Chairman’s letter

Dear shareholders,

With the completion of the third year of our five-year strategy cycle ‘Committed to Growth, with Purpose’, I am pleased to share that overall we delivered a solid business performance showing the global strength of our business, and made good progress on delivering our 2025 strategic goals.

The external environment remained challenging in 2023, with ongoing geopolitical instabilities and a macroeconomic environment of inflationary pressures and rising interest rates. Our industry has also gone through a period of significant change. In this dynamic market environment, we have remained focused on our core strategy of growing with our customers through customised, high value-added solutions. I am very proud of how our teams around the world have responded to the challenges and continued to deliver fantastic products that meet our customers’ needs. I’d like to express my thanks to our colleagues, customers, partners and suppliers for their continued commitment and great collaboration. 

In 2023 we delivered solid topline growth of 4.1% on a like-for-like basis, with a decrease of 2.8% in Swiss francs due to the continuing strength of the Swiss franc. 

Our growth in 2023 was strongly supported by pricing actions which we delivered in order to fully compensate for increases in input costs and broader inflationary effects. Our free cash flow generation of 13.3% of sales was impacted positively by the improved profitability and the contribution from our performance improvement plan which has delivered the expected results. The impact of rising interest rates and the broader business environment has also affected our share price, however, our consistent financial results and clear strategy has enabled us to remain the most highly valued Company in our sector on a relative basis. On the basis of Givaudan’s performance in 2023 and its continued solid business position, the Board of Directors will propose an increase in the dividend to CHF 68 per share at the Annual General Meeting on 21 March 2024. This is the twenty-third consecutive dividend increase following Givaudan’s listing at the Swiss stock exchange in 2000.

We’ve also made good progress on our non-financial targets, aligned to Givaudan’s purpose of ’creating for happier, healthier lives with love for nature’, which is also integrated into our 2025 strategy. Having clear, measurable targets is an important part of how we demonstrate our contribution to growing our business in a sustainable way. Here, I’d like to highlight the progress we’ve made with our climate ambitions. We achieved a double AA ranking by CDP for our climate and water action for the fourth consecutive year. We were also recognised at this year’s RE100 awards, receiving the ‘Enterprising Leader’ award for our renewable electricity journey. With our goal of 100% renewable electricity by 2025, we are very close to achieving this having reached 94% at the end of 2023. 

We hold ourselves accountable through the highest standards of reporting with the IR framework and GRI standards, and against mandatory disclosure standards. In addition, as per Swiss code of obligations, we have created a separate report on non-financial matters which is available on our website – www.givaudan.com in early February. Following the industry-wide investigation by European, US, UK and Swiss authorities, Givaudan continues to fully cooperate with the authorities. Givaudan is committed to and adheres to the highest ethical standards in business conduct as set out in our Principles of Conduct.  

Across all areas of our strategy, the global macro trends and themes that we anticipated for 2025, continue to drive our business and allow us to remain the creative partner of choice for our customers. Innovation is at the core of our business. And as you will read in this report, there were a number of exciting new innovations that we brought to market in 2023. From the use of white biotechnology to expand the boundaries of skin hydration, to making use of neuroscience to understand and gather insights on food and beverage experiences, this is how we inspire our customers. We’ve strengthened our biotechnology capabilities through partnerships, contributing to our sustainability journey and helping to meet our customers’ goals. With the increased interest and focus on the developments in AI, we’ve continued to explore the value add that it brings to our business. In particular, the role it plays in aiding the creation process. We see the potential that lies in combining human intelligence along with AI tools to enhance our processes and product development capabilities.

At the 2024 Annual General Meeting, all Board members will stand for re-election. Succession planning continues to be a focus for the Board. We have an excellent talent and succession programme that has been in place for a number of years. We have an experienced team in place at the Board level, and at all levels we continue to ensure we have the necessary competencies and the right blend of expertise and experience.

Looking ahead, we anticipate some challenges to remain in the external environment. I remain confident that we have the right strategy for our future, long term success. We will continue to create further stakeholder value through profitable, responsible growth, guided by the purpose of our Company.  

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. It is a unique Company and industry to work in, and what continues to impress me, is the passion and commitment shown by our people.

Finally, I would like to share my thanks to you, our shareholders, for your trust and continuing support. I also look forward to seeing and meeting you all in-person on 21 March 2024.

I send my best wishes for the year ahead.

Calvin Grieder
Chairman