• Despite difficult times in Europe, International Flavors & Fragrances Inc. (IFF) reported a 1% increase in revenue for the second quarter to $721.3 million. The company noted that excluding the impact of foreign currency, local currency sales increased 4%.
On a like-for-like basis, which excludes the exit of low-margin sales activities in flavors, local currency sales increased 5%. Net income rose more than 16% to $88.6 million.
“We are pleased with our performance this quarter,” said Doug Tough, chairman and chief executive officer. “We delivered solid top-line growth and even stronger double-digit EPS growth, despite the challenges presented by the ongoing difficulties in Western Europe and volume declines in fragrance ingredients. Our performance against this backdrop underscores the strength and diversity of our portfolio and geographic reach, as well as our ability to drive manufacturing efficiencies and control operating costs. As expected, increases in raw material costs are beginning to moderate and price realization has improved, resulting in margin expansion and operating profit growth.”
Tough noted that quarterly growth was driven by the flavors business, which achieved high single-digit local currency growth in every region and 8% growth overall, on top of 8% growth in the prior year, reflecting the balanced and consistent nature of this business. IFF’s fragrances compounds business increased by 6% overall, led by strong growth in Latin America and Greater Asia, which offset continued softness in ingredients.
“We continue to be cautiously optimistic in our outlook, given the lagging economic growth and uneven recovery cycle,” said Tough. “Although we achieved solid momentum in both flavors and fragrance compounds, we believe we will continue to face a weak economic environment in Western Europe and softness in fragrance ingredients. Longer term, we see significant growth opportunities for the business and believe we are well positioned to achieve our long-term goals.”