Frutarom reports another record quarter

31 May 2018

Frutarom has reported what it says is another record quarter. Sales grew by 27.2% to a record $384.8 million; constant currency growth on a pro forma basis of 7.6%, while sales from Core Activities grew by 29.0% to $365.7 million.

Frutarom reports another record quarter

Frutarom has reported what it says is another record quarter. Sales grew by 27.2% to a record $384.8 million; constant currency growth on a pro forma basis of 7.6%, while sales from Core Activities grew by 29.0% to $365.7 million; constant currency growth on a pro forma basis of 8.3%. Flavors sales activity grew by 28.3% to $281.5 million, constant currency growth on a pro forma basis of 8.1%. Sales from Specialty Fine Ingredients grew by 29.9% to $86.7 million, constant currency growth on a pro forma basis of 8.5%.

Frutarom also reported record profits from operating activities. Gross profit rose 34.6% to $155.7 million; EBITDA rose 44.3% to $80.4 million; EBITDA margin of core activities reached a record level of 22.2%. Net income rose 35.4% to $45.7 million.

Ori Yehudai, President and CEO of Frutarom Group, said: "We are pleased with our significant step forward and the results achieved in Q1 2018, in which we once again set new records in sales, profits, and core activities' profitability. These quarterly results reflect the successful implementation of our rapid and profitable growth strategy, 1 net of a nonrec combining profitable internal growth at higher growth rates than those of the markets in which we operate, together with our strategic acquisitions, which contribute to the ongoing consistent improvement in our results.

"Frutarom started 2018 at peak performance: growing at a rate higher than the growth rate of the market it operates in, with a strong and experienced management team, and a global organization operating in over 150 countries, based on a production infrastructure of 74 plants, 93 research and development labs, and 111 marketing and sales offices, with approximately 5,400 employees - over 1,200 of them in marketing and sales, and over 800 in R&D - who cater to, and maintain close daily contact with, over 30,000 customers (12,000 of which have joined us through the 39 acquisitions we've made in the past 5 years), with a broad and innovative product portfolio that places an emphasis on natural products at the interesting cross section of flavor and health, with a customer focus that gives Frutarom a substantial competitive edge.

"We have significantly expanded our capabilities into the field of specialty fine ingredients for infant nutrition and clinical elderly nutrition through the Enzymotec acquisition, and its merger into Frutarom is successfully completed and is already contributing to our margins this quarter. We proceed to accelerate the measures aimed at establishing global market leadership in natural herbal extracts, while embracing a vision which includes global collaborations with research institutions and farmers for the development of species and crops of strategic fine ingredients used for flavor, color, health and in the cosmetics industry, while supporting our customers' accelerated switch from synthetic to natural fine ingredients. During the first quarter, we have also expanded our activity in the growing category of natural specialty fine ingredients for the cosmetics and personal care industries, through the acquisition of IBR with its activities integrated with Frutarom's existing activity in this field.

"We are very excited to combine Frutarom with IFF and together create global leadership in natural solutions for flavors, specialty fine ingredients for health and nutrition and fragrances. We are certain that the rapid and profitable organic growth and the strategic acquisitions we have made, combined with continuous improvement in our product mix, our focus on natural and healthy products in step with the demands of billions of consumers throughout the world, the geographic expansion in emerging markets with high growth rates, the measures we are taking to optimize our resources will support the merged company's ongoing journey of profitable growth. We will work in full collaboration with IFF's management, to ensure the successful merger of these two great companies, which complement each other in a broad range of areas, while capitalizing on the abundant cross-selling opportunities. I am certain that the growth potential for the combined company is substantial so that our shareholders will benefit from a significant upside."

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