IFF reports fourth quarter dip

26/01/06 International Flavors & Fragrances (IFF) has reported that fourth quarter sales for 2005 totaled $461.6 million, declining 1% in reported dollars and increasing 1% in local currency compared to the 2004 quarter. The sales performance was led by continued strong growth in fine fragrances, mainly driven by new product wins. Flavor sales, most notably in North America and Europe, were unfavorably impacted by lower selling prices for naturals, mainly vanilla.

The flavors giant said that fourth quarter and full year 2005 results include pretax charges totaling $23.3 million ($15.9 million after tax or $.17 per share) relating to the elimination of approximately 300 positions in manufacturing, selling, research and administration functions, principally in the Company’s European and North American operating regions.

Sales in 2005 totaled $1,993.4 million, declining 2% in reported dollars and 3% in local currency in comparison to the prior year.

Excluding the effects of the charges from both years, and the AJCA benefit from 2005 results, 2005 fourth quarter and full year earnings per share would have been $.32 and $1.94, respectively, compared to $.46 and $2.27 in the comparable prior year periods. On an as-adjusted basis, excluding the operating results of the fruit business and the effects of the charges related to the disposition, 2004 full year earnings per share would have been $2.23; the fourth quarter 2004 impact of excluding fruit sales and operating results was not significant.

Richard A. Goldstein, Chairman and Chief Executive Officer of IFF, commented, “While a challenging year overall, we are encouraged by the fact that local currency sales to our five largest customers grew by over 5%, following 7% growth in 2004. Notably, we also achieved many new fine fragrance wins in 2005. The continued growth of our largest global accounts and our strong performance in fine fragrances demonstrate that our customers recognize IFF’s unique value proposition.”

Mr. Goldstein continued, “To improve further our financial performance, however, we must do more. I am confident that the actions we announced in early January 2006 will help reduce costs and improve IFF’s overall profitability. We will continue to take the appropriate steps to manage through this challenging pricing environment, while also looking for ways to better meet our customers’ needs and create additional value for IFF’s shareholders.”