IFF reports profits up, revenues steady
The company said that group sales were up by 2 percent to $727.8m for its first quarters, a figure that was negatively impacted by foreign currencies by 1 percent, while net profits increased by around 10 percent to $90.7m.
“As expected, gross margins in the first quarter benefited from the combined impact of previous price increases and modest raw material cost declines,” said IFF CEO Doug Tough.
“Based on our strategy of maximizing our portfolio, gross margins also benefited from strong innovation-based wins, an improved product mix in part due to the exit of low-margin sales activities in Flavors, as well as various other cost savings and value-enhancing initiatives.”
Brazil and China lead the way
On a regional basis, Tough also pointed out that many of the company’s operations in emerging markets managed to return revenue growth rates in double digits for the quarter, including Brazil and China.
The company is currently undergoing some significant operational restructuring, which has impacted the company’s fragrance division with the closure of its production facility in Jakarta, Indonesia, while earlier in the week it also confirmed that it was closing its fragrance ingredients manufacturing facility in Augusta, Georgia.
The company has also entered into multi-year collaborative project with Amyris, which aims to co-develop a substantial platform to develop sustainable and cost-effective ingredients.
Fragrance compounds remain strong
Breaking the figures down, the company’s fragrance operations saw sales increase by 3 percent to $371.5m, a result that was said to be negligibly impacted by foreign currency translations.
Within the division, fragrance compounds performed the strongest, with revenue gains of 7 percent in local currencies, which the company said more than offset a decline of 11 percent in its fragrance ingredients business.
Most of the gains in this part of the business were from emerging markets, with sales from these markets rising 18 percent in the fragrance compounds category, accounting for 54 percent of the total sales.
“We see solid momentum in each of our business units, and expect to deliver stronger sales growth in the second quarter as we continue to focus on leveraging our geographic reach, strengthening our innovation platform and maximizing our portfolio,” Tough said.
