This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

IFF Reports Strong Fourth Quarter And Full Year 2013 Results

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 fourth quarter and full year ended December 31, 2013.

Fourth Quarter 2013 Results

  • Reported revenue increased $44 million, or 7%, to $725 million from $681 million in the prior year quarter. Local currency sales increased 7% reflecting solid sales growth in both the Flavor and Fragrance business units, fueled by double-digit growth in the emerging markets. In the fourth quarter, our expanding footprint in the emerging markets accounted for 50% of consolidated sales.
  • Reported net income for the quarter totaled $61.5 million, or $0.75 per share, compared with net income of $68.1 million, or $0.83 per share, in the prior year quarter. Net income in the fourth quarter of 2013 included a $9.1 million after-tax Spanish capital tax charge, a $1.9 million after-tax loss on the sale of a non-operating asset, and other costs associated with previously announced restructuring or improvement initiatives.
  • Excluding the Spanish capital tax charge and other costs included in the Reconciliation of Income table from the current year’s results, adjusted net income increased 11% to $75.5 million from $68.1 million in the prior year quarter, and adjusted earnings per share (EPS) increased 11% to $0.92 per share from $0.83 per share in the prior year quarter.

Full Year 2013 Results

  • Reported revenue for the full year increased 5% to $3.0 billion. Local currency sales increased 5% for the full year, reflecting strong growth from new business wins and positive volume on existing business. On a like-for-like basis (LFL), which excludes the exit of Flavors low-margin sales activities, local currency sales increased 6%. The emerging markets grew by 10% and accounted for 49% of full year sales.
  • Reported net income for the full year totaled $353.5 million, or $4.29 per share, compared with net income of $254.1 million, or $3.09 per share, in the prior year. The current year’s net income included charges of $22.9 million related to a Spanish capital tax charge and other costs associated with the recently announced restructuring and operational improvement programs. These charges were partially offset by an $8.5 million after-tax net gain on the sale of non-operating assets. The prior year’s net income included charges of $73.4 million (or $0.89 per share), primarily related to the Spanish income tax settlement.
  • Excluding these charges from both years’ operating results, adjusted net income increased 12% to $368.0 million from $327.5 million in 2012 and full year adjusted EPS increased 12% to $4.46 from $3.98 in the prior year.
  • Cash flows from operations for the full year were $407.6 million, or 13.8% of sales, compared with $323.8 million, or 11.5% of sales in the prior year. The current year’s cash flow from operations included $48 million of cash payments related to the Spanish tax cases and incremental U.S. pension contributions. The prior year cash flow from operations included a $105.5 million cash payment due to the Spanish income tax settlement. Excluding these payments from the Company’s operating cash flow, adjusted cash flow from operations would have increased 6% from $429 million in 2012 to $456 million in 2013.

Subsequent Events

  • On January 16 th, IFF announced it had completed the acquisition of Aromor Flavors and Fragrances, Ltd, a privately-held manufacturer and marketer of complex specialty ingredients. Aromor would have represented approximately $35 million of incremental sales to IFF’s 2013 results on a pro-forma basis. Aromor is expected to be accretive to IFF’s earnings per share in 2014. The acquisition of Aromor, with its strong R&D capabilities, supports IFF’s strategic focus on creating consumer-preferred Fragrance Compounds using specialized, value-added, cost-effective molecules.

Management Commentary

“We are very pleased with our fourth quarter performance, which benefited significantly from the diversity of our businesses and end-use categories in both the developed and emerging markets,” said Doug Tough, Chairman and CEO of IFF. “The emerging markets continue to be a primary driver of our topline growth, and accounted for half of our consolidated sales and a majority of our top line local currency sales increase. This strong, continued growth further validates our emerging market strategy and is yet one more data point that underpins our commitment to these markets.”

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,461.32 -153.49 -0.92%
S&P 500 1,927.11 -14.17 -0.73%
NASDAQ 4,382.8470 -36.6310 -0.83%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs