That figure is up 9% over $3.1bn in net sales for 2016. And, according to the IFF press release, more than half of that lift is attributed to recent acquisitions.
Commenting on the results, IFF CEO and chairman Andreas Fibig calls “2017…another notable year in terms of progress, both strategically and in regards to our financial performance.”
“We continued to advance our long-term strategy that will enable us to deliver strong returns for our shareholders. We successfully launched three new captive fragrance ingredients, commercialized three natural modulators, expanded our core list participation with several key accounts….In addition, we continued to make progress towards our M&A ambition, adding nearly $90 million in expected annualized revenue with the acquisitions of Fragrance Resources and PowderPure,” Fibig tells the press. (Read about the company's acquisition of Fragrance Resources here.)
Fragrance and beauty
IFF notes, among the company’s strategic highlights for the year, that the cosmetic active ingredients business grew by double digits in 2017. Also, the company “added approximately $90 million of expected annual revenue with the acquisitions of Fragrance Resources - increasing our participation in specialty fine fragrances.”
Fragrance sales were up 9% for the year, reaching $1.8bn. Fine fragrance was up 18%, thanks to “strong double-digit growth” in North America and other regions. Consumer fragrance was up 7% because of growth in the company’s personal wash, fabric care, and home care divisions.
IFF’s fragrance ingredients business grew by 8% thanks in part to growth in the LATAM region and that lift (mentioned above) from the cosmetics actives business.
Like all companies based or doing business in the US, IFF has been affected by recent tax reform legislation.
“As a result, the Company recording a provisional net charge of $139 million in the quarter ended December 31, 2017, which includes a transition tax on the Company’s historic unremitted foreign earnings and the revaluation of the Company’s net deferred tax assets.”
And for now, the company is proceeding on this assumption: “Based on our current assessment and understanding of the Tax Act and the Company’s current global operating structure, the Company believes its effective tax rate will be approximately 21% in 2018. The ultimate impact of the Tax Act may differ from this estimate, due to, among other things, changes in interpretations and assumptions the Company has made, additional guidance that may be issued by the taxing authorities as well as operating and/or structural changes that the Company may take as a result of the Tax Act.”
Deanna Utroske, CosmeticsDesign.com Editor, covers beauty business news in the Americas region and publishes the weekly Indie Beauty Profile column, showcasing the inspiring work of entrepreneurs and innovative brands.