UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
______________
FORM 8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of report (Date of earliest
event reported)
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February
10, 2016
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INTERNATIONAL
FLAVORS & FRAGRANCES INC.
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(Exact
Name of Registrant as Specified in Charter)
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New York
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1-4858
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13-1432060
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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(I.R.S. Employer
Identification No.)
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521 West 57th Street, New York, New York
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10019
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s telephone number, including area code
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(212) 765-5500
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Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions:
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition
Attached and being furnished hereby as Exhibit 99.1 is a copy of a press
release of International Flavors & Fragrances Inc. ("IFF" or the
"Company") dated February 10, 2016 reporting IFF's financial results for
the quarter and fiscal year ended December 31, 2015.
An audio webcast to discuss the Company's fourth quarter and full year
2015 financial results and full year 2016 outlook will be held tomorrow,
February 11, 2016, at 10:00 a.m. EST. Interested parties can access the
webcast and accompanying slide presentation on the Company's website at
www.iff.com under the Investor section. For those unable to listen to
the live broadcast, a replay will be available on the Company's website
approximately one hour after the event and will remain available on the
IFF website for one year.
Non-GAAP financial measures: In the attached press release and the
referenced audio webcast, the Company uses the following non-GAAP
financial operating measures: (i) adjusted earnings per share, (ii)
adjusted currency neutral earnings per share; (iii) adjusted operating
profit, (iv) adjusted currency neutral operating profit, (v) adjusted
operating profit margin, (vi) adjusted sales and (vii) adjusted currency
neutral sales. Such information is supplemental to information presented
in accordance with GAAP and is not intended to represent a presentation
in accordance with GAAP. In discussing the Company’s historical and
expected future results and financial condition, the Company believes it
is meaningful for investors to be made aware of and to be assisted in a
better understanding of, on a period-to-period comparable basis,
financial amounts both including and excluding these identified items,
as well as the impact of exchange rate fluctuations. The Company
believes such additional non-GAAP information provides investors with an
overall perspective of the period-to-period performance of our business.
In addition, management internally reviews each of these non-GAAP
measures to evaluate performance on a comparative period-to-period basis
in terms of absolute performance, trends and expected future performance
with respect to our business. A material limitation of these non-GAAP
measures is that such measures do not reflect actual GAAP amounts. The
Company compensates for such limitations by presenting the
reconciliations contained in the attached press release to the most
directly comparable GAAP measure. These non-GAAP measures may not be
comparable to similarly titled measures used by other
companies.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
99.1 Press Release of International Flavors & Fragrances Inc., dated
February 10, 2016.
SIGNATURE
Pursuant to
the requirements of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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INTERNATIONAL FLAVORS & FRAGRANCES INC.
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Dated:
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February 10, 2016
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/s/ Alison A. Cornell
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Name: Alison A. Cornell
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Title: Executive Vice President and Chief Financial Officer
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Exhibit Index
Number
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Description
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99.1
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Press Release of International Flavors & Fragrances Inc. dated
February 10, 2016
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Exhibit 99.1
IFF
Reports Full Year 2015 Results
Sales
+5%; Adjusted Operating Profit +8%; Adjusted EPS +11%, all on a currency
neutral basis
NEW YORK--(BUSINESS WIRE)--February 10, 2016--International Flavors &
Fragrances Inc. (NYSE:IFF) (Euronext Paris:IFF) reported financial
results and strategic achievements for the fourth quarter and full year
ended January 1, 2016.
Management Commentary
“2015 was a successful year for IFF as we embarked on a new chapter in
our 126 year journey of discovery and pioneering firsts,” said Chairman
and CEO Andreas Fibig. “I am pleased with the progress we’ve made in
terms of our financial performance and strategic execution. From a
strategic perspective, since the initiation of our Vision 2020 strategy
we believe we have taken the right steps in our ambition to build
greater differentiation, accelerate profitable growth and increase
shareholder value. In the Middle East & Africa, one of our targeted
areas of focus in the emerging markets, we saw a 14% increase for 2015
with strong growth across flavors and fragrances on a currency neutral
basis. In Latin America, Flavors grew 16% on a currency neutral basis,
driven in part by key customers and our proprietary delivery system. We
also fortified our market share in North America – achieving the number
two position in Flavors – with the successful acquisition of Ottens
Flavors.
“Delivery systems across both flavors and fragrances continued to drive
solid results. In Fragrances, encapsulation-related sales grew
mid-teens, led by Fabric Care and Home Care, while in Flavors, sweetness
& savory modulation portfolio sales grew strong double-digits, led by
Savory, Dairy and Beverage. We also commercialized four captive
fragrance ingredients in 2015 – doubling IFF’s historical annual output.
These accomplishments are a testament to our continued commitment to
advance our innovation and R&D capabilities.
“To support our goal to become our “customers’ partner of choice” we
launched a new branding initiative by unveiling our new purpose
statement, visual identity and refreshed tone of voice to ensure all our
current and future customers understand our vision, imagination and
innovative focus. We were also recognized by several customers to be
among their top performing business partners and received several
innovation awards for IFF | Lucas Meyer Cosmetics. We also made
significant progress working towards creating a sustainable future. In
2015, we reached a series of sustainability achievements, including
surpassing our initial 2020 water reduction goal of 25%, being
recognized on the CDP Climate “A” List, receiving “For Life” social
responsibility certification for Turkish Rose, Patchouli, Basil and
Vetiver, and being first in our industry to join the Together for
Sustainability sustainable sourcing initiative.
“In terms of strengthening and expanding our portfolio, M&A,
partnerships and collaborations have become a more pronounced element of
our strategy. Over the course of the year, we successfully completed the
acquisition of Ottens Flavors and Lucas Meyer Cosmetics. We also
established collaborations with Duke University for flavor modulation,
the University of Liverpool for delivery systems in fragrances, and
announced a partnership with Vapor Communications to pioneer the future
of digital scent.
“Financially, we delivered solid growth across all our key financial
metrics with sales improving 5%, adjusted operating profit growing 8%,
and adjusted EPS increasing 11%, all on a currency neutral basis. In the
fourth quarter, we experienced softness in our year-over-year organic
top-line growth, which included an additional week of sales in 2014. In
addition, our performance was also impacted by increased economic
pressures in key emerging markets, a more pronounced portfolio
rationalization by one of our largest Fragrance Ingredients customers,
and efforts by some of our larger customers to manage their inventories.
Despite these fourth quarter challenges, we delivered positive currency
neutral sales growth, including M&A, and solid improvements in
profitability and EPS.
“As we look ahead to 2016, we are preparing ourselves for even more
challenging conditions given a higher level of economic uncertainty and
the more cautious volume outlook of consumer packaged goods companies.
