, even in difficult economic surroundings.

The landscape of our industry also underwent significant changes, and it remains a competitive and dynamic environment. We are well positioned with our focus on customised, high value-added solutions for our customers which help them differentiate their brands with consumers. We are continuously enhancing our capabilities with digital technologies for better offerings and more efficient reach to our customers. Our digital expertise is opening up new avenues to innovate in our creation process, to reach new customers, and be able to respond with agility.

We strengthened our use of biotechnology for contributing to our own journey on sustainability, but also in helping to meet our customers’ goals and responding to consumer’s changing preferences for more sustainable products. In collaboration with our suppliers, who also play an important role in our innovation solutions portfolio, we are actively investigating texture and biotechnologies that contribute positively to renewability and biodegradability. We are also harnessing circular approaches which allow us to rethink how we source, access, develop and invent ingredients for our portfolio and creative palette - like upcycling. Being at the leading edge of innovation of this kind is not only a great source of pride for our business but remains key to driving growth and goes hand-in-hand with our journey towards our bold purpose and sustainability ambitions.

The Board continues its focus on ESG topics aligned to Givaudan’s purpose of “creating for happier, healthier lives with love for nature”, which is also integrated into our 2025 strategy. We have set bold, measurable targets under our four purpose areas of creations, nature, people and communities, and are clear about the areas where we want to focus our efforts on and have the most impact, while also being transparent about our progress. As societal demands on business to act and behave in a responsible way grow, we believe it is important that we not only acknowledge the challenges, but demonstrate the action we are taking. We hold ourselves accountable through the highest standards of reporting with the IR framework and GRI standards, and against mandatory disclosure standards.

At the 2023 Annual General Meeting, three of our long-standing Board members, Michael Carlos, Prof. Dr-Ing. Werner Bauer and Lilian Biner will stand down, after a combined service of 29 years. I’d like to express my appreciation and thanks for their great contributions over these many years. In addition, we will propose to the AGM to elect Roberto Guidetti as a new Board member. All other Board members will stand for re-election. We continue to ensure the Board has the necessary competencies and the right blend of expertise, experience and diversity.

In a particularly challenging year, I’d like to take the opportunity to share my heartfelt thanks and gratitude to my fellow members of the Board of Directors, the Executive Committee and all our colleagues worldwide. People are at the heart of our business, and it is their passion and relentless focus on delivering excellence that ensures the continued success of Givaudan. I would also like to share my thanks to you, our shareholders, for your trust and continuing support. After a three-year hiatus of an in-person Annual General Meeting, I also look forward to seeing and meeting you all in-person on 23 March 2023.

Looking ahead, I remain confident this Company will continue on its path of long-term success, creating further value for all stakeholders through profitable, responsible growth, guided by our purpose.

I send my best wishes and health for the year ahead.

Calvin Grieder
Chairman