First quarter bears fruit for Frutarom
The Israeli firm sets tough targets for itself in growth, and has been blazing an acquisition trail for a number of years as well as pursuing organic growth. CEO Ori Yehudai’s latest ambition is to double sales turnover in the next four years, to around US$1bn.
The results for its Q1 indicate that its ambitious attitude is not awry. In the first three months of the year it reported a 15.3 per cent increase in sales to $113.5m, and a 23.4 per cent increase in profit to $43.5m. Net profit doubled to reach $11.1m.
The good set of results are attributed to a wind change in currency exchanges, as Western European currencies and the Israeli NIS strengthened against the US dollar, in which Frutarom reports. Three acquisitions made in the first half of 2009 have also been integrated into the company and are delivering results, all in the flavours area: the savoury division of Chr Hansen, UK flavour firm Oxford, and Flavor Specialties Inc in the US.
In late 2008 and early 2009 Yehudai was frank about the opportunities thrown up by the economic crisis for a company with a strong balance sheet and ready cash. But like most companies, 2009 was tougher than most. The currency winds were against it, and it experienced the effects of customers destocking, leading to a year with net income of $33.2m compared to $37.3m recorded for 2008.
In Q4, it started to see some recovery, and the company took steps to ensure it was operating as leanly as possible.
Yehudai is confident the upswing is here to stay. “We are satisfied by the profitable growth trend in the quarter and believe that it will be also continuing during the year. As expected, we witness fine results that emerged from the steps we have taken to strengthen and improve our competitiveness and to increase our operating efficiency,” he said.