ZURICH, (Reuters) –Givaudan in Switzerland said Friday it will increase its costs this year to offset a decline in net profits and dividends for 2021.

The net profit rose 10.5% last year to 821 millions Swiss francs (883.18million). This led the Geneva-based company to propose a dividend at 66 Swiss Francs per share. Refinitiv polls showed that this was less than the 863 million-franc forecast and an average 67.1 franc dividend.

Givaudan enjoyed a strong demand for flavours used in toothpaste and cosmetics during the pandemic.

The company announced that it is increasing input costs by 2022 and will implement price hikes in cooperation with customers in order to compensate. It also mentioned ongoing problems in parts of its supply chain.

From 15.8% in 2020, its operating margin increased to 16.3% last yea.

Like-for-like sales, which remove the impact of currency changes and acquisitions, increased 7.1% to 6.684 billion francs in the full year, in line with forecasts, with its fragrance & beauty business up 6.6% and taste & wellbeing rising 7.6%, Givaudan said.

Givaudan reported that the sales growth in 2021 slowed down to 5.3% during the fourth quarter.

The company confirmed that it will achieve its 2025 goals of organic sales growth of 4-5% and free cash flow equal to or greater than 12%.

($1 = 0.9296 Swiss francs)