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ZURICH, April 11 (Reuters) - Givaudan confirmed its mid-term growth targets after strong emerging market demand for its fine fragrances used in perfumes and its flavours for snacks helped first-quarter sales rise 5.7 percent.
The Swiss firm and its peers have benefited from strong demand for flavours for snacks and ready-to-eat dishes and fragrances for cosmetics and detergents in emerging markets, where more and more consumers can afford these products.
Sales rose to 1.087 billion Swiss francs ($1.24 billion) in the first quarter, in line with estimates in a Reuters poll.
Sales in its fragrances unit, which has created Dior’s J‘adore and Calvin Klein’s Obsession perfumes but also makes fragrances for shampoos and deodorants, rose 5.6 percent led by double-digit growth in fine fragrances.
Sales in its flavours, which add taste to potato chips, yoghurt, tea and other foods, rose 5.8 percent, boosted by strong demand in Asia Pacific and Latin America.
The world’s biggest fragrance and flavour maker confirmed its mid-term objective of 4.5-5.5 percent organic sales growth.
Givaudan shares have risen more than 10 percent this year, on top of a 32 percent rise last year, outperforming the European chemicals sector. They trade at 21 times forward earnings, in line with Symrise, but at a premium to International Flavors & Fragrances at 18.5 times.
The company also confirmed its intention to return above 60 percent of the company’s free cash flow to shareholders whilst maintaining a medium-term leverage ratio target below 25 percent. ($1 = 0.8772 Swiss Francs) (Reporting by Silke Koltrowitz; Editing by Stephen Coates)