IFF Reports Third Quarter 2017 Results
International Flavors & Fragrances Inc. (NYSE: IFF) (Euronext Paris: IFF), a leading innovator of sensory experiences that move the world, reported financial results and strategic achievements for the third quarter ended September 29, 2017.
“We are pleased to report strong financial results in the third quarter,” said IFF Chairman and CEO Andreas Fibig. “Thanks in large part to our industry-leading innovation, the strength and diversity of our business and our recent acquisitions, we achieved growth in all our categories and regions. Both businesses delivered marked improvements versus the first half led by strong new win performance as well as improved volume trends. At the same time, our focus on driving greater efficiency throughout our business via cost and productivity initiatives, continued to support overall profitability.”
Mr. Fibig continued, “Based on our year-to-date performance and our current outlook for the fourth quarter, we remain optimistic that we can achieve our previously stated full year currency neutral guidance. We continue to focus on the execution of our strategy to drive growth, increase differentiation, and generate return to deliver sustainable, profitable growth and maximize shareholder value.”
Third Quarter 2017 Consolidated Financial Highlights
- Reported net sales for the third quarter totaled $872.9 million, an increase of 12% from $777.0 million for the third quarter of 2016. Excluding the impact of foreign exchange, currency neutral sales increased 12% over the prior year, including approximately six percentage points related to recent acquisitions.
- Reported operating profit for the third quarter was $157.7 million versus $124.4 million reported in 2016. Excluding the impact of foreign exchange and those items that affect comparability, currency neutral adjusted operating profit grew 7%, to $167.3 million, principally driven by volume growth, acquisitions and productivity initiatives which more than offset weaker sales mix, incentive compensation and price to input costs.
- Reported earnings per share (EPS) for the third quarter was $1.39 per diluted share versus $1.12 per diluted share reported in 2016. Excluding the impact of foreign exchange and those items that affect comparability, currency neutral adjusted EPS improved 5%, to $1.47 per diluted share, as currency neutral operating profit growth, a lower effective tax rate and year-over-year reduction in shares outstanding more than offset higher interest expense.
Third Quarter 2017 Strategic Highlights
- Sweetness and savory modulation portfolio sales continued to grow double-digits, with strong growth across all categories, led by Sweet and Dairy
- Encapsulation related sales grew high-single-digits led by Fabric Care and Personal Wash
- Tastepoint℠ – focused on mid-tier flavor customers – grew strong double-digits
- Cosmetic Active Ingredients continued its strong growth, growing double-digits
- Middle East & Africa improved high-single-digits, with growth in both flavors and fragrances; Expanded Flavors site in Cairo to support growth in this key market
- Launched Re-Imagine… program to accelerate flavor innovation and increase agility to capture unmet opportunities in the changing food and beverage market
- Joined FReSH initiative, a project of the World Business Council on Sustainable Development, designed to accelerate transformational change in global food systems
Fragrances Business Unit
- On a reported basis, sales increased 13%, or $53.0 million, to $463.1 million while currency neutral sales improved 12%. Overall growth was broad-based, with a balanced contribution between organic and acquired business. Regionally, growth was strongest in EAME and Latin America – increasing double-digits – followed by mid-single-digit growth in Greater Asia.
- Fine Fragrances improved 20% on a reported basis and 18% on a currency neutral basis, inclusive of additional sales related to the acquisition of Fragrance Resources. Performance was driven by strong new wins in EAME, Greater Asia and North America as well as improved volume trends in Latin America.
- Consumer Fragrances grew 12% on a reported basis and 11% on a currency neutral basis, with a balanced contribution from organic business and additional sales related to the acquisition of Fragrance Resources. Within Consumer Fragrance, nearly all categories achieved growth, led by double-digit growth in Home Care and high-single-digit growth in Fabric Care.
- Fragrance Ingredients grew 9% on a reported basis and 8% on a currency neutral basis, with double-digit growth in Latin America and EAME as well as double-digit growth in cosmetic active ingredients.
- Fragrances segment profit increased 10% on a reported basis and 6% on a currency neutral basis led by volume growth, the contribution of acquisitions and the benefits from productivity initiatives.
Flavors Business Unit
- On a reported basis, sales increased 12%, or $42.9 million, to $409.8 million while currency neutral sales grew 12%. Overall growth was driven by additional sales related to the acquisition of David Michael, as well as mid-single-digit organic growth, where all categories improved year-over-year.
