Investing in Europe #41
LVMH, Givaudan keep growing. Asos bad, DSV good. A transition year for Chr. Hansen and more
Company news and results
LVMH continues to grow in line with the first-half of the year.
In Q3:
Organic revenue growth over the period was 40% compared to 2020. Compared to 2019, organic growth over the first nine months of 2021 was 11%, with trends in the third quarter (+ 11%) comparable to those of the first half, both by activity and by region.
The Fashion & Leather Goods division is growing +38% compared to 2019, close to the +40% reported last quarter. Watches & Jewelry growth slowed down due to new Covid restrictions in Asia. Tiffany is going well, with strong momentum in the US, they commented.
Asia and the US remained the strongest regions. Europe improved quite a bit from last quarter and is getting closer to 2019 levels.
No quantitative guidance but LVMH is “confident in the continuation of the current growth”. Finally, the presentation deck looks nicer than before, well done IR team! 👏
Givaudan, the flavour and fragrance company, reported a 7.7% like-for-like increase in sales in the first 9 months of the year. Fragrance & Beauty was +8.4%, Taste & Wellbeing +7.2%.
Asos, the UK online apparel retailer, had a tough week: 1) their CEO is stepping down; 2) the market did not like their guidance, with slower growth and supply chain pressures:
FY22 sales growth expected to be in the range of 10% and 15% with H1 revenue growth in mid-single digits reflecting:
Tougher comparables in the first half of the year, particularly the UK (+66% since FY19)
Industry-wide supply chain pressures expected to continue throughout H1, resulting in longer lead times and constrained supply from a number of our partner brands
An acceleration of sales in the second half of the year driven by increased event-led demand, an easing of supply constraints and marketing investment to support international growth
On the other hand, another week another upgrade in the logistics sector: DSV increased its guidance:
The strong results are driven by high activity levels and continued extraordinary market conditions with disruption and tight capacity in both air and sea freight markets.
Chr. Hansen, the supplier of food cultures, probiotics and enzymes, reported a +6% organic revenue growth in their last quarter.
FY 2020/21 was a year of “transition”, with higher revenues but lower operating profit and free cash flow.
The prolonged impact from the COVID-19 pandemic increased the complexity of transitioning Chr. Hansen to a fully-focused bioscience company. Limited customer access, delayed registration times, and general macroeconomic uncertainty restrained growth opportunities, and our Human Health business disappointed in the second half of the year due to the part of the business serving the traditional sales channels.
Publicis, the French multinational advertising and public relations company, reported a +11.2% increase in sales in Q3 and upgraded its guidance:
Today, all of this means that we are in a position to upgrade our full year guidance for all our KPIs a second time this year. This is the case for organic growth, that we now anticipate at +8.5-9% from +7%. We are also revising our operating margin upwards, to slightly above 17%, while continuing to invest in future growth and talent. And at close to 1.3 billion Euros, our free cash flow is expected at the high end of our previous objective.
Capital Markets Day this week:
Kerry (taste & nutrition)
The Group has set an EBITDA margin target of 18%+ by 2026. This will be underpinned by expanding the EBITDA margin in Taste & Nutrition to 20%+. The key pillars of Kerry’s margin expansion target are enhanced portfolio mix, operating leverage, and operational efficiencies, partially offset by reinvestment for growth initiatives
Lonza (chemicals and biotechnology)
Deals and IPO
Advent-backed Rubix targets €850M IPO (link)
‘We will become the number 2 global player in natural colours’: Givaudan talks DDW acquisition (link)
EDF's electric vehicle charging firm Pod Point eyes London listing (link)
French group Bollore considering selling African logistics divisions -Le Monde (link)