We remain confident in our ability to navigate through these uncertain
times as we strive to deliver between 3.5% and 4.5% sales growth,
between 5% and 7% adjusted operating profit growth and between 6.5% and
8.5% adjusted EPS growth, all on a currency neutral basis. Inclusive in
our guidance is approximately 1.5% contribution related to our two
acquisitions.”
Full Year 2015 Consolidated Summary: Growth vs. Prior Year ¹
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Adjusted Currency Neutral (Non-GAAP)
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Adjusted (Non-GAAP)
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Reported (GAAP)
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Sales
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Operating Profit
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EPS
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Sales
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Operating Profit
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EPS
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Sales
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Operating Profit
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EPS
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Consolidated
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5%
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8%
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11%
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(2)%
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2%
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3%
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(2)%
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(2)%
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0%
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Acquisition Impact
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2%
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2%
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2%
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2%
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2%
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1%
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¹ Schedules at the end of this release contain reconciliations of
reported GAAP to non-GAAP metrics.
Full Year 2015 Strategic Highlights: Currency Neutral Performance
Win Where We Compete: achieve market leadership position in key
markets, categories & customers
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Middle East and Africa sales +14%
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China Fragrance compounds sales were up high-single-digits
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Home Care grew high-single-digits
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Flavors Latin America sales +16%
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Became the #2 Flavors company in North America with the acquisition of
Ottens Flavors
Innovating Firsts: strengthen position and drive differentiation
in priority R&D platforms
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Commercialized four captive fragrance ingredients
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Encapsulation-related sales grew mid-teens vs. year-ago led by Fabric
Care & Home Care
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Developed new capsule to expand encapsulation technology into personal
care categories
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Sweetness and savory modulation portfolio sales grew strong
double-digits
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Commercialized two natural taste modulators to build
consumer-preferred products
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Flavors proprietary delivery system sales posted strong growth across
all regions and all categories
Become Our Customers’ Partner of Choice: attain commercial
excellence
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Completed branding initiative showcasing IFF’s vision, imagination and
innovation
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IFF recognized by several customers; named top-performing business
partner by a customer and received several innovation awards for IFF |
Lucas Meyer Cosmetics
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Surpassed initial 2020 water reduction goal of 25%; reset goal to 50%
by 2020
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Recognized on the CDP Climate “A” List – received a perfect score of
100 in disclosure
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“For Life” social responsibility certification received by IFF | LMR
for Turkish Rose, Patchouli, Basil, and Vetiver
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First in industry to join Together for Sustainability
sustainable sourcing initiative
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Committed to 100% renewable energy by joining RE 100
Strengthen and Expand the Portfolio: pursue value creation
through collaborations & acquisitions
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Strengthened Flavors North America with the acquisition of Ottens
Flavors: Sales grew double-digits with strongest growth coming from
regional customers
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Expanded into Cosmetic Actives with the acquisition of Lucas Meyer
Cosmetics which achieved solid sales growth on a standalone basis
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Established collaborations with Duke University for flavor modulation
and the University of Liverpool for delivery systems in fragrances
Announced collaboration with Vapor Communications to pioneer the future
of digital scent
Full Year 2015 Segment Summary: Growth vs. Prior Year
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Reported (GAAP)
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Currency Neutral (Non-GAAP)
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Sales
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Segment Profit
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Sales
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Segment Profit
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Fragrances:
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(3)%
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(4)%
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4%
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6%
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Acquisition Impact
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1%
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2%
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1%
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2%
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Flavors:
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(1)%
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(4)%
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6%
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4%
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Acquisition Impact
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3%
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1%
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3%
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2%
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Fragrances Business Unit
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Currency neutral sales improved 4%, including approximately 1
percentage point related to the acquisition of Lucas Meyer Cosmetics.
Overall growth was led by a high-single-digit increase in EAME, a
mid-single-digit improvement in Latin America and low-single-digit
growth in Greater Asia.
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Fine Fragrances increased 1% as EAME grew 6% due to strong new wins.
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Consumer Fragrances improved 5% led by double-digit growth in Fabric
Care, high-single-digit growth in Home Care and a mid-single-digit
increase in Hair Care. On a geographic basis, all regions delivered
growth led by double-digit growth in Latin America and
high-single-digit growth in EAME, both on a currency neutral basis.
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Fragrance Ingredients grew 2% against a very strong 18% growth rate
reported in the year-ago period. Performance was primarily driven by
the contribution of sales related to Lucas Meyer Cosmetics.
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Fragrances currency neutral segment profit improved approximately 6%
driven by sales growth, gross margin expansion, the benefits from cost
and productivity initiatives and lower incentive compensation expense.
Segment profit margin on a currency neutral basis increased 40 basis
points to 20.4%.
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On a reported basis, sales decreased 3%, or $51.2 million, to $1.6
billion. Fragrances segment profit decreased 4%, or $13.7 million, to
$321.8 million.
Flavors Business Unit
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Currency neutral sales grew 6%, including approximately 3 percentage
points related to the acquisition of Ottens Flavors. All categories
and regions delivered broad-based growth, with the strongest results
in Beverage and Latin America.
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EAME improved 4% as all categories reported growth, led by a
mid-single-digit increase in Savory and mid-single-digit growth in
Beverage. Within the EAME region, the Middle East and Africa grew
fastest, improving 14%, driven by strong new wins.
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North America improved 11%, reflecting the contribution of additional
sales related to the acquisition of Ottens Flavors, double-digit
growth in Dairy and mid-single-digit growth in Sweet.
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Latin America increased 16% as all categories reported growth;
Beverage, Savory and Dairy all reported double-digit growth.
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Greater Asia grew 2% led by new win performance in Savory, Dairy and
Beverage.
-
Flavors currency neutral segment profit improved approximately 4% as
sales growth and productivity initiatives more than offset higher raw
material costs. Segment profit margin on a currency neutral basis
decreased 60 basis points to 22.1% in the prior year quarter.
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On a reported basis, sales decreased 1%, or $14.1 million, to $1.44
billion. Flavors segment profit decreased 4% to $318.5 million from
$331.3 million.
Fourth Quarter 2015 Segment Summary: Growth vs. Prior Year
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Reported (GAAP)
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Currency Neutral (Non-GAAP)
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Sales
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Segment Profit
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Sales
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Segment Profit
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Fragrances:
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(5)%
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(9)%
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1%
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1%
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Acquisition Impact
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3%
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5%
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4%
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5%
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Flavors:
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(6)%
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(15)%
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1%
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(9)%
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Acquisition Impact
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4%
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2%
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4%
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2%
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Total Company:
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(5)%
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(15)%
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1%
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3%
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Acquisition Impact
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4%
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4%
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4%
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4%
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Fragrances Business Unit
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Currency neutral sales increased 1% driven primarily by a 4 percentage
point contribution from the acquisition of Lucas Meyer Cosmetics and
mid-single-digit growth in EAME.
