IFF Reports Solid Flavor Sales in Q2 2008

IFF (New York) has reported sales for the second quarter 2008 (ended June 30) of $636.12 million, up 11% from the prior year period. Sales benefitted from the generally weaker US dollar, mainly against the Euro. Gross profit, as a percentage of sales, was 41.5% compared with 42.9% in the prior year quarter. This decrease was mainly the result of the decline in North American sales, which impacted absorption of manufacturing expenses, most notably in fragrance compounds. In addition, product mix and some impact of higher material costs also affected margins. 

The flavors business unit reported a 15% growth to reach $289.79 million. This was a result of market share gains and volume increases of existing business. Growth in Latin America was particularly strong with flavors sales up 36% in the quarter. Greater Asia posted sales growth of 22%. 

The fragrance business unit reported an increase of 7% to reach $346.33 million. Fragrance sales grew 18% in Greater Asia, 15% in Europe and 14% Latin America, which offset an 11% decline in North America. 

Of the results, IFF chairman and CEO Robert Amen said, “While North America continues to be a challenge, total company revenue benefitted from growth in the Greater Asia and Latin America regions where sales grew 20% or more. Our non-US sales in the second quarter amounted to 75% of total revenue, with more than one-third coming from the world’s emerging markets.”

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