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International Flavors & Fragrances Inc. (New York) reported third quarter 2010 revenue of $673 million, 10% higher than the prior year quarter. Revenue in local currency increased 13% as foreign currency had a three percentage point impact on results. "Our third quarter performance marks the continuation of excellent results," said IFF chairman and CEO Doug Tough. "All categories performed at or above expectations, as both flavor and fragrance results were once again supported by strong new win performance. This outstanding top-line performance combined with our continued focus on cost discipline enabled us to deliver a margin profile that has not been achieved in over five years."
Tough continued, "As we look towards the balance of the year, we expect local currency sales in the fourth quarter to remain strong, albeit approaching more normalized levels. We believe that our teams' continued ability to win new business will be a critical driver of results going forward as it appears that the benefits of restocking are subsiding. We expect that this performance will support our efforts to drive market share improvements while also creating long-term value for our shareholders."
Flavor Business Unit
Local currency sales in the third quarter increased 10% over the comparable 2009 period as all regions reported strong results. For the third consecutive quarter, an accelerated level of demand from existing accounts and new business wins led to double-digit growth in Europe, Africa, the Middle East (EAME) and Greater Asia. Performance in North America continued to benefit from double-digit performances in both confectionery and eeverage; while Latin America experienced strong double-digit growth in confectionery, savory and dairy.
Reported operating profit increased 15% year-over-year, or $8 million, to $63 million in the third quarter. This increase was driven by accelerated sales growth, improving input costs and continued margin improvement initiatives. Operating profit margin in the quarter improved 100 bps to 21.0% versus 20.0% in the prior year period.