Business Wire

IFF Reports First Quarter 2018 Results

Share

International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris: IFF) reported financial results and strategic achievements for the first quarter ended March 31, 2018.

Management Commentary

“We have started the year very well, with robust growth across all of our key financial metrics,” said IFF Chairman and CEO Andreas Fibig. “Top-line trends remained strong in both businesses, with new wins, volume and pricing all contributing to growth. Our focus to drive differentiation, balance our customer base, maximize our portfolio and generate return is yielding strong results. Growth with local and regional customers was strong, growing four times faster than our global customers. Cosmetic Active Ingredients, sweetness and savory modulation, and POWDERPURE, on a standalone basis, also all grew double-digits.

“Cost and productivity initiatives continued to play an integral role in our ability to invest in the business while delivering robust profit growth. Through the combination of these initiatives, as well as our strong sales growth, we delivered double-digit operating profit and EPS growth.”

Mr. Fibig added, “We are off to a strong start to the year and that gives us added confidence in achieving our financial objectives for 2018. And while it’s still early in the year, we believe we will be closer to the upper end of our previously communicated sales and operating profit guidance range.”

First Quarter 2018 Consolidated Financial Highlights

  • Reported net sales for the first quarter totaled $931 million, an increase of 12% from
    $828 million in 2017. Excluding the impact of foreign exchange, currency neutral sales increased 7% over the prior year.
  • Reported operating profit for the first quarter was $175 million versus $130 million reported in 2017, an increase of 34%. Excluding the impact of foreign exchange and those items that affect comparability, currency neutral adjusted operating profit grew 12%, principally driven by volume growth, the benefits associated with cost and productivity initiatives and favorable sales mix.
  • Reported earnings per share (EPS) for the first quarter was $1.63 per diluted share versus $1.45 per diluted share reported in 2017. Excluding the impact of foreign exchange and those items that affect comparability, currency neutral adjusted EPS improved 12%.

Flavors Business Unit

  • On a reported basis, sales increased 11%, or $42.9 million, to $449.0 million. Currency neutral sales grew 6% driven by growth in all categories and nearly all regions.
  • EAME increased 24% on a reported basis and 11% on a currency neutral basis, led by strong double-digit growth in Africa and the Middle East as well as mid-single digit growth in Europe. Growth was achieved across all categories, led by strong performances in Dairy, Savory, and Beverage.
  • North America improved 10% driven by double-digit growth at Tastepoint℠ and strong new wins in Beverage and Dairy.
  • Latin America decreased 2% on a reported and currency neutral basis. Mid-single digit growth in South Cone was more than offset by softness in Mexico and Colombia – both of which grew strong double-digits in the year-ago period. On a category basis, strong double-digit growth was achieved in Savory as well as low-single digit growth in Dairy.
  • Greater Asia increased 6% on a reported basis and 2% on a currency neutral basis, as double-digit growth in India and China was muted by softness in Indonesia and the ASEAN region. On a category basis, growth was strongest in Sweet, Savory and Dairy.
  • Flavors segment profit increased 18% on a reported basis and 15% on a currency neutral basis, driven primarily by volume growth, the benefits from productivity initiatives and favorable sales mix.

Fragrances Business Unit

  • On a reported basis, sales increased 14%, or $59.8 million, to $481.9 million. Currency neutral sales improved 8%, with broad-based growth from all categories and regions.
  • Fine Fragrances increased 12% on a reported basis and 4% on a currency neutral basis led by strong double-digit growth in LATAM and North America.
  • Consumer Fragrances grew 11% on a reported basis and 6% on a currency neutral basis with growth achieved in all categories. Performance was led by high-single digit increases in Home Care, Toiletries, and Hair Care. On a geographic basis, growth was broad-based, with all regions contributing positively to the results.
  • Fragrance Ingredients grew 26% on a reported basis and 18% on a currency neutral basis, with growth in all regions as well as very strong double-digit growth in Cosmetic Active Ingredients.
  • Fragrances segment profit increased 20% on a reported basis and 12% on a currency neutral basis driven primarily by volume growth and the benefits from cost and 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 www.sec.gov by May 9, 2018.

IFF to Combine with Frutarom Industries Ltd.

In a separate press release issued today, IFF announced its intention to combine with Frutarom Industries Ltd. to create a global leader in taste, scent and nutrition. To access the press release, please visit our press release page here.

