IFF to Benefit From Growing Demand for Flavors and Fragrances, Remains Exposed
16 Sept 2015 --- Zacks Investment Research has issued an updated research report on International Flavors & Fragrances Inc, in which it states that the company's prospects are good, but exposure to certain near-term headwinds has restricted its growth momentum.
In addition, acquisitions will help International Flavors & Fragrances to explore new markets and customer base. In July 2015, the company added Unipex Group's Lucas Meyer Cosmetics business to its portfolio. With the addition of this entity, the company expects to significantly boost its fragrances business.
Over the long term, International Flavors & Fragrances anticipates deriving roughly $500 million to $1 billion in revenues from acquired assets. Also, the firm remains committed toward rewarding its shareholders with dividend payments and share buybacks, aiming to return roughly 50-60% of net income over the long run.
However, International Flavors & Fragrances remains exposed to risks arising from adverse currency movements, geopolitical issues in some foreign countries and stiff competition. For 2015, the company expects adjusted earnings per share to grow by 10%, while predicting a 6% increase in currency-nautral net sales, including 2% gain from Ottens Flavors and Lucas Meyer Cosmetics. Adverse foreign currency movements are anticipated to reduce revenue growth by 7%. Also, the company sources its raw materials from various foreign countries, and hence, is susceptible to risks related to disruptions in supply or quality of ingredients or rising prices.
