2022 Integrated Annual Report

2022 IntegratedAnnualReport Whoweare Humanbynature. AtGivaudan,weputpeoplefirst. Webelieveinthewisdomofnatureanditisourmissiontoprotectit. Wearegrowingwithpurpose. >16﹐670 Employeesin52countries Locationsworldwide 166 Creationandresearchcentres 65 Givaudan–2022IntegratedAnnualReport1 Givaudan–2022IntegratedAnnualReport2 Whatwedo Creatingforhappier,healthierliveswithlovefornature. Taste&Wellbeing Goingbeyondgreattasteto createfoodexperiencesthatdogoodandfeelgood,forbody,mindandplanet. Fragrance&Beauty Craftsmanship,creativityand passiontobringyouinspiringcreationsintheworldofscentandbeauty. Discoverourworld Withaheritagethatstretchesbackover250years,wearecommittedtodriving long-term,purpose-ledgrowthwiththeintentionofincreasingourpositiveimpactontheworldbyinnovatingsustainablesolutionswhileshowingourlovefornatureandleadingthewaytoimprovehappinessandhealthforpeople. Let’simaginetogether. Givaudan–2022IntegratedAnnualReport3 Tableofcontents Ayearinreview Oursustainable performancein20228 KeyFinancialand ESGfigures10 Chairman’sletter12CEOinterview14 Committedto Growth,withPurpose Externalenvironment framingourbusiness20 Managingrisks22Businessmodel26Deliveringonour 2025strategy32 Progressagainst ourtargets38 Actingasaforceforgood Ourpurpose42Creations43Nature54People68Communities77 6 18 40 Givaudan–2022IntegratedAnnualReport4 Sustainablefinancialperformance Asustainable investmentcase88 Ourbusiness performancein202290 Value-basedgovernance Goodcorporate citizenship96 Leadingthewayinregulatoryadvocacy99Ourcodeofconduct forapositiveimpact onsociety102 Effectiveandtransparentcorporategovernance105Settingincentives tocreatevalue111 Consolidatedstatements Keyfigures116Consolidatedfinancialstatements118 ConsolidatedESGdata124 Appendix Givaudanataglance132Givaudansites worldwide134 Aboutthisreport140 –IntegratedReporting141 –GRIStandards142 –SASBStandards144 –TCFD Recommendations146 –UNGlobalCompact147 –Sustainable DevelopmentGoals147 Glossary150Ourreportingsuite154 86 94 114 130 Givaudan–2022IntegratedAnnualReport5 Givaudan–2022IntegratedAnnualReport6 Ayearinreview 8Oursustainableperformancein2022 10KeyFinancialandESGfigures 12Chairman’sletter 14CEOinterview Givaudan–2022IntegratedAnnualReport7 Ayearinreview∕Oursustainableperformancein2022 Oursustainableperformancein2022 90% Environment Renewable electricity % –35 GHGemissionsscope1+2since2015 % –13 Waterwithdrawalratereductiononsitesfacingwater-stresssince2020 CDPLIST AA Leadershipintransparencyandactiononclimatechangeandwatersecurity 27 Social % Womeninsenior management % –36 Reductionofrecordablecaseratesince2018 % 100 ProductionsitesregisteredonSedex > 215,000 Peoplebenefittedthrough communityinitiatives 100 Governance % Non-executiveandindependentBoardmembers % 20 Non-financialtargetsinPerformanceSharePlancompensation % 2 Averagebasesalarydifferencebetweenmenandwomen1 % 88 OfemployeeswhohavecompletedthePrinciplesofConducttraining 1.ResultsfortheGivaudanGroupgloballyforequivalentrolesandskillsets.ForSwitzerland’sprivatesectortheaverageregressedpaygapis8%. Givaudan–2022IntegratedAnnualReport8 7117 Economic CHF﹐million Saleslike-for-like¹ % 5.3 Salesgrowth % 6.7 Freecashflowasa%ofsales CHF 67.00 Dividendpershare GROUP–SALES InmillionSwissfrancs TASTE&WELLBEING–SALES InmillionSwissfrancs FRAGRANCE&BEAUTY–SALES InmillionSwissfrancs 5,527 6,322 6,203 6,684 7,117 3,404 3,002 3,398 3,593 3,861 2,799 2,525 2,924 3,091 3,256 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 FREECASHFLOW InmillionSwissfrancs COMPARABLEEBITDAMARGIN5-YEARSSHAREPRICEDEVELOPMENT InSwissfrancs 787 479 703 843 811 22.8% 22.5% 21.0% 21.5% 20.9% 5,000 4,000 2018 2019 2020 2021 2022 2018 2019 2020 2021 2022 3,000 2018 2019 2020 2021 2022 2,000 1.Like-for-likeexcludestheimpactofcurrency,acquisitionsanddisposals. Ayearinreview∕KeyFinancialandESGfigures KeyFinancialandESGfigures Fortheyearended31December,inmillionsofSwissfrancs,exceptforenvironmentandsocialdata 2022 Percentage2021change EconomicGroupsales 7,117 6,6846.5% Like-for-likesalesgrowth¹ 5.3% 7.1% Grossprofit 2,762 2,855(3.3%) as%ofsales 38.8% 42.7% EBITDA² 1,476 1,482(0.4%) as%ofsales 20.7% 22.2% R&Dspend 522 562(7.0%) as%ofsales 7.3% 8.4% Operatingincome 1,112 1,0892.1% as%ofsales 15.6% 16.3% Netincome 856 8214.2% as%ofsales 12.0% 12.3% Operatingcashfiow 948 1,288(26.4%) as%ofsales 13.3% 19.3% Freecashfiow 479 843(43.2%) as%ofsales 6.7% 12.6% Totalassets 11,509 11,4340.7% Netdebt 4,530 4,3993.0% Leverageratio 51% 51% SharepriceasoflasttradingdayofDecember(CHF) 2,833 4,792(40.9%) Cashdividend³(CHF) 67 661.5% Earningspershare−basic(CHF) 92.83 89.034.3% 1.Like-for-likeexcludestheimpactofcurrency,acquisitionsanddisposals. 2.EBITDAdefinedasEarningsbeforeinterest(andotherfinancialincome(expense),net),Tax,DepreciationandAmortisation,correspondstooperatingincomebeforedepreciation,amortisationandimpairmentoflong-livedassets. 3.2022dividendsubjecttoshareholderapprovalattheAGMon23March2023. Ourso