January 26, 2018 / 6:34 AM / 23 days ago

UPDATE 1-Givaudan confirms targets after double-digit profit rise

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ZURICH, Jan 26 (Reuters) - Fragrance and flavour maker Givaudan proposed raising its 2017 dividend after net profit rose 11.7 percent last year, helped by strong sales growth in the fourth quarter.

Givaudan and its peers are trying to extend their activities in natural flavours, where strong demand has pushed up prices.

“Givaudan completed the year with good business momentum and with the project pipeline and win rates being sustained at high levels,” the Swiss company said on Friday.

“The company continues to implement price increases in collaboration with its customers to fully compensate for the increases in input costs.”

The net profit rise to 720 million Swiss francs ($766.45 million) far exceeded the average estimate of 637 million francs and beat even the highest estimate in a Reuters poll of analysts.

Sales at the company competing with Germany’s Symrise and U.S.-based IFF rose 8.3 percent to 5.05 billion francs, above the 4.995 billion franc forecast in the poll, due to good growth across all its product segments and geographies.

Like-for-like sales growth was 4.9 percent in the full year and 9.4 percent in the final quarter, Givaudan said.

In the fragrance unit -- which makes fragrances for perfumes, washing powder and toothpaste -- sales rose 12 percent on a like-for-like basis from October through December, while its business with flavours for foods and drinks recorded a 7.2 percent increase in like-for-like sales, Givaudan said.

Givaudan confirmed its mid-term targets that include 4-5 percent sales growth on average over a five-year period.

The company said it would propose a dividend of 58 francs per share for 2017, below the 60.5 franc estimate in the poll.

$1 = 0.9394 Swiss francs Reporting by Brenna Hughes Neghaiwi and Silke Koltrowitz; Editing by Michael Shields

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