Frutarom Announces Record Q3 Profits
20 Nov 2015 --- Hot on the heels of its 11th acquisition this year, taste solutions company Frutarom, based in Israel, reports attaining record levels in sales reaching US$647.2m, in gross profit reaching US$251.1million, and in operating profit reaching $99.4m in the first nine months of 2015.
The record results for the third quarter of 2015 and for the first nine months of the year, both in sales and in profits, were achieved despite the significant effects of changes in the exchange rates of currencies in which Frutarom transacts business against the US dollar. In addition, during the quarter non-recurring expenses were recorded for actions being taken by Frutarom to optimize its resources, merge production plants, and achieve maximal operational efficiency, as well as for the acquisitions carried out. These non-recurring expenses reduced the reported operating profit by $2.4 million for the quarter and by US$ 4.6 million for the first nine months of the year.
The continued successful integration of the acquisitions made in recent years into Frutarom's global activity has also contributed to both the growth in sales and to the improvement in profits and margins. Since the beginning of 2015 Frutarom has carried out 11 acquisitions, three of them since the beginning of the third quarter: the acquisitions of US-based Scandia, which engages in specialty citrus solutions, and of Nutrafur in Spain, which engages in the field of natural extracts, as well as of the Polish company AMCO (for which the purchase agreement was signed in November) which engages in the field of savory solutions (the non-sweet spectrum of flavors) in Poland. Frutarom believes the acquisitions it has performed offer many potential synergies and operational savings that are expected to be reflected in its results over the upcoming quarters and it is taking action to successfully integrate them and fully tap the great potential they bring it.
Ori Yehudai, President and CEO of Frutarom, said: “We are continuing on our campaign of rapid and profitable growth and present another record-breaking quarter across all key parameters while continuing the successful implementation of our rapid and profitable growth strategy which combines internal growth, at rates above the growth rates of markets in which we operate, with strategic acquisitions that contribute to sustained improvement in Frutarom's performance and the achieving of another record quarter in sales, operating margins and net income, as well as cash flow, despite the considerable continuing effect of the US dollar strengthening against the various currencies in which we transact business, which reduced revenues this quarter by 14.6%. We are continuing to both raise our market share in the United States and growing emerging markets as well as to enter new expanding fields such as the natural colors and natural solutions for food protection and preservation, along with deepening our activity in specialty citrus and reinforcing our savory activity (the non-sweet spectrum of flavors) in North America, China and in Poland. Continued profitable internal growth alongside the contribution by our acquisitions, together with steps we are taking to optimize our resources, position Frutarom and reinforce its standing as a leading global player in the fields of Flavors and Specialty Fine Ingredients.”
