International Flavors & Fragrances Inc. (IFF, Financial) filed Quarterly Report for the period ended 2012-03-31.
Intl F & F has a market cap of $4.87 billion; its shares were traded at around $59.48 with a P/E ratio of 16.1 and P/S ratio of 1.8. The dividend yield of Intl F & F stocks is 2.1%. Intl F & F had an annual average earning growth of 6.5% over the past 10 years. GuruFocus rated Intl F & F the business predictability rank of 3-star.
Cash flows from operations were $52.6 million or 7.4% of sales in 2012 as compared to an outflow of $34.9 million or -4.9% of sales during 2011. The increase in cash generation was primarily driven by the impact of lower incentive compensation payments and lower tax payments in 2012 compared to 2011 as well as sharply lower core working capital needs for trade receivables and inventories.
The Fragrances business experienced a 4% decrease in reported sales and a 3% decline in LC sales, compared to strong 7% LC sales growth during the comparable first quarter 2011 period. New business wins and the realization of price increases were more than offset by volume declines in existing business, most notably in Ingredients and to a lesser extent Fine Fragrances. LC declines within the regions was most significant in GA down 10%, mainly due to volume declines on existing business in Functional Fragrance along with volume declines in Ingredients, and EAME down 5%. All other regions were slightly up reflecting gains in Fabric Care. Emerging markets, which represented more than 44% of first quarter 2012 Fragrance sales, had LC declines of 3%.
Flavors segment profit totaled $79.7 million in the first quarter 2012 (22.8% of sales) compared to $79.0 million (23.3% of sales) in the comparable 2011 period. The increase in profitability was mainly driven by LC sales growth and the realization of price increases that more than offset higher raw material costs.
Fragrances segment profit totaled $56.1 million in the first quarter 2012 or 15.5% as a percentage of sales, compared to $68.7 million or 18.3% as a percentage of sales reported in 2011. The decline in profit was driven by double digit input costs and lower sales volume that could only be partially offset by the realization of price increases, other margin improvement initiatives, and lower incentive compensation.
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Intl F & F has a market cap of $4.87 billion; its shares were traded at around $59.48 with a P/E ratio of 16.1 and P/S ratio of 1.8. The dividend yield of Intl F & F stocks is 2.1%. Intl F & F had an annual average earning growth of 6.5% over the past 10 years. GuruFocus rated Intl F & F the business predictability rank of 3-star.
Highlight of Business Operations:
Operating profit decreased $12.5 million to $120.9 million (17.0% of sales) in 2012 compared to $133.4 million (18.7% of sales) in the comparable 2011 period. The 2012 period included an additional restructuring charge of $1.7 million associated with the strategic realignment of the Fragrance business unit that was originally recorded in the fourth quarter 2011. As a result, adjusted operating profit, excluding the effects of restructuring charges in 2012 decreased $10.8 million to $122.6 million (17.2% of sales) in 2012. The year-over-year decline in adjusted operating profit was driven by 9% higher raw material input costs that were partially offset by cost discipline, including lower accruals for incentive compensation.Cash flows from operations were $52.6 million or 7.4% of sales in 2012 as compared to an outflow of $34.9 million or -4.9% of sales during 2011. The increase in cash generation was primarily driven by the impact of lower incentive compensation payments and lower tax payments in 2012 compared to 2011 as well as sharply lower core working capital needs for trade receivables and inventories.
The Fragrances business experienced a 4% decrease in reported sales and a 3% decline in LC sales, compared to strong 7% LC sales growth during the comparable first quarter 2011 period. New business wins and the realization of price increases were more than offset by volume declines in existing business, most notably in Ingredients and to a lesser extent Fine Fragrances. LC declines within the regions was most significant in GA down 10%, mainly due to volume declines on existing business in Functional Fragrance along with volume declines in Ingredients, and EAME down 5%. All other regions were slightly up reflecting gains in Fabric Care. Emerging markets, which represented more than 44% of first quarter 2012 Fragrance sales, had LC declines of 3%.
Flavors segment profit totaled $79.7 million in the first quarter 2012 (22.8% of sales) compared to $79.0 million (23.3% of sales) in the comparable 2011 period. The increase in profitability was mainly driven by LC sales growth and the realization of price increases that more than offset higher raw material costs.
Fragrances segment profit totaled $56.1 million in the first quarter 2012 or 15.5% as a percentage of sales, compared to $68.7 million or 18.3% as a percentage of sales reported in 2011. The decline in profit was driven by double digit input costs and lower sales volume that could only be partially offset by the realization of price increases, other margin improvement initiatives, and lower incentive compensation.
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