Flavours and ingredients company Frutarom has reported continued rapid growth and record results again for Q3 2012 and for the first nine months of 2012 in terms of sales, gross profit, operating profit, EBITDA, net profit and earnings per share, presenting substantial increase in cash flow.
Frutarom said that its organic growth, reflected also in its accelerated expansion into target markets in emerging markets where growth rates are high, the continued rapid growth of the company's flavours sector in North America, alongside the successful integration and utilisation of the synergies and cross selling opportunities resulting from the eight acquisitions Frutarom has made since 2011, have brought about its record results for the third quarter, despite challenging market conditions in the global economy in general and in Western Europe in particular and despite the strengthening of the dollar versus the main currencies in which the company operates, which detracted from sales and dollar profits.
Third quarter sales grew to US$157.1 M, 24% up net of currency effects on the year-ago period. Frutarom's sales in the flavours segment, the most profitable of the company's activities, grew, net of currency effects, by 26.4% during Q3 of this year, compared with the same quarter last year, reaching a third quarter record high of US$114.2 M. Flavours sales now constitute 73% of total Frutarom sales (compared with 40% in 2001).
Over the first nine months of 2012, Frutarom sales grew, net of currency effects, by 27.9%, achieving record sales for the first nine months of US$473.1 M. Frutarom's sales in the flavours segment, net of currency effects, increased by 34.6% compared with the first nine months of last year.
The trend of improvement in profit and gross and operational margins continues, said the company. Organic growth, strategic acquisitions, adjustments in Frutarom's product selling prices to its customers, continued stabilisation and even the start of a decrease in the prices of some of the raw materials Frutarom uses in the manufacture of its products, actions taken for lowering costs of raw materials by strengthening global purchase and utilisation of the many operational synergies derived from the recent acquisitions and improvement in the cost structure have led to a significant rise in Frutarom’s margins and profit, which are expected to continue in 2013.
The company’s gross profit in Q3 2012 increased by 21.8%, reaching a third quarter record high of US$58.1 M compared with US$47.7 M during the same quarter last year. Operating profit in Q3 2012 achieved a record third quarter high of US$19.5 M, 12.4% of sales, a 51.5% increase compared with the same quarter last year. Operating profit in the first nine months of 2012 increased by 27.1% to US$59.1 M - 12.5% of sales
"Quarter after quarter we have succeeded in realising our rapid profitable growth strategy - a business vision which has led and continues to lead Frutarom to strengthening its business and competitive status and to establish its positioning as one of the largest companies in the world in the area of flavours and fine ingredients,” said Ori Yehudai, Frutarom’s president and CEO. “Over the first nine months of the year we achieved a 70% growth in the emerging markets of China, South East Asia, Central and South America, Central and Eastern Europe and Africa, which currently constitute 35% of our sales compared to 25% of sales only two years ago. In the BRIC countries, Frutarom’s sales grew by 41%. At the same time, rapid growth in our flavour sector continues in North America, the largest flavour market in the world, where we grew this year by 60%.”
