While sales across the board were up 8 percent to $553m, the company's flavor business was principally responsible for this growth as fragrance sales rose by only 2 percent to $300m.
In the fragrance division, ingredients sales rose 4 percent whereas demand for its functional products increased 3 percent and fine fragrance sales fell 2 percent.
Sales in the fragrance business weakened most noticeably in Europe and North America and were strongest in Asia where ingredient sales were pushed up by strong demand for compounds and production shifting to the region, the firm said.
The poor performance of the fragrance division as well as higher material costs affected profits as the group's net income was down $1m on 2006 to $47m
Full year results
For full year results, sales in the fragrance division rose 5.9 percent to $1.27bn while the group's sales rose 9 percent to $2.76bn.
Meanwhile, IFF's net income increased by $247m - up 9 percent from last year.
Chairman and chief executive officer Robert Amen said: "I am pleased with our 2007 financial performance, which reflects strong top line and earnings per share growth.
"We met or exceeded our financial goals and delivered our second consecutive year of increased earnings.
"Our full-year financial results demonstrate that our strategies are working. Specifically, we increased sales, grew market share and built a stronger organization. While we still have opportunities for improvement, our 2007 accomplishments provide a sound foundation for continued growth in sales and earnings per share in 2008 and beyond."
Flavors
On the flavors side the company's sales performance for the fourth quarter was strong across all regions - most notably in Latin America, Greater Asia and Europe.
Overal sales rose 16 percent to $253m in the flavors business for the quarter, driven primarily by "new wins" and increased volume in Europe and the emerging markets in Asia and Latin America.
In North America the sales were up just one percent year on year in North America, compared to 20 percent in Europe and 42 per cent in Latin America.
