IFF Reports Upbeat Q4, Flavor Sales Rise 4%

13 Feb 2015 --- International Flavors & Fragrances Inc.,has reported that reported sales increased $30.9 million, or 4%, to $756.1 million from $725.2 million in the prior year quarter. Local currency sales increased 7% reflecting strong growth across both businesses and an additional week of sales activity in 2014.

Adjusted operating profit increased $20.6 million, or 18%, to $132.6 million from $112.0 million in the prior year quarter, and adjusted diluted earnings per share (EPS) increased 17% to $1.07 from $0.92. On a reported basis, operating profit rose $35.8 million, or 38%, to $130.6 million from $94.8 million in the prior year quarter. Reported diluted EPS rose 48% to $1.10 from $0.75.

For the Full Year, reported and local currency sales in 2014 both increased 5% to $3.1 billion driven by solid new win performance and the acquisition of Aromor during the first quarter of 2014. The emerging markets, which grew three times faster than the developed markets on a local currency basis, now account for approximately 50% of total sales.

“We are pleased to report that IFF achieved its long-term financial targets for 2014. We met or exceeded our revenue, operating profit and EPS goals and, at the same time, continued to invest in R&D, manufacturing and commercial resources to strengthen our business longer-term,” said Andreas Fibig, Chairman and Chief Executive Officer. “In addition to our strong results, 2014 marked great strides in sustainability, with our inclusion in the CDP Climate Disclosure Leadership Index. We also successfully integrated Aromor into our Fragrances business, which contributed to our overall results. And of course, we celebrated our 125th year anniversary, a tremendous achievement, which was exemplified by our people and their passion, creativity, expertise and empowerment.”

For the Flavors Business Unit, reported sales increased 4%, or $13.3 million, to $356.3 million from $343.0 million in the prior year quarter. Local currency sales grew 6% in the fourth quarter, against a 7% year-ago comparison, led by 7% growth in the emerging markets and a strong performance in North America. On a category basis, Beverages grew high double-digits with broad-based growth across all regions driven by strong innovative solutions for better-for-you products. Growth in Savory was also solid, improving mid-single digits globally, led by new win performance. Flavors segment profit totaled $72.6 million, compared with $69.5 million in the prior year quarter. Flavors segment profit margin improved 10 basis points to 20.4% from 20.3% in the prior year quarter reflecting topline growth, productivity and cost control, and lower incentive compensation expense.

In terms of outlook, Mr. Fibig continued, “As we look ahead to 2015, we believe our business is positioned for continued performance that generates favorable returns for our shareholders, despite some macro-economic uncertainty and increased currency pressure. We have a well-balanced geographic profile, a diverse product portfolio, and a strong innovation pipeline that we believe sets us apart from the competition. We believe this breadth and diversity provides our investors with an attractive combination of sustainable growth and strong cash flow generation. As such, our local currency sales and operating profit outlook for 2015 is consistent with our long-term targets, while we expect EPS growth in the high-single digits.”