Frutarom's Sales in the Fourth Quarter Increased by 9.9%; Profit Before Tax Increased by 86.7% and Net Profit Increased by 24.1%
By Frutarom Industries Ltd, PRNETuesday, March 16, 2010
HAIFA, Israel, March 17, 2010 -
- Net Profit Excluding non Recurring Effects Increased by 38.5%
- Operating Profit Increased by 30.1% to US$ 11 m
- EBITDA Increased by 29.2% to US$ 16 m
- Profit Before tax Increased by 86.7% to US$ 10.1 m
- Net Profit Excluding non Recurring Effects Increased by 38.5% to US$
7.5 m
- Record in the Cash Flow in the Quarter and From the Beginning of the
Year: in 2009 Cash Flow of US$ 84.9 m compared to US$ 37 m in 2008
- Earning per share Excluding non Recurring Effects Increased by 37.5%
to US$ 0.13
- Will Distribute Dividends in the Amount of NIS 0.18 per share for an
Overall Amount of NIS 10.4 m (US$ 2.8 m)
Frutarom (LSE: FRUT, TASE: FRUT, FRUTF.PK) today presented its 2009
full year and fourth quarter results.
Frutarom, one of the ten largest companies in the world in the
field of flavors and specialty fine ingredients, continues to
successfully implement its rapid and profitable growth strategy, combining
organic growth and the execution strategic acquisitions.
Frutarom achieved an increase of 9.9% in its sales in the
forth quarter of 2009, to US$ 108.5 M. In local currency terms, sales
increased by 3.1% compared to the forth quarter of 2008. The strengthening of
the European currencies and the NIS in which most of Frutarom's sales are
implemented, against the US$, contributed approximately 6.8% to the increase
in the Company's sales in US$ terms.
In accordance with its strategic plan, after Frutarom focused
during 2008 on the integration and utilization of the many synergies from the
seven acquisitions made in 2007, Frutarom resumed its acquisitions strategy
in 2009 and has implemented during the first half of 2009 three successful
strategic acquisitions: Oxford in UK, FSI in the US and the Savory activities
of Christian Hansen (CH) in Germany. The three acquisitions contributed to
the sales in the fourth quarter US$ 8.1 M and US$ 25.3 M to the sales in
2009. Frutarom estimates that its strong cash flow, its solid capital
structure and the support it has from leading financial institutions will
enable it to further realize its acquisition strategy and to execute
additional strategic acquisitions.
The global economic crisis made 2009 a challenging year to the
global economy and to Frutarom as a leading player in the fields of Flavors
and Specialty Fine Ingredients. Frutarom estimates that it maintained its
market share with its customers and the stabilization of the global economy
in recent months, the moderation in currencies fluctuations, the halt of the
destocking trend and the signs of gradual improvement in consumption,
including in countries significantly affected by the devaluation in their
currency, will contribute to an improvement in its sales level and to future
return to a growth trend at rates similar to those characterizing its
activities in the past.
Gross profit in the fourth quarter of 2009 increased by 8.6%
and reached US$ 39.6 M compared to US$ 36.5 M in the same quarter in 2008;
gross margin reached 36.5%. Operating profit increased by 30.1% to US$ 11 M
compared to US$ 8.4 M last year and operating margin increased and reached
10.1% compared to 8.5% in the same period in 2008.
EBITDA in the fourth quarter of 2009 increased by 29.2% to US$
16 M compared to US$ 12.4 M in the same quarter in 2008. EBITDA margin
improved and reached 14.8% compared to 12.6% in the same period last year.
Profit before taxes in the fourth quarter of 2009 increase at a sharp rate of
86.7% and totaled US$ 10.1 M (9.3% of sales) compared to US$ 5.4 M (5.5% of
sales) in the same quarter last year.