Audio Webcast

A live webcast to discuss the Company’s first quarter 2018 financial results will be held on May 7, 2018, at 8:00 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 in our full year 2018 guidance, including our focus to drive differentiation, balance our customer base, maximize our portfolio and our ability to deliver growth across all of our key financial metrics and the impact of our actions on value creation for our shareholders. 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 27, 2018. 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 refreshed 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 cost and productivity initiatives, (5) the impact of the disruption in supply of citral from BASF on the price and availability of citral in 2018; (6) the Company’s ability to effectively compete in its market, and to successfully develop new, cost-effective and competitive products that appeal to its customers and consumers; (7) changes in consumer preferences and demand for the Company’s products or a decline in consumer confidence and spending; (8) the Company’s ability to benefit from its investments and expansion in emerging markets; (9) the impact of recently enacted U.S. tax legislation on the Company’s effective tax rate in 2018 and beyond; (10) the impact of currency fluctuations or devaluations in the principal foreign markets in which it operates; (11) the economic and political risks associated with the Company’s international operations, including challenging economic conditions in China and Latin America; (12) the impact of any failure or interruption of the Company’s key information technology systems or a breach of information security; (13) the Company’s ability to attract and retain talented employees; (14) the Company’s ability to comply with, and the costs associated with compliance with U.S. and foreign environmental protection laws; (15) the Company’s ability to realize expected cost savings and efficiencies from its profitability improvement initiative and other optimization activities; (16) volatility and increases in the price of raw materials, energy and transportation; (17) price realization in a rising input cost environment (18) fluctuations in the quality and availability of raw materials; (19) the impact of a disruption in the Company’s supply chain or its relationship with its suppliers; (20) any adverse impact on the availability, effectiveness and cost of the Company’s hedging and risk management strategies; (21) the Company’s ability to successfully manage its working capital and inventory balances; (22) uncertainties regarding the outcome of, or funding requirements related to litigation or settlement of pending litigation uncertain tax positions or other contingencies; (23) 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; (24) 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 (25) 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 (1) Currency Neutral Sales, (2) Adjusted Operating Profit and Currency Neutral Adjusted Operating Profit and (3) Adjusted EPS and Currency Neutral Adjusted EPS, which exclude restructuring costs and other significant items of a non-recurring and/or nonoperational nature such as legal charges/credits, gain on sale of assets, operational improvement initiatives, integration costs, FDA mandated recall costs, acquisition related costs and U.S. Tax reform (often referred to as “Items Impacting Comparability”) and, with respect to the currency neutral items, the impact of foreign currency movements. We provide these metrics as we believe that they are useful in providing period to period comparisons of the results of our operational performance. When we provide our expectations for our currency neutral metrics in our full year 2018 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 2018 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.

Meet IFF

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 7,300 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.

Contact information

International Flavors & Fragrances Inc.
Michael DeVeau, 212-708-7164
VP, Corporate Strategy, Investor Relations & Communications
Michael.DeVeau@iff.com

About Business Wire

Business Wire
Business Wire
24 Martin Lane
EC4R 0DR London

+44 20 7626 1982http://www.businesswire.co.uk

(c) 2018 Business Wire, Inc., All rights reserved.

Business Wire, a Berkshire Hathaway company, is the global leader in multiplatform press release distribution.

Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

IDEMIA Will Present Its H1 2019 Financial Results to Investors on July 30, 201923.7.2019 07:00:00 CESTPress release

IDEMIA, the world leader in Augmented Identity, today announced that it will present its H1 2019 financial results to investors on Tuesday July 30, 2019. Yann Delabrière (CEO) and Laurent Lemaire (CFO) will be presenting the financial results and taking questions the same day at 3:30 pm CET (2:30 pm London Time / 9:30 am New York Time). For more information, please refer to our website: https://investors.idemia.com/ About IDEMIA IDEMIA, the global leader in Augmented Identity, provides a trusted environment enabling citizens and consumers alike to perform their daily critical activities (such as pay, connect and travel), in the physical as well as digital space. Securing our identity has become mission critical in the world we live in today. By standing for Augmented Identity, an identity that ensures privacy and trust and guarantees secure, authenticated and verifiable transactions, we reinvent the way we think, produce, use and protect one of our greatest assets – our identity – whet

Gain Therapeutics SA Announces Award Notification of a €1.4M Grant Support From Eurostars-2 Together With the Institute for Research in Biomedicine and Neuro-Sys SAS After Having Scored 2nd Among 325 Eligible Applications23.7.2019 06:30:00 CESTPress release

