Flavors and fine ingredients maker Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Pink Sheets:FRUTF) predicts further strong growth in 2013 after reporting record profits on double-digit growth for 2012, driven by eight acquisitions, including three early last year.
Revenue rose 24% to $618 million in 2012 from $518.4 million in 2011. Acquisitions made in 2011 and 2012 contributed $115.5 million to last year's sales. Net profit rose 23.7% to $52 million ($0.90 per share) in 2012 from $42 million in 2011.
Fourth quarter revenue rose 13.5% to $144.9 million from $131.6 million for the corresponding quarter of 2011, and net profit rose 33.1% to $10.5 million ($0.18 per share) from $7.9 million.
Cash flow from operations jumped 156% to $91.2 million in 2012 from $35.6 million in 2011. The company will distribute a dividend of NIS 14 million.
Frutarom president and CEO Ori Yehudai attributed the company's record results to the successful and systematic implementation of its profitable rapid growth strategy, based on organic growth and strategic acquisitions, and utilizing the resulting synergies. He added, "Frutarom in 2013 stands with strong infrastructures for continued growth and improving margins…The company’s equity structure and net debt level, which stands at a low $136.1 million, supported by the strong cash flow, will allow Frutarom to continue to successfully realize its rapid growth strategy while strengthening its competitiveness and to continue to fulfill its commercial goals."
Yehudai said that Frutarom would continue its growth in developed and emerging markets, based on innovation and on the combination of taste and health. The company is targeting large multinational customers and mid-sized local customers, with a special emphasis on the rapidly growing private label market by constantly adapting its thousands of tailor-made taste and health solutions to changing consumer preferences and future demands.
“We intend to continue investing in growing regions, including in Asia, Central and South America, Central and Eastern Europe and Africa, following the growth of our market share in emerging markets from 27% in 2010 to 36% in 2012, and to 31% this year in the BRIC countries. At the same time and as a result, our share of sales in Western European markets (which also increased), went down from 51% in 2010, to 42% this year," he said.
Frutarom's flavors segment, its most profitable activity, accounted for 74% of sales in 2012. The company boosted sales of its flavors products by 60% in 2012 in China and Southeast Asia, Central and South America, Central and Eastern Europe and Africa. Sales in the US, the largest flavors market in the world, rose 43% in 2012.
Published by Globes [online], Israel business news - www.globes-online.com - on March 13, 2013
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