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International Flavors & Fragrances Inc.’s third-quarter total revenue rose 5%, led by a 7% increase in fragrance business unit sales. The company is also beginning to see greater stability in its fragrance ingredients business.
For the quarter ended Sept. 30, IFF's net income surged to $99.05 million from $16.36 million a year earlier. Excluding restructuring and other charges and operational improvement initiative costs from the current quarter, and a $72.4 million charge related to the Spanish tax settlement from the prior year's results, adjusted net income increased 14% to $100.8 million from $88.7 million in the prior year.
Revenue for the quarter totaled $742.3 million, an increase of 5% from $709 million in the third quarter of 2012.
Fragrances business unit sales rose 7% to $392.9 million, compared with $368.3 million in the third quarter of 2012. Excluding the impact of foreign currency, local currency sales increased 5%. Fragrance compounds achieved local currency sales growth of 7% in the third quarter led by double-digit growth in the emerging markets. The emerging markets accounted for 50% of fragrance compounds’ sales during the quarter. Fragrance ingredients’ local currency sales growth was flat, year-over-year, and is showing signs of stabilization. IFF said the majority of product families experienced volume growth during the quarter.
Sales in the company’s flavors business unit rose 3% to $349.4 million, compared with $340.7 million in the prior year quarter. Excluding the impact of foreign currency, local currency sales also increased 3%, marking the 31st quarter of consecutive local currency sales growth for flavors. Flavors segment profit increased $5 million, or 7%, to $81.1 million in the third quarter of 2013, compared to $76.1 million the prior year quarter.
"Looking forward, we expect to see moderate growth in the fourth quarter, given the strong growth achieved in the prior year period,” said Doug Tough, chairman and CEO of IFF. “We continue to expect that the company will deliver on its long-term growth targets for the full year 2013."
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