UPDATE 2-Givaudan takes heart from emerging market growth
* Q3 sales 1.105 bln vs 1.078 bln Sfr in Reuters poll
* Reiterates mid-term target sales growth of up to 5.5 pct
* Sales growth driven by emerging markets
* Shares rise 1 percent, outperform sector
(Adds analyst comment, share price, background)
ZURICH, Oct 9 (Reuters) - A focus on everyday essentials like toothpaste and shampoo, and strong demand for perfumes in emerging markets, will help Swiss fragrance and flavour maker Givaudan beat a tough economy and consumer goods rivals, it predicted on Tuesday.
The company confirmed its mid-term goals after third-quarter sales came in at the high end of expectations, helped by a positive currency impact and growth in emerging markets.
"This is our main growth segment. They (emerging markets) keep up fantastically well, which is vindicating our strategy," a company spokesman said on Tuesday.
Givaudan is largely geared towards consumer products and food and beverages, and has in the past proven resilient to economic downturns, similarly to defensive food stocks such as Nestle .
The Geneva-based company also makes fragrances for Dior and Prada perfumes and is therefore able to capitalise on demand for luxury goods in Asia.
Emerging markets constitute 43 percent of Givaudan's overall sales, and growing demand there has helped to offset slackness in Europe due to the debt crisis.
Thanks to growth in Asia and Latin America, Givaudan confirmed that for the next five years it is targeting sales growth of up to 5.5 percent, against expectations for broader market growth of 2 to 3 percent.
"Global market leadership, innovative products, a strong pipeline and rising spending for consumer goods as well as a trend towards healthier food are just some of the ingredients speaking in favour of Givaudan," Bank Notenstein said in a note.
Shares in the firm rose 1.25 percent by 0925 GMT, compared with a 0.4 percent weaker sector index .
The company, which competes with Germany's Symrise , American International Flavors & Fragrances and unlisted Swiss company Firmenich, also confirmed its goal to return over 60 percent of its free cash flow to shareholders once it has met its target for a leverage ratio of 25 percent.
That could be as early as next year, the spokesman said.
The group said sales rose to 1.105 billion Swiss francs ($1.18 billion) in the third quarter, from 966 million a year ago and compared with an average analyst forecast of 1.078 billion. Givaudan did not provide any profit figures.
Sales for the first nine months of the year rose 8.8 percent to 3.231 billion Swiss francs, with double-digit growth in consumer products more than offsetting weaker sales of fragrance ingredients mainly in Europe and North America.
($1 = 0.9284 Swiss francs)
(Reporting by Catherine Bosley; Editing by Hans-Juergen Peters)
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