IFF reports "strong" results with sales up 12%, profit up 7%

For the third quarter, International Flavors & Fragrances reported net sales for the third quarter of $872.9 million, an increase of 12% from $777.0 million for the third quarter of 2016.

IFF reports strong results with sales up 12%, profit up 7%

International Flavors & Fragrances (IFF) has reported its financial results for the third quarter ended September 29, 2017.

“We are pleased to report strong financial results in the third quarter,” said IFF Chairman and CEO Andreas Fibig. “Thanks in large part to our industry-leading innovation, the strength and diversity of our business and our recent acquisitions, we achieved growth in all our categories and regions. Both businesses delivered marked improvements versus the first half led by strong new win performance as well as improved volume trends. At the same time, our focus on driving greater efficiency throughout our business via cost and productivity initiatives, continued to support overall profitability.”

“Based on our year-to-date performance and our current outlook for the fourth quarter, we remain optimistic that we can achieve our previously stated full year currency neutral guidance. We continue to focus on the execution of our strategy to drive growth, increase differentiation, and generate return to deliver sustainable, profitable growth and maximize shareholder value.”

Reported net sales for the third quarter totalled $872.9 million, an increase of 12% from $777.0 million for the third quarter of 2016. Excluding the impact of foreign exchange, currency neutral sales increased 12% over the prior year, including approximately six percentage points related to recent acquisitions.

Reported operating profit for the third quarter was $157.7 million versus $124.4 million reported in 2016. Excluding the impact of foreign exchange and those items that affect comparability, currency neutral adjusted operating profit grew 7%, to $167.3 million, principally driven by volume growth, acquisitions and productivity initiatives which more than offset weaker sales mix, incentive compensation and price to input costs.

On a reported basis, sales in the Flavors Business Unit increased 12%, or $42.9 million, to $409.8 million while currency neutral sales grew 12%. Overall growth was driven by additional sales related to the acquisition of David Michael, as well as mid-single-digit organic growth, where all categories improved year-over-year.

EAME increased 12% on both a reported and currency neutral basis, inclusive of additional sales related to the acquisition of David Michael, with the strongest growth in Beverage, Savory and Dairy. On a geographic basis, Western, Central and Southeast Europe as well as Africa and the Middle East all reported strong growth.

North America grew 28% reflecting additional sales related to the acquisition of David Michael and PowderPure as well as high-single-digit growth on an organic basis. Growth was strongest in Savory and Beverage, both driven by new win performance.

Latin America remained constant on a reported basis and increased 1% on a currency neutral basis, as growth in Colombia and Argentina more than offset softness in Brazil.

Greater Asia grew 2% on both a reported and currency neutral basis, principally driven by growth in India and Thailand with Savory being the strongest category.

Flavors segment profit grew 18% on a reported basis and 19% on a currency neutral basis, driven by volume growth, the contribution of acquisitions, and the benefits from productivity initiatives.