IFF 2Q09 Savory Sales Offset Beverage Losses

NEW YORKInternational Flavors & Fragrances, Inc. (IFF) released its 2Q09 financial results that reported revenues of $568 million, 11 percent lower than the prior year quarter. Despite the weaker operating environment, its Flavors Unit performance in North America and Latin America was quite resilient, according to the report.

In North America, higher volumes and new wins in Savory offset the volume weakness in the Beverage category. The 8-percent local currency sales growth in Latin America was credited to new wins, as well as volume growth in Confectionery and Dairy. Europe was again the weakest region, mainly attributable to lower end-use consumption and further inventory contractions by our customers.

Worldwide Flavor sales were down 7 percent due to the impact of the stronger U.S. dollar. Operating profit was $55 million, lower by $2 million from a very strong year ago quarter, due to unfavorable exchange rates, higher raw material costs and weaker mix. Despite these pressures, operating profit margin improved to 20.2 percent versus the prior year period of 19.6 percent as price increases and internal cost-reduction initiatives gained momentum.

I am encouraged with the progress made in the second quarter, said Chairman and CEO Robert M. Amen. Our Flavors Business continues to perform very well in a difficult environment.