International Flavors & Fragrances (IFF) reported revenue of $828.3 million in 1Q17. For the first time, it broke the jinx of $800 million in revenue during a quarter. Reported revenue rose 6%—compared to $783.3 million in 1Q16. However, International Flavors & Fragrances didn’t meet analysts’ expectation of $831.80 million.
International Flavors & Fragrances’ revenue grew primarily due to revenue from its acquisition of David Michael and Fragrance Resources. The foreign exchange hedge had a negative impact on sales. During the quarter, the sweetness and savory modulation portfolio had double-digit growth. International Flavors & Fragrances launched and commercialized two new flavor molecules. Revenue rose for both of the company’s reporting segments. We’ll look at each of the reporting segments later in this series.
CEO’s remarks and fiscal guidance
Andreas Fibig, International Flavors & Fragrances’ chairman and CEO, said, “Sales performance was broad-based, driven by the contribution of our recent acquisitions and a strong performance in Flavors, where we achieved growth across all categories and regions.”
International Flavor & Fragrances expects fiscal revenue to rise 7.5%–8.5% compared to the previous year—excluding currency impact. Including currency impact, revenue growth is projected to be 6.0%– 7.0% compared to the previous year.
Investors can indirectly hold International Flavors & Fragrances by investing in the Vanguard Materials ETF (VAW). VAW has invested 1.20% of its holdings in International Flavors & Fragrances as of May 8, 2017. The fund’s top holdings include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON) with weights of 8.4%, 8.4%, and 6.1%, respectively.
In the next part, we’ll look at how the Fragrance Business segment performed in 1Q17.