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IFF Reports Third Quarter 2012 Local Currency Sales Growth Of 5% And Adjusted EPS Growth Of 8% To $1.08 Per Share

Stocks in this article: IFF

International Flavors & Fragrances Inc. (NYSE: IFF), a leading global creator of flavors and fragrances for consumer products, today reported financial results for the third quarter ended September 30, 2012.

Third Quarter 2012 Results

  • Reported revenue for the quarter totaled $709.0 million, a decrease of 1% from $713.8 million in the third quarter of 2011. Excluding the impact of foreign currency, local currency sales increased 5%.
  • On a like-for-like basis, which excludes the impact of proactively managing the exit of low-margin Flavors sales activities, local currency sales increased 7%.
  • Reported net income totaled $16.4 million, or $0.20 per diluted share, for the third quarter. Reported net income includes $72.4 million of tax expense related to the previously announced Spanish tax settlement.
  • Excluding the impact of the $72.4 million charge in the third quarter related to the Spanish tax settlement and a $0.6 million reversal of a restructuring charge in the prior year third quarter, adjusted net income increased 9% to $88.7 million versus adjusted net income of $81.8 million in the prior year period.
  • Adjusted EPS grew 8% to $1.08 per share from $1.00 in the third quarter of 2011.

Management Commentary

“Continuing the trends we saw in the second quarter, both our Flavors and Fragrance Compounds businesses delivered solid top-line growth and margin recovery this quarter, reflecting the strength, stability and diversity of our business, even with ongoing economic uncertainty in many parts of the world,” said Doug Tough, Chairman and CEO of IFF. “By focusing on the execution of our strategic priorities we achieved local currency growth of 7% on a like-for-like basis, which was the highest growth we have achieved since the first quarter of 2011.”

“We saw strong momentum in every region and end-use product category, with the exception of Fragrance Ingredients. Fragrance Compounds achieved 9% local currency growth, which was the result of 10% growth in Fine and Beauty Care and 8% growth in Functional Fragrance. Flavors delivered 9% growth on a like-for-like basis, supported by double-digit growth in Beverages and Dairy, and solid growth in Savory and Sweet. These strong growth trends, as well as an improved mix of business and ongoing manufacturing efficiencies, resulted in adjusted earnings growth of 8%.”

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