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IFF · International Flavors & Fragrances

32 filings

10-K

IFF 10-K Annual Reports

International Flavors & Fragrances - 32 annual reports

Filing record · 2016–202610-K1110-Q338-K151

2025
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2025
International Flavors & Fragrances Inc. (IFF) reported net sales of $10.890 billion for 2025, down 5% from $11.484 billion in 2024, while comparable currency neutral sales rose 2%. The company posted a net loss attributable to IFF shareholders of $361 million, or $(1.41) per share, compared with net income of $263 million in 2024. The loss was driven primarily by a $1.153 billion goodwill impairment on the Food Ingredients reporting unit, which followed the January 1, 2025 segment reorganization. Gross margin improved to 36.2% from 35.9%, and Segment Adjusted Operating EBITDA totaled $2.086 billion, with consolidated margin at 19.2%. The company completed the divestitures of the Pharma Solutions disposal group (gross cash proceeds of approximately $2.581 billion) and the Nitrocellulose business in May 2025, and it is pursuing strategic alternatives for Food Ingredients, including a pending sale of its Soy Crush, Concentrates & Lecithin business expected to close in the second quarter of 2026. Cash flow from operations fell to $850 million from $1.070 billion, while investing cash flow of $2.269 billion reflected divestiture proceeds. Total debt declined to $5.994 billion at December 31, 2025, following tender offers that retired $2.0 billion of senior notes and produced a $488 million gain on extinguishment. The filing also discloses ongoing antitrust investigations and class action lawsuits related to its fragrance businesses, with a $43 million provision recorded in 2025 for U.S. class action lawsuits. The company revised prior-period tax-related errors and disclosed that its disclosure controls and internal control over financial reporting were effective as of December 31, 2025.
Feb 27, 2026
2024
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2024
International Flavors & Fragrances Inc. (IFF) reported net sales of $11.484 billion for 2024, essentially flat versus $11.479 billion in 2023. Currency neutral sales rose 3%, and comparable currency neutral sales rose 6%, driven by volume increases. Reported gross profit increased 12% to $4.124 billion (35.9% of sales), and operating profit was $766 million, compared with an operating loss of $2.110 billion in 2023, which included a $2.623 billion goodwill impairment. Net income attributable to IFF shareholders was $243 million, or $0.95 per share, versus a loss of $2.567 billion in 2023. Adjusted operating EBITDA rose to $2.205 billion from $1.980 billion. The company is in the middle of a portfolio optimization strategy. It completed the divestitures of its Cosmetic Ingredients business (April 2, 2024) and its Flavors and Essences UK business (September 1, 2024). Agreements to sell the Pharma Solutions disposal group and the nitrocellulose business are expected to close in the second quarter of 2025. IFF also expects a material goodwill and long-lived asset impairment charge of $1.0 billion to $1.5 billion in the first quarter of 2025, tied to the reorganization of Nourish into Taste and Food Ingredients segments effective January 1, 2025. Balance sheet and cash flow pressures remain significant. Total debt was $8.977 billion at December 31, 2024, and cash flow from operating activities fell to $1.070 billion from $1.439 billion. The company remains in compliance with its credit agreements, which operate under a financial covenant relief period through December 31, 2025, and dividends per share were reduced to $1.60 in 2024 from $3.24 in 2023. Antitrust investigations in the United States and Europe into its fragrance businesses, along with related class action lawsuits, remain unresolved.
Feb 28, 2025
2023
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2023
International Flavors & Fragrances Inc. (IFF) reported 2023 net sales of $11.479 billion, down $961 million, or 8% on a reported basis (6% currency neutral), from $12.440 billion in 2022. The decline was driven by volume decreases across businesses and a net impact of about $572 million from changes in business portfolio mix, partly offset by price increases. The company recorded a goodwill impairment charge of $2.623 billion tied to its Nourish reporting unit, producing an operating loss of $2.110 billion and a net loss attributable to IFF shareholders of $2.567 billion, or $(10.05) per diluted share. Excluding the impairment, the company's underlying performance weakened, with segment adjusted operating EBITDA falling to $1.980 billion from $2.455 billion in 2022. Cash flow from operations improved to $1.439 billion from $397 million, mainly due to lower working capital, while the company paid $826 million in dividends. Total debt was $10.071 billion at year-end, and the company operated under amended credit agreements that relax the leverage covenant through December 31, 2025 and restrict share repurchases and dividends above $0.81 per share per quarter. The company also entered into an agreement to sell its Cosmetic Ingredients business, expected to close in the first quarter of 2024, and announced that J. Erik Fyrwald would succeed Frank K. Clyburn Jr. as CEO effective February 6, 2024. Investors should weigh the earnings decline and impairment charges against leverage and the covenant relief period, along with ongoing antitrust investigations into the fragrance businesses by the European Commission, UK CMA, U.S. DOJ and Swiss Competition Commission, plus related class actions.
Feb 28, 2024
2022
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2022
International Flavors & Fragrances Inc. (IFF) reported 2022 net sales of $12.440 billion, up 7% on a reported basis from $11.656 billion in 2021, with price increases across businesses partly offset by the change in business portfolio mix and volume decreases. The company posted a net loss attributable to IFF shareholders of $1.871 billion (diluted loss per share of $7.32), compared with net income of $270 million in 2021. The loss was driven primarily by a $2.250 billion goodwill impairment in the Health & Biosciences reporting unit and a $120 million impairment of long-lived assets in Russia. Gross margin improved to 33.4% from 32.0%, and Segment Adjusted Operating EBITDA totaled $2.455 billion, compared with $2.425 billion in 2021. Cash flow from operations fell to $397 million from $1.437 billion, driven mainly by higher working capital, largely inventories and accounts payable. Total debt was $10.970 billion at December 31, 2022, and cash and cash equivalents were approximately $535 million, including $52 million in assets held for sale. The company paid dividends of $810 million, and its net debt to credit adjusted EBITDA covenant ratio was 4.14 to 1.0. S&P Global Ratings downgraded the company's local currency long-term rating from BBB to BBB- on October 13, 2022. Management is pursuing a strategic transformation announced in December 2022, including a 2023 restructuring program expected to cost approximately $70 million with run-rate savings of approximately $100 million, and portfolio divestitures. The Savory Solutions Group sale is expected to close in the second quarter of 2023, and the Flavor Specialty Ingredients sale was announced in the first quarter of 2023. Both businesses are classified as held for sale.
