Reducing forecasts: Incorporating H119A numbers into our model along with the implications on margin development and interest costs drives a considerable downward revision to our earnings forecasts (-8.7%, -11.0% and -9.7% for FY19E, FY20E and FY21E, respectively). Last year, downgrades were driven by citral shortages; this year, it is raw material price increases and the lower-margin nature of the Naturex business, which the market had not fully appreciated. It’s those margins again: When Givaudan acquired Naturex, we argued it had paid full price (17.9x forward EBITDA) for a company that had seen EBITDA margins slip to 11.2% in FY14A, before recovering to 15.8% by FY17A. At the time, Givaudan’s FY17A EBITDA margin was 21.6%. The unknown at the time was whether or not Naturex’s margin expansion could continue. Margin pressure since mid-2018 would suggest that progress has not been up to expectations. Behind the curve: We believe it is not a good sign when a company looks to grow earnings through cost-cutting, which we consider is part of the GBS mandate. The fact that another GBS goal would appear to be adapting the business to deal with a larger volume of smaller orders from local and regional players indicate to us that the company is behind the curve relative to peers such as Kerry, who have had such processes in place for a number of years. Overpriced: Givaudan trades at 35.6x FY19E P/E and 22.3x EV/EBITDA, a 24.0% premium to peers. We value Givaudan on a DCF basis. Running the revised forecasts into our model while reducing our terminal EBITA margin to 19.5% from 21% to reflect the impact of Naturex on Group margins generates our new PT of CHF2465. As this implies a FTR of -8.6%, we downgrade to Sell.