Frutarom, who in the past few days announced two further acquisitions to support the company’s aggressive growth strategy, has reported record results for the third quarter and for the first nine month of 2013 in terms of sales, gross profit, operating profit, EBITDA, net profit and earnings per share. Net profit and EPS doubled from the third quarter of 2011.
Third quarter sales were up 2.5% to $161.0 million. In the first nine months of 2013 Frutarom’s sales rose to $481.9 million. Operating profit in the third quarter of 2013 totalled $22.6 million, 14.0% of sales, up 15.7% from an operating profit of $19.5 million in Q3/2012, which accounted for 12.4% of sales. The operating profit in the first nine months of 2013, net of one-time expenses, rose 15.7% to $68.6 million, 14.2% of total sales.
The company said that its record results for the third quarter and first nine months of 2013 were achieved owing to the significant expansion of its activities in developing markets with higher growth rates and in the USA; to the successful integration of all eight acquisitions that were made during 2011 and 2012 alongside Frutarom’s global activity, which bolster sales and improve profit and profitability; the stability in the prices of raw materials used by Futarom and the improvement in the product mix, resulting from the development of new products with higher margins.
Frutarom said that its share in developing markets as a percentage of total sales grew from 27% in 2010 to 36% in 2012, and expects he last three acquisitions will accelerate the rise in market share in these growing markets.
“We are pleased with the results for the third quarter and first nine months of 2013 reflect the successful implementation of our rapid growth strategy,” said Ori Yehudai, president and CEO of Frutarom. “The considerable improvement in profitability and the net earnings in Q3, which doubled within two years, stems from the successful combination of organic growth with the acquisitions made in 2011 and 2012. We optimized business synergies and began capitalizing on cross-selling opportunities. The growth in gross profitability is also driven by the launch of unique, natural products with higher profit margins, which contribute to the improvement in the product mix. The expansion of the range of natural products with high profit margin is achieved by focusing on natural, health-oriented food, in response to a growing global demand.”
“In the past three years, we continued to reinforce our presence and market share in strategic markets in Asia, East Europe, Latin America and Africa, which are considered the fastest growing food markets. At the same time, we are enjoying growth and increasing our foothold in the US market, the world’s biggest flavour market, with a view to additional strategic acquisitions.”
Frutarom said that it anticipates further improvement in profit and margins as a result of its actions to streamline operations, reduce costs, reinforce its global purchase infrastructure and the successful merger of the acquisitions made in 2011 and 2012. The last three acquisitions in 2013 will also boost profit.