Gain Therapeutics SA, a biotechnology company discovering and developing novel therapeutics to target lysosomal enzymes involved in inborn errors of metabolism and in central nervous system (CNS) diseases, today announced that together with Dr. Maurizio Molinari from the Institute for Research in Biomedicine, Bellinzona (Switzerland) affiliated to the Università della Svizzera italiana (USI) and Neuro-Sys SAS in Gardanne (France), it has received funding support from Eurostars-2 joint programme with co-funding from the European Union Horizon 2020 research and Innosuisse – Swiss Innovation Agency. This grant will further strengthen Gain Therapeutics’s novel therapeutic approach for targeting rare diseases in the CNS, where lysosomal misfolded enzymes lead to sever clinical phenotypes, where no treatment is available and/or high unmet medical needs still do afflict patients, families and carers. This funding will support the development of the drugs portfolio of Gain Therapeutics for the

iBASIS Accelerates Growth With JC Geha as Chief Operating Officer23.7.2019 06:00:00 CESTPress release

iBASIS, provider of communications solutions for operators and digital players worldwide, today announced the appointment of JC Geha as its COO. He will take his new post effective August 1, and be based at iBASIS’ headquarters in Lexington, Massachusetts. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190722005757/en/ JC Geha (Photo: Business Wire) Formerly Senior Vice President, Head of International Technology and Services for Deutsche Telekom, and of Managed Services for Ericsson, Geha brings to iBASIS an impressive track record of profitable growth, technology and digital transformation expertise. His expertise spans 25 years of deep global industry relationships across the United States, Europe, Middle East, and Africa. Geha will lead iBASIS’ global operations, engineering, IT, and product development. He will report to iBASIS’ CEO and founder of the Group Tofane Global, Alexandre Pébereau, with the responsibility of g

Abzena Announces Successful Technical Transfer of Synaffix GlycoConnect™ Antibody Drug Conjugate (ADC) Technology to Enable Use in Client Projects23.7.2019 06:00:00 CESTPress release

Abzena, the global partner research organization, announced it has successfully completed a technology transfer and scalability evaluation using the Synaffix technologies of GlycoConnect™ (antibody conjugation) and HydraSpace™ (highly polar spacer). Familiarity with these Antibody-Drug Conjugate (ADC) technologies adds to Abzena’s leadership in process development and GMP manufacturing of ADC linkers and payloads. Abzena can now rapidly ramp up ADC projects using Synaffix technology with high scientific quality. Jonathan Goldman, MD, Abzena CEO added: “Abzena believes in patient first drug development. Our expertise and experience with Synaffix GlycoConnect™ and HydraSpace™ technology further advances our leadership across multiple platforms in ADC. We look forward to supporting our customers as they leverage Synaffix technology to rapidly advance ADCs from IND stage into early clinical development.” About Abzena Abzena provides the most complete set of solutions in integrated discover

Aroma Bit to Develop Smartphone Embeddable Ultra-compact Silicon CMOS Based Smell Sensor That Has Dog Nose Equivalent Resolution in 1mm Squared Die Size23.7.2019 01:30:00 CESTPress release

Aroma Bit launched a new subsidiary to develop the next generation smell sensor based on silicon CMOS sensor substrate that are ultra-compact, high resolution and low cost. The technology is realized by applying Aroma Bit developed smell sensor receptor membrane technology to ultra-sensitive silicon CMOS based ion imaging sensor technology developed by professor Kazuaki Sawada at Toyohashi University of Technology and associated companies. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190722005004/en/ Picture of 1mm squared die of silicon CMOS based smell sensor, with dog nose equivalent ~1,200 sensor pixels (Photo: Business Wire) Aroma Bit: http://www.aromabit.com Realizing smartphone embeddable smell sensor with dog nose equivalent ultra-high resolution smell sensor on only 1 millimeter square silicon die size Aroma Bit has developed and are currently selling a compact smell sensor that employs QCM or Quartz Crystal Micro

Logitech Delivers a Strong Start to Fiscal Year 2020 with Robust Sales and Profit Growth23.7.2019 01:00:00 CESTPress release

Logitech International (SIX: LOGN) (Nasdaq: LOGI) today announced financial results for the first quarter of Fiscal Year 2020. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190722005781/en/ Logitech delivers a strong start to Fiscal Year 2020 with robust sales and profit growth. (Graphic: Business Wire) Q1 sales were $644 million, up 6 percent in US dollars and 9 percent in constant currency, compared to Q1 of the prior year. Q1 GAAP operating income grew 46 percent to $47 million, compared to $32 million in the same quarter a year ago. Q1 GAAP earnings per share (EPS) grew 17 percent to $0.27, compared to $0.23 in the same quarter a year ago. Q1 non-GAAP operating income grew 11 percent to $67 million, compared to $61 million in the same quarter a year ago. Q1 non-GAAP EPS grew 15 percent to $0.39, compared to $0.34 in the same quarter a year ago. Cash flow from operations was $37 million, compared to $12 million in the sa