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Fine Fragrances posted its strongest growth of 2015, increasing 3%
versus the year-ago period. Both EAME and Latin America delivered 5%
growth, principally driven by very strong new win performance.
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Consumer Fragrances declined 2% against the strong 8% growth reported
in the prior year period. Both EAME and Greater Asia posted modest
gains while North America was challenged by the timing of order
patterns.
-
Fragrance Ingredients grew 9% driven by the contribution of sales
relating to IFF | Lucas Meyer Cosmetics. On a standalone basis, IFF |
Lucas Meyer Cosmetics continued to grow double-digits.
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Fragrances currency neutral segment profit increased approximately 1%,
as benefits from cost and productivity initiatives, the contribution
of acquisitions and lower incentive compensation expense drove results.
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On a reported basis, sales decreased 5% to $381.4 million in the
fourth quarter compared with $399.8 million in the prior year quarter.
Fragrances segment profit decreased 9%, or $6.8 million, to $69.3
million.
Flavors Business Unit
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Currency neutral sales grew 1%, driven primarily by a 4 percentage
point contribution related to the acquisition of Ottens Flavors as
well as solid growth in Dairy.
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EAME decreased 4% as low-single-digit growth in Dairy was offset by
Beverage softness. Within EAME, Africa and the Middle East improved
15%.
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North America grew 8% reflecting additional sales related to the
acquisition of Ottens Flavors as well as low-single-digit growth in
Dairy and Sweet.
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Latin America increased 8% led by double-digit growth in Beverage,
Savory and Dairy.
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Greater Asia decreased 3% as growth in Indonesia, India, Singapore and
South Korea was offset by softness in China.
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Flavors currency neutral segment profit decreased approximately 9% as
productivity initiatives, the benefit of acquisitions, and lower
incentive compensation were more than offset by lower sales, as well
as higher manufacturing expenses and amortization relating to
acquisitions.
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On a reported basis, sales decreased 6% going to $334.3 million from
$356.3 million in the prior year quarter. Flavors segment profit
decreased 15% to $61.9 million from $72.6 million.
Q4 2015 Profit Improvement Initiative
During the fourth quarter, the Company established a series of
initiatives that are expected to streamline our management structure,
simplify decision-making and accountability, better leverage and align
our capabilities across the organization and improve the efficiency of
our global manufacturing and operations network. As a result, the
Company recorded a pre-tax charge of approximately $8 million to cover
severance and related costs associated with expected terminations, a
portion of which are subject to consultation processes. The Company
expects to realize pre-tax savings of $7-9 million once fully
implemented in the second half of 2017, half of which is expected to be
realized in 2016.
Separately, the Company recorded a charge of approximately $7 million
associated with the acceleration from 2016 to 2015 of contingent
consideration payments from the Aromor acquisition that were triggered
by certain of the affected positions noted above.
FY 2016 Guidance: Growth vs. Prior Year
The Company’s full year 2016 guidance:
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Currency Neutral
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FX Impact
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Reported
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Organic
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M&A
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Total
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Sales
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2.0 - 3.0%
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~1.5%
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3.5 - 4.5%
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~(2.5)%
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1.0 - 2.0%
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Operating Profit
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3.5 - 5.5%
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~1.5%
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5.0 - 7.0%
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~(5)%
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0.0 - 2.0%
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EPS
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5.0 - 7.0%
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~1.5%
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6.5 - 8.5%
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~(5)%
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1.5 - 3.5%
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A copy of the Company’s Annual Report on Form 10-K will be available on
its website at www.iff.com or at sec.gov by March 1, 2016.
Audio Webcast
A live webcast to discuss the Company’s fourth quarter and full year
2015 financial results will be held on February 11, 2016, at 10:00 a.m.
EST. Investors may access the webcast and accompanying slide
presentation on the Company's IR website at ir.iff.com. For those unable
to listen to the live webcast, a recorded version will be made available
on the Company's website approximately one hour after the event and will
remain available on IFF’s website for one year.
Cautionary Statement Under The Private Securities Litigation
Reform Act of 1995
This press release includes “forward-looking statements” under the
Federal Private Securities Litigation Reform Act of 1995, including
statements regarding our outlook for fiscal year 2016 and beyond,
expected returns from our recent acquisitions and partnerships, our
ability to accelerate growth and maximize shareholder value and expected
impact and savings from our profitability improvement plan. These
forward-looking statements are qualified in their entirety by cautionary
statements and risk factor disclosures contained in the Company’s
Securities and Exchange Commission filings, including the Company’s
Annual Report on Form 10-K filed with the Commission on March 2, 2015.
The Company wishes to caution readers that certain important factors may
have affected and could in the future affect the Company’s actual
results and could cause the Company’s actual results for subsequent
periods to differ materially from those expressed in any forward-looking
statements made by or on behalf of the Company. With respect to the
Company’s expectations regarding these statements, such factors include,
but are not limited to: (1) the Company’s ability to implement its
Vision 2020 strategy; (2) the Company’s ability to successfully identify
and complete acquisitions in line with its Vision 2020 strategy, and to
realize the anticipated benefits of those acquisitions; (3) the
Company’s ability to effectively complete in its market, and to
successfully develop new and competitive products that appeal to its
customers and consumers; (4) changes in consumer preferences and demand
for the Company’s products or a decline in consumer confidence and
spending; (5) the Company’s ability to benefit from its investments and
expansion in emerging markets; (6) the impact of currency fluctuations
or devaluations in the principal foreign markets in which it operates,
including the devaluation of the Euro; (7) the economic and political
risks associated with the Company’s international operations, including
current challenging economic conditions in China and Latin America; (8)
the impact of any failure of the Company’s key information technology
systems or a breach of information security; (9) the Company’s ability
to attract and retain talented employees; (10) the Company’s compliance
with environmental protection laws; (11) the Company’s ability to
realize expected cost savings and efficiencies from its profitability
improvement initiative and other optimization activities; (12)
volatility and increases in the price of raw materials, energy and
transportation; (13) fluctuations in the quality and availability of raw
materials; (14) the impact of a disruption in the Company’s supply chain
or its relationship with its suppliers; (15) any adverse impact on the
availability, effectiveness and cost of the Company’s hedging and risk
management strategies; (16) the Company’s ability to successfully manage
it working capital and inventory balances; (17) the effect of legal and
regulatory proceedings, as well as restrictions imposed on the Company,
its operations or its representatives by U.S. and foreign governments;
(18) adverse changes in federal, state, local and international tax
legislation or policies and adverse results of tax audits, assessments,
or disputes; and (19) changes in market conditions or governmental
regulations relating to our pension and postretirement obligations. New
risks emerge from time to time and it is not possible for management to
predict all such risk factors or to assess the impact of such risks on
the Company’s business. Accordingly, the Company undertakes no
obligation to publicly revise any forward-looking statements, whether as
a result of new information, future events, or otherwise.
