IFF Reports First Quarter 2012 Results

International Flavors & Fragrances Inc. (IFF) posted a 1% drop in first quarter 2012 revenue to $711 million.

“IFF continued to execute its strategy and generated results broadly in line with our expectation,” said IFF chairman and chief executive officer Doug Tough. “The diversity and strength of our category and geographic portfolios, combined with our cost discipline, helped ease the impact of rising raw material costs, softness in fragrance ingredients, and a challenging macroeconomic environment. Going forward, we expect our business trends will improve over the course of the year as we continue to capitalize on our strong emerging market presence, healthy research and development pipeline, and profit improvement initiatives.”

In the Flavors Business Unit, sales increased 3%. Overall growth can once again be attributed to a double-digit performance in the emerging markets led by Africa, Asia and the Middle East, according to the company. In the developed markets of North America and Western Europe, more modest growth continued to be driven by health and wellness initiatives. Operating profit increased 1% to $80 million.

In the Fragrances Business Unit, sales decreased 4%. Operating profit declined 18% to $56 million as increases in raw material costs and volume declines more than offset higher prices and cost control initiatives. Fine Fragrance & Beauty Care sales showed significant improvements versus the fourth quarter 2011 driven by positive trends in fine fragrance, said the company. In Functional Fragrance, strong new wins in Fabric Care continued to drive solid sales results.

Despite a sequential improvement versus the fourth quarter 2011, Fragrance Ingredients remained under pressure as higher prices to protect margin continued to have a negative impact on volume, said IFF.