International Flavors & Fragrances Inc. (IFF) (New York) announced its financial results for the fourth quarter and full year 2010. In the fourth quarter, revenue grew 8% over the prior year period to $630 million. Excluding the impact of foreign currency, revenue in local currency increased 9%. Reported earnings per share (EPS) increased 15% to $0.68 compared to $0.59 for the fourth quarter 2009. EPS in 2010 included a $0.01 per share expense related to the company’s ongoing restructuring efforts in Europe, while fourth quarter 2009 included a $0.04 per share expense related to restructuring efforts. Excluding these items, adjusted EPS for the fourth quarter increased 10 percent to $0.69 versus $0.63 in the prior year quarter. For the full year, IFF reported revenue of $2.6 billion, a 13% increase over the prior year.
"IFF had an outstanding year in 2010 led by strong new business wins across both flavors and fragrances," said Doug Tough, IFF chairman and CEO. "Our double-digit top-line performance reflects strong growth in the emerging markets, increased levels of innovation and an underlying strength across our product portfolio. This record top-line performance provided strong operational leverage that, when combined with our margin improvement initiatives, drove a substantial increase in operating profit and EPS."
Tough continued, "We accomplished these excellent results while simultaneously working through a strategic assessment of our company. Thanks to the hard work and dedication of our employees, we gained insights from this review that will help drive incremental value longer-term for our shareholders. As we enter 2011, we are optimistic in our ability to deliver local currency sales and EPS growth in line with our long-term financial targets and a margin profile that is approaching our long-term target."
For Q4 2010, in the flavor business unit, local currency sales increased 11% over the prior year period. Increased volumes and new business across all categories and all regions drove results. The strong emerging market trend seen throughout the year continued in Q4, led by double-digit growth in every category in Greater Asia. Performance in Latin America was strong, as dairy, confectionery and savory continued to increase at a double-digit rate. In North America and Europe, Africa and the Middle East (EAME), double-digit growth in savory and confectionery also led strong results.
For the fragrance business unit’s fourth quarter, local currency sales increased 8% over the prior year period. Overall growth can once again be attributed to strong emerging market performance, as new business wins in Latin America and Greater Asia continued to drive results. For the fourth consecutive quarter, IFF realized double-digit growth in fine fragrance and beauty care, as new business wins and increased volumes with existing customers drove results. Functional fragrance results were solid as new business win performance across all categories more than offset volume erosion on existing business, and fragrance ingredients sales continued to perform well as an underlying improvement in demand drove results.
The flavor business unit’s full year 2010 financial report saw local currency sales increase 10% over the prior year. All categories achieved strong growth as higher volumes and new business wins drove results. In Greater Asia and EAME, nearly all categories experienced double-digit growth. In North America, increased volumes and new business wins in beverages and confectionery drove results. Performance in Latin America was strong as new business wins and volume recovery in savory, confectionery and dairy more than offset the loss of non-strategic business.
And local currency sales for the full year 2010 for the fragrance business unit increased 16% over the prior year as all regions and nearly all categories reported double-digit growth. In fine fragrance and beauty care, new business wins, increased volumes and some benefits of restocking earlier in the year drove strong double-digit growth. Functional fragrance performance was strong as new wins across all categories led results, and in fragrance ingredients, underlying improvements in demand and some elements of restocking drove double-digit growth.