IFF Reports Strong Growth for Flavors in Q4

For the Flavors Business Unit, local currency sales in the fourth quarter increased eight percent over the prior year period as double-digit growth in the emerging markets continued to drive results.

Feb 10 2012 --- International Flavors & Fragrances Inc. (IFF) has reported that fourth quarter, revenue grew two percent over the prior year period to $644 million. Revenue in local currency also increased two percent as foreign currency had a limited impact on results. Reported diluted earnings per share (EPS) for the quarter were $0.30 compared to $0.68 in the fourth quarter 2010. EPS in the fourth quarter 2011 included an expense of $0.44 per share related to the previously announced patent litigation settlement and restructuring costs, as compared to a $0.01 per share expense related to the European restructuring in the fourth quarter 2010. Excluding these items, adjusted EPS for the fourth quarter increased seven percent to $0.74 from $0.69 in the prior year quarter.

For the full year, the Company reported revenue of $2.8 billion, a six percent increase over the prior year. Excluding the impact of foreign currency, revenue in local currency increased four percent. Reported EPS for the year was $3.26 compared to $3.26 for the full year 2010. EPS in 2011 included an expense of $0.48 per share related to the previously announced patent litigation settlement and restructuring efforts, while 2010 included an expense of $0.11 per share related to the European restructuring. Excluding these items, adjusted EPS for the full year 2011 increased 11 percent to $3.74 from $3.37 in the prior year.

“Our ability to achieve our long-term financial targets for the second consecutive year demonstrates the team’s aptitude for successfully executing our strategy and navigating through a challenging operating environment,” said IFF Chairman and Chief Executive Officer Doug Tough. “At the beginning of 2011, we expressed optimism that IFF would continue to perform well despite ongoing macroeconomic challenges and unprecedented raw material cost increases.”

Mr. Tough added, “Thanks to the focus and dedication of the organization, we delivered progress in several key areas. We continued to leverage our geographic reach to capture the growth potential of the emerging markets, to strengthen our innovation platform to deliver differentiating products, and to maximize our portfolio to improve the underperforming areas of our business. I’m proud of all our employees, each of whom played a role in achieving our results, and I remain confident in our ability to continue to navigate through these uncertain times as we strive to achieve our long-term targets in 2012.”

For the Flavors Business Unit, local currency sales in the fourth quarter increased eight percent over the prior year period as double-digit growth in the emerging markets continued to drive results. In the developed markets of North America and Western Europe, growth was once again led by health and wellness initiatives. From a category perspective, growth was strongest in Beverage, increasing double-digits, followed by high single-digit growth in Savory, and mid-single-digit growth in Dairy.

Operating profit decreased $25 million year-over-year to $28 million including an expense of $35 million associated with the patent litigation settlement and restructuring costs in the fourth quarter 2011. Excluding these items, operating profit increased 18 percent, or $10 million, to $63 million. Adjusted operating profit margin increased 170 bps versus the prior year period to 19.6 percent as volume growth, pricing actions and cost control more than offset the impact of higher raw material costs.

For the fragrances Business Unit, local currency sales in the fourth quarter declined three percent as growth in the emerging markets was offset by lower sales to the developed markets.