Meet IFF
International Flavors & Fragrances Inc. (NYSE:IFF) (Euronext Paris: IFF)
is a leading innovator of sensorial experiences that move the world. At
the heart of our company, we are fueled by a sense of discovery,
constantly asking “what if?”. That passion for exploration drives us to
co-create unique products that consumers taste, smell, or feel in fine
fragrances and beauty, detergents and household goods, as well as
beloved foods and beverages. Our 6,800 team members globally take
advantage of leading consumer insights, research and development,
creative expertise, and customer intimacy to develop differentiated
offerings for consumer products. Learn more at www.iff.com,
Twitter , Facebook, Instagram, and LinkedIn.
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International Flavors & Fragrances Inc.
Consolidated Income Statement
(Amounts in thousands except per diluted share data)
(Unaudited)
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Three Months Ended December 31,
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Twelve Months Ended December 31,
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2015
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2014
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% Change
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2015
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|
|
|
2014
|
|
|
|
|
% Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
715,649
|
|
|
|
$
|
756,082
|
|
|
|
(5
|
)%
|
|
|
|
$
|
3,023,189
|
|
|
|
$
|
3,088,533
|
|
|
|
|
(2
|
)%
|
|
Cost of goods sold
|
|
|
402,493
|
|
|
|
|
428,102
|
|
|
|
(6
|
)%
|
|
|
|
|
1,671,590
|
|
|
|
|
1,726,383
|
|
|
|
|
(3
|
)%
|
|
Gross margin
|
|
|
313,156
|
|
|
|
|
327,980
|
|
|
|
(5
|
)%
|
|
|
|
|
1,351,599
|
|
|
|
|
1,362,150
|
|
|
|
|
(1
|
)%
|
|
Research and development
|
|
|
57,376
|
|
|
|
|
62,005
|
|
|
|
(7
|
)%
|
|
|
|
|
246,101
|
|
|
|
|
253,640
|
|
|
|
|
(3
|
)%
|
|
Selling and administrative
|
|
|
137,527
|
|
|
|
|
135,027
|
|
|
|
2
|
%
|
|
|
|
|
520,087
|
|
|
|
|
514,891
|
|
|
|
|
1
|
%
|
|
Restructuring and other charges
|
|
|
7,764
|
|
|
|
|
386
|
|
|
|
1,911
|
%
|
|
|
|
|
7,594
|
|
|
|
|
1,298
|
|
|
|
|
485
|
%
|
|
Operating Profit
|
|
|
110,489
|
|
|
|
|
130,562
|
|
|
|
(15
|
)%
|
|
|
|
|
577,817
|
|
|
|
|
592,321
|
|
|
|
|
(2
|
)%
|
|
Interest expense
|
|
|
11,705
|
|
|
|
|
12,019
|
|
|
|
(3
|
)%
|
|
|
|
|
46,062
|
|
|
|
|
46,067
|
|
|
|
|
(0
|
)%
|
|
Other (income) expense, net
|
|
|
6,499
|
|
|
|
|
954
|
|
|
|
581
|
%
|
|
|
|
|
3,184
|
|
|
|
|
(2,807
|
)
|
|
|
|
(213
|
)%
|
|
Pretax income
|
|
|
92,285
|
|
|
|
|
117,589
|
|
|
|
(22
|
)%
|
|
|
|
|
528,571
|
|
|
|
|
549,061
|
|
|
|
|
(4
|
)%
|
|
Income taxes
|
|
|
20,700
|
|
|
|
|
27,454
|
|
|
|
(25
|
)%
|
|
|
|
|
116,906
|
|
|
|
|
134,518
|
|
|
|
|
(13
|
)%
|
|
Net income
|
|
$
|
71,585
|
|
|
|
$
|
90,135
|
|
|
|
(21
|
)%
|
|
|
|
$
|
411,665
|
|
|
|
$
|
414,543
|
|
|
|
|
(1
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - basic
|
|
$
|
0.89
|
|
|
|
$
|
1.11
|
|
|
|
|
|
|
|
$
|
5.09
|
|
|
|
$
|
5.09
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
$
|
0.89
|
|
|
|
$
|
1.10
|
|
|
|
|
|
|
|
$
|
5.06
|
|
|
|
$
|
5.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
79,978
|
|
|
|
|
80,810
|
|
|
|
|
|
|
|
|
80,449
|
|
|
|
|
80,936
|
|
|
|
|
|
|
Diluted
|
|
|
80,400
|
|
|
|
|
81,312
|
|
|
|
|
|
|
|
|
80,891
|
|
|
|
|
81,494
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
Condensed Consolidated Balance Sheet
(Amounts in thousands)
(Unaudited)
|
|
|
|
|
|
|
December 31, 2015
|
|
|
|
December 31, 2014
|
|
Cash & cash equivalents
|
|
|
$
|
181,988
|
|
|
|
$
|
478,573
|
|
Receivables
|
|
|
|
537,896
|
|
|
|
|
493,768
|
|
Inventories
|
|
|
|
592,703
|
|
|
|
|
568,729
|
|
Other current assets
|
|
|
|
136,451
|
|
|
|
|
168,957
|
|
Total current assets
|
|
|
|
1,449,038
|
|
|
|
|
1,710,027
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
|
732,794
|
|
|
|
|
720,268
|
|
Goodwill and other intangibles, net
|
|
|
|
1,247,393
|
|
|
|
|
752,041
|
|
Other assets
|
|
|
|
284,639
|
|
|
|
|
312,285
|
|
Total assets
|
|
|
$
|
3,713,864
|
|
|
|
$
|
3,494,621
|
|
|
|
|
|
|
|
|
|
|
Bank borrowings and overdrafts, and
|
|
|
|
|
|
|
|
|
current portion of long-term debt
|
|
|
$
|
132,349
|
|
|
|
$
|
8,090
|
|
Other current liabilities
|
|
|
|
610,514
|
|
|
|
|
510,718
|
|
Total current liabilities
|
|
|
|
742,863
|
|
|
|
|
518,808
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
|
937,844
|
|
|
|
|
934,232
|
|
Non-current liabilities
|
|
|
|
444,447
|
|
|
|
|
518,892
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity
|
|
|
|
1,588,710
|
|
|
|
|
1,522,689
|
|
Total liabilities and shareholders' equity
|
|
|
$
|
3,713,864
|
|
|
|
$
|
3,494,621
|
|
|
|
|
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
|
2015
|
|
|
|
|
|
2014
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
411,665
|
|
|
|
|
$
|
414,543
|
|
|
Adjustments to reconcile to net cash provided by operations:
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
89,597
|
|
|
|
|
|
89,354
|
|
|