Net profit in the period, excluding non-recurring effects for
tax gains in 2008 compared to 2009, increased by 38.5% and totaled US$ 7.5 M
compared to US$ 5.4 M in the same period last year and net margin improved
and reached 6.9% compared to 5.5%. Including the non-recurring effects net
profit in the period increased by 24.1% and totaled US$ 7.5 M compared to US$
6 M in the same period last year and net margin improved and reached 6.9%
compared to 6.1%.
In the fourth quarter 2009, Frutarom further improved its cash
flow from current activities, which reached US$ 27 M compared to a cash flow
of US$ 15.8 M in the fourth quarter of 2008. In 2009 Frutarom generated a
record cash flow from current activities in the amount of US$ 84.9 M compared
to US$ 37.0 M in the same period last year. The strong cash flow achieved by
Frutarom enables the reduction in the scope of its bank debt in spite of the
three acquisitions made this year. Frutarom's strong cash flow, together with
financial institutes' support, will enable Frutarom to implement additional
strategic acquisitions.
Earning per share in the fourth quarter of 2009 excluding the
non-recurring effects increased by 37.5% and totaled US$ 0.13 compared to US$
0.09 per share in the same period last year. Including the non-recurring
effects earning per share in the period increased and totaled US$0.13
compared to US$ 0.10 in the same period last year.
In 2009, Frutarom's sales totaled US$ 425.2 M - a decrease of
2.7% in local currency terms compared to 2008, where Frutarom achieved record
results. The strengthening of the US$ against the European currencies and the
NIS, where most of the Company's sales are implemented, in sharp rates of up
to 16% during the three first quarters of the year caused a decrease in sales
in 2009 at a rate of approximately 7.5%. In US$ terms, sales decreased in
2009 by 10.2% compared to 2008.
Frutarom's sales in 2009 were also affected from the ongoing
effects of the economic crisis and the global slowdown trend, which
temporarily changed the growth trend characterizing most of the global market
in recent years and the business environment in which Frutarom operates. As a
result of the crisis, many of Frutarom's customers in the world vigorously
acted to reduce their inventory levels. The destocking trend became moderate
and the Company's estimates that it ended during the fourth quarter of 2009.
In addition, a decrease in the Trade and Marketing activity in Israel (an
activity which is not of Frutarom's core activities) partially arising from
the focus on products with higher profit margins, contributed approximately
1.3% to the decrease in sales.
Annual gross profit reached US$ 155.5 M compared to US$ 176.3
M in 2008. The decrease in gross profit arises from the decrease in sales.
The actions taken by Frutarom to improve its compatibility and to reduce its
expenses, moderated the effect of the decrease in sales on the gross profit
and enabled the Company to maintain the gross margin level in the period
which reached 36.6% compared to 37.2% in 2008.
During 2009 non-recurring costs of US$ 1.4 M for the
restructuring plan of the Company's activities in Germany and UK, mainly for
the acquisition of the Savory activity of CH and of Oxford were recorded.
Excluding these non-recurring effects, the operating profit achieved by
Frutarom in 2009 totaled US$ 48.7 M compared to US$ 56.6 M in 2008; operating
margin reached 11.4% compared to 12% in the same period last year; and the
EBITDA achieved by Frutarom in 2009 totaled US$ 67.6 M which comprise 15.9%
of sales, compared to US$ 76.3 M which comprise 16.1% of sales in 2008.
Including the non-recurring effects, the operating profit in 2009 totaled US$
47.3 M; operating margin reached 11.1%; and the EBITDA totaled US$ 66.2 M
which comprise 15.6% of the sales.
Operating profit and EBITDA in 2009 were affected by the
strengthening of the US$ against the European currencies at a rate of 7.5%
and reduced the US$ translation of the sales and the profits arising from
Frutarom's activities in Europe (which comprise approximately 70% of
Frutarom's activities).
Profit before taxes in 2009 excluding the non recurring
effects totaled US$ 44.3 M compared to US$ 46.1 M in 2008 and the profit
before tax margin improved and reached 10.4% compared to 9.7% in 2008.
