IFF posts 16% boost in Q2 net profit
Net profit increased 16% to $89m and net revenue grew 1% to $721.3m in the quarter ended June 30, with growth driven by its Flavors division, the company said – despite challenging economic conditions in Western Europe that saw overall sales slip 7% in that region.
Meanwhile, revenue in IFF’s fragrance segment was down, by 3% to $359.9m, although profits inched up 2% during the quarter to $63.6m.
On an adjusted basis, earnings per share grew 11% compared to the prior year period.
IFF CEO and chairman Doug Tough said in a statement: “We delivered solid top-line growth and even stronger double-digit EPS growth, despite the challenges presented by the ongoing difficulties in Western Europe and volume declines in Fragrance Ingredients….As expected, increases in raw material costs are beginning to moderate and price realization has improved, resulting in margin expansion and operating profit growth.”
On a geographical basis, North American revenue was up 2% compared to last year’s second quarter, while EAME sales fell 7%, although they were flat on a constant currency basis. The company’s revenue in the Latin American and Greater Asia markets grew strongly, up 10% and 5% respectively.
Tough said that the ongoing growth in its Flavors segment reflected the balanced and consistent nature of the business.
He added that the company continued to be “cautiously optimistic” in its outlook, considering continued uncertainty in the global economy.
“Although we achieved solid momentum in both Flavors and Fragrance Compounds, we believe we will continue to face a weak economic environment in Western Europe and softness in Fragrance Ingredients,” Tough said.
