International Flavors & Fragrances (IFF) has reported financial results for the fourth quarter and full year ended December 31, 2013.
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, fuelled by double-digit growth in the emerging markets. In the fourth quarter, IFF said that its expanding footprint in the emerging markets accounted for 50% of consolidated sales.
Reported net income for the quarter totalled $61.5 million, compared with net income of $68.1 million in the prior year quarter. Excluding one-off items, 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.
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 totalled $353.5 million compared with net income of $254.1 million in the prior year. Excluding one off items, adjusted net income increased 12% to $368.0 million from $327.5 million in 2012.
“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.”
“We once again delivered local currency sales growth and adjusted operating profit improvements that exceeded our long-term targets, while continuing to make important investments in our people and portfolio to strengthen our company and position IFF for continued success.”
“2013 was an extremely productive year for IFF. By executing on our three strategic priorities, we have delivered on our long-term growth targets for full year 2013, achieving 5% local currency growth (6% LFL), 11% adjusted operating profit growth and 12% adjusted EPS growth, while having the financial flexibility to invest in the future growth of IFF, and return capital to our shareholders.”
“We are very excited about the future profitable growth of IFF and believe we are well-positioned to deliver another strong year in 2014.”
Reported revenue for the full year for the Flavors Business Unit increased 3% to $1.4 billion. The Flavors segment contributed 48% of the company’s total consolidated revenue.
Local currency sales increased 4% for the full year. Growth from new business wins offset a slight sales decline on existing business and the exit of low-margin sales activities. Excluding the impact of exiting these low-margin sales activities, LFL growth would have been 6%.
LFL growth of 6% was due to positive growth in every region, led by double-digit growth in Latin America, and high single digit growth in Greater Asia and EAME.
Full year sales were supported by strong growth in the emerging markets, which accounted for 51% of Flavors total sales, and continued to outpace the growth in the developed markets. From an end-use category perspective, local currency sales growth was fueled by double-digit growth in Beverages and solid growth in Savory.