Deferred income taxes
|
|
|
|
13,043
|
|
|
|
|
|
23,350
|
|
|
Gain on disposal of assets
|
|
|
|
(622
|
)
|
|
|
|
|
(3,768
|
)
|
|
Stock-based compensation
|
|
|
|
23,160
|
|
|
|
|
|
22,648
|
|
|
Pension contributions
|
|
|
|
(67,897
|
)
|
|
|
|
|
(43,982
|
)
|
|
Changes in assets and liabilities, net of acquisitions
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
|
(91,712
|
)
|
|
|
|
|
(2,635
|
)
|
|
Inventories
|
|
|
|
(37,628
|
)
|
|
|
|
|
(40,042
|
)
|
|
Accounts payable
|
|
|
|
94,522
|
|
|
|
|
|
19,403
|
|
|
Accruals for incentive compensation
|
|
|
|
(17,399
|
)
|
|
|
|
|
(30,947
|
)
|
|
Other current payables and accrued expenses
|
|
|
|
20,926
|
|
|
|
|
|
(30,982
|
)
|
|
Changes in other assets/liabilities, net
|
|
|
|
(4,077
|
)
|
|
|
|
|
101,448
|
|
|
Net cash provided by operating activities
|
|
|
|
433,578
|
|
|
|
|
|
518,390
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for acquisition, net of cash received (including $15
million of contingent consideration related to the Aromor
acquisition in 2014)
|
|
|
(493,424
|
)
|
|
|
|
|
(102,500
|
)
|
|
Additions to property, plant and equipment
|
|
|
|
(101,030
|
)
|
|
|
|
|
(143,182
|
)
|
|
Proceeds from disposal of assets
|
|
|
|
4,302
|
|
|
|
|
|
3,295
|
|
|
Maturity of net investment hedges
|
|
|
|
12,128
|
|
|
|
|
|
3,304
|
|
|
Proceeds from life insurance contracts
|
|
|
|
868
|
|
|
|
|
|
17,750
|
|
|
Net cash used in investing activities
|
|
|
|
(577,156
|
)
|
|
|
|
|
(221,333
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
Cash dividends paid to shareholders
|
|
|
|
(158,870
|
)
|
|
|
|
|
(133,239
|
)
|
|
Net change in revolving credit facility borrowings and overdrafts
|
|
|
|
136,826
|
|
|
|
|
|
8,332
|
|
|
Deferred financing costs
|
|
|
|
—
|
|
|
|
|
|
(1,023
|
)
|
|
Proceeds from issuance or drawdown of long-term debt
|
|
|
|
—
|
|
|
|
|
|
3,609
|
|
|
Proceeds from issuance of stock under stock plans
|
|
|
|
886
|
|
|
|
|
|
1,864
|
|
|
Excess tax benefits on stock-based payments
|
|
|
|
12,055
|
|
|
|
|
|
6,330
|
|
|
Purchase of treasury stock
|
|
|
|
(122,193
|
)
|
|
|
|
|
(88,203
|
)
|
|
Net cash used in financing activities
|
|
|
|
(131,296
|
)
|
|
|
|
|
(202,330
|
)
|
|
Effect of exchange rates changes on cash and cash equivalents
|
|
|
|
(21,711
|
)
|
|
|
|
|
(21,659
|
)
|
|
Net change in cash and cash equivalents
|
|
|
|
(296,585
|
)
|
|
|
|
|
73,068
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
478,573
|
|
|
|
|
|
405,505
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
181,988
|
|
|
|
|
$
|
478,573
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
Business Unit Performance
(Amounts in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended December 31,
|
|
|
|
|
Twelve Months Ended December 31,
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
|
|
2015
|
|
|
|
|
2014
|
|
|
Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flavors
|
|
$
|
334,262
|
|
|
|
|
$
|
356,329
|
|
|
|
|
$
|
1,442,951
|
|
|
|
|
$
|
1,457,055
|
|
|
Fragrances
|
|
|
381,387
|
|
|
|
|
|
399,753
|
|
|
|
|
|
1,580,238
|
|
|
|
|
|
1,631,478
|
|
|
Consolidated
|
|
|
715,649
|
|
|
|
|
|
756,082
|
|
|
|
|
|
3,023,189
|
|
|
|
|
|
3,088,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flavors
|
|
|
61,931
|
|
|
|
|
|
72,641
|
|
|
|
|
|
318,476
|
|
|
|
|
|
331,257
|
|
|
Fragrances
|
|
|
69,348
|
|
|
|
|
|
76,194
|
|
|
|
|
|
321,764
|
|
|
|
|
|
335,447
|
|
|
Global Expenses
|
|
|
(1,115
|
)
|
|
|
|
|
(16,259
|
)
|
|
|
|
|
(28,180
|
)
|
|
|
|
|
(65,443
|
)
|
|
Restructuring and other charges, net
|
|
|
(7,764
|
)
|
|
|
|
|
(386
|
)
|
|
|
|
|
(7,594
|
)
|
|
|
|
|
(1,298
|
)
|
|
Operational improvement initiative costs
|
|
|
(274
|
)
|
|
|
|
|
(1,628
|
)
|
|
|
|
|
(1,115
|
)
|
|
|
|
|
(7,642
|
)
|
|
Acquisition related costs
|
|
|
(4,445
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(18,342
|
)
|
|
|
|
|
—
|
|
|
Accelerated contingent consideration
|
|
|
(7,192
|
)
|
|
|
|
|
—
|
|
|
|
|
|
(7,192
|
)
|
|
|
|
|
—
|
|
|
Operating profit
|
|
|
110,489
|
|
|
|
|
|
130,562
|
|
|
|
|
|
577,817
|
|
|
|
|
|
592,321
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
(11,705
|
)
|
|
|
|
|
(12,019
|
)
|
|
|
|
|
(46,062
|
)
|
|
|
|
|
(46,067
|
)
|
|
Other (expense) income, net
|
|
|
(6,499
|
)
|
|
|
|
|
(954
|
)
|
|
|
|
|
(3,184
|
)
|
|
|
|
|
2,807
|
|
|
Income before taxes
|
|
$
|
92,285
|
|
|
|
|
$
|
117,589
|
|
|
|
|
$
|
528,571
|
|
|
|
|
$
|
549,061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Margin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flavors
|
|
|
18.5
|
%
|
|
|
|
|
20.4
|
%
|
|
|
|
|
22.1
|
%
|
|
|
|
|
22.7
|
%
|
|
Fragrances
|
|
|
18.2
|
%
|
|
|
|
|
19.1
|
%
|
|
|
|
|
20.4
|
%
|
|
|
|
|
20.6
|
%
|
|
Consolidated
|
|
|
15.4
|
%
|
|
|
|
|
17.3
|
%
|
|
|
|
|
19.1
|
%
|
|
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
Sales Performance by Region and Category
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter 2015 vs. 2014
|
|
|
|
|
|
|
|
Percentage Change in Sales by Region of Destination
|
|
|
|
|
|
|
|
Fine
|
|
Consumer Fragrances(*)
|
|
Ingredients
|
|
Total Frag.