Feb 27, 2023
2021
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2021
International Flavors & Fragrances Inc. (IFF) reported 2021 net sales of $11.656 billion, up $6.572 billion, or 129% on a reported basis, from $5.084 billion in 2020. The increase was driven mainly by $6.084 billion of incremental sales from the Nutrition & Biosciences (N&B) business, which merged into IFF effective February 1, 2021. Gross profit rose to $3.735 billion, but gross margin fell to 32.0% of sales from 41.0%, reflecting higher input costs and N&B's product mix. Reported operating profit was $585 million, net income attributable to IFF stockholders was $270 million, and diluted EPS was $1.10, compared with $3.21 in 2020. Amortization of acquisition-related intangibles rose to $732 million, and the N&B inventory step-up cost $368 million. The balance sheet expanded substantially. Total assets reached $39.658 billion, including $16.414 billion of goodwill and $10.506 billion of other intangible assets. Total debt was $11.400 billion at year-end, against cash of $711 million. Management reported a net debt to Credit Adjusted EBITDA ratio of 4.11 to 1, below the covenant maximum, and stated that it was in compliance with all covenants. Operating cash flow was $1.437 billion, and dividends paid totaled $667 million. The company described its capital allocation as focused on debt repayment to maintain its investment grade rating. The filing highlights integration risk from the N&B transaction, a planned divestiture of the Microbial Control business expected to close in the second quarter of 2022 for approximately $1.273 billion, and ongoing cost-reduction work to close about 30 manufacturing sites by the end of 2022. Management also cited COVID-19, supply chain disruption, and inflation in input costs as ongoing pressures on margins.
Feb 28, 2022
2020
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2020
International Flavors & Fragrances Inc. (IFF) reported 2020 net sales of $5.08 billion, down about 1% from $5.14 billion in 2019, with flat currency-neutral sales. Scent sales rose 2% on a reported basis, led by Consumer Fragrances, while Taste sales fell 3%, driven by volume reductions in most Taste categories, especially retail food service, as COVID-19 restrictions weighed. Operating profit declined to $566.5 million (11.1% of sales) from $665.3 million, and diluted EPS fell to $3.21 from $4.00. Adjusted operating profit was $729.7 million (14.4% of sales) versus $793.1 million in 2019. Net income attributable to IFF stockholders was $363.2 million, and operating cash flow was $714.1 million. The most significant event in the filing is the February 1, 2021 closing of the N&B Transaction with DuPont's Nutrition & Biosciences business, in which IFF issued 141,740,461 shares representing approximately 55.4% of its fully diluted common stock and DuPont received a $7.3 billion special cash payment. The filing states that the transaction increases indebtedness by $7.5 billion and adds approximately $20.5 billion of goodwill and other intangible assets. Following the closing, IFF will report four segments: Nourish, Scent, Health & Biosciences and Pharma Solutions. As of December 31, 2020, total debt was $4.4 billion, and the company reported a Net Debt/adjusted EBITDA ratio of 3.43 to 1 under its credit agreements. Investors should also note the filing's risk disclosures, including integration and synergy risk, the goodwill cushions for the Savory (about 5% excess fair value) and Natural Product Solutions (about 1%) reporting units, and pending litigation tied to Frutarom's improper payments, including a securities class action and an Israeli criminal investigation.
Feb 22, 2021
2019
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2019
International Flavors & Fragrances Inc. reported 2019 net sales of $5.14 billion, up 29% on a reported basis and 32% on a currency neutral basis from $3.98 billion in 2018, driven principally by the Frutarom acquisition completed October 4, 2018. Net income attributable to IFF stockholders was $455.9 million, or $4.00 per diluted share, compared with $337.3 million, or $3.79, in 2018. Operating profit rose to $665.3 million (12.9% of sales) from $583.9 million (14.7% of sales), and the company noted $127.8 million of charges related to operational improvement, integration, restructuring, and transaction items, while adjusted operating profit was $793.1 million (15.4% of sales). Cash flow from operations was $699.0 million, and total debt stood at $4.38 billion against cash of $606.8 million. The central investor event is the pending DuPont N&B Transaction announced December 15, 2019, under which DuPont's nutrition and biosciences business will combine with IFF in exchange for IFF shares, with DuPont receiving a one-time $7.3 billion special cash payment. Upon completion, DuPont shareholders would own approximately 55.4% of IFF and existing IFF shareholders approximately 44.6%. The company expects closing in early 2021, subject to IFF shareholder approval, the effectiveness of registration statements, and Hart-Scott-Rodino clearance. The filing also discloses a termination fee of $521.5 million in certain circumstances. The filing describes ongoing integration of Frutarom, with approximately 35 manufacturing sites expected to close over two years, a Frutarom integration program with expected total costs of about $65 million, and a $145 million synergy target against roughly $50 million of cost synergies realized in 2019. It also discloses a securities class action filed in August 2019 and related Israeli actions tied to improper payments made by Frutarom businesses in Russia and Ukraine, which the company says were less than 1% of 2019 consolidated net sales.
Mar 3, 2020
2018
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2018
International Flavors & Fragrances Inc. (IFF) reported net sales of $3,977,539 thousand for 2018, up from $3,398,719 thousand in 2017, a 17.0% increase on a reported basis and 15% on a currency neutral basis. The increase was driven in large part by the October 4, 2018 acquisition of Frutarom Industries Ltd., which contributed $359.6 million of net sales and $27.4 million of segment profit. Net income attributable to IFF stockholders was $337,302 thousand, or $3.79 per diluted share, compared with $295,665 thousand, or $3.72 per diluted share, in 2017. Operating profit rose to $583.9 million, though operating margin declined to 14.7% from 16.3%, reflecting Frutarom acquisition costs of $89.6 million and unfavorable price versus input costs, including the BASF supply disruption. The Frutarom acquisition was valued at approximately $7 billion and was funded with about $3.3 billion of new debt and $2.3 billion of equity, including 14.9 million shares issued to Frutarom shareholders. Total debt rose to $4,553.1 million at December 31, 2018 from $1,639.2 million a year earlier, and total assets increased to $12,889.4 million. Goodwill and intangible assets reached $8,417.7 million, and the company disclosed that the Frutarom goodwill could be subject to impairment if its benefits are not realized. Management stated its capital allocation priority is debt repayment to maintain an investment grade rating, and it suspended share repurchases until its deleveraging target is met. Net debt to adjusted EBITDA was 3.56 to 1 under credit agreement definitions. Looking ahead, management expects raw material cost pressures and supply chain disruptions, mainly in the Scent business, to reduce currency neutral operating profit growth in 2019, and expects capital spending of about 5-6% of sales in 2019. The company also noted risks from the expected UK departure from the European Union in 2019 and the lease accounting standard ASU 2016-02, which is expected to have a material impact on its balance sheet.
