By Jagoda Darlak and Matteo Allievi
(Reuters) -Swiss fragrance and flavour maker Givaudan reported third-quarter sales above expectations on Thursday driven by sustained high demand across its markets.
Givaudan's quarterly sales rose 10.2% to 1.91 billion Swiss francs ($2.22 billion) on a reported basis, ahead of analysts' average forecast of 1.86 billion francs in a poll compiled by the company.
While the rest of the European chemicals sector, and Germany in particular, is grappling with weak demand amid a sluggish economy, companies engaged in the fragrance and flavour markets have seen a strong increase in sales.
A wave of destocking amid softer demand hit Givaudan's volumes last year, but strong sales growth has boosted its profitability since then.
"We are able to continue to support the strong and broad based volume demand from our customers," CEO Gilles Andrier said in the statement.
On a like-for-like basis, Givaudan's sales rose 14.1% in the third quarter, above the 10.4% growth expected by analysts, and a third straight quarter of double-digit percentage growth.
Like-for-like sales at its Taste & Wellbeing business, which makes up more than half of Givaudan's revenue, rose 12.4% from a year earlier, while sales at the Fragrance & Beauty unit were up 16.0%.
"The highlight of Q3 is the acceleration in Taste which has been lagging the exceptionally strong Fragrance business for quite some time," Vontobel analyst Arben Hasanaj said.
Depending on how the consumer sentiment develops, next year should see a much more normalised environment, Hasanaj added.
Givaudan's January-September sales rose in all regions. The highest like-for-like increase was seen in Latin America at 29.5%, while North American sales grew 5.7% compared to a decline of 9.3% last year.
It reiterated the target for average organic sales growth of 4-5% per year until 2025, with free cash flow growth of at least 12%.
Givaudan's shares were up 0.8% by 0740 GMT, after spiking 4% earlier in the session.
($1 = 0.8604 Swiss francs)