International Flavors & Fragrances Inc. (IFF; New York) has announced results for the fourth quarter and full year 2008, reporting a 2% increase in local currency sales for both periods. The reported sales for the entire year were up 5% from 2007 to $2,389 million, while net income was $230 million, against $247 million in 2007. The company attributed this change to $32 million of higher interest expense in 2008, partially offset by higher volume and favorable currency impacts. IFF’s gross profit, as a percentage of sales, was 39.8% compared with 40.7% in the prior year quarter.
FlavorThe flavor business reported that sales increased 9% to $1.1 billion, whereas the operating profit increased $11 million to $198 million.
FragranceReported sales for IFF’s fragrance business were down 4% as a result of a stronger US dollar. The operating profit was reported at $41 million, an increase of $4 million versus the comparable period last year.
Of the results, Robert Amen, IFF's chairman and chief executive officer said, “Margin pressure increased through most of 2008 as a result of higher input costs and weaker sales mix. In the fourth quarter, we were able to largely mitigate these factors and reduce the year-over-year gap in operating margins through internal improvements and cost recovery initiatives … I remain cautiously optimistic about 2009.”