IFF Reports Strong Third Quarter 2007 Results
Reported sales benefited from the generally weaker U.S. dollar, mainly against the Euro and Pound Sterling; at comparable exchange rates, sales would have increased 5 percent over the 2006 quarter.
05/11/07 International Flavors & Fragrances Inc., a leading global creator of flavors and fragrances for consumer products, has reported strong growth in sales for the third quarter of 2007. Earnings per share as reported were $.67 in the quarter compared to $.70 per share in the third quarter of 2006.
The 2007 results include a pension curtailment loss of $5.9 million or $.04 per share resulting from changes to the Company’s U.S. defined benefit pension plan. The 2006 results included a $3 million or $.03 per share insurance recovery related to a 2005 product contamination issue and $6 million or $.04 per share of other income relating primarily to gains on disposition of assets. Excluding these items from the respective years, the 2007 third quarter earnings per share would have been $.71 compared to $.63 per share in the 2006 quarter, representing a 13 percent increase.
“Our strong financial performance in the third quarter is a result of significant growth in our Flavors business combined with another quarter of strong growth in Fine Fragrances,” said Robert M. Amen, Chairman and Chief Executive Officer. “We continue to build positive momentum by focusing on our three strategic drivers – customers, people and innovation.
“Looking ahead, IFF is well positioned to benefit from the strong global economy and the rapid growth in consumer sectors of Asia, Latin America and Eastern Europe.”
Third quarter 2007 sales were $583 million, an increase of 8 percent from the prior year quarter. Reported sales benefited from the generally weaker U.S. dollar, mainly against the Euro and Pound Sterling; at comparable exchange rates, sales would have increased 5 percent over the 2006 quarter.
Flavors business unit sales increased 12 percent, due to new wins and volume growth in each region. Flavor sales were particularly strong in Latin America, increasing 31 percent, with excellent growth in North America and Greater Asia.
The 6 percent increase in total Fragrance business unit sales was driven by an 11 percent increase in both fine and beauty care sales and ingredient sales. The fine and beauty care sales benefited from both new product introductions and continued success of existing creations. The growth in ingredient sales was attributable to higher volumes. Functional fragrance sales declined by 1 percent.
Flavors Business Unit profitability as reported increased 8 percent compared to the 2006 quarter, on the 12 percent sales increase. The comparison with the prior year period was affected by the $3 million insurance recovery related to the product contamination matter; excluding the insurance recovery from the prior year comparative, Flavors profitability would have increased 16 percent over the 2006 quarter. The profitability improvement was enabled by the strong sales growth, favorable product mix and continued good cost control.
