IFF results put fragrance and personal care in the shadows
The company’s group net sales were up 6% to reach $828.3m, reflecting a very strong performance in the North America market, while reported operating profit fell to $137.4m from $169.9m, reflecting higher input costs and a series of unplanned expenses that included a product recall.
Splitting the results into the flavors and fragrance division, reported flavors sales were up by 9% to $406.2m, positively impacted by 6% from acquisitions, while fragrance sales were up 3% to $422.1m, positively impacted by 4% from acquisitions.
Acquisitions drive growth
A number of recent acquisitions were completed within the last year, highlighted by the acquisition of David Michael and Fragrance Resources, which contributed approximately 5% of the total sales growth for the quarter.
“We are pleased to report that our first quarter sales growth was strong and in line with our expectations,” said IFF Chairman and CEO Andreas Fibig.
“Sales performance was broad-based, driven by the contribution of our recent acquisitions and a strong performance in Flavors, where we achieved growth across all categories and regions.”
Growth in cosmetics and personal care
The company has significantly expanded its footprint in the cosmetics and personal care arena in recent years, particularly with the addition of the Lucas Meyer active cosmetics ingredients business, which happened in 2015.
To that end, IFF executives also noted that a business highlight during the recemt quarter was the fact that Lucas Meyer won three Cosmetics Design Beauty Industry Awards, including the global award for Best Skin Care Ingredient.
Another noteworthy achievement was the fact that related sales for its encapsulation business had led to particularly strong growth for its Personal Wash category.
Other highlights for the fragrance division included an increase of 10% in fine fragrance sales, mainly attributable to the addition of the Fragrance Resources business.