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IFF Ends 2017 With Strong Q4 Results

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International Flavors & Fragrances Inc. (IFF) has reported its financial results for the fourth quarter of 2017. The report stated that net sales for the full year totaled $3.4 billion, an increase of 9% from $3.1 billion in 2016, and currency neutral adjusted operating profits grew 5% due to volume growth and productivity initiatives and acquisitions.

“In terms of full-year financial performance, we achieved currency neutral growth across all of our key metrics. Both business units successfully delivered solid top-line growth – with a marked acceleration in the second half of 2017. Bottom-line performance was supported by strong benefits from cost and productivity initiatives and value-enhancing acquisitions,” said chairman and CEO, Andreas Fibig.

Acquisition and Organic Flavor Growth

The report divided growth among its flavor and fragrance business units. For the flavor segment, sales increased 9%, or $135.6 million, to $1.6 billion due to the acquisitions of David Michael and PowderPure. This resulted in the flavor segment's profits increasing by 11% on a reported basis and 14% on a currency neutral basis.

Additionally, the flavor business saw growth in all major regions:

  • North America saw the strongest growth, with sales improving by 23%. In addition to acquisitions, organic growth and wins in savory helped improve sales.  
  • EAME increased 6% on a reported basis and 8% on a currency neutral basis, with the dairy and beverage category both seeing strong growth.
  • Latin America increased 7% on a reported basis and 6% on a currency neutral basis led by double-digit growth in the South Cone and Andean Pact sub-regions and by growth in savory and dairy categories.
  • Greater Asia increased 1% on a reported and on a currency neutral basis, with strong double-digit growth in India and Thailand and growth in beverages, savory and sweets.

Fine Fragrance Freshens Up  

In addition to the growth in the flavor segment, IFF’s fragrance business has improved in the quarter. Annual sales increased 9%, or $146.7 million, to $1.8 billion and improved on a currency neutral sales basis by 9%, attributed by organic business growth and the acquisition of Fragrance Resources.

Growth occurred across every main category and included:

  • Fine fragrances increased 18% on a reported basis and 16% on a currency neutral basis due to the acquisition of Fragrance Resources and strong double-digit growth in EAME, North America and greater Asia.
  • Fragrance ingredients grew 8% on a reported and currency neutral basis, led by growth in LATAM and EAME, as well as double-digit growth in cosmetic active ingredients.
  • Consumer fragrance grew by 7% on a reported and currency neutral basis led by growth in home care, fabric care and personal wash. EAME and North America regions led the growth in this segment.

“We continued to advance our long-term strategy that will enable us to deliver strong returns for our shareholders. We successfully launched three new captive fragrance ingredients, commercialized three natural modulators, expanded our core list participation with several key accounts, and launched Tastepointa by IFF - a fully dedicated organization within IFF designed to service middle-market customers in North America. In addition, we continued to make progress towards our M&A ambition, adding nearly $90 million in expected annualized revenue with the acquisitions of Fragrance Resources and PowderPure,” said Fibig.  

For more information on IFF's financials, view the full report on IFF's website

a Tastepoint is a tradename of IFF.