|
|
Flavors
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
Reported
|
|
-3%
|
|
-9%
|
|
7%
|
|
-4%
|
|
8%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAME
|
|
Reported
|
|
-7%
|
|
-11%
|
|
1%
|
|
-7%
|
|
-15%
|
|
-10%
|
|
|
|
Currency Neutral
|
|
5%
|
|
1%
|
|
11%
|
|
4%
|
|
-4%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
Reported
|
|
-3%
|
|
-7%
|
|
7%
|
|
-5%
|
|
-2%
|
|
-4%
|
|
|
|
Currency Neutral
|
|
5%
|
|
-3%
|
|
7%
|
|
-1%
|
|
8%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater Asia
|
|
Reported
|
|
-14%
|
|
-2%
|
|
7%
|
|
-1%
|
|
-9%
|
|
-6%
|
|
|
|
Currency Neutral
|
|
-12%
|
|
1%
|
|
10%
|
|
2%
|
|
-3%
|
|
-1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Reported
|
|
-5%
|
|
-7%
|
|
4%
|
|
-5%
|
|
-6%
|
|
-5%
|
|
|
|
Currency Neutral
|
|
3%
|
|
-2%
|
|
9%
|
|
1%
|
|
1%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full Year 2015 vs. Full Year 2014
|
|
|
|
|
|
|
|
Percentage Change in Sales by Region of Destination
|
|
|
|
|
|
|
|
Fine
|
|
Consumer Fragrances
|
|
Ingredients
|
|
Total Frag.
|
|
Flavors
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
Reported
|
|
-5%
|
|
1%
|
|
-7%
|
|
-2%
|
|
11%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EAME
|
|
Reported
|
|
-9%
|
|
-8%
|
|
-7%
|
|
-8%
|
|
-11%
|
|
-9%
|
|
|
|
Currency Neutral
|
|
6%
|
|
8%
|
|
4%
|
|
7%
|
|
4%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
Reported
|
|
-10%
|
|
7%
|
|
1%
|
|
2%
|
|
7%
|
|
4%
|
|
|
|
Currency Neutral
|
|
-5%
|
|
10%
|
|
3%
|
|
6%
|
|
16%
|
|
9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Greater Asia
|
|
Reported
|
|
-2%
|
|
0%
|
|
3%
|
|
0%
|
|
-3%
|
|
-2%
|
|
|
|
Currency Neutral
|
|
-1%
|
|
2%
|
|
8%
|
|
3%
|
|
2%
|
|
2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
Reported
|
|
-8%
|
|
-1%
|
|
-5%
|
|
-3%
|
|
-1%
|
|
-2%
|
|
|
|
Currency Neutral
|
|
1%
|
|
5%
|
|
2%
|
|
4%
|
|
6%
|
|
5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Currency neutral growth is calculated by translating prior year sales
at the exchange rates used for the corresponding 2015 period.
|
|
International Flavors & Fragrances Inc.
GAAP to Non-GAAP Reconciliation
Foreign Exchange Impact
(Unaudited)
|
|
|
|
|
|
|
|
|
|
Q4 Consolidated
|
|
Sales
|
|
Operating Profit
|
|
EPS
|
|
% Change - Reported (GAAP)
|
|
-5%
|
|
-15%
|
|
-20%
|
|
Items Impacting Comparability
|
|
0%
|
|
13%
|
|
18%
|
|
% Change - Adjusted (Non-GAAP)
|
|
-5%
|
|
-2%
|
|
-2%
|
|
Currency Impact
|
|
6%
|
|
5%
|
|
11%
|
|
% Change - Currency Neutral (Adjusted)
|
|
1%
|
|
3%
|
|
9%
|
|
|
|
|
|
|
|
|
|
Q4 Flavors
|
|
Sales
|
|
Segment Profit
|
|
|
|
% Change - Reported (GAAP)
|
|
-6%
|
|
-15%
|
|
|
|
Currency Impact
|
|
7%
|
|
6%
|
|
|
|
% Change - Currency Neutral
|
|
1%
|
|
-9%
|
|
|
|
|
|
|
|
|
|
|
|
Q4 Fragrances
|
|
Sales
|
|
Segment Profit
|
|
|
|
% Change - Reported (GAAP)
|
|
-5%
|
|
-9%
|
|
|
|
Currency Impact
|
|
6%
|
|
10%
|
|
|
|
% Change - Currency Neutral
|
|
1%
|
|
1%
|
|
|
|
|
|
|
|
|
|
|
|
FY Consolidated
|
|
Sales
|
|
Operating Profit
|
|
EPS
|
|
% Change - Reported (GAAP)
|
|
-2%
|
|
-2%
|
|
0%
|
|
Items Impacting Comparability
|
|
0%
|
|
4%
|
|
3%
|
|
% Change - Adjusted (Non-GAAP)
|
|
-2%
|
|
2%
|
|
3%
|
|
Currency Impact
|
|
7%
|
|
6%
|
|
8%
|
|
% Change - Currency Neutral (Adjusted)
|
|
5%
|
|
8%
|
|
11%
|
|
|
|
|
|
|
|
|
|
FY Flavors
|
|
Sales
|
|
Segment Profit
|
|
|
|
% Change - Reported (GAAP)
|
|
-1%
|
|
-4%
|
|
|
|
Currency Impact
|
|
7%
|
|
8%
|
|
|
|
% Change - Currency Neutral
|
|
6%
|
|
4%
|
|
|
|
|
|
|
|
|
|
|
|
FY Fragrances
|
|
Sales
|
|
Segment Profit
|
|
|
|
% Change - Reported (GAAP)
|
|
-3%
|
|
-4%
|
|
|
|
Currency Impact
|
|
7%
|
|
10%
|
|
|
|
% Change - Currency Neutral
|
|
4%
|
|
6%
|
|
|
|
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
GAAP to
Non-GAAP Reconciliation
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation
information between reported GAAP amounts and non-GAAP certain adjusted
amounts. This information and schedules are not intended as, and should
not be viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.
