Frutarom: ‘record’ sales and growing operating profit for Q3
In the period from July-September 2013, other monetary indicators were also positive as the company reported a growth in bottom-line profit and a respectable increase in share price.
The company claims that its results reflect the success of its rapid growth strategy, which aims to take advantage of strategic acquisitions to target markets with high growth rates, particularly in the developing world.
In the company’s directors’ report for this quarter, Frutarom stated: “Frutarom continues to act with determination to implement its rapid profitable growth strategy with focused strengthening of its research and development, manufacturing, marketing and sales infrastructures together with continued examination of additional strategic acquisitions.”
Financial highlights
Frutarom posted another “record” with sales at US161.0 million, putting them just below the previous quarter’s result of US$168.6m but marking an increase on Q3 for the previous two years.
Gross profitability also grew to 38.8% of total sales, making it slightly less than growth in the last quarter, but again higher than gross profit in 2012. Share prices also grew by more than 16% to $0.29.
Frutarom also anticipates futher savings through continued efforts to streamline operations.
New emerging market acquisitions
Frutarom acquired three growing companies in South Africa, Russia and Guatemala, and the company’s centre of gravity is beginning to shift outside of developed markets- percentage of total sales in emerging markets increased from 27% in 2010 to 36% in 2012.
The company credits these acquisitions with providing adding technological strength as well as local experience to their portfolio. Frutarom also commented that moving production sites to countries with lower operating costs has enabled them to create savings of around $10m on an annual basis.
Going forward, according to their report on this quarter, the firm will take advantage of the infrastructure and local advantages acquired in emerging markets to leverage the cross-selling options that these factors create.