Feb 26, 2019
2017
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2017
International Flavors & Fragrances Inc. reported 2017 net sales of $3,398,719 thousand (about $3.4 billion), up 9.1% from $3,116,350 thousand in 2016, with sales growth of 9% on both a reported and currency neutral basis, of which acquisitions contributed approximately 5%. Gross margin decreased 140 bps to 43.5%, and operating profit rose to $581,443 thousand (17.1% of sales) from $567,356 thousand (18.2%). Net income fell to $295,665 thousand, or $3.72 per diluted share, from $405,031 thousand, or $5.05 per diluted share in 2016, reflecting a provisional $100.6 million one-time toll charge and $38.6 million deferred tax expense from the Tax Act. Adjusted operating profit was $647,440 thousand (19.0% of sales) and adjusted diluted EPS was $5.89 versus $5.51 in 2016, per the company's non-GAAP reconciliation. Management highlighted emerging markets at 48% of 2017 sales, growth from the Fragrance Resources and PowderPure acquisitions, and a BASF supply disruption on a key ingredient that management expects to reduce currency neutral operating profit growth in 2018. Cash flow from operations was $390.8 million, down from $550.1 million, mainly due to higher core working capital needs and payments on legal claims. Total debt rose to $1,639.2 million at year-end 2017 after issuing $500 million of 4.375% Senior Notes due 2047, and the company repaid $250 million of 2007 senior notes. The company's 2017 provisional tax figures may be adjusted in 2018, and the company expects its effective tax rate to be approximately 21% in 2018. The company also disclosed an FDA-mandated product recall with $11.0 million of charges in 2017, a $56 million settlement payment to ZoomEssence, and a 2017 Productivity Program with expected cumulative pre-tax cash charges of $30 to $35 million.
Feb 27, 2018
2016
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2016
International Flavors & Fragrances Inc. (IFF) reported 2016 net sales of $3.12 billion, up 3% on a reported basis and 5% on a currency neutral basis, with acquisitions contributing approximately 2% to both growth rates. Gross margin rose to 44.9% from 44.7%, but operating profit declined $21.0 million to $567.4 million (18.2% of sales) from $588.3 million (19.5%), largely due to $48.5 million of net legal charges principally related to a litigation accrual. Excluding specified items, adjusted operating profit was $623.0 million (20.0% of sales). Net income was $405.0 million, or $5.05 per diluted share, versus $5.16 in 2015. Operating cash flow increased to $535.4 million from $433.6 million, principally due to lower core working capital requirements and lower pension contributions. The company operates two segments, Flavors (48% of 2016 sales) and Fragrances (52%), and generates 51% of sales from emerging markets. Its 25 largest customers accounted for 52% of sales, and its largest customer for 12%. Management expects challenging market conditions to continue in 2017, with a stronger U.S. dollar and the reset of incentive compensation expected to pressure currency neutral operating profit growth. In February 2017, IFF announced a multi-year productivity program with cumulative pre-tax cash charges of $30 to $35 million and expected annual run-rate savings of $40 to $45 million by 2019. The company also completed the acquisitions of David Michael in October 2016 (about $242.0 million) and Fragrance Resources in January 2017 (about $150.5 million). At year-end 2016, total debt was $1,325.4 million and cash was $324.0 million. The company's Vision 2020 strategy targets $500 million to $1.0 billion of sales growth through acquisitions. The filing also discloses a $50 million reserve recorded in 2016 related to the ZoomEssence litigation, and a plan to relocate certain fragrance ingredients facilities in China.
Feb 28, 2017
2015
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2015
International Flavors & Fragrances Inc. (IFF) reported 2015 net sales of $3.02 billion, down 2% on a reported basis but up 5% on a currency neutral basis, with acquisitions contributing approximately 2% to growth. Net income was $419.2 million, or $5.16 per diluted share, compared with $414.5 million, or $5.06 per diluted share, in 2014. Operating profit was $588.3 million (19.5% of sales), and adjusted operating profit was $612.1 million (20.2% of sales). Management stated that exchange rate variations represented a 7% decrease in year-over-year sales and that foreign currency changes reduced operating profit by approximately 6%. The company acquired Ottens Flavors in May 2015 for $198.9 million and Lucas Meyer Cosmetics in July 2015 for approximately $312.0 million, expanding into cosmetic active ingredients. Under its Vision 2020 strategy, IFF is targeting $500 million to $1 billion of incremental sales growth through acquisitions by 2020. Cash flow from operations fell to $433.6 million from $518.4 million, driven by higher pension contributions and working capital needs. Management expects mid single-digit currency neutral operating profit growth in 2016 and capital spending of about 5% of sales. Key risks cited include customer consolidation and core list pressures, with the 25 largest customers accounting for 52% of sales and the largest customer for 12%, plus a China odor compliance matter that temporarily idled a flavors facility, and a pending ZoomEssence trade secret litigation.
Mar 1, 2016
2014
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2014
International Flavors & Fragrances Inc. (IFF) reported 2014 net sales of $3.09 billion, up 5% on both a reported and local currency basis, with the Aromor acquisition adding approximately 1% to growth. Operating profit rose to $592.3 million (19.2% of sales) from $516.3 million (17.5% of sales) in 2013, and net income increased to $414.5 million, or $5.06 per diluted share, compared with $4.29 in 2013. Fragrances sales grew 7% reported and local currency, while Flavors grew 2% reported and 4% in local currency. Emerging markets represented 50% of 2014 sales, with 6% local currency growth in those markets. Cash flow from operations was $518.4 million in 2014, up from $407.6 million in 2013. The company paid $133.2 million in dividends, repurchased $88.2 million of treasury stock under a $250 million program, and ended 2014 with $478.6 million in cash and $942.3 million of debt. Management expects 2015 local currency sales growth in line with its long-term targets of 4%-6%, operating profit growth at the low end of the range, and high single-digit EPS growth, citing a stronger U.S. dollar and higher incentive compensation expense. The filing also highlights ongoing risks, including elevated raw material costs, international and emerging market exposure, currency fluctuations, and the Spanish tax disputes, which the company does not believe will have a material impact on its financial condition. A pending ZoomEssence trade secret lawsuit is not expected to be a material loss contingency.
