IFF Reports Strong First Quarter Results, Growth in All Flavor Categories
13 May 2015 --- International Flavors & Fragrances Inc. (IFF) has reported that currency neutral sales increased 6% in the first quarter ended March 31, 2015, reflecting broad-based growth in both businesses and across all regions. Sales to the emerging markets, which now represent 51% of total company sales, grew 9% on a currency neutral basis.
Currency neutral adjusted operating profit increased 10% versus the prior year quarter driven by strong sales growth, and manufacturing and RSA cost leverage. The net impact on adjusted earnings per share (EPS) was positive, increasing 13% on a currency neutral basis to $1.45 per share in the quarter.
Reported sales increased $4.7 million, or 1%, to $774.9 million from $770.2 million in the prior year quarter. On a reported basis, operating profit rose $5.7 million, or 4%, to $161.8 million from $156.1 million in the prior year quarter and reported diluted EPS rose 21% to $1.57 from $1.30.
“We are pleased with our performance in the first quarter.” said IFF Chairman and CEO Andreas Fibig. “Financially, we delivered mid-single-digit sales growth, and double-digit increases in both adjusted operating profit and adjusted EPS, all on a currency neutral basis. At the same time, we continued to invest in the business to support our goal of Winning Where We Compete by bolstering our Flavors business with the acquisition of Ottens, the opening of a new sales and creative facility near Chicago, and the expansion of our creative center in South Africa.”
In the Flavors Business Unit, currency neutral sales grew 9% in the first quarter, against a 5% year-ago comparison, with growth across all regions led by double-digit growth in Latin America and North America and high single-digit growth in EAME. On a category basis, Beverages grew high double-digits with growth across all regions driven by new win performance and strong innovative solutions for better-for-you products. Growth was also achieved in all other categories including Dairy, Sweet and Savory. Reported sales increased 3%, or $10.6 million, to $377.1 million from $366.5 million in the prior year quarter. Flavors segment profit increased 5%, or $4.7 million, to $92.7 million in the first quarter of 2015. Segment profit margin improved 60 basis points to 24.6% from 24.0% in the prior year quarter, reflecting topline growth, mix benefits, productivity initiatives and disciplined cost control that more than offset the negative impact of currency.
Mr. Fibig continued, “Looking to the balance of year, we continue to believe we can deliver attractive returns to our shareholders. On a currency neutral basis, we expect all of our key financial metrics to be in line with our long-term targets in 2015. Yet, if global currencies remain where they are today throughout the rest of the year, we expect adjusted operating profit and adjusted EPS to grow low to mid-single-digits.”
