Bolt on buys boost Frutarom year end
acquisitions as year end figures show 40 per cent boost in sales.
The Tel Aviv-based company saw sales rise to €151 million in 2004, up from €107 million in 2003. Net profit nearly doubled from €6.17 million to €12 million.
"The excellent results are due to the double digit organic growth in core activities, the successful integration of the Flachsmann activities acquired by Frutarom in 2003; and our focus on leveraging the cross selling possibilities from the recent acquisition of the Food Systems activity from International Flavors & Fragrances," said Frutarom's CEO Ori Yehudai.
Aiming to become one of the top ten flavour players, an ambition largely fed through an aggressive acquisition strategy, earlier this year Frutarom announced plans to seek a listing on the London Stock Exchange to raise funds.
The Israeli firm has openly said for a long time that it planned to float shares on an overseas exchange, in addition to the Tel Aviv Stock Exchange (TASE), in order to fuel new purchases.
"The company intends to use the proceeds to finance future strategic acquisitions, as part of Frutarom's growth strategy and to refinance the cost of the recent acquisition of the European food systems business of IFF," said the group in January, operating in the €5 billion global flavours market.
Reflecting the firm's hunger, in August last year Frutarom completed the €30 million acquisition of International Flavours & Fragrances (IFF) fruit preparation operations in Europe, including Germany, Switzerland and France.
Buying into IFF's fruit and vegetable extract business gives Frutarom a firm foothold in the growing natural ingredients market. The fruit and vegetable extracts market has risen in parallel to the burgeoning functional food trend, itself driven by the consumer's desire to improve health and prevent disease through food and beverage consumption.
The €819.9 million European and US fruit and vegetable extracts and powders market is on course to grow 4.5 per cent annually, reaching €1.07 billion by 2009, estimate market analysts Frost & Sullivan.
In a previous bolt-on acquisition, in June 2003 Frutarom UK paid €20 million for the Swiss flavours company Emil Flachsmann (now Frutarom Switzerland), and with an increased stake in the botanical extracts market.
Looking forward to the next three to four years, Frutarom confirmed its ambitious strategy this week announcing it is looking to more than triple turnover to $ 500 - 600 million by 2008, through acquisitions and "accelerated growth in core activities".
