Givaudan S.A.

First-half 2026 group sales were CHF 3,799 million, up 3.6% like-for-like and down 1.7% in Swiss francs. Adjusted EBITDA was CHF 923 million versus CHF 973 million a year ago, with margin at 24.3% versus 25.2%; reported EBITDA was CHF 820 million versus CHF 945 million. Reported net income was CHF 475 million versus CHF 592 million, and adjusted EPS was CHF 60.25 versus CHF 66.71. Gross margin improved to 44.5% from 44.0%. Adjusted free cash flow was minus CHF 119 million, and net debt-to-EBITDA was 2.8x at end-June versus 2.5x a year ago and 2.1x in December 2025. For the second half, management expects low single-digit input-cost inflation, tariff refunds to be passed back to customers, and continued momentum in Fragrance & Beauty with sequential improvement in Taste & Wellbeing. They also reaffirmed the 2026-2030 ambition of 4% to 6% like-for-like sales growth and adjusted free cash flow margin above 12% on average over the cycle; on EBITDA, management said the full-year outlook is around plus/minus 24% margin based on current visibility.

Christian Stammkoetter framed his first months as CEO as a listening-and-assessment period and said he is now focused on three priorities: optimize, future-proof, and together. He emphasized Givaudan’s combination of creativity, science, operational excellence and customer intimacy, and said the company is putting its 2030 strategy into action through selective investment, innovation, digital/AI, sustainability, and deeper local presence. His tone was constructive and confident, while acknowledging that some areas, especially Taste & Wellbeing, still need step-by-step optimization.

Stewart Harris highlighted that the strong headline profitability was affected by nonrecurring items, including CHF 83 million of litigation settlements and provisions plus CHF 20 million of acquisition, restructuring and project-related costs, for total nonrecurring costs of CHF 103 million. He said gross margin rose to 44.5% and adjusted EBITDA margin remained 24.3%, despite currency pressure and higher distribution costs. Cash flow was the main soft spot: adjusted free cash flow was minus CHF 119 million, net working capital rose to 30.8% of sales from 27.1%, and net debt was CHF 4.6 billion with a weighted average interest rate of 2.12%; he expects meaningful working-capital improvement in H2 and noted the only FCF-definition change is the settlement item tied to Fragrance & Beauty, not added flexibility.

Analysts focused heavily on weak H1 cash flow, receivables, and working-capital build. Management said the increase in receivables and inventory was phasing-related and temporary, with no evidence of customer prebuying or stocking that would unwind in H2. In Taste & Wellbeing, management said North America weakness reflects both soft end markets and mix shifts, but pipeline is improving in areas like functional beverages, natural colors, food service and private label; they described GLP-1 as a net positive because it increases demand for taste-modulation, protein-masking and reformulation solutions. They also said tariff refunds will be passed back to customers in H2, leaving little net pricing contribution.