Consumer Ingredients: Assessing Resilience to Stagflation Risk

This report assesses the European Consumer Ingredients sector's resilience to stagflation risk using a four-dimension framework, identifying Novonesis as the top pick due to its favorable raw material and demand profile.

Key Takeaways

• 1.Novonesis is the standout performer in the sector due to its low exposure to synthetic raw materials and discretionary consumer spending.
• 2.High synthetic raw material dependence (petrochemical-derived) poses significant margin risk for Givaudan and DSM-Firmenich.
• 3.Exposure to Emerging Markets, particularly APAC, is a risk factor due to supply chain disruptions from the Strait of Hormuz closure.

Table of Contents

• CONSUMER INGREDIENTS: Assessing Resilience to Stagflation Risk
• A Framework to Assess Consumer Ingredients Resilience to Stagflation
• 1. Discretionary Demand Exposure
• 2. Synthetic Raw Material Dependence
• 3. Local & Regional Customer Concentration
• 4. Emerging Market Revenue Mix
• Sector & Single Stock Views
• Appendix
• Valuation & Risks
• Disclosure Appendix

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