* H1 net profit up 13 pct to 305 mln Sfr
* Ahead of 276 mln Sfr poll estimate
* H1 sales up 4.5 pct, down 1.5 pct in Sfr
* CEO says profitability improvement sustainable
* CEO says emerging markets not slowing, U.S. weak (Adds CEO and analyst comments, background, shares)
By Silke Koltrowitz
ZURICH, July 17 (Reuters) - Givaudan, the world's biggest maker of fragrances and flavours, has seen no evidence of a slowdown in emerging markets, where strong sales helped the company to produce a 13 percent increase in first-half profits.
The Swiss group is benefiting from growth in demand for its products in these markets, which account for 45 percent of group sales and where consumers have more cash to spend on snacks and ready-to-eat dishes, perfumes and detergents.
"There was concern about a possible slowdown in emerging markets, but it is not happening," Chief Executive Gilles Andrier told Reuters in a telephone interview on Thursday.
Givaudan's Latin American business grew 14 percent in the first half, driven by Argentina, Brazil and Peru. Its flavours for beverages, dairy and snacks had "exceptional growth", the group said.
"Brazil, our biggest market in Latin America, is the world's No.1 fine fragrance market and we mainly work with regional clients there. Fabric care is also quite successful," the CEO said.
Andrier said overall sales growth had slowed to 3.4 percent in the second quarter from 5.7 percent in the first, mainly due to a high comparative base the group would also face in the second half of the year.
"The developing markets will continue and the United States should also come back at some point, but we don't see that yet. We supply customers that supply retailers so when retail picks up, we don't see it right away, there's always a time lag."
Givaudan's flavours business supplies food manufacturers and its fragrance business contributes to a big range of products, from washing powder to perfumes, including Plum Japonais for American designer Tom Ford, Bottega Veneta's pour Homme, Victoria by Victoria's Secret and Ralph Lauren's Polo Red.
The company wants to grow underlying annual sales by 4.5-5.5 percent over the mid term. In the first half, they rose 4.5 percent to 2.191 billion Swiss francs ($2.44 billion), in line with forecasts. In francs, they fell 1.5 percent.
Sales in North America, which account for about a fifth of the total, were flat, while the group's biggest markets Europe and Asia Pacific grew 2.5 percent and 7.0 percent, respectively.
Sales in its fragrance division grew 4.8 percent, driven by Latin America. Sales at the flavours business rose 4.3 percent as strong growth in Latin America and Asia Pacific offset stagnating mature markets.
"Robust set of results from Givaudan which continues to improve its best-in-class profitability," Vontobel analyst Jean-Philippe Bertschy said in a note, confirming his "Hold" rating.
Givaudan's net profit rose by a forecast-beating 13 percent to 305 million francs.
Andrier said the improved profitability should be sustainable. "We've been working to improve profitability in our flavour division and there's further upside there," he said.
Givaudan's shares were up 1.3 percent by 0900 GMT, outperforming a 0.6 percent lower European chemicals index . They trade at 22.4 times forward earnings, in line with Germany's Symrise, but ahead of U.S.-based International Flavors & Fragrances at 19.6 times. IFF reports results on Aug. 5, followed by Symrise on Aug. 7.
Andrier said the group could make further acquisitions in cosmetics ingredients after buying French cosmetics ingredient maker Soliance for 34 million Swiss francs in June.
Mergers in the fragrance and flavour market have picked up. Last week, U.S. agribusiness firm Archer Daniels Midland agreed to buy Wild Flavors for 2.3 billion euros, while Germany's Symrise earlier this year acquired Diana Group for 1.3 billion euros.
$1 = 0.8975 Swiss Francs Editing by Jane Merriman