|
|
|
|
Fourth quarter 2015
|
|
|
|
|
|
Items Impacting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported (GAAP)
|
|
|
|
Restructuring
and Other Charges
|
|
Operational
Improvement Initiative Costs
|
|
Accelerated Contingent Consideration
|
|
Acquisition related Costs
|
|
|
|
Adjusted (Non-GAAP)
|
|
Net Sales
|
|
|
|
|
715,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
|
|
|
402,493
|
|
|
|
|
|
|
|
|
(274
|
)
|
|
(b)
|
|
|
|
|
|
|
(3,515
|
)
|
|
(d)
|
|
|
|
Gross Profit
|
|
|
|
|
313,156
|
|
|
|
|
|
|
|
|
274
|
|
|
|
|
|
|
|
|
|
3,515
|
|
|
|
|
|
316,945
|
|
Research and Development
|
|
|
|
|
57,376
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and Administrative
|
|
|
|
|
137,527
|
|
|
|
|
|
|
|
|
|
|
|
|
(7,192
|
)
|
|
(c)
|
|
|
(930
|
)
|
|
(d)
|
|
|
129,405
|
|
RSA Expense
|
|
|
|
|
194,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges, net
|
|
|
|
|
7,764
|
|
|
|
|
(7,764
|
)
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
|
|
|
110,489
|
|
|
|
|
7,764
|
|
|
|
|
|
274
|
|
|
|
|
|
7,192
|
|
|
|
|
|
4,445
|
|
|
|
|
|
130,164
|
|
Interest Expense
|
|
|
|
|
11,705
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income) expense, net
|
|
|
|
|
6,499
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
|
|
92,285
|
|
|
|
|
7,764
|
|
|
|
|
|
274
|
|
|
|
|
|
7,192
|
|
|
|
|
|
4,445
|
|
|
|
|
|
111,960
|
|
Taxes on Income
|
|
|
|
|
20,700
|
|
|
|
|
2,362
|
|
|
|
|
|
69
|
|
|
|
|
|
—
|
|
|
|
|
|
4,346
|
|
|
|
|
|
27,477
|
|
Net Income
|
|
|
|
|
71,585
|
|
|
|
|
5,402
|
|
|
|
|
|
205
|
|
|
|
|
|
7,192
|
|
|
|
|
|
99
|
|
|
|
|
|
84,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
|
$
|
0.89
|
|
|
|
$
|
0.07
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
0.09
|
|
|
|
|
$
|
—
|
|
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Restructuring costs related to Q4 2015 Profit Improvement
Initiative.
|
|
|
(b)
|
|
Related to plant closings in Europe and partial closing in Asia.
|
|
|
|
(c)
|
|
Represents the acceleration of the contingent consideration
payment related to the Aromor acquisition.
|
|
|
(d)
|
|
Transaction costs related to acquisitions (Ottens Flavors and
Lucas Meyer Cosmetics) as well as expense related to the fair
value step up of inventory for Lucas Meyer.
|
|
|
|
*
|
|
The Company tracks the amount of amortization recorded on
recent acquisitions in order to monitor its progress with respect
to its Vision 2020 goals. The following amounts were recorded with
respect to recent acquisitions: $2.9M.
|
|
|
|
|
|
|
|
|
|
|
|
Fourth quarter 2014
|
|
|
|
|
|
Items Impacting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported (GAAP)
|
|
|
|
Restructuring and Other Charges
|
|
Operational Improvement Initiative Costs
|
|
Spanish Tax
|
|
|
|
Gain on Sale of Asset
|
|
|
|
Adjusted (Non-GAAP)
|
|
Net Sales
|
|
|
|
|
756,082
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
|
|
|
428,102
|
|
|
|
|
|
|
|
|
(1,628
|
)
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
327,980
|
|
|
|
|
|
|
|
|
1,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
329,608
|
|
Research and Development
|
|
|
|
|
62,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and Administrative
|
|
|
|
|
135,027
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSA Expense
|
|
|
|
|
197,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges, net
|
|
|
|
|
386
|
|
|
|
|
(386
|
)
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
|
|
|
130,562
|
|
|
|
|
386
|
|
|
|
|
|
1,628
|
|
|
|
|
|
|
|
|
|
|
|
|
|
132,576
|
|
Interest Expense
|
|
|
|
|
12,019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income) expense, net
|
|
|
|
|
954
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(723
|
)
|
|
(d)
|
|
|
|
Income before taxes
|
|
|
|
|
117,589
|
|
|
|
|
386
|
|
|
|
|
|
1,628
|
|
|
|
|
|
|
|
|
|
(723
|
)
|
|
|
|
|
118,880
|
|
Taxes on Income
|
|
|
|
|
27,454
|
|
|
|
|
135
|
|
|
|
|
|
410
|
|
|
|
|
|
3,825
|
|
|
(c)
|
|
|
(253
|
)
|
|
|
|
|
31,571
|
|
Net Income
|
|
|
|
|
90,135
|
|
|
|
|
251
|
|
|
|
|
|
1,218
|
|
|
|
|
|
(3,825
|
)
|
|
|
|
|
(470
|
)
|
|
|
|
|
87,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
|
$
|
1.10
|
|
|
|
$
|
—
|
|
|
(e)
|
|
$
|
0.01
|
|
|
(e)
|
|
$
|
(0.05
|
)
|
|
(e)
|
|
$
|
—
|
|
|
(e)
|
|
$
|
1.07
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Costs related to the Fragrance Ingredients Rationalization
|
|
|
(b)
|
|
Related to a plant closing, partial closings and other
organizational realignments, principally in Europe and Asia
|
|
|
|
(c)
|
|
Related to favorable ruling on 2001 dividend withholding case
|
|
|
|
(d)
|
|
Represents gain on the sale of a non-operating asset
|
|
|
|
(e)
|
|
The sum of these items do not foot due to rounding
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
GAAP to
Non-GAAP Reconciliation
(Amounts in thousands)
(Unaudited)
The following information and schedules provide reconciliation
information between reported GAAP amounts and non-GAAP certain adjusted
amounts. This information and schedules are not intended as, and should
not be viewed as, a substitute for reported GAAP amounts or financial
statements of the Company prepared and presented in accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Full year 2015
|
|
|
|
|
|
|
|
|
|
Items Impacting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported (GAAP)
|
|
|