Mar 2, 2015
2013
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2013
International Flavors & Fragrances Inc. (IFF) reported 2013 net sales of $2,952,896 thousand ($2.95 billion), up from $2,821,446 thousand in 2012, with net income of $353,544 thousand, or $4.29 per diluted share, compared with $254,134 thousand ($3.09 per diluted share) in 2012. Operating profit rose to $516,339 thousand (17.5% of sales) from $486,618 thousand (17.2% of sales). The company operates two segments, Flavors (48% of 2013 sales) and Fragrances (52%), and states that emerging markets represented 49% of 2013 sales. Management described local currency sales growth of 5% for 2013 (6% on a like-for-like basis excluding the exit of low-margin Flavors activities) and said results were driven by new customer wins and price increases. Profitability and cash generation improved, though the filing notes several one-time items. The 2013 results include a $13,011 thousand Spanish capital tax charge, $8,770 thousand of operational improvement initiative costs, and $7.4 million of Fragrance Ingredients Rationalization charges tied to the planned closure of the Augusta, Georgia facility by July 2014. Cash flow from operations was $407,562 thousand, compared with $323,796 thousand in 2012, which included a $105,503 thousand outflow for the Spanish tax settlement. Cash and cash equivalents ended the year at $405,505 thousand, and total debt was $932,814 thousand. The company acquired Aromor Flavors and Fragrances Ltd. on January 16, 2014, funded with cash, and repurchased $51,363 thousand of stock in 2013 under a $250 million program that runs through December 31, 2014. The filing highlights risks including volatile raw material and energy costs, exposure to emerging-market and currency risks (78% of 2013 net sales were to customers outside the United States), and ongoing tax and litigation matters, most notably the Spanish tax disputes and the ZoomEssence trade secret lawsuit, for which management does not believe a material loss is probable. The company states its 2014 expectations: growth consistent with its long-term targets of 4%-6% local currency growth, capital spending of 4-5% of sales, and a gross margin improvement rate substantially less than in 2013.
Feb 25, 2014
2012
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2012
International Flavors & Fragrances Inc. (IFF) reported 2012 net sales of $2,821.4 million, up 1% from $2,788.0 million in 2011, with local currency sales growth of 4% (5% like-for-like, excluding the exit of low margin sales activities). Operating profit rose to $486.6 million (17.2% of sales) from $427.7 million (15.3%), and gross margin improved to 41.7% from 39.6%. Diluted net income per share was $3.09, versus $3.26 in 2011, as net income fell to $254.1 million from $266.9 million. The decline in earnings per share reflects a $72.4 million after-tax charge tied to the overall Spanish tax settlement, which lifted the effective tax rate to 42.7% from 28.6%. The company operates two segments, Flavors (49% of 2012 sales) and Fragrances (51%), with emerging markets representing 47% of sales and growing 8% in local currency. Management expects 2013 local currency growth at the lower end of its long-term 4%-6% target range, citing macroeconomic uncertainty and continued pressure in Fragrance Ingredients. Cash flow from operations was $323.8 million, including a $105.5 million outflow for the Spanish tax settlement, and cash and cash equivalents rose to $324.4 million. Total debt was $1,031.2 million at year-end, and the Board authorized a $250 million share repurchase program to run through 2014. Key risks disclosed include raw material price volatility, the ongoing Spanish tax disputes over 2002-2003 assessments and capital tax claims, competition from Givaudan, Firmenich and Symrise, and dependence on large customers, with the 25 largest customers accounting for 53% of sales and the largest customer for 11%.
Feb 26, 2013
2011
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2011
International Flavors & Fragrances Inc. (IFF) reported 2011 net sales of $2.79 billion, up 6% on a reported basis and 4% in local currency (LC), with net income of $266.9 million and diluted EPS of $3.26, essentially flat with 2010 ($3.26). Flavors sales rose 12% reported (9% LC) to $1.35 billion, while Fragrances rose 1% reported (down 1% LC) to $1.44 billion, with Fragrances weighed down by Ingredients and Fine Fragrance volume declines. Emerging markets represented 46% of 2011 sales. Operating profit increased $11.4 million to $427.7 million (15.3% of sales), and adjusted operating profit, excluding restructuring and the Mane patent litigation settlement, rose to $474.4 million (17.0% of sales). Gross margin fell to 39.6% from 41.7% as higher raw material costs outpaced price increases, and cash flow from operations declined to $189.2 million from $315.1 million. The company incurred a $33.5 million charge related to the settlement of the Mane patent litigation, which required a payment of approximately $40 million, and recorded restructuring charges tied to a December 2011 strategic initiative that eliminated 72 positions and is expected to yield about $9.0 million in 2012 savings. Management expects LC growth in 2012 to be toward the low end of its 4%–6% long-term target, with a larger drag on Flavors sales and a particularly weak first quarter. The company also disclosed ongoing Spanish tax disputes, with assessments of Euro 23.1 million and Euro 61.6 million, and a provision of $49.6 million for uncertain tax positions tied to the Spanish cases. Balance sheet highlights include total debt of $894.9 million, net debt to adjusted EBITDA of 1.42 to 1 against a covenant maximum of 3.25 to 1, and cash of $88.3 million. In November 2011 the company entered into a new $942 million revolving credit facility maturing in 2016. Dividends declared rose to $1.16 per share from $1.04, and the company stated a target payout of 30%–35% of yearly earnings.
Feb 28, 2012
2010
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2010
International Flavors & Fragrances Inc. (IFF) reported net sales of $2,622,862 thousand in 2010, up from $2,326,158 thousand in 2009, and net income of $263,557 thousand, or $3.26 per diluted share, compared with $195,526 thousand, or $2.46 per diluted share, in 2009. Management attributes the sales increase mainly to a broad-based recovery in demand, new business wins, and restocking. Sales grew 13% overall, with Fragrances up 14% and Flavors up 11% on a reported basis. Cost of goods sold fell to 58.3% of sales from 59.8%, reflecting favorable input costs, better absorption from higher volumes, and a stronger sales mix, partly offset by inventory write-offs and transition costs tied to the European rationalization. The balance sheet strengthened over the year. Cash and cash equivalents rose to $131,332 thousand, total debt fell to $921.6 million from $1,011.5 million, and operating cash flow was $315,136 thousand. Management said it was in compliance with all debt covenants, with a Net Debt/adjusted EBITDA ratio of 1.56 to 1 against a 3.25 to 1 maximum. The Board's stated intention is to pay dividends of 30%-35% of yearly earnings, and quarterly dividends were raised to $0.27 per share in the second half of 2010. Key risks disclosed include ongoing volatility in global economic and credit conditions, currency fluctuations, raw material price and availability, and a number of pending legal matters. These include popcorn flavor respiratory-illness litigation (16 actions involving 269 claimants) and a patent suit by V. Mane Fils S.A. for which a provision was recorded in the second quarter of 2010. Management does not expect these matters to have a material adverse effect on financial condition, results of operations or liquidity.
