Fragrance revenues boost jump in sales at IFF
New York-based flavoring and fragrance producer International Flavors & Fragrances, Inc. (IFF) saw a 39% increase in net sales in the first quarter of 2019, thanks to the contribution of its recently acquired Frutarom business and strong progress in its fine fragrance segment.
In the second quarter ended March 31, 2019, the company reported sales of $1.3 billion, up from $931.0 million in the prior-year period.
Sales in IFF’s scent business unit increased 1%, or $6.4 million, to $488.4 million in the quarter, while currency neutral sales rose 4%, reflecting growth across all regions and categories. Fine fragrances performed particularly well, seeing double-digit sales growth, while consumer fragrances posted a mid-single-digit increase.
The company’s taste business unit saw a decrease of 1%, or $4.4 million, in its sales, which totaled $444.6 million. Currency neutral sales, however, rose 2%.
Frutarom, acquired by IFF in October of last year, contributed $364.4 million in sales to the company’s quarterly total.
Despite IFF’s progress with its sales, however, net income attributable to the company fell 16% year over year to $108.8 million, or $0.96 per diluted share, down from $129.4 million, or $1.63 per diluted share, in Q1 2018.
The company’s profits were impacted principally by a 49% increase in selling and administrative expenses and a 46% rise in the cost of goods sold. Research and development expenses also rose 15%, while the company’s restructuring activities resulted in net charges of around $16.2 million.
“Our first quarter results were in line with our expectations and reflect strong progress in the company’s transformation following the Frutarom acquisition,” said IFF Chairman and CEO Andreas Fibig in a release. “In the first quarter of 2019, we achieved solid sales growth across all three of our divisions and maintained strong profitability levels despite the continued higher raw material cost environment.”
IFF currently expects to report full-year sales of between $5.2 billion and $5.3 billion in fiscal 2019, while adjusted EPS is predicted to be in the range of $4.90 to $5.10.
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