Restructuring and Other Charges
|
|
Operational Improvement Initiative
Costs
|
|
Accelerated Contingent Consideration
|
|
Acquisition related Costs
|
|
|
|
Tax Settlements
|
|
|
|
Adjusted (Non-GAAP)
|
|
Net Sales
|
|
|
|
|
3,023,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
|
|
|
1,671,590
|
|
|
|
|
|
|
|
(1,115
|
)
|
|
(b)
|
|
|
|
|
|
|
(6,825
|
)
|
|
(d)
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
|
1,351,599
|
|
|
|
|
|
|
|
1,115
|
|
|
|
|
|
|
|
|
|
6,825
|
|
|
|
|
|
|
|
|
|
1,359,539
|
|
Research and Development
|
|
|
|
|
246,101
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and Administrative
|
|
|
|
|
520,087
|
|
|
|
|
|
|
|
|
|
|
|
(7,192
|
)
|
|
(c)
|
|
|
(11,517
|
)
|
|
(d)
|
|
|
|
|
|
|
501,378
|
|
RSA Expense
|
|
|
|
|
766,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges, net
|
|
|
|
|
7,594
|
|
|
|
(7,594
|
)
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
|
|
|
577,817
|
|
|
|
7,594
|
|
|
|
|
|
1,115
|
|
|
|
|
|
7,192
|
|
|
|
|
|
18,342
|
|
|
|
|
|
|
|
|
|
612,060
|
|
Interest Expense
|
|
|
|
|
46,062
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income) expense, net
|
|
|
|
|
3,184
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
|
|
528,571
|
|
|
|
7,594
|
|
|
|
|
|
1,115
|
|
|
|
|
|
7,192
|
|
|
|
|
|
18,342
|
|
|
|
|
|
|
|
|
|
562,814
|
|
Taxes on Income
|
|
|
|
|
116,906
|
|
|
|
2,302
|
|
|
|
|
|
279
|
|
|
|
|
|
—
|
|
|
|
|
|
6,225
|
|
|
|
|
|
10,478
|
|
|
(e)
|
|
|
136,190
|
|
Net Income
|
|
|
|
|
411,665
|
|
|
|
5,292
|
|
|
|
|
|
836
|
|
|
|
|
|
7,192
|
|
|
|
|
|
12,117
|
|
|
|
|
|
(10,478
|
)
|
|
|
|
|
426,624
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
|
$
|
5.06
|
|
|
$
|
0.07
|
|
|
|
|
$
|
0.01
|
|
|
|
|
$
|
0.09
|
|
|
|
|
$
|
0.15
|
|
|
|
|
$
|
(0.13
|
)
|
|
|
|
$
|
5.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Restructuring costs related to Q4 2015 Profit Improvement
Initiative.
|
|
|
|
|
(b)
|
|
Related to plant closings in Europe and partial closing in Asia.
|
|
|
|
(c)
|
|
Represents the acceleration of the contingent consideration
payment related to the Aromor acquisition.
|
|
|
|
(d)
|
|
Transaction costs related to acquisitions (Ottens Flavors and
Lucas Meyer Cosmetics) as well as expense related to the fair
value step up of inventory for both acquisitions.
|
|
|
|
(e)
|
|
Settlements due to favorable tax rulings in jurisdictions for
which reserves were previously recorded for ongoing tax disputes.
|
|
|
|
*
|
|
The Company tracks the amount of amortization recorded on
recent acquisitions in order to monitor its progress with respect
to its Vision 2020 goals. The following amounts were recorded with
respect to recent acquisitions: $7.6M.
|
|
|
|
|
|
|
|
|
|
|
Full year 2014
|
|
|
|
Items Impacting Comparability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reported (GAAP)
|
|
|
|
Restructuring and Other Charges
|
|
Operational Improvement Initiative Costs
|
|
Spanish Tax Charges
|
|
|
|
Gain on Asset Sale
|
|
|
|
Adjusted (Non-GAAP)
|
|
Net Sales
|
|
|
|
3,088,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of Goods Sold
|
|
|
|
1,726,383
|
|
|
|
|
|
(5,100
|
)
|
|
(a)
|
|
|
(2,541
|
)
|
|
(b)
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
|
|
|
1,362,150
|
|
|
|
|
|
5,100
|
|
|
|
|
|
2,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,369,791
|
|
|
Research and Development
|
|
|
|
253,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and Administrative
|
|
|
|
514,891
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSA Expense
|
|
|
|
768,531
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and other charges, net
|
|
|
|
1,298
|
|
|
|
|
|
(1,298
|
)
|
|
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
|
|
|
592,321
|
|
|
|
|
|
6,398
|
|
|
|
|
|
2,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
601,260
|
|
|
Interest Expense
|
|
|
|
46,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income) expense, net
|
|
|
|
(2,807
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(723
|
)
|
|
(d)
|
|
|
(2,084
|
)
|
|
Income before taxes
|
|
|
|
549,061
|
|
|
|
|
|
6,398
|
|
|
|
|
|
2,541
|
|
|
|
|
|
|
|
|
|
(723
|
)
|
|
|
|
|
557,277
|
|
|
Taxes on Income
|
|
|
|
134,518
|
|
|
|
|
|
2,240
|
|
|
|
|
|
636
|
|
|
|
|
|
3,825
|
|
|
(c)
|
|
|
(253
|
)
|
|
|
|
|
140,966
|
|
|
Net Income
|
|
|
|
414,543
|
|
|
|
|
|
4,158
|
|
|
|
|
|
1,905
|
|
|
|
|
|
(3,825
|
)
|
|
|
|
|
(470
|
)
|
|
|
|
|
416,311
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share - diluted
|
|
|
$
|
5.06
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
0.02
|
|
|
|
|
$
|
(0.05
|
)
|
|
|
|
$
|
—
|
|
|
|
|
$
|
5.08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
Costs related to the Fragrance Ingredients Rationalization
|
|
|
|
(b)
|
|
Related to a plant closing, partial closings and other
organizational realignments, principally in Europe and Asia
|
|
|
|
(c)
|
|
Related to favorable ruling on 2001 dividend withholding case
|
|
|
|
(d)
|
|
Represents gain on the sale of a non-operating asset
|
|
|
|
|
|
|
|
|
International Flavors & Fragrances Inc.
521 West 57th
Street
New York, NY 10019
T +212.765.5500
F +212.708.7132
iff.com
CONTACT:
International Flavors & Fragrances Inc.
Michael
DeVeau, 212-708-7164
VP, Global Corporate Communications & Investor
Relations
Michael.DeVeau@iff.com
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