DAVY VIEW

Givaudan’s H1 release points to continued top-line momentum across both divisions with a strong contribution from developing markets. We noted weak performance in North American Flavour. Givaudan’s statement will likely draw investors’ attention back to margin — Naturex’s lower margin profile, dilution from price increases and ongoing raw materials inflation drove the miss on EBITDA margin (mostly above the line). At first glance, we anticipate a modest downward revision to FY 2019 consensus margin estimates.