Feb 24, 2011
2009
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2009
International Flavors & Fragrances Inc. (IFF), incorporated in New York in 1909, is a creator and manufacturer of flavor and fragrance products sold to other manufacturers. Flavors accounted for 46% of 2009 sales and fragrances 54%. Net sales were $2,326,158 thousand in 2009, down from $2,389,372 thousand in 2008, while net income fell to $195,526 thousand from $229,628 thousand. Diluted earnings per share were $2.46, versus $2.86 in 2008. Management noted that foreign exchange had a 3% negative impact on reported sales, and local currency sales increased over 2% in both the third and fourth quarters after a 3% decline in the first half. The company undertook a leadership transition: Robert Amen resigned as Chairman and CEO effective September 30, 2009, and Douglas D. Tough became non-executive Chairman on October 1, 2009, with a planned move to executive Chairman and CEO on March 1, 2010. A temporary Office of the CEO comprising Kevin Berryman, Nicolas Mirzayantz and Hernan Vaisman is in place until then. Restructuring charges of $18,301 thousand were recorded in 2009, primarily tied to closing the Drogheda, Ireland fragrance compounding facility and partially closing the Haverhill, UK ingredients plant, with total expected costs of approximately $22-$29 million and estimated annual savings of $17-$20 million not fully realized until 2011. Balance sheet and cash flow were stable. Operating cash flow was $291,637 thousand, and long-term debt was reduced to $934,749 thousand from $1,153,672 thousand. Total debt was $1,011,529 thousand at year-end 2009, and the company reported a Net Debt/adjusted EBITDA ratio of 2.08 to 1 against a covenant maximum of 3.25 to 1. The company also disclosed that one customer accounted for 11% of 2009 sales and that its 30 largest customers accounted for 57% of sales.
Feb 25, 2010
2008
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2008
International Flavors & Fragrances Inc. (IFF) reported 2008 net sales of $2.39 billion, up 5% from $2.28 billion in 2007, with flavors sales rising 9% to $1.09 billion and fragrances rising 2% to $1.30 billion. Net income was $229.6 million, or $2.87 per diluted share, compared with $247.1 million, or $2.82 per diluted share, in 2007. The filing attributes the sales gain partly to a weaker U.S. dollar; at comparable exchange rates, sales would have increased 2%. Gross margin pressure is visible: cost of goods sold rose to 59.4% of sales from 58.2%, driven by higher input costs and lower manufacturing absorption, mainly in North American fragrance compounds. Interest expense more than doubled to $74.0 million from $41.5 million, reflecting borrowings used for 2007 share repurchases, and the effective tax rate fell to 18.1% from 24.8%. Balance sheet and cash flow data show increased financial leverage. Operating cash flow fell to $220.6 million from $314.1 million, mainly due to working capital and higher interest payments. Total debt was $1.26 billion at year-end 2008, and shareholders' equity declined to $573.1 million from $617.2 million, reflecting share repurchases and a $116.9 million negative foreign currency translation adjustment. The company reports Net Debt/Adjusted EBITDA of 2.34 to 1 against a covenant maximum of 3.25 to 1, and states it was in compliance with all covenants at December 31, 2008. The filing also notes that the Chief Financial Officer position was held on an interim basis. The filing highlights risks from the economic downturn and tighter credit markets, reduced consumer spending, raw material price volatility (natural products are about 50% of raw material purchases), currency fluctuation, and litigation. The company faces ongoing lawsuits by plaintiffs alleging respiratory illness from exposure to butter flavorings, with 18 actions involving 392 claimants pending. Management states it does not expect these matters to have a material adverse effect, and environmental PRP exposure at ten sites is estimated at less than $5 million.
Feb 26, 2009
2007
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2007
International Flavors & Fragrances Inc. (IFF) reported net sales of $2,276,638 thousand for fiscal 2007, up 9% from $2,095,390 thousand in 2006, with flavors sales of $1,005,544 thousand and fragrances sales of $1,271,094 thousand. Net income rose to $247,128 thousand from $226,500 thousand, and diluted EPS was $2.82 compared with $2.48 in 2006. The company stated that 2007 sales benefited from a weaker U.S. dollar and would have increased 5% at comparable exchange rates. Gross margin pressure was noted: cost of goods sold rose to 58.2% of sales from 57.8%, driven by product mix, lower fragrance ingredient pricing and under-absorption at a new China facility. Fragrance operating profit declined to $209,812 thousand from $212,240 thousand, while flavors operating profit increased to $187,275 thousand from $153,099 thousand. Capital structure changed significantly during 2007. Total debt rose to $1,212,641 thousand from $807,340 thousand after the company issued $500 million of Senior Unsecured Notes in September 2007, used primarily to fund share repurchases. The company purchased 10.2 million shares for $532 million in 2007 and entered a $450 million accelerated share repurchase program. Shareholders' equity fell to $617,197 thousand from $905,168 thousand, and interest expense increased to $41,535 thousand from $25,549 thousand. Operating cash flow was $314,062 thousand, and the company stated that cash flows and credit facilities are expected to be sufficient for at least the next eighteen months. The filing also discloses ongoing product liability litigation, principally relating to butter flavor and respiratory illness claims from workplace exposure, with management stating it does not expect a material adverse effect. Environmental PRP exposure at nine sites is estimated at less than $5 million. Management concluded that internal control over financial reporting was effective as of December 31, 2007, and PricewaterhouseCoopers LLP issued an unqualified opinion.
Feb 27, 2008
2006
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2006
International Flavors & Fragrances Inc. (IFF), a New York corporation headquartered at 521 West 57th Street, New York, reported net sales of $2.095 billion for 2006, up from $1.993 billion in 2005, and net income of $226.5 million, or $2.48 per diluted share, compared with $193.1 million, or $2.04 per diluted share, in 2005. Fragrance products accounted for 57% of 2006 sales and flavor products for 43%. Net sales rose 5% in both dollars and local currency, led by fine fragrances, and gross margin improved as cost of goods sold fell to 57.8% of sales from 58.6%. Restructuring charges were minimal at $2.7 million in 2006 versus $23.3 million in 2005. Balance sheet and cash flow changes were significant. Total debt was $807 million at year-end 2006, down from $951 million, after the company issued $375 million of Senior Notes in July 2006 and repaid maturing notes. Operating cash flow rose to $263 million from $177 million, and cash and cash equivalents fell to $115 million. The company repurchased 6.9 million shares for $271 million in 2006, and in October 2006 the Board approved a new $300 million repurchase program, of which $206 million remained at year-end. The quarterly dividend was raised to $0.21 per share, effective with the January 2007 payment. The filing also describes ongoing exposure to workplace respiratory-illness lawsuits tied to flavor ingredients, including butter-flavor popcorn claims, and to environmental claims as a potentially responsible party. Management states it does not expect these matters to have a material adverse effect, and it believes adequate provision has been made for known claims. Robert M. Amen became Chairman and CEO in July 2006.
