IFF Boosted by Developing Markets Performance

For the full year, the Company reported revenue of $2.6 billion, a 13 percent increase over the prior year. Revenue in local currency also increased 13 percent as foreign currency had a limited impact on results.

2/11/2011 --- International Flavors & Fragrances Inc., a leading global creator of flavors and fragrances for consumer products, announced financial results for the fourth quarter and full year 2010. In the fourth quarter, revenue grew eight percent over the prior year period to $630 million. Excluding the impact of foreign currency, revenue in local currency increased nine percent. Reported earnings per share (EPS) increased 15 percent to $0.68 compared to $0.59 for the fourth quarter 2009. EPS in 2010 included a $0.01 per share expense related to our ongoing restructuring efforts in Europe, while fourth quarter 2009 included a $0.04 per share expense related to restructuring efforts. Excluding these items, adjusted EPS for the fourth quarter increased 10 percent to $0.69 versus $0.63 in the prior year quarter.

For the full year, the Company reported revenue of $2.6 billion, a 13 percent increase over the prior year. Revenue in local currency also increased 13 percent as foreign currency had a limited impact on results. Reported EPS for the year increased 33 percent to $3.26, compared to $2.46 for the full year 2009. EPS in 2010 included an expense of $0.11 per share related to ongoing restructuring efforts in Europe, while 2009 included an expense of $0.23 per share related to restructuring charges and employee separation costs. Excluding these items, adjusted EPS for the full year 2010 increased 25 percent to $3.37 versus $2.69 in the prior year.

"IFF had an outstanding year in 2010 led by strong new business wins across both Flavors and Fragrances," said Doug Tough, Chairman and Chief Executive Officer. "Our double-digit top-line performance reflects strong growth in the emerging markets, increased levels of innovation and an underlying strength across our product portfolio. This record top-line performance provided strong operational leverage that, when combined with our margin improvement initiatives, drove a substantial increase in operating profit and EPS."

Mr. Tough continued, "We accomplished these excellent results while simultaneously working through a strategic assessment of our Company. Thanks to the hard work and dedication of our employees, we gained insights from this review that will help drive incremental value longer-term for our shareholders. As we enter 2011, we are optimistic in our ability to deliver local currency sales and EPS growth in line with our long-term financial targets and a margin profile that is approaching our long-term target."

Local currency sales in the fourth quarter increased 11 percent over the prior year period. Increased volumes and new business across all categories and all regions drove results. The strong emerging market trend seen throughout the year continued in the fourth quarter, led by double-digit growth in every category in Greater Asia. Performance in Latin America was strong as Dairy, Confectionery and Savory continued to increase at a double-digit rate. In North America and Europe, Africa and the Middle East (EAME), double-digit growth in Savory and Confectionery led our strong results.

Operating profit increased 16 percent, or $8 million, to $53 million. Excluding a $1 million charge related to restructuring efforts in Europe in the prior year period, adjusted operating profit increased 14 percent, or $7 million, to $53 million. This increase was mainly driven by accelerated sales growth and our continued margin improvement initiatives. As a result, adjusted operating profit margin improved to 17.9 percent versus 17.4 percent in the prior year period.