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International Flavors & Fragrances Inc. (IFF) has reported third quarter 2009 revenue of $613 million, 1% lower than the prior year quarter. Excluding the impact of foreign currency, the revenue in local currency was up 2%.
Driven by strong demand in the emerging markets, new wins in North America (particularly in savory) and stronger volumes and new wins in confectionary and dairy in the EAME region, IFF’s local currency flavor sales increased 2% in the third quarter. On the downside, sales were impacted by customer specific volume weakness in Asia and loss of non-strategic business in Latin America. The operating profit, meanwhile, increased $3 million to a total of $55 million.
Fragrance sales grew 3% percent in local currency, driven by an overall growth reported in all categories (except fine fragrances) and low double-digit gains in the beauty care and functional fragrance categories. Fine fragrance sales continued to decline in North American and European markets, but showed significant improvements compared to first half 2009 results; sales in the emerging markets were strong, particularly in Asia. In fragrance ingredients, local currency sales were up 3% (compared to first half 2009), due to reduction in customer de-stocking activity and cost driven price increases. The operating profit for fragrance unit, meanwhile, decreased by $9 million to $46 million in the current quarter, as a result of an $11 million restructuring charge related to its European facility rationalization plan.
“We are very pleased with our performance for the quarter,” said Kevin Berryman, IFF’s executive VP and CFO, of the results. Commenting on the future he said, “While predicting near-term economic conditions remain difficult, we believe that we are well-positioned to deliver positive local currency sales growth in the fourth quarter.”