International Flavors and Fragrance's (IFF) sales were up in the third quarter of 2010 as markets continue to recover, driving a strong bottom line.
The New York-headquartered company recorded sales of $673m in the quarter compared to $612m in the same period last year, an increase of 10 percent (13 per cent in local currencies).
This increase in sales, along with a focus on cost cutting, led to an improvement in profits in comparison to previous years, with the company recording an operating profit of $121m.
Excluding one off items, this equates to an operating profit increase of 18 per cent versus last year’s figure, IFF claimed. Net income was also up, standing at $77m, a 46 percent increase on last year’s $52m.
“This outstanding top-line performance combined with our continued focus on cost discipline enabled us to deliver a margin profile that has not been achieved in over five years,” said IFF CEO Doug Tough.
Fine fragrance recovers after difficult 2009
Fragrance sales, which make up just over half of the company’s business, came in at $373m up 11 percent on 2009’s third quarter.
Particularly strong growth figures were seen in the fine fragrance and beauty care category, reflecting the very difficult period late 2009 when destocking severely affected results.
According to IFF, new wins and increased volumes drove the fine fragrance business and in beauty care it was hair care and toiletries that led results. Sales growth for functional fragrance and fragrance ingredients were 3 percent and 12 percent, respectively.
Confectionary drives flavors
Flavor sales were up 10 percent on last year’s figures and IFF highlighted confectionary and beverage as two strong markets in North America, and confectionary, savory and dairy as leading the way in Latin America.
Sales for the business unit totalled $301m.
New wins to overtake restocking for new growth
Looking to the future Tough said local currency sales were expected to remain strong although at more ‘normalized levels’. In addition, the CEO said the positive benefits of restocking were coming to an end and predicted new business wins to be the driver of future growth.
“We expect that this performance will support our efforts to drive market share improvements while also creating long-term value for our shareholders," he added.