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International Flavors and Fragrances Posts Highest Q4 Revenue

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International Flavors and Fragrances’ 4Q17 revenue

International Flavors and Fragrances (IFF) reported revenue of $854.6 million in 4Q17, a rise of ~12.1% on a YoY (year-over-year) basis.

In 4Q16, IFF reported revenue of $762.6 million. IFF’s 4Q17 revenue beat analysts’ estimate of $831.6 million. It was IFF’s highest ever fourth-quarter revenue.

IFF’s revenue growth was primarily driven by higher volumes resulting in good organic growth. IFF’s revenue growth was also helped by contributions from acquisition-related revenue from PowderPure and Fragrance Resources. Both IFF’s reporting segments witnessed growth. We’ll discuss each of IFF’s reporting segments in detail in the next couple of parts. Foreign currency continued to impact IFF’s revenue adversely.

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2018 revenue guidance

IFF expects the strong demand for fragrances to continue worldwide. As a result, IFF expects its revenue to grow in the range of 3.0%–5.0% on a currency neutral basis.

Management comments

Andreas Fibig, IFF’s chair and CEO, said, “As we enter 2018—recognizing that uncertainty remains in the operating environment—we are targeting growth across all of our key financial metrics. We are doing so by taking action to accelerate sales growth in advantaged categories, deliver innovation that is truly differentiated and generate higher returns via continued cost and productivity initiatives.”

Investors looking for indirect exposure to IFF can invest in the Guggenheim S&P 500 Equal Weight Materials ETF (RTM), which invests 3.7% of its portfolio in IFF. The other holdings of the fund include Eastman Chemical (EMN), LyondellBasell (LYB), and Air Products and Chemicals (APD), which have weights of 4.3%, 4.1%, and 3.9%, respectively, as of February 15, 2018.

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