- EAME increased 12% on both a reported and currency neutral basis, inclusive of additional sales related to the acquisition of David Michael, with the strongest growth in Beverage, Savory and Dairy. On a geographic basis, Western, Central and Southeast Europe as well as Africa and the Middle East all reported strong growth.
- North America grew 28% reflecting additional sales related to the acquisition of David Michael and PowderPure as well as high-single-digit growth on an organic basis. Growth was strongest in Savory and Beverage, both driven by new win performance.
- Latin America remained constant on a reported basis and increased 1% on a currency neutral basis, as growth in Colombia and Argentina more than offset softness in Brazil.
- Greater Asia grew 2% on both a reported and currency neutral basis, principally driven by growth in India and Thailand with Savory being the strongest category.
- Flavors segment profit grew 18% on a reported basis and 19% on a currency neutral basis, driven by volume growth, the contribution of acquisitions, and the benefits from productivity initiatives.
A copy of the Company’s Quarterly Report on Form 10-Q will be available on its website at www.iff.com or at sec.gov by November 8, 2017.
A live webcast to discuss the Company’s third quarter financial results will be held on November 7, 2017, at 10:00 a.m. ET. Investors may access the webcast and accompanying slide presentation on the Company's IR website at ir.iff.com. For those unable to listen to the live webcast, a recorded version will be made available on the Company's website approximately one hour after the event and will remain available on IFF’s website for one year.
Cautionary Statement Under The Private Securities Litigation Reform Act of 1995
This press release includes “forward-looking statements” under the Federal Private Securities Litigation Reform Act of 1995, including statements regarding our outlook for fiscal year 2017. These forward-looking statements are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company’s Securities and Exchange Commission filings, including the Company’s Annual Report on Form 10-K filed with the Commission on February 28, 2017. The Company wishes to caution readers that certain important factors may have affected and could in the future affect the Company’s actual results and could cause the Company’s actual results for subsequent periods to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. With respect to the Company’s expectations regarding these statements, such factors include, but are not limited to: (1) macroeconomic trends affecting the emerging markets; (2) the Company’s ability to implement and adapt its Vision 2020 strategy; (3) the Company’s ability to successfully identify and complete acquisitions in line with its Vision 2020 strategy, and to realize the anticipated benefits of those acquisitions; (4) the Company’s ability to realize the benefits of its productivity initiatives and other optimization activities, (5) the Company’s ability to effectively compete in its market, and to successfully develop new and competitive products that appeal to its customers and consumers; (6) changes in consumer preferences and demand for the Company’s products or a decline in consumer confidence and spending; (7) the Company’s ability to benefit from its investments and expansion in emerging markets; (8) the impact of currency fluctuations or devaluations in the principal foreign markets in which it operates, including the devaluation of the Euro and certain emerging market currencies; (9) the economic and political risks associated with the Company’s international operations, including challenging economic conditions in China and Latin America; (10) the impact of any failure of the Company’s key information technology systems or costs that could be incurred due to a breach of data privacy or information security; (11) the Company’s ability to attract and retain talented employees; (12) the Company’s ability to comply with, and the costs associated with compliance with U.S. and foreign environmental protection laws; (13) volatility and increases in the price of raw materials, energy and transportation; (14) price realization in a rising input cost environment (15) fluctuations in the quality and availability of raw materials; (16) the impact of a disruption in the Company’s supply chain or its relationship with its suppliers; (17) the impact of customer claims or product recalls; (18) any adverse impact on the availability, effectiveness and cost of the Company’s hedging and risk management strategies; (19) the Company’s ability to successfully manage its working capital and inventory balances; (20) uncertainties regarding the outcome of, or funding requirements related to litigation or settlement of pending litigation uncertain tax positions or other contingencies; (21) the effect of legal and regulatory developments, as well as restrictions or costs that may be imposed on the Company or its operations by U.S. and foreign governments; (22) adverse changes in federal, state, local and international tax legislation or policies, including with respect to transfer pricing and state aid, and adverse results of tax audits, assessments, or disputes; and (23) changes in market conditions or governmental regulations relating to our pension and postretirement obligations. New risks emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risks on the Company’s business. Accordingly, the Company undertakes no obligation to publicly revise any forward-looking statements, whether as a result of new information, future events, or otherwise.
