Frutarom (Haifa, Israel) has announced its 2010 annual and fourth-quarter (Q4) financial results, reporting record results for Q4 2010, as well as growth in revenues and record margins in the financial year 2010. Its revenues in Q4 2010 totaled US $112.4 million, a 7.3% increase in local currency terms compared to Q4 2009. The strengthening of the dollar against European currencies offset 3.7% of the increase in Frutarom's sales, so in terms of US dollars growth, a 3.6% increase was achieved. Additionally, Frutarom's revenues in the financial year 2010 totaled US $451.1 million, an 8% increase in comparison to revenues of US $425.2 million in 2009 in local currency terms. The strengthening of the US dollar against European currencies offset 1.9% of the increase in Frutarom's sales, meaning ultimately sales increased by 6.1% compared to 2009.
According to the company, Frutarom is determined to accelerate its growth and increase its market share in key operating regions while putting a greater emphasis on additional emerging markets. Frutarom’s strengthening of activities in emerging markets is reflected in its sales in the Asia-Pacific region, which grew by 22.8% in 2010. Additionally, an increase of 12.6% in America compared to the same period in 2009 was seen.
Annual gross profit increased by 12.4% totaling US $174.8 million compared to US $155.5 in 2009. Gross margin rose and reached 38.8% compared to 36.6% in 2009, while gross profit in Q4 2010 increased by 4.3% and reached US $41.3 million compared to US $39.6 million in the same quarter in 2009. Gross margin reached 36.8% compared to 36.5% in the same period in 2009.
EBITDA in 2010 increased by 23.9% and reached a record level US $82 million compared to US $66.2 million in 2009. EBITDA margin reached a record level of 18.2% of sales compared to 15.6% of sales in 2009. EBITDA in Q4 2010 increased by 5.3% to US$16.9 million compared to US $16 million in the same quarter in 2009. EBITDA margin improved and reached 15% compared to 14.8% in the same period last year. Frutarom’s continually profitable organic growth, diversification of product offering, and discipline of the competitive expense structure achieved through a focus on operational efficiency in 2009 and 2010 led to the material improvement in operating profit and margin and in the EBITDA and EBITDA margin, which reached record levels in 2010.
Net profit in 2010 increased sharply by 32.8% and reached a record level of US $44.1 million compared to US $33.2 million in 2009. Net margin in 2010 improved and reached 9.8% compared to 7.8% in 2009. Net profit in Q4 2010 increased by 17.8% and reached a Q4 record level of US $8.8 million compared to US $7.5 million in 2009. Net margin also increased and reached 7.9% compared to 6.9% in the same quarter last year.
Earnings per share in 2010 increased sharply by 32.6% and reached a record level of US $0.77 per share compared to US $0.58 per share in 2009. Earnings per share in Q4 2010 increased by 17.9% and reached a Q4 record level of US $0.15 compared to US $0.13 per share in the same quarter last year.
Ori Yehudai, Frutarom’s president and CEO, summarized the results in saying, "2010 was a year of growth in Frutarom's sales and a record year in profit and margin. This year was characterized by a return to growth in the global economy in general, and in the food, flavors and specialty ingredients industries in particular. Frutarom is continuously accelerating its penetration into emerging markets, which are characterized by a high growth rate and increasing demand for the company’s products, while continuing to grow in traditional markets. We had preemptively identified the trend towards health products and convenience foods, and we were wise to integrate them into the company's product offering; this allowed us to achieve a marketing and competitive advantage that will ensure the continued long-term growth of the company.
"In recent months, we have witnessed a global trend of increased prices of raw materials, including some of the raw materials used by Frutarom in the manufacture of its products. We have acted determinedly, and shall continue to do so as long as this trend prevails, to prevent future effects on the results of our activity including by adjusting selling prices of affected products. We are constantly acting to expand our sources of supply and optimally use the diverse capabilities of Frutarom's production sites worldwide.
"Upon the recovery of the mergers and acquisition market from the effects of the global economic crisis during 2009, we have restarted in recent months to implement acquisitions and acquired the savory activity of Rieber & Son from Norway and the assets and activities of EAFI in the UK. These two acquisitions, as well as previous acquisitions we implemented in 2009, are synergetic with our activities, expand our customer base and our product mix and enable us to offer our diverse customer a high-quality and comprehensive solutions to their demands. Frutarom strives for realizing its excellent acquisitions pipeline and will put a greater emphasis on acquisitions in the growing, target markets of Asia, Eastern Europe, Central and South America, alongside acquisitions in traditional markets such as North America. Alongside the acquisitions, we will continue to act for achieving profitable, organic growth, to achieve our goal and again double our turnover within the next four years," he concluded.