Record Year for Frutarom - Continues to Grow and Expand for the Ninth Consecutive Year

HAIFA, Israel - Sharp Growth in Sales and Considerable Improvement in Profit and
Margins; Cash Flow More Than Doubled; Earnings per Share Grew by 55%

- Sales in 2008 Grew Sharply by 28.5% to US$ 473.3M

- Gross Profit Grew by 34.8% to US$ 176.3M

- Operating Profit Grew by 64% to US$ 56.6M

- EBITDA Grew by 57.2% to US$ 76.3 M

- Net Profit Grew by 53.9% to US$ 37.2 M

- Cash Flow From Current Activities Grew by 145% to US$37M

- Earnings per Share Grew by 55% to US$ 0.65

- Frutarom Will Distribute Dividend of NIS 0.18 per Share, for an Overall
Amount of NIS 10.4 M (US$ 2.45 M)

- The results reflect Frutarom’s continued successful implementation of
its rapid and profitable growth strategy, the successful merger of the seven
acquisitions made in 2007 and the measures taken to adjust its selling prices
to the price increases of raw materials used in production, while further
improving profit and margins

- Gross margin - 37.2% compared to 35.5% in parallel quarter

- Operating margin - 12% compared to 9.4% in parallel quarter

- EBITDA margin - 16.1% compared to 13.2% in parallel quarter

- Cash flow from current activities - US$ 37 M compared to US$ 15.1 M in
2007

- After focusing during 2008 on the integration and utilization of the
many synergies from the seven acquisitions made in 2007, during the first
quarter of 2009, Frutarom resumed its acquisitions strategy

- Ori Yehudai, Frutarom’s President and Chief Executive Officer:
“Frutarom will continue to act determinedly to implement its rapid growth
strategy which combines organic growth and strategic acquisitions. We
consider the challenging and complex period which global economics undergoes
as an opportunity for further strengthening. Frutarom entered this
challenging and crisis-related economic period, as a leading, global,
stronger-than-ever company, with a solid capital structure. Frutarom’s core
businesses, mostly intended for the food industry, a basic human need, which
place it in a stable and defensive field and its ability to generate cash
from current activities, will enable it to successfully glide trough the
global economic crisis and exploit opportunities which have emerged and
continue to emerge as a result of this crisis.”

Frutarom (LSE: FRUT, TASE: FRUT, OTC: FRUTF.PK) today presented its 2008
full year and fourth quarter results.

Frutarom, a producer of flavors and specialty fine ingredients, continues
to successfully implement its rapid and profitable growth strategy, reflected
in its organic growth and the execution of strategic acquisitions. Frutarom
is today the seventh largest company in the field of flavors and specialty
fine ingredients. In accordance with Frutarom’s plan, its sharp and
continuing growth in sales, combining organic growth, at a rate surpass the
industry’s average, the execution of the 7 strategic acquisitions made in
2007, and the actions taken to adjust its selling prices to the price
increases in raw materials used in production, are translated to an
improvement in margins, profit and in cash flow.

Frutarom reports record sales of US$ 473.3 M for the year 2008 - a growth
of 25% compared with 2007, excluding the effect of the strengthening of
European currencies and the Shekel against the US dollar. Without excluding
the aforementioned effect, sales increased by 28.5%. At the same time,
Frutarom achieved an increase of 34.8% in the annual gross profit to US$
176.3 M, an improvement of gross margin to 37.2% compared to 35.5% last year,
a leap of 64% in operating profit which totaled US$ 56.6 M, and a significant
improvement of operating margin to 12% compared to 9.4% during the same
period last year. During 2008, EBITDA grew by 57.2% and reached US$ 76.3M,
while improving the EBITDA margin to 16.1% compared to 13.2% during the same
period last year. In 2008 net profit grew by 53.9% and reached US$ 37.2M
compared to US$ 24.2 M during 2007 and net margin reached 7.9% compared to
6.6%.

The following factors mainly contributed to the sharp growth in the
Company’s sales: organic growth in sales of flavors produced and sold by the
Flavors Division; organic growth in the sale of specialty ingredients
produced and sold by the Fine Ingredients Division; the merger of Belmay,
Jupiter, Raychan, Adumim, Rad and Gewurzmuller, acquired during the second,
third and last quarters of 2007 and their merge with Frutarom’s global
activity; utilization of the synergy and cross selling opportunities between
Frutarom’s divisions and its customers and products, both the existing ones
and those added as a result of the acquisitions carried out in recent years;
and the strengthening of the European currencies and the Shekel (in which
most of Frutarom’s sales are made) against the US dollar (a trend which
reversed during the fourth quarter of 2008).