Feb 23, 2007
2005
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2005
International Flavors & Fragrances Inc. (IFF) reported net sales of $1,993.4 million for 2005, down from $2,033.7 million in 2004, with net income of $193.1 million ($2.04 diluted EPS) versus $196.1 million ($2.05 diluted) a year earlier. Management attributes the sales decline mainly to the 2004 disposition of the European fruit preparations business and to lower selling prices for naturals, mainly vanilla, partly offset by strong fine fragrance growth from new product wins. Cost of goods sold rose to 58.6% of sales from 57.1%, driven by higher raw material costs that were not fully recovered through pricing, plus a vendor-supplied raw material contamination issue. The 2005 effective tax rate fell to 21.6% from 30.2%, aided by a $24.7 million net tax benefit from repatriating $242.0 million of foreign dividends under the American Jobs Creation Act. Balance sheet and liquidity changed significantly. Cash and short-term investments rose to $272.9 million, while bank borrowings and the current portion of long-term debt reached $819.4 million, largely because the $499.2 million 6.45% Notes mature in May 2006. Working capital was negative $11.4 million at year-end, and management expects to reduce borrowings by about $200.0 million in 2006. Restructuring charges of $23.3 million relate to eliminating about 300 positions, with $25 million to $30 million of total charges anticipated and annual savings of $16 million to $18 million expected. Management also expects R&D spending to rise to about $190.0 million in 2006. Litigation remains a notable risk. The filing describes three remaining plaintiff verdicts in the Benavides respiratory-injury cases (Moenning $2.74 million, Brand $15 million, McNeely $15 million), all under appeal, along with a number of other pending flavor-exposure suits. Management believes adequate provision has been made and does not expect the outcome to have an adverse effect on financial condition, results of operations or liquidity, though it cannot assure that accruals will not increase.
Mar 13, 2006
2004
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2004
International Flavors & Fragrances Inc. (IFF) reported net sales of $2,033,653 thousand for 2004, up from $1,901,520 thousand in 2003, and net income of $196,071 thousand, or $2.05 per diluted share, compared with $172,597 thousand, or $1.83 per diluted share, in 2003. Sales of fragrance products were $1,123.1 million and flavor products were $910.6 million. Operating profit was $310.3 million after restructuring and other charges of $31.8 million, which the company tied to the sale of its European fruit preparations business and the closure of a Canadian plant and the planned closure of its Dijon, France facility. Management described its 2004 results as reflecting improved fine fragrance sales and better product mix, partly offset by weak absorption from the Dijon production transfer. The balance sheet strengthened over the year. Shareholders' equity rose to $910,487 thousand from $742,631 thousand, and total debt fell to $684.9 million from $884.5 million, with no commercial paper outstanding at year-end. Cash and short-term investments totaled $33.0 million. Cash provided by operations was $295,847 thousand. The company repurchased 1,801,900 shares in 2004, had $75.5 million remaining under its July 2004 repurchase authorization, and raised its quarterly dividend to $0.175 per share. The filing also flags several forward-looking items. Management expects 2005 research and development spending of about $190 million, a 2005 effective tax rate of approximately 31.2%, and stock-based compensation expense of $12.0 to $14.0 million. The company is evaluating a repatriation of $250 to $500 million of foreign earnings under the American Jobs Creation Act of 2004. IFF also faces product liability lawsuits involving flavorings used in butter-flavor popcorn and respiratory injury claims at food plants, which management believes will not have a material adverse effect on its financial condition.
Mar 14, 2005
2003
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2003
International Flavors & Fragrances Inc. (IFF) reported net sales of $1,901.5 million for 2003, up from $1,809.2 million in 2002, and net income of $172.6 million, or $1.83 diluted EPS, compared with $175.9 million in 2002. The filing attributes sales growth partly to the weaker U.S. dollar, and states that on a constant-currency basis net sales would have declined 2%. Operating profit was $285.8 million versus $299.9 million in 2002, with restructuring and other charges of $42.4 million in 2003 and $11.7 million in 2002. The company states that it completed its reorganization program in 2003, eliminating 321 positions, and that the Bush Boake Allen integration was completed quickly with savings exceeding the $70 million anticipated. The balance sheet strengthened over the year. Long-term debt fell to $690.2 million from $1,007.1 million, as the company repurchased $200.7 million of its 6.45% Notes due 2006, funded with commercial paper. Shareholders' equity rose to $742.6 million from $574.7 million. Cash and short-term investments were $12.6 million at year-end, and the company expects to reduce borrowings by approximately $100.0 million in 2004. Capital expenditures were $66.0 million in 2003, with about $90.0 million expected for 2004. Management expects 2004 research and development spending of approximately $179 million, and an effective tax rate near 31.5%. The filing discloses ongoing respiratory-injury lawsuits related to flavor products, including a Missouri class action that was denied class status, with individual cases now heard separately, and an Ohio popcorn-factory suit. Management does not expect these matters to have a material adverse effect, citing the merits of its defenses and available insurance. The company also disclosed a $0.16 quarterly dividend for the first quarter of 2004, and a share repurchase authorization with $42.0 million remaining at year-end.
Mar 11, 2004
2002
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2002
International Flavors & Fragrances Inc. (IFF) reported net sales of $1.81 billion for fiscal 2002, down 2% from $1.84 billion in 2001 as reported, while pro-forma sales rose 2% to $1.80 billion. Net income was $175.9 million, or $1.84 diluted per share, compared with $116.0 million, or $1.20 per share, in 2001. Excluding nonrecurring charges, diluted earnings were $1.92 per share. The company attributes the 2002 profit improvement largely to the discontinuance of goodwill amortization under FAS 142, the disposal of non-core businesses, and integration savings from the Bush Boake Allen (BBA) acquisition completed in November 2000. Fragrance products accounted for about 59% of 2002 sales and flavor products for about 41%, with about 70% of sales generated outside the United States. Cash flow from operations was $243.3 million, and debt was reduced to $1.06 billion in total debt at year-end, versus $1.17 billion a year earlier. Management expects to reduce debt by approximately $100.0 million in 2003 and plans a new $100.0 million share repurchase program over the next two years. Research and development spending rose to $144.0 million (8.0% of sales), and is expected to reach about $160.0 million in 2003. The filing describes ongoing litigation involving a Missouri class action over respiratory injuries alleged to be linked to a BBA flavor, which the company does not expect to have a material adverse effect, and environmental waste-site claims it considers immaterial. The company disclosed that its 30 largest customers accounted for about 52% of sales and that no single customer exceeded 3% of sales.
