IFF profits slip on higher raw material costs

By Caroline Scott-Thomas

- Last updated on GMT

Related tags: Economics, Cost

IFF profits slip on higher raw material costs
International Flavors and Fragrances (IFF) has reported a 6% increase in quarterly revenue, although higher pricing did not keep up with double-digit growth in raw material costs, the company said.

IFF reported revenue of $714m during the third quarter, ended September 30, compared to $673m for the prior year period. Gross profit fell 2% from $285m to $278m. However, the company said that flavors had achieved double-digit growth in emerging markets, while flavors growth was strongest in North America, for which it cited several health and wellness initiatives.

IFF’s CEO and chairman Doug Tough said in a statement that the company had a cautious approach to the upcoming fourth quarter, and expected sales growth to approach the low end of its financial targets for the full year 2011 of 4-6%.

He said: “Our category, customer and geographic diversity continued to support our financial results in the third quarter. The Flavors business continued to gain market share led by our innovative health and wellness portfolio and double-digit growth in the emerging markets.”

Financial analysis firm Morningstar said that rivalry between flavor and fragrance companies was likely to intensify as commodity costs remain elevated and industry growth prospects limited”.

“Another tough quarter for International Flavors & Fragrances (IFF) supports our view that input cost inflation and fragile consumer spending could challenge the firm,” ​it said. “…We expect the fragile economic environment could continue to challenge IFF and eventually present a better buying opportunity for investors.”

IFF shares were down 6.4% at 12pm ET on Tuesday to $54.95.

Tough added: “Despite the challenging economic conditions, we continue to believe we can deliver adjusted operating profit growth above our long-term targets driven by our efforts in pricing, the benefit of previous restructuring activities, and cost control initiatives.”

Related topics: Suppliers, Flavors and colors

Related news

Show more

Related products

show more

Clean-label flavor enhancement and sodium reduction

Clean-label flavor enhancement and sodium reduction

Salt Of The Earth LTD | 01-Jul-2020 | Application Note

Mediterranean Umami is a mixture of plant extracts rich in umami flavor compounds and sea-salt. It is an all-natural and clean-label solution for flavor...

REAL Eggs Integral Role in Baking White Paper

REAL Eggs Integral Role in Baking White Paper

American Egg Board | 06-Oct-2019 | Technical / White Paper

By enhancing ingredient statements, REAL Eggs contribute to gold standard quality. In a world where consumer expectations evolve at sometimes dizzying...

Enhancing Bakery’s Appeal

Enhancing Bakery’s Appeal

Bunge Oils | 23-Sep-2019 | Technical / White Paper

Many of the attributes consumers love about bakery are determined by the type of fat bakers use. Some initial PHO substitutes did not fully meet sensory...

Related suppliers

Follow us


View more