Frutarom expansion drives sales growth
quarter results to an ambitious acquisition strategy.
The company said that it has enjoyed increased sales and profits over the period, and has successfully implemented a rapid growth strategy that combines organic growth with strategic acquisitions.
Frutarom achieved nice results for the first quarter," said Frutarom president Ori Yehudai.
"Sales increased by 15 per cent excluding currency effect, and by 9.7 per cent in US dollars."
Growth in sales was reached while achieving an internal growth in our core activities and a significant increase in net profit, which totalled to $ 8.8m.
"We are very pleased with the acquisition of Nesse on which we announced at the beginning of the quarter," said Yehudai. "This acquisition made an immediate contribution to Frutarom's sales and profits.
"The integration of Frutarom's and Nesse's activities is being successfully executed and we are working to extract the considerable synergies existing in this strategic acquisition, while leveraging the many cross-selling opportunities."
Yehudai said that Nesse's acquisition would significantly strengthen the firm's activities in emerging markets such as CIS countries as well as in Western-European countries.
"Nesse made a significant contribution to Frutarom's sales and profits for the first quarter, and as Nesse's seasonality is opposite to Frutarom's seasonality, we expect it to make an even greater contribution during the rest of the year," he said.
However, gross margin reached only 38.1 per cent during the period, compared with 38.6 per cent during the same period in 2005. The company said that postponed demand for the company's products used for the manufacturing of summer products (such as beverages, ice creams and yoghurts) due to the long and cold winter in Europe, impacted the margin, as these products usually have higher margins than average.
Frutarom is a global company active in global flavour and fine ingredients markets.