Mar 25, 2003
2001
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2001
International Flavors & Fragrances Inc. (IFF) reported net sales of $1,843.8 million for fiscal 2001, up 26% from $1,462.8 million in 2000 on a reported basis, though the filing notes that sales declined 2% against 2000 pro-forma sales of $1,880.6 million. The increase reflects the November 2000 acquisition of Bush Boake Allen (BBA). Net income was $116.0 million, or $1.20 per diluted share, versus $123.0 million ($1.22 per diluted share) in 2000. The filing states that nonrecurring charges were $30.1 million in 2001, and that the company expects about $70.0 million in annual integration savings, with approximately $40.0 million realized in 2001. Operating profit was $255.6 million, and segment profit rose to $380.4 million from $291.7 million, which management attributes to integration savings. The balance sheet shows total assets of $2,268.1 million and long-term debt rising to $939.4 million from $417.4 million, largely from a $700.0 million 6.45% note due 2006 and yen notes issued in 2001. Commercial paper fell to $204.2 million from $809.4 million, and shareholders' equity declined to $524.2 million from $631.3 million. Cash dividends were cut to $0.15 per quarter in 2000 and remained at that level through 2001. Management expects 2002 to focus on completing the reorganization and integration and on driving top-line growth, and notes that Fine Fragrances will remain weak at least through the first half of the year. The company expects 2002 research and development expenses of about $149.0 million, and it has facility consolidation plans, including the closure or consolidation of 16 operations during 2001. The filing describes the Jasper, Missouri class action as preliminary and not expected to be material, and it states that waste-site liabilities are not expected to be material.
Mar 27, 2002
2000
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 2000
International Flavors & Fragrances Inc. (IFF) reported 2000 net sales of $1,462.8 million, up from $1,439.5 million in 1999, with net income falling to $123.0 million from $162.0 million, or $1.22 per diluted share versus $1.53. The results include $41.3 million of nonrecurring charges and $7.0 million of amortization of goodwill and other intangibles tied to the November 3, 2000 acquisition of Bush Boake Allen Inc. (BBA) for approximately $970.0 million in cash. Excluding BBA, the filing states that 2000 sales declined 3% versus 1999, with the continuing strong U.S. dollar reducing reported sales; the filing says reported sales would have been about 5% higher at constant exchange rates. The balance sheet changed significantly with the acquisition. Total assets rose to $2.49 billion from $1.40 billion, intangible assets reached $755.9 million, and commercial paper outstanding was $1,209.4 million at an average rate of 7.4%. Total shareholders' equity fell to $631.3 million from $858.5 million, reflecting $201.0 million of 2000 treasury stock purchases. The current ratio dropped to 0.9 from 2.3. Management is pursuing permanent long-term financing for much of the BBA-related debt, expected in the first half of 2001. Management is restructuring the business. The company is reorganized around Business Development and Operations, with a single regional manager for each geographic cluster effective January 1, 2001. The filing projects about $70.0 million in annual BBA synergy savings, with roughly half expected in 2001, and total reorganization costs of $90.0 million to $100.0 million through 2002. On February 20, 2001, the Board authorized management to divest a significant portion of the BBA aroma chemicals business, which had annual sales of about $100.0 million, with proceeds to pay down debt. The quarterly dividend was cut by 60% to $0.15 per share beginning in the fourth quarter of 2000.
Mar 30, 2001
1999
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 1999
International Flavors & Fragrances Inc. reported net sales of $1,439,499 thousand (about $1.44 billion) for 1999, up from $1,407,349 thousand in 1998, with net income of $162,000 thousand ($1.53 per diluted share) compared with $203,785 thousand ($1.90 per diluted share) in 1998. The filing attributes the earnings decline to nonrecurring charges of $32,948 thousand under a worldwide streamlining program announced in June 1999, a decline in gross margin, higher research and development spending, and Brazil's currency devaluation and economic disruption. Cost of goods sold rose to 55.0% of sales from 54.2%, and selling and administrative expenses rose to 18.2% from 17.0%, partly due to Year 2000 program costs of $14.2 million. The company's financial position remained strong, according to management. Cash, cash equivalents and short-term investments totaled $62,971 thousand at year-end 1999, working capital was $465,712 thousand, and long-term debt was only $3,832 thousand. The company established a $300 million commercial paper program in October 1999, under which $63.2 million was outstanding at year-end, and total shareholders' equity declined to $858,497 thousand from $945,051 thousand. The company also expects a charge of approximately $10 million in 2000 from a Voluntary Retirement Incentive Program initiated in January 2000. Sales outside the United States represented approximately 70% of total sales in 1999, 1998 and 1997. Management reported that the Year 2000 program was completed before January 1, 2000, with no significant problems identified through February 2000. The filing also describes the company's roughly 4,680 employees and its status as one of the four largest international producers of fragrance and flavor products, based on management's belief.
Mar 30, 2000
1998
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 1998
International Flavors & Fragrances Inc. reported net sales of $1.407 billion for 1998, down from $1.427 billion in 1997, and net income of $203.8 million, a decrease of $14.4 million or 7% from the prior year. Diluted earnings per share were $1.90, compared with $1.99 in 1997. Fragrance products accounted for about 59% of 1998 sales and flavor products about 41%. Sales were flat for fragrances at $820.1 million, while flavor sales fell 3% to $587.2 million. Sales in the Far East dropped 20%, affected by economic disruption in Japan and Southeast Asia, and the stronger U.S. dollar reduced reported sales. Sales in North America rose 6%, and Latin America rose 8%. The company described its financial condition as strong. Cash, cash equivalents and short-term investments totaled $116.0 million at year-end 1998, compared with $260.4 million a year earlier. Working capital was $575.1 million and long-term debt was only $4.3 million. Shareholders' equity fell to $945.1 million from $1.000 billion, mainly because of $134.4 million of treasury stock purchases. The company paid $159.6 million in dividends in 1998 and, in January 1999, raised the annual cash dividend rate to $1.52 per share from $1.48. Cost of goods sold held at 54.2% of sales, while selling and administrative expenses rose to 17.0% of sales, including about $12.5 million of Year 2000 expense. Looking ahead, the company's Year 2000 program has a total estimated cost of about $45 million, with $24 million spent at December 31, 1998, and is expected to be completed by December 31, 1999. The company is also evaluating its selling, administrative, manufacturing and distribution functions, and the filing says this may lead to nonrecurring charges in 1999 whose extent is not yet quantifiable. Research and development spending was $98.4 million in 1998 and is expected to rise to about $106 million in 1999. Capital expenditures are expected to be about $90 million in 1999. The company states that the Euro conversion is not expected to have a significant effect on its revenues, costs or competitive position.
