IFF sees positive increase in earnings

27/10/05 International Flavors & Fragrances Inc. has reported earnings per share for the third quarter 2005 of $.72 compared to $.44 in the prior year quarter. The 2005 third quarter results include a net tax benefit of $23.3 million ($.24 per share) relating to the Company's intention to repatriate, in 2005, approximately $250 million of dividends from foreign subsidiaries under the provisions of the American Jobs Creation Act of 2004. On an as-adjusted basis, excluding the tax impact noted above, 2005 third quarter earnings per share would have been $.48. The 2004 third quarter results include $20.0 million ($12.7 million after tax or $.14 per share) of restructuring and other charges related to the sale of certain European fruit business assets, the closure of the Company's Dijon, France manufacturing facility and other related reorganization activities. On an as-adjusted basis, excluding both the sales and operating results of the fruit business and the effects of the charges related to the disposition thereof, 2004 third quarter earnings per share would have been $.58.

ThiIrd quarter 2005 sales totaled $493.1 million, declining 3% in comparison to the prior year in both local currency and reported dollars. Fragrance and flavor sales decreased 1% and 3%, respectively, in both local currency and dollars.

Flavor sales in the 2005 quarter were impacted by the disposition, in the second half of 2004, of the Company's European fruit preparations business. On an as-adjusted basis, excluding $10.6 million in sales attributable to the fruit business from the 2004 third quarter, flavor sales for the current quarter would have increased 2% in dollars and 1% in local currency. Flavor sales, most notably in North America and Europe, were also unfavorably impacted by lower selling prices for naturals, mainly vanilla.

Fragrance sales were led by fine fragrance which increased 1% in both local currency and dollars; the fine fragrance performance reflected the benefit of new product wins. Chemical sales decreased 5% in both local currency and dollars while sales of functional fragrances were flat in both local currency and dollars.

"Our growth with IFF's largest global accounts gives me confidence that our long-term strategic initiatives will enable us to successfully manage through the current challenging pricing environment," said Richard A. Goldstein, Chairman and Chief Executive Officer of IFF. "Year-to-date, local currency sales to our 5 largest customers have grown by over 6%, following 7% growth for the full year 2004. Innovative technologies, combined with our collaborative approach to working with our customers will prove to be important differentiators. With our customer partnerships and continued technology leadership, we are well positioned to achieve our goals and drive value for IFF shareholders."