IFF chairman and CEO Robert Amen discussed the company's results during a recent conference call. Amen highlighted strong double-digit sales gains in emerging markets and good performance in North America and Western Europe despite troubled economies. IFF's sales for the period were up 11%.
Meanwhile, flavors grew 15%. "These results were driven by new wins, higher volume and low erosion of existing products," said Amen.
Fragrance sales rose 8% for the period. "It's worth noting that while the fragrance business continues to be challenged in North America, this region's sales decline improved from the first quarter," said Amen. "And increases in other regions contributed to the positive growth for the quarter."
Speaking of fine fragrance, Amen said "we see the light at the end of the tunnel." Wins in the category have grown over first-half 2008, and are expected to increase through 2009. "Functional fragrance results were impacted by slower growth at a few accounts, and pulled down by erosion in a couple of others, especially in North America," said Amen. He also noted that fragrance ingredient sales were improved.
Amen also explained that raw material costs had grown to about 5% due to transportation and higher raw material prices. This lead to an operating margin that declined to 16%. Finally, results were affected by investments in resources and staff in Eastern Europe and Asia.