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Dec 31, 2019
IFF Q4 2019 Earnings Report
IFF reported a 5% increase in sales and an EPS of $0.70 for the fourth quarter of 2019.
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
Revenue by Segment
Taste Revenue
CapyFin.comScent Revenue
CapyFin.com 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