Fragrance Sales in the US Perform Well but Income is Down at IFF

10 May 2016 --- International Flavors & Fragrances (IFF) has reported that income fell eight percent in the quarter but said that fragrance sales in the US are performing well.

Net income fell eight per cent to $119,000 in the quarter while sales nudged up one percent to $787,000 in the quarter.

IFF, which makes flavors and fragrances found in a variety of products from ice creams to shower gels, said it remains cautious about the outlook for the rest of the year, citing market volatility.

The New York based company's shares were up over 1 percent to $121.45 following the results.

IFF chief executive Andreas Fibig said: "We are pleased with how we started 2016, in light of the volatile global operating environment and against our strongest year-ago growth comparison.”

“Currency neutral sales growth was strong, improving 6%, with broad-based contributions from our acquisitions and organic growth. “

“Performance in both Flavors and Fragrances accelerated sequentially with nearly all categories showing improvement versus the fourth quarter of 2015."

"In terms of profitability, we achieved strong gross profit performance driven primarily by volume growth, the benefits of productivity initiatives and contributions of acquisitions. “

“This enabled us to strategically reinvest in our business while simultaneously delivering 7% adjusted operating profit and 11% adjusted EPS growth, all on a currency neutral basis."

“We also continue to make strides in our Vision 2020 strategy focused on building greater differentiation, accelerating profitable growth and increasing shareholder value. Innovation and R&D are crucial to our success, demonstrated by delivery systems in both Flavors & Fragrances continuing to be a growth driver in the quarter. In Fragrances, encapsulation-related sales grew high-single-digits, led by Fabric Care and Toiletries."

"In Flavors, our sweetness & savory modulation portfolio sales grew strong double-digits, led by Savory, Dairy and Beverage. Simultaneously, we commercialized two new flavor molecules and one new natural sweetness modulator to continue to build consumer-preferred solutions."

“We are pleased with our results in targeted growth areas such as North America, where we saw an 11% sales increase for the first quarter of 2016 driven by our recent acquisitions and strong growth in Fragrances."

"In the Middle East & Africa, the strong growth trends we experienced in 2015 continued into the first quarter, in which we saw a double digit increase, with strong performance in both flavors and fragrances. In Latin America, Flavors grew 8% on a currency neutral basis against a very strong 21% prior year comparison, driven in part by continued success leveraging innovation with key customers."

“In addition to the progress we have made from an innovation and market share perspective, we continue to position ourselves to be our customers’ partner of choice and go-to supplier. In the first quarter of 2016, IFF | Lucas Meyer won an innovation award at the In-Cosmetics for Minipory."

“Our continued commitment to intertwine sustainability into all aspects of our business and corporate culture has led us to be rated gold by EcoVadis and ranked a top supplier.

“We also joined the World Business Council for Sustainable Development which is an organization of forward-thinking companies that stimulate the global business community to create a sustainable future for business, society and the environment.”

“Our strategic acquisitions have also continued to perform well. IFF | Ottens Flavors posted solid growth on a standalone basis led mostly by regional customers and IFF | Lucas Meyer Cosmetics achieved double-digit growth on a standalone basis.”

“Although we have started the year well, we continue to remain cautiously optimistic in our previously stated financial guidance for 2016 given the persistent volatility in the market.”