IFF Q4 2019 Earnings Report
Key Takeaways
IFF reported a 5% increase in net sales to $1.28 billion for the fourth quarter of 2019. Reported EPS was $0.70, while adjusted EPS ex amortization was $1.46. The company continued to achieve significant cost synergies from Frutarom and captured solid year one revenue synergies.
Delivered high-single digit currency neutral top-line growth.
Achieved a robust double-digit increase in adjusted EPS ex amortization.
Continued to achieve significant cost synergies from Frutarom well ahead of year-one targets.
Captured solid year one revenue synergies, demonstrating broad operational strength.
IFF
IFF
IFF Revenue by Segment
Forward Guidance
The Company's 2020 guidance is as follows: Sales $5.15B - $5.35B, Adjusted EPS $4.89 - $5.14 and Adjusted EPS Ex Amortization $6.20 - $6.45.
Positive Outlook
- Sales growth for 2020 is expected to be approximately 1% to 5% on a currency neutral basis.
- Excluding the impacts of the 53rd week in the prior year period and an anticipated 0.5 percentage point impact, principally related to the carryover effect from the Russia/Ukraine compliance issue and CitraSource, currency neutral core sales growth is expected to be approximately 2.5% to 6.5%.
- Adjusted EPS ex amortization growth for 2020 is expected to be approximately 3.5% to 7.5% on a currency neutral basis.
- Offsetting the negative impacts is a 6 percentage point contribution from integration synergies.
- The Company expects to achieve a Net Debt to EBITDA ratio of less than 3.0x by the end of 2020.
Challenges Ahead
- Currency is expected to negatively impact sales by an estimated 1 percentage point, and adjusted EPS ex amortization by 3 percentage points.
- Sales growth for 2020 includes an estimated 1 percentage point impact related to the 53rd week in the prior year period and an anticipated 0.5 percentage point impact, principally related to the carryover effect from the Russia/Ukraine compliance issue and CitraSource.
- Adjusted EPS ex amortization growth for 2020 includes an estimated 5 percentage point impact related to an incentive compensation reset, an estimated 1 percentage point impact related to the 53rd week in the prior year period and an anticipated 0.5 percentage point impact, principally related to the carryover effect from the Russia/Ukraine compliance issue and CitraSource.
- The Company expects a modest impact from the recent coronavirus outbreak in Asia, based on its knowledge at this time.
- There are still too many variables and uncertainties regarding this outbreak to quantify currently.
Revenue & Expenses
Visualization of income flow from segment revenue to net income