Use of Non-GAAP Financial Measures
We provide in this press release (i) Currency Neutral Sales, (ii) Adjusted Operating Profit and Currency Neutral Adjusted Operating Profit and (iii) Adjusted EPS and Currency Neutral Adjusted EPS. Currency Neutral Sales eliminate the effects that result from translating its international sales in U.S. dollars. Adjusted Operating Profit and Adjusted EPS exclude (a) restructuring costs, (b) certain other non-operational significant items such as legal charges/credits, gain on sale of assets, operational improvement initiatives, acquisition related costs, integration-related costs and CTA realization and (c) costs associated with product recalls (often referred to as “Items Impacting Comparability”). When we provide our expectations for our currency neutral metrics in our full year 2017 guidance, we estimate the anticipated FX impact by comparing prior year results to the prior year results restated at exchange rates in effect for the current year based on the currency of the underlying transaction. When we provide our expectations for our Adjusted Operating Profit and our Adjusted EPS in our full year 2017 guidance, the closest corresponding GAAP measures (expected reported Operating Profit and EPS) and a reconciliation of the differences between the non-GAAP expectation and the corresponding GAAP measure generally are not available without unreasonable effort due to inherent difficulty of forecasting the timing and amount of reconciling items that would be excluded from the GAAP measure in the relevant future period and the relevant tax impact of such reconciling items on EPS. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results. Currency Neutral Sales, Adjusted Operating Profit, Currency Neutral Adjusted Operating Profit, Adjusted EPS and Currency Neutral Adjusted EPS should not be considered in isolation or as substitutes for analysis of the Company’s results under GAAP and may not be comparable to other companies’ calculation of such metrics.
International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris: IFF) is a leading innovator of sensorial experiences that move the world. At the heart of our company, we are fueled by a sense of discovery, constantly asking “what if?”. That passion for exploration drives us to co-create unique products that consumers taste, smell, or feel in fine fragrances and beauty, detergents and household goods, as well as beloved foods and beverages. Our 7,400 team members globally take advantage of leading consumer insights, research and development, creative expertise, and customer intimacy to develop differentiated offerings for consumer products. Learn more at www.iff.com, Twitter, Facebook, Instagram, and LinkedIn.
International Flavors & Fragrances Inc.
Michael DeVeau, 212-708-7164
VP, Corporate Strategy, Investor Relations & Communications
For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.
Tilaa tiedotteet sähköpostiisi
Haluatko tietää asioista ensimmäisten joukossa? Kun tilaat mediatiedotteemme, saat ne sähköpostiisi välittömästi julkaisuhetkellä. Tilauksen voit halutessasi perua milloin tahansa.
Lue lisää julkaisijalta Business Wire
Manifesto: Call for a Successful Transition to Renewables in the Transportation Sector21.11.2018 16:04 | Tiedote
Political course corrections, coupled with the alarming reports on climate conservation, have led the organizers behind Power2Drive and other endorsers to initiate a manifesto. The aim is to deepen the close connection between e-mobility and renewable sources of energy and achieve a sustainable future. The smarter E Europe, the largest energy industry platform in Europe, will demonstrate the potential held by this combination of mobility and clean energy, and the pressing need to pay greater attention to sector coupling. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181121005307/en/ Survey shows: Solar power for refuelling is popular (© Solar Promotion GmbH & Bundesverband Solarwirtschaft e.V. BSW) The organizers behind Power2Drive have formed a strong alliance committed to the idea of a successful transition to renewable sources of energy in the transportation sector. Some of the declaration’s first signatories include the
Knopp Biosciences to Present at the Piper Jaffray 30th Annual Healthcare Conference21.11.2018 14:00 | Tiedote
Knopp Biosciences LLC, a privately held drug discovery and development company focused on delivering breakthrough treatments for inflammatory and neurological diseases of high unmet need, today announced that management will present at the Piper Jaffray 30th Annual Healthcare Conference to be held in New York, NY on November 27-29. Michael Bozik, M.D., President and CEO of Knopp Biosciences, is scheduled to present on Tuesday, November 27th at 12:50 p.m. Eastern Time. ABOUT KNOPP BIOSCIENCES LLC Knopp Biosciences is a privately held drug discovery and development company focused on delivering breakthrough treatments for inflammatory and neurological diseases of high unmet need. Knopp’s clinical-stage small molecule, dexpramipexole, is entering Phase 3 clinical studies in hypereosinophilic syndrome and Phase 2 clinical studies in eosinophilic asthma. Knopp’s preclinical Kv7 platform is directed to small molecule treatments for neonatal epileptic encephalopathy, other rare epilepsies, ti
