IFF Reported Sales Up 17%

Operating profit was very strong, increasing 17 percent, or $9 million, to $62 million in the first quarter. This increase was driven by accelerated sales growth, improving input costs and our continued success in disciplined cost management.

7 May 2010 --- International Flavors & Fragrances Inc., a leading global creator of flavors and fragrances for consumer products, reported first quarter 2010 revenue of $654 million, 17 percent higher than the prior year quarter. Excluding the impact of foreign currency, revenue in local currency increased 13 percent. Reported earnings per share (EPS) were $0.80, compared to $0.60 for the first quarter 2009. Excluding an expense of $0.05 per share in the first quarter 2010 related to ongoing restructuring efforts in Europe, adjusted EPS for the quarter increased 42 percent to $0.85 versus $0.60 in the prior year quarter.

"We are very pleased to report financial results that are strong and slightly above the preliminary projections we announced in March," said Doug Tough, Chairman and Chief Executive Officer. "We continued to see solid momentum throughout the quarter as both our Flavor and Fragrance teams did an excellent job capitalizing on new business opportunities. The combination of this strong commercial performance as well as some elements of customer restocking and favorable year-over-year comparisons, allowed us to deliver strong local currency sales growth that resulted in a substantial increase in our adjusted EPS."

Mr. Tough added, "We continue to be mindful that economic conditions remain fluid and that a portion of our success can be attributed to the benefits of customer restocking as well as favorable comparisons versus a soft year-ago period. Nonetheless, we feel confident that the underlying health of our commercial performance is strong and as a result, we will continue to monitor our performance throughout the balance of the year as we look to make targeted investments to strengthen our marketplace position."

In flavors, local currency sales in the first quarter increased eight percent over the comparable 2009 period. Growth was led by a double-digit performance in Europe, Africa and Middle East (EAME) and Greater Asia as increased volumes and new business drove results. In North America, sales declined one percent as our success in Dairy was more than offset by Confectionery challenges. Latin American sales increased six percent as new business and volume recovery in Savory, Confectionery and Dairy offset the loss of non-strategic business that began in the third quarter of 2009.

Operating profit was very strong, increasing 17 percent, or $9 million, to $62 million in the first quarter. This increase was driven by accelerated sales growth, improving input costs and our continued success in disciplined cost management. As a result, operating profit margin improved to 20.5 percent versus 19.9 percent in the prior year period.

In fragrances, local currency sales in the first quarter increased 18 percent over the prior-year period as all categories reported strong results. The accelerated performance in the emerging markets continued, particularly Greater Asia, where every Fragrance Compound category experienced double-digit growth.