Mar 30, 1999
1997
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 1997
International Flavors & Fragrances Inc. (IFF), a New York corporation headquartered at 521 West 57th Street, New York, reported 1997 net sales of $1,426,791,000, down slightly from $1,436,053,000 in 1996, and net income of $218,229,000, or $1.99 per diluted share, compared with $189,894,000 in 1996. The 1996 figure included a nonrecurring pretax charge of $49,707,000 ($31,315,000 after tax) tied to streamlining its aroma chemical production, so 1997 net income rose against that depressed base. The filing attributes the sales shortfall largely to a stronger U.S. dollar; the company states that at constant exchange rates sales would have increased approximately 4% worldwide. Fragrance products accounted for $821,592,000 of sales and flavor products for $605,199,000. Gross margin fell to a cost of goods sold ratio of 54.2%, unchanged from 1996 but up from 51.9% in 1995, and selling and administrative expenses rose to 15.9% of sales. The balance sheet remains conservative. Total assets declined to $1,422,261,000 from $1,506,913,000, long-term debt was only $5,114,000, and cash, cash equivalents and short-term investments totaled $260,446,000. Operating cash flow was $239,148,000, down from $307,999,000 in 1996, and the company spent $58,211,000 on net property additions and $70,988,000 repurchasing treasury stock. Dividends declared totaled $1.45 per share for 1997, and the annualized dividend rate was increased to $1.48 per share in January 1998. The company spent $94,411,000 on research and development and reported 30% of 1997 sales in North America, 33% in Western Europe and 37% in the rest of the world. The filing also discloses a number of routine risks. The company is a potentially responsible party at 10 waste sites, which it states will not be material. Year 2000 remediation is in progress with no material cost expected. Management states that the Far East and Brazil slowdowns affected sales in the fourth quarter, though those countries represent only about 7% of consolidated sales. Long-serving Chief Financial Officer Thomas H. Hoppel retires on March 31, 1998, and Douglas J. Wetmore assumes the CFO role on April 1, 1998.
Mar 31, 1998
1996
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 1996
International Flavors & Fragrances Inc. reported net sales of $1,436,053 thousand for 1996, roughly flat compared with $1,439,487 thousand in 1995 (0% change per the filing's table). Net income fell to $189,894 thousand, or $1.71 per share, from $248,817 thousand, or $2.24 per share, in 1995. The 1996 results include a nonrecurring pretax charge of $49,707 thousand ($31,315 thousand after tax, or $.29 per share) tied to a program to expand and streamline worldwide aroma chemical production. Excluding that charge, the filing states net income was $221,209 thousand, a decrease of $27,608 thousand or 11% from the prior year. Management attributed the weaker 1996 performance to slow customer reordering of fragrances in Europe and the United States, a temporary slowdown in new product introductions, restructuring at some major U.S. food customers, and a cool, wet summer that hurt flavor sales to beverage, ice cream and yogurt makers. Currency translation also reduced reported sales, which the company said would have risen about 1% worldwide at constant exchange rates. Fragrance products accounted for $813,918 thousand of sales and flavor products for $622,135 thousand. Operating profit was $296,456 thousand, down from $390,702 thousand. The balance sheet remained conservative, with cash, cash equivalents and short-term investments of $317,983 thousand, working capital of $725,892 thousand, and long-term debt of only $8,289 thousand. Shareholders' equity was $1,076,537 thousand. The company paid $150,864 thousand in dividends during 1996, raised its annual dividend rate to $1.44 per share in January 1997, and repurchased shares under authorizations totaling 15 million shares.
Mar 31, 1997
1995
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 1995
International Flavors & Fragrances Inc. (IFF) reported net sales of $1,439,487 thousand (about $1.44 billion) for fiscal 1995, up from $1,315,237 thousand in 1994, with fragrance sales of $819,263 thousand and flavor sales of $620,224 thousand. Net income rose to $248,817 thousand, or $2.24 per share, compared with $226,022 thousand, or $2.03 per share, in 1994. Operating profit was $390,702 thousand, and the effective tax rate was 36.8%. Sales outside the United States represented approximately 70% of total sales in 1995, 1994 and 1993. Cost of goods sold was 51.9% of sales, research and development expenses were 6.3%, and selling and administrative expenses were 15.1%. The balance sheet remained strong, with total assets of $1,534,269 thousand, shareholders' equity of $1,116,560 thousand, and cash, cash equivalents and short-term investments of $296,933 thousand. Long-term debt was only $11,616 thousand, and the company stated it has virtually no long-term debt and expects to fund growth, capital expenditures and its share repurchase program from internal sources. Cash provided by operations was $244,338 thousand. The Board increased the annual cash dividend 9.7% to $1.36 per share in January 1996, and dividends declared for 1995 totaled $1.27 per share. The company disclosed that it is named as a potentially responsible party at 11 waste sites, but management believes the amounts it will probably pay will not be material to its financial condition, results of operations or liquidity. Research and development spending was $90,846 thousand in 1995 and is expected to increase to approximately $97,000,000 in 1996.
Mar 28, 1996
1994
International Flavors & Fragrances Annual Report, Year Ended Dec 31, 1994
International Flavors & Fragrances Inc. reported 1994 net sales of $1.315 billion, up $126,592,000 or 11% from 1993. Fragrance sales were $772,786,000, up 11%, and flavor sales were $542,451,000, up 11%. Operating profit rose 14% to $354,425,000, and net income increased 12% to $226,022,000, or $2.03 per share. The filing attributes the growth primarily to sales growth, and states that currency translation had virtually no effect on 1994 sales or operating profit. Sales outside the United States were approximately 70% of the total. The balance sheet remained strong. Total assets were $1,399,725,000 and shareholders' equity was $1,008,079,000. Cash, cash equivalents and short-term investments totaled $301,808,000, and working capital was $704,763,000. Operating cash flow was $239,531,000. The company held $14,342,000 of long-term debt, compared with none at the end of 1993. Management expects growth, capital spending and the share repurchase program to be funded from internal sources. Gross property additions were $103,019,000 in 1994 and are expected to approximate $105,000,000 in 1995. Shareholders received a dividend increase in January 1995 of 14.8%, to an annual rate of $1.24 per share, following increases of 8% in January 1994 and 10% in January 1993. Research and development spending was $81,369,000 in 1994 and is expected to rise to approximately $92,000,000 in 1995. The company faces potentially responsible party claims at ten waste sites in New Jersey and Pennsylvania, but management states that the amounts it will probably pay will not be material, and that insurers share defense and indemnity costs up to an agreed amount.
Mar 30, 1995