Flavour sales continued to decline in Europe for number one flavours and fragrances company, International Flavors & Fragrances, but despite this the overall picture for the third quarter of 2002 was optimistic and the company's divestment plan appears to be paying off.
This week IFF reported that third quarter sales for 2002 totalled $462.8million (€468.9m), increasing 5 per cent over the comparable $462.7 million results for 2001.
Richard A. Goldstein, chairman and chief executive officer of IFF, said: "We continue to be pleased with the progress made this year, particularly in view of the weak economic conditions in every region in which we operate."
"We achieved solid earnings growth while at the same time increasing spending on research and development to our targeted level of 8 per cent of sales. We also made substantial progress in reducing our debt, enabled by our very strong cash flow, contributing to substantially lower interest expense."
In June this year US company Kerr Concentrates purchased the fruit and vegetable concentrate business of IFF. Goldstein commented at the time:"This divestiture is a part of IFF's ongoing reorganisation efforts and reflects our renewed focus on our high value-added, core flavours and fragrances business."
said Richard A. Goldstein, IFF chairman and chief executive officer.
As part of this focus IFF has integrated flavours company Bush Boake Allen into the company at the beginning of 2001. Goldstein said this week: "Our focus on successfully completing the integration of BBA combined with our commitment to top-line growth continues to pay off."
IFF reported that local currency fragrance sales in Europe increased 8 per cent resulting in a 20 per cent increase in dollar sales due to the stronger than expected Euro. Flavour sales in Europe declined 1 per cent in local currency, resulting in a 10 per cent increase in dollar sales.
Flavour sales were stronger in North America, seeing a five per cent growth. North America fragrance sales increased 2 per cent, mainly due to the benefit of new fine fragrance launches.
In India flavours witnessed strong growth with sales increasing 17 per cent in local currency (18 per cent in dollars) and fragrance sales rising eleven per cent (14 per cent in dollars).
The results released this week are a far cry from May 2001 when the company saw a 54 per cent drop in first-quarter net income.