During the fourth quarter of 2008, Frutarom’s sales totaled US$ 98.7 M, a
decrease of 1% compared to the same quarter last year, excluding the effect
of the weakening of the European currencies and the Shekel (in which most of
Frutarom’s sales are made) against the US dollar, at rates of up to 24%.
Without excluding the aforementioned effect, sales decreased by 9%. The
considerable trend of reducing inventory levels among Frutarom’s customers
worldwide in the last few months, also affected the decrease in sales during
the fourth quarter. Despite the sales decrease in the fourth quarter, gross
margin increased and reached 36.9% compared to 33.8% during the first fourth
quarter of 2007 and gross profit was not affected and totaled US$ 36.5M
compared to US$ 36.6 M during the same period last year. Operating profit
rose by 15.3% and totaled US$ 8.4 M and operating margin recorded a
significant improvement and reached 8.5% compared to 6.7% during the same
period last year. During the fourth quarter of 2008, EBITDA grew 3.4% and
reached US$ 12.4 M. EBITDA margin improved and reached 12.6% compared to
11.1% during the same period last year. Net profit during the period
increased by 25.8% and totaled US$ 6 M compared to US$ 4.8 M during the same
period last year and net margin improved and reached 6.1% compared to 4.4%.

Earnings per share grew during the year 2008 by approximately 55% and
totaled US$ 0.65 compared to US$ 0.42 per share during 2007. During the
fourth quarter of 2008, earnings per share grew at a rate of 25% and reached
US$ 0.10 compared to US$ 0.08 during the same period last year.

The sharp increase in profit generated a significant growth in cash flow
from current activities. During 2008, Frutarom more than doubled its cash
flow from current activities that totaled US$ 37 M compared to a cash flow of
US$ 15.1 M during 2007. During the fourth quarter of 2008, the Company
generated cash flow from current activities in the amount of US$ 15.8 M
compared to US$ 9.2 M during the same period last year.

Frutarom’s shareholders’ equity as at December 31, 2008, totaled US$
278.3 M (54.5% of balance sheet total) compared to US$ 251.1 M (45.8% of
balance sheet total) as at December 31, 2007. Most of the increase in
shareholders’ equity resulted from the net profit generated during the
period.

Ori Yehudai summed up and stated: “During the last months of 2008, the
economic atmosphere in the world, which permeated to the global economy,
materially changed the growth trend characterizing most of the world’s
economies in recent years. Frutarom entered this challenging and
crisis-related economic period, as a leading, global, stronger-than-ever
company, with a solid capital structure, experienced global management and
varied and diversified customer base. Our core businesses are mostly geared
for the food industry which is considered stable and defensive. We are
partners in the creation process of essential products, which answer the
basic human needs of consumers around the world. Such needs do not vanish in
times of economic crisis, and indeed, analyzing previous economic crises
tells us that the food industry and industries related usually demonstrate
relatively low sensitivity to the effects of slowdown and instability in the
macro-economic environment, especially in comparison to many other
industries. Frutarom’s management is wisely and determinedly preparing for
and coping with the effects of the economic crisis. We are convinced, that we
will be able to achieve our goals and double Frutarom’s turnover, so that it
will reach US$ 1 billion by 2012. We will continue to determinedly act for
the implementation of our rapid growth strategy, combining organic growth and
strategic acquisitions. After focusing during 2008 on the integration,
consolidation and utilization of the many synergies from the seven
acquisitions we made in 2007, during the first quarter of 2009, we resumed
our acquisition strategy. We have already made two strategic acquisitions
which enhance the further expansion of our global presence, our customer base
throughout the world and the product range we offer them. Frutarom’s solid
capital structure and the strong support we receive from leading financial
institutes will enable us to utilize acquisition opportunities created due to
the global economic crisis and to continue implementing our acquisition
strategy. We consider the challenging and complex period which global
economics undergoes as an opportunity for further strengthening”.

About the Company

Frutarom is a global company active in the world markets for flavors and
ingredients. Frutarom has significant production and development centers on
three continents and markets its products on five continents to over 13,000
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 1,500 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 United States,
England, Switzerland, Germany, Israel, China, and Turkey. The Company’s
global marketing organization includes branches in Israel, the United States,
England, Switzerland, Germany, Belgium, Holland, 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.

Company Contact
Ori Yehudai, President & CEO
Frutarom Ltd.
Tel: +97299603800
Email: oyehudai@frutarom.com

Source: Frutarom Industries Ltd

Company Contact: Ori Yehudai, President & CEO, Frutarom Ltd., Tel: +97299603800, Email: oyehudai at frutarom.com