REPLY: Syskoplan Reply Awarded with the SAP Quality Award in the Innovation Category21.11.2018 12:00 | Tiedote
Syskoplan Reply, the SAP technology specialist within the Reply Group, has been awarded with the SAP Quality Award from SAP in the Innovation category for a project for the SEA Group. The award honors the latest SAP solutions and it is presented annually at the SAP NOW event. Syskoplan Reply receives the renowned award for the fifth time in a row. The gold award winning project is an innovative SAP Hybris Marketing solution for SEA from Syskoplan Reply. The SEA Group manages both Milan Linate and Milan Malpensa airports and provides all services and related activities. The project consists of implementing SAP Hybris Marketing to design, create and monitor marketing initiatives. The aim is to increase the customer experience of passengers at Milan Malpensa Airport and make their stay a special experience. The cross-departmental, effective marketing campaign is based on the concept of gamification: in the multi-channel campaign, passengers can participate in a treasure hunt "Hashtag Hunt
GSMA Launches New Industry-Wide Initiative to Support Development of Operator Edge Cloud AR/VR21.11.2018 12:00 | Tiedote
The GSMA today announced the launch of a new industry-wide initiative called The GSMA Cloud AR/VR Forum that will focus on the development of cloud virtual reality (VR) and augmented reality (AR) technology. The programme which was unveiled at Huawei’s 9th Global Mobile Broadband Forum in London, is backed by mobile operators including China Mobile, China Telecom, China Unicom, Deutsche Telekom, KDDI, KT Corp., NTT DOCOMO, SK Telecom, Telefónica, Telenor, TIM, Turkcell and Vodafone, as well as other industry partners including Huawei and HTC. The programme aims to encourage all parties to collaborate on accelerating the delivery and deployment of 5G cloud-based AR/VR services. “Both VR and AR are disruptive forms of immersive multimedia that, combined with operator edge cloud and 5G connectivity, will transform the cost structures of the enterprise and entertainment fields,” commented Alex Sinclair, Chief Technology Officer, GSMA. “Mobile operators will play a key role in its developme
Clientron to exhibit its embedded computing innovations at SPS IPC Drives 201821.11.2018 12:00 | Tiedote
Clientron Corp., a world-leading supplier of embedded systems, will introduce its intelligent embedded solutions including single board computers, embedded box PC, and industrial panel PC at SPS IPC Drives 2018, taking place at the Exhibition Centre Nuremberg (No.8-512, Hall 8) from 27 to 29 November in Nuremberg, Germany. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181121005002/en/ Clientron to exhibit its brand new intelligent embedded systems at SPS IPC Drives 2018 (Photo: Business Wire) The SPS IPC Drives is the leading trade fair for electronic automation solutions. At the show, Clientron will proud to illustrate its embedded computing solutions for factory automation and food industry applications. The advantages of Clientron’s products are designed for high quality, durability, flexibility and maximum compatibility to facilitate the business transformation towards Industry 4.0. During the show, Clientron will intro
Wireless charging makes a world’s first debut on South Western Railway trains in the UK.21.11.2018 12:00 | Tiedote
Baker Bellfield, one of the UK’s leading suppliers of commercial interior solutions for the rail sector, and Aircharge, global leader in wireless charging solutions for contract use, have announced today the launch of the world’s first fully rail compliant inductive phone wireless charging system. On-train wireless charging will debut on South Western Railway’s (SWR) refurbished and reconfigured class 444 Siemens Desiro five-car EMUs on the London Waterloo – Southampton – Bournmouth – Weymouth route from November 2018. When the refurbishment programme is completed, all 172 of SWR Desiro class trains will have this new feature. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20181121005180/en/ The Aircharge - Baker Bellfield mobile phone wireless charging solution for trains (Photo: Business Wire) With mobile devices becoming the best travel companions for personal and business purposes, including the use of mobile check-in appl
Uutishuoneessa voit lukea tiedotteitamme ja muuta julkaisemaamme materiaalia. Löydät sieltä niin yhteyshenkilöidemme tiedot kuin vapaasti julkaistavissa olevia kuvia ja videoita. Uutishuoneessa voit nähdä myös sosiaalisen median sisältöjä. Kaikki STT Infossa julkaistu materiaali on vapaasti median käytettävissä.Tutustu uutishuoneeseemme