Emerging markets offset lower fragrance and beauty sales for IFF
The company reported that sales for the quarter increased by 7.5 percent to $716m, compared to the corresponding quarter last year, a figure that represented an increase of 3 percent excluding the negative impact of foreign currency.
The figures beat industry forecasts, with a group of analysts polled by Thomson Reuters expecting sales of $701.7m for the period, on average.
“We are please with our second quarter performance in light of our challenging 17 percent local currency sales growth comparison and the significant increase in raw material costs,” said Doug Tough, IFF chairman and CEO.
The company said it experienced double digit sales growth in Russia, Brazil, India and in China the growth for the period was in excess of 20 percent.
Tough added that the diversification of the product portfolio as well as the company’s geographic spread had helped pushed local currency sales, while profitability had been boosted by pricing and cost disciplines.
Net profit for the period increased by 13.4 percent, from $67.2m in the corresponding period last year, compared to $76.2m for the current quarter.
On the fragrances side of the business, sales were up from $361.5m in the corresponding period last year, to $370.2m, a figure that reflected considerably slower sales growth compared to the flavors division.
The slower growth in the division was attributed to difficult comparison with the corresponding period last year, when growth was exceptionally strong.
The company also said that fragrance side of the business was also more heavily impacted by the rising cost of commodity and raw material prices.
"While our first half performance was strong, it is worth noting that we will continue to face strong year-over-year comparables and elevated levels of raw material costs over the balance of the year,” said Tough.
“Nonetheless, we believe that by focusing on our strategy - leveraging our geographic reach, strengthening innovation and maximizing our portfolio - we can achieve our long-term targets of four to six percent local currency sales growth, seven to nine percent operating profit growth, and 10 percent plus EPS growth for the full year 2011."