Reported earnings per share (EPS) increased 29 per cent to $1.03 compared with $0.80 for the first quarter last year. Revenue in local currency also increased nine per cent as foreign currency had a limited impact on results in the quarter.
Operating profit within IFF’s Flavor Business Unit climbed 28 per cent, or $17m to reach $79m in the first quarter. Accelerated sales growth and continued cost control, which more than offset rising costs, were responsible for growth, according to a company statement. As a result, operating profit margin improved 280 bps to 23.3 per cent compared with same quarter of last year.
Double-digit growth
In Europe, Africa the Middle East and North America, double-digit growth in the beverage and savoury sectors were the main contributors to mid-teen growth.
Results in Greater Asia remained strong, as double-digit trends in beverage and dairy sectors continuing into the first quarter.
In Latin America, solid growth was achieved as business in the confectionery and dairy each achieved double-digit growth.
Local currency sales in the first quarter increased 12 percent over the prior year period
Doug Tough, chairman and chief executive officer, said: "We are pleased with our excellent start to 2011, especially given that we are comparing to a very strong year-ago performance of double-digit growth.
"Our top-line performance was once again driven by double-digit growth in the emerging markets. In the developed markets, strong demand for our innovative products, such as healthier and more natural offerings, drove high single-digit growth. This strong top-line performance provided operational leverage that when combined with our continued focus on cost discipline drove a double-digit increase in operating profit."
Long-term targets
Despite local currency sales levels coming under pressure at the beginning of the second quarter, Tough remained bullish about the prospects for the remainder of the year. “…we are optimistic that our performance in the first quarter, coupled with the opportunities we see throughout the remainder of the year, give us the confidence to achieve our long-term targets of four to six per cent local currency sales growth, seven to nine per cent operating profit growth and 10 percent plus EPS growth for the full year 2011," he said.
Meanwhile, in the company’s Fragrance Business Unit, operating profit increased by $13m to $69m in the first quarter. The results reflected a $5m expense related to restructuring in Europe in the first quarter of last year.
Excluding restructuring, adjusted operating profit grew 13 per cent, or $8m reflecting volume growth, higher pricing, the benefits from the European facilities rationalization and cost control.