Frutarom has released its Q2 and first half of 2018 financials.
During the second quarter, sales were reported at $401.3 million, a growth of 16.8%. Sales from core activities grew 19.5% to $380.4 million, while flavor activities grew 16.4% to $296 million. Sales from specialty ingredients were reported at $88.8 million (up 33.7%).
For the first half of 2018, sales grew 21.7% to $786.1 million. Core activities sales were reported at $746.1 million, up 24%. Sales from flavor activity grew 21.9% to $577.5 million, and sales from specialty fine ingredients grew 31.8% reaching $175.5 million.
During the first half of 2018, the company announced it had signed a merger agreement with IFF; on Aug. 6 of the same year, a special general meeting of Frutarom’s shareholders convened and a majority of 94.6% approved the merger. The transaction is slated to close in Q4 2018.
Related: Frutarom Shareholders Approve IFF Transaction
Ori Yehudai, president and CEO, commented: “We are pleased with our significant step forward and the results achieved in the second quarter and first half of 2018, in which we once again set new records in the sales, profits, and margins of our core activities. The quarterly and half-year results reflect the successful implementation of our rapid and profitable growth strategy, combining profitable internal growth at higher growth rates than those of the markets in which we operate, together with our strategic acquisitions, which contribute to the ongoing consistent improvement in our results, and which have led us to achieve our EBITDA margin target of 23% in core activities, originally set for 2020, in the first half of the year.
"Frutarom started 2018 at peak performance: with a broad and innovative product portfolio that places an emphasis on natural products at the interesting cross-section of flavor, nutrition and health, with a focus on local, medium-sized customers as well as private label manufacturers, which gives Frutarom a substantial competitive edge. We consider our strategic focus as a significant growth engine for Frutarom's business in the years to come and we intend to continue and accelerate measures conducive to further rapid growth in our core activities - Flavors and Specialty Fine Ingredients. Frutarom’s Flavors activity has grown since 2000 at an average annual rate (CAGR) of 24%, and the Specialty Fine Ingredients continues to grow rapidly, with an emphasis on specialty solutions in the areas of nutrition and natural herbal extracts, while embracing a vision which includes global collaborations with research institutions and farmers, for the development of species and crops of strategic fine ingredients used for flavor, color, health and in the cosmetics industry, while supporting our customers' accelerated switch from synthetic to natural fine ingredients.
"We are excited to combine Frutarom with IFF and together create global leadership in natural flavor solutions, fragrances, and fine ingredients for health and nutrition, and are delighted with the vote of confidence from our shareholders, who supported the merger in a majority of 94.6%. We are working in full collaboration with IFF management on preparing the integration plan, merging these two great companies, which complement each other, to ensure a successful commercial, operational, technological and organizational merger, while capitalizing on the abundant cross-selling opportunities. I am certain that the growth potential for the combined company is substantial and our shareholders will continue to enjoy this upside in the future”