Including the non-recurring effects, profit before tax totaled US$ 42.9 M
(10.1% of sales) compared to US$ 46.1 M (9.7% of sales) in 2008.
Excluding the net non-recurring effects in the total amount of
US$ 2.4 M, for the restructuring plan of the acquired activities and for the
excess tax benefits in 2008, the net profit in 2009 totaled US$ 33.4 M
compared to US$ 34.9 M in the same period. Net margin in 2009 improved and
reached 7.8% compared to 7.4% in 2008. Including the non-recurring effects
the net profit reached US$ 33.2 M compared to US$ 37.2 M in 2008 which
reflect net margin rate of 7.8%, similar to the net margin of 7.9% reached in
2008.
Frutarom's shareholders equity as at December 31, 2009 totaled
US$ 318.5 M (60.5% from the total balance sheet) compared to US$ 278.3 M
(54.5% of the total balance sheet) as at December 31, 2008. The main increase
in shareholders' equity arises from the profit in the period.
Ori Yehudai, Frutarom's President and Chief Executive Officer,
summed up and stated: "2009 was characterized by a relative slowdown in the
markets, whose origin is in the global economic crisis. We entered this
challenging and crisis-related period as a leading and strong global company,
with a solid capital structure and an experienced global management. During
the year, we acted to strengthen our competitiveness and improve our
operational efficiency while tightly reducing and controlling our expense
level and while continuing to strengthen our R&D and sales infrastructures to
ensure the continuation of our rapid profitable growth. Our quick response to
the conditions created by the global economic situation contributed to the
improvement achieved in our results from quarter to quarter and enabled us to
maintain our operating and EBITDA margins and to improve our net margin in
spite of the slowdown in the markets. We estimate that the stabilization of
the global economy in recent months, the moderation in currencies
fluctuations, the halt of the destocking trend and the signs of gradual
improvement in consumption, including in countries significantly affected by
the devaluation in their currency rate, will contribute to an improvement in
our sales level and to future return to a growth trend at rates similar to
those characterizing our activities in the past. We will continue decisively
to act to implement our rapid growth strategy, combining organic growth and
strategic acquisitions. In 2009 we implemented three successful strategic
acquisitions which support the further expansion of our global presence, our
customer base throughout the world and the product portfolio we offer. The
excellent cash flow we achieve, our solid capital structure and support we
receive from leading financial institutions, will enable us to continue our
rapid profitable growth strategy and again double our sales turnover within
the next 4 years, to approximately US$ 1 billion".
About the Company
Frutarom is a multinational company operating in the global
flavor and fine ingredients markets. Frutarom has significant production and
development centers in three continents and it markets its products in five
continents to over 10,000 customers in more than 120 countries. Frutarom's
products are intended mainly for the food, beverage, flavor, fragrance,
pharmaceutical, nutraceutical, health food, functional food, food additive,
and cosmetic industries.
Frutarom, which employs approximately 1,450 people worldwide,
operates through two Divisions:
- The Flavors Division, which develops, produces and markets
flavor compounds and food systems.
- The Fine Ingredients Division, which develops, produces and
markets natural flavor extracts, natural functional food ingredients,
natural pharma/nutraceutical extracts, specialty essential oils and
citrus products, and aroma chemicals.
Frutarom's products are produced at its plants in the US, UK,
Switzerland, Germany, Israel, China, and Turkey. The Company's global
marketing organization includes branches in Israel, the US, UK, Switzerland,
Germany, Belgium, the Netherlands, Denmark, France, Hungary, Romania, Russia,
Ukraine, Kazakhstan, Belarus, Turkey, Brazil, Mexico, China, Japan, Hong
Kong, India and Indonesia. The Company also works through local agents and
distributors worldwide.
For further information, visit our website: www.frutarom.com.
