IFF Reports Strong Q3 Results
10 Nov 2015 --- International Flavors & Fragrances Inc reported financial results and strategic achievements for the third quarter ended September 30, 2015.
In the Flavors Business Unit, currency neutral sales grew 8%, including approximately four and a half percentage points related to the acquisition of Ottens Flavors. All categories experienced broad-based growth, with the strongest results in Beverage and Dairy.
EAME improved 4% led by high-single-digit growth in Beverage. Western Europe reported the highest growth, improving 9%, driven by strong new win performance.
North America grew 19% reflecting additional sales related to the acquisition of Ottens Flavors and high-double-digit growth in Dairy.
Latin America increased 20% as all categories reported positive growth. The strong double-digit trend in Beverage continued for the 8th consecutive quarter. Savory and Dairy also grew double-digits as a result of strong new win performance.
Greater Asia remained constant as growth in Indonesia, India, Singapore and Japan was offset by softness in China, most notably due to a challenging economic environment.
Flavors currency neutral segment profit improved approximately 9% as sales growth, gross margin expansion and cost and productivity benefits more than offset the inclusion of amortization of intangibles related to the acquisition of Ottens Flavors. Segment profit margin on a currency neutral basis increased 10 basis points to 22.2% in the prior year quarter.
On a reported basis, sales were flat going to $359.1 million from $358.7 million in the prior year quarter. Flavors segment profit remained constant at $79.8 million from $79.7 million.
Chairman and CEO Andreas Fibig said: “We are pleased to report strong financial results in the third quarter, despite ongoing volatility in many key international markets. Thanks in large part to the diversity of our business and our recent acquisitions, we achieved strong revenue growth, gross margin expansion and double-digit increases in adjusted operating profit and adjusted EPS – all on a currency neutral basis.”
“Currency neutral sales improved 7%, including three percentage points of growth relating to the acquisition of Ottens Flavors and Lucas Meyer Cosmetics. Overall our top-line performance continues to be driven by strong new wins, particularly in Fragrance Compounds, where the contributions from new wins were at the highest levels in nearly two years. Adjusted operating profit and adjusted EPS on a currency neutral basis grew at a rate faster than sales, both up 10%, as we benefitted from gross margin expansion and fixed cost leverage,” he continued.
“With a focus on building greater differentiation, accelerating profitable growth and increasing shareholder value, we continued to make strides against our Vision 2020 strategy. In North America – one of the areas we are targeting for leadership positions – the Flavors team has done a nice job integrating our recent acquisition of Ottens Flavors. Leveraging their defined go-to-market strategy – geared toward ensuring we are the partner of choice for key regional accounts – Flavors North America was up 19%. In China, Fragrances grew 6% on a currency neutral basis, despite the volatile economic environment, as we continued to have success with many of the strong regional Consumer Fragrance brands.
Fibig concluded: “Based on our strong year-to-date results and our outlook for more modest sales growth in the fourth quarter – due to challenging comparisons that include an extra week of sales in the prior year – we continue to believe we can deliver 6% full year 2015 currency neutral sales growth, including acquisitions. To correspond with our top-line performance, we continue to believe we can deliver approximately 9% adjusted operating profit growth and 10% adjusted EPS growth, both on a currency neutral basis for full year 2015”.
In the Flavors Business Unit, currency neutral sales grew 8%, including approximately four and a half percentage points related to the acquisition of Ottens Flavors. All categories experienced broad-based growth, with the strongest results in Beverage and Dairy.
EAME improved 4% led by high-single-digit growth in Beverage. Western Europe reported the highest growth, improving 9%, driven by strong new win performance.
North America grew 19% reflecting additional sales related to the acquisition of Ottens Flavors and high-double-digit growth in Dairy.
Latin America increased 20% as all categories reported positive growth. The strong double-digit trend in Beverage continued for the 8th consecutive quarter. Savory and Dairy also grew double-digits as a result of strong new win performance.
Greater Asia remained constant as growth in Indonesia, India, Singapore and Japan was offset by softness in China, most notably due to a challenging economic environment.
Flavors currency neutral segment profit improved approximately 9% as sales growth, gross margin expansion and cost and productivity benefits more than offset the inclusion of amortization of intangibles related to the acquisition of Ottens Flavors. Segment profit margin on a currency neutral basis increased 10 basis points to 22.2% in the prior year quarter.
On a reported basis, sales were flat going to $359.1 million from $358.7 million in the prior year quarter. Flavors segment profit remained constant at $79.8 million from $79.7 million.
