IFF (New York) has reported that second-half 2009 results offset a weak first half. Fourth quarter revenue totaled $586 million, a growth of 9%, year-over-year. For full-year 2009, the company has reported revenue of $2.3 billion, down 3% compared to 2008 results.
In the fourth quarter the flavor business grew 1% in part due to results in greater Asia, higher volumes, and new wins in beverage and dairy categories. In the developed world, weakness in confectionery and savory categories undermined strength in beverages. Sales in Latin America, meanwhile, continued to be mixed. Operating profit increased by $13 million to $46 million, including a $1 million charge related to restructuring efforts in Europe. Strong profits benefited from improved margins and cost management.
On a local currency basis, flavor sales for 2009 increased 2% compared to 2008. Strength was reported in Asia, Latin American and North America, including new wins and price increases. Local currency sales in Europe remained flat due to destocking.
Local currency fragrance sales in the fourth quarter increased 4%, year-over-year, based primarily on strength in emerging markets (particularly Greater Asia and Latin America) and new wins. Improvements in fine fragrance added to double-digit growth in the fine fragrance and beauty care category. Fine fragrance remains challenged in the developed world. Wins in fabric care and personal wash helped drive success in functional fragrance. Fragrance ingredient sales grew in line with renewed demand.
Full-year 2009 local currency sales fell 1% year-over-year due to first-half weakness. Fine fragrance and beauty care local currency sales declined 8%. Fragrance ingredients local currency sales also fell 2%, primarily due to weakness in fine fragrance. Positive growth was seen in the second half of the year for both fine fragrance and ingredient sales, providing momentum into 2010. Functional fragrance achieved a 5% local currency gain due to strength in fabric care and personal wash. Beauty care improvements were led by the hair care and toiletries categories and emerging markets.
Of the results, executive vice president and CFO Kevin Berryman said, "The combination of focused strategies, disciplined cost control, and prudent working capital management enabled us to build sales, earnings and cash flow momentum in the second half of the year. We took important steps to strengthen our product portfolio, enhance our geographic growth opportunities and optimize our manufacturing and supply chain footprint to further reinforce our competitive position. As our strategic initiatives continue to gain traction and we adapt to an ever changing economy, we believe that we are well-positioned to return to local currency sales growth and improve on our overall profitability in 2010."