FRUTAROM INDUSTRIES LTD.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As of 31 December
2009 2008 2007
U.S. dollars in thousands
A s s e t s
CURRENT ASSETS:
Cash and cash equivalents 42,940 37,229 31,942
Financial assets at fair value through
Profit or loss 52 1,279
Accounts receivable:
Trade 65,194 68,204 78,006
Other 13,380 11,573 11,995
Prepaid expenses and advances to 3,018 2,564 3,637
suppliers
Inventories 79,113 94,916 90,452
203,645 214,538 217,311
NON-CURRENT ASSETS :
Property, plant and equipment - net 126,113 125,705 135,607
Intangible assets - net 191,145 166,083 190,150
Deferred income tax assets 3,653 2,990 3,745
Prepaid expenses in respect of
operating lease 1,557 1,476 1,898
322,468 296,254 331,400
T o t a l assets 526,113 510,792 548,711
As of 31 December
2009 2008 2007
U.S. dollars in thousands
Liabilities and Shareholders' Equity
CURRENT LIABILITIES:
Credit and short term loans and current
maturities of long-term loans 46,911 42,784 44,221
Accounts payable:
Trade 28,290 26,705 38,797
Other 25,788 27,801 96,412
Provisions 407 1,028 440
101,396 98,318 179,870
NON-CURRENT LIABILITIES:
Long-term loans net of current
maturities 70,204 99,383 82,579
Liability for employee rights upon
retirement - net 11,605 11,269 11,518
Deferred income taxes 24,433 22,142 22,209
Provisions in respect of other
liabilities
net of current maturities 1,420 1,420
106,242 134,214 117,726
COMMITMENTS AND
CONTINGENT LIABILITIES
T o t a l liabilities 207,638 232,532 297,596
SHAREHOLDERS' EQUITY:
Ordinary shares 16,597 16,490 16,466
Capital surplus 96,995 95,802 94,392
Translation differences 18,063 9,836 17,638
Retained earnings 190,237 159,502 125,279
Net of - cost of Company shares held
by subsidiary (3,417) (3,370) (2,660)
T o t a l equity 318,475 278,260 251,115
T o t a l equity and liabilities 526,113 510,792 548,711
FRUTAROM INDUSTRIES LTD.
CONSOLIDATED INCOME STATEMENTS AND CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
Year ended 31 December
2009 2008 2007
U.S. dollars in thousands,
(except for per share data)
SALES 425,179 473,286 368,261
COST OF SALES 269,677 297,015 237,506
GROSS PROFIT 155,502 176,271 130,755
SELLING AND MARKETING, RESEARCH AND
DEVELOPMENT EXPENSES - net 75,408 85,003 66,898
GENERAL AND ADMINISTRATIVE EXPENSES 33,004 35,206 29,525
OTHER INCOME - net (195) (549) (194)
OPERATING PROFIT 47,285 56,611 34,526
FINANCIAL EXPENSES - net 4,344 10,550 2,923
PROFIT BEFORE TAXES ON INCOME 42,941 46,061 31,603
TAXES ON INCOME 9,721 8,832 7,410
NET INCOME FOR THE YEAR 33,220 37,229 24,193
U.S dollars
EARNINGS PER SHARE:
BASIC 0.58 0.65 0.42
FULLY DILUTED 0.58 0.64 0.41
U.S. dollars in thousands
INCOME FOR THE YEAR 33,220 37,229 24,193
OTHER COMPREHENSIVE INCOME -
translation differences 8,227 (7,802) 11,922
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 41,447 29,427 36,115
Company Contact
Ori Yehudai, President & CEO
Frutarom Ltd.
Tel: +97299603800
Email: oyehudai@frutarom.com
Filed under: Banking and Financial Services, Consumer Products, Earnings, Food / Beverages, Investors
Tags: Frutarom Industries Ltd, Haifa, Israel, March 17
Tags: Frutarom Industries Ltd, Haifa, Israel, March 17
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