Perfume maker Firmenich scents strong rebound for fine fragrances

Firmenich expects continued strong demand for the rest of 2021 after the Swiss maker of scents including Ariana Grande's R.E.M, Calvin Klein's CK One and Yves Saint Laurent Black Opium reported accelerating sales growth in the first six months.

Privately-held flavours and fragrances firm Firmenich, which competes with Givaudan, Symrise and IFF, said its revenue for the year to June 30 rose 10.2% to 4.27 billion Swiss francs ($4.71 billion).

Firmenich, whose clients also include Bulgari, Gucci and Avon, said it had seen an acceleration in revenue growth in the first six months of 2021, with a strong rebound in fine fragrances, with sales up 39% compared to 9% for the year.

"Fine fragrances are an affordable luxury, they are not expensive items, and they give you warmth and make you feel good," Chief Executive Gilbert Ghostine told Reuters. "I think the fine fragrance growth will continue to be solid – customers and retailers are restocking after running down their supplies, and everyone is preparing new launches of products for Christmas," Ghostine added.

But Ghostine cautioned against a rapid recovery in the sale of perfumes at airports and by airlines, a key sales channel, which he said would not fully recover before mid-2023.

During its financial year, Firmenich's adjusted earnings before interest, tax, depreciation and amortisation fell 5% to 816 million francs as its profit margin declined. Ghostine said the company would reverse this.

"We are confident and well positioned to drive profitable organic growth and expand profitability over the next six months," Ghostine said. The Geneva-based company, owned by the fourth and fifth generations of the Firmenich family, has no intention of listing, he added.

"We have been private for the last 126 years, and the shareholders are extremely passionate about the company and want to remain independent. This formula has worked," said Ghostine.