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IFF Financials Indicate Strong Showing for Q4, Full Year 2010
Posted: February 10, 2011
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.