Frutarom expects 2018 to be “another record year” as it continues to improve profitability as it posts 2017 results which show sales grew by 18.8 percent to a record US$1,362.4 million. The Israel-based flavor and fragrance company says it is progressing towards achieving its sales target of US$2.25 billion and an EBITDA margin from core activity of 23 percent in 2020.
The company hails 2017 as a successful year because of projects which combined plants, resource optimization and the completion of the Enzymotec acquisition, which was part of a series of acquisitions during the year for Frutarom.
In fact, during 2017 Frutarom carried out 12 strategic acquisitions and two additional ones were already performed in 2018 in exchange for a total of US$390 million.
Other financial highlights include sales from core activities growing by 19.1 percent to a record US$1,271.4 million and constant currency pro forma2 growth of 7.5 percent.
Sales from Flavors activity grew by 21.1 percent to a record US$ 1,025.4 million, constant currency pro forma2 growth of 7.2 percent, while sales from Natural Specialty Fine Ingredients grew by 14.2 percent to US$ 260.1 million.
Meanwhile, gross profit grew by 20.0 percent to US$525.1 million; EBITDA grew by 33.9 percent to US$259.6 million; adjusted for nonrecurring expenses, the EBITDA grew by 23.1 percent 267.5 million; net income grew by 36.5 percent to US$151.6 million; a record cash flow from operations grew by 50.5 percent to US$187.5 million and Earnings per share grew by 36.0 percent to a record US$2.52 In Q4 2017.
Ori Yehudai, President and CEO of Frutarom Group, is pleased with the “significant step forward” and the results achieved in 2017, where new records in sales, profits and cash flows were set.
“In the past four years, we've managed to once again double Frutarom's revenues and profits, a result which reflects the successful implementation of the rapid and profitable growth strategy, combining profitable internal growth at higher growth rates than those of the markets in which we operate, together with the strategic acquisitions we have made which are contributing to the continuing and consistent improvement in our results,” he said.
“The accelerated 19.1 percent growth in our core activities in 2017, is a result of the continued rapid organic growth of our Flavors activity at an annual rate of 7.2 percent, and a quarterly rate of 10.2 percent and our Specialty Fine Ingredients activity at an annual rate of 11.8 percent and the contribution of the strategic acquisitions we have carried out and merged successfully.”
“Following the eight acquisitions we carried out in 2016, we made 12 more acquisitions in 2017, and two additional ones since the beginning of 2018, and we are successfully progressing with the plans for their full merger and integration.”
Yehudai adds how the company is working on establishing a robust and top quality pipeline of future acquisitions, which support the realization of Frutarom’s plans for rapid growth while expanding the share of the Flavors activity.
This includes establishing market leadership in Savory Solutions and expanding the portfolio of natural solutions the company offers in flavors, health, colors and natural antioxidant activities.
Frutarom also plans to accelerate growth and expand its market share in North America and emerging markets with high growth rates.
“Also, we've expanded and deepened our activity in the field of Natural Specialty Fine Ingredients for infant nutrition and elderly clinical nutrition through the acquisition of Enzymotec, whose merger process is progressing successfully and the impressive growth rate of its core products continues,” Yehudai continues.
“We've also expanded our activity in the growing field of Natural Specialty Fine Ingredients for cosmetics and personal care through the acquisition of IBR at the beginning of 2018.”
“We are proceeding with our plan to establish global market leadership in natural herbal extracts, as we adopt a vision of embracing global collaborations with research institutes and farmers for the development of varieties and crops of strategic natural raw materials for flavors, colors, health, and cosmetics, which will support our customers' accelerated transition from synthetic to fine natural ingredients.”
