ISRAEL – Frutarom, a flavors and fragrances specialist, has posted third-quarter earnings which show 19.6% sales increase to a record US$358.8 million in, prompting the company to raise its 2020 sales target to US$2.25 billion.

According to the company, there was a constant currency pro-forma growth of 6%, while the sales from core activities grew by 20.2% to a record US$336.6 million and constant currency pro-forma growth of 7.4%.

Sales from flavor activities also grew by 21.3% to US$272.9 million and sales from the Natural Specialty Fine Ingredients activities grew by 19.4% to a record US$67.1 million.

“We are pleased with the results achieved in the third quarter and the first nine months of 2017 in which we again set ourselves new records in sales, profits and cash flows,” says Ori Yehudai, President and CEO of Frutarom.

“The results reflect the successful implementation of the rapid and profitable growth strategy in our core businesses, Flavors and Natural Specialty Fine Ingredients.

Combining profitable internal growth at higher growth rates than those of the markets in which we operate, together with the successful merger of the strategic acquisitions we have made which are contributing to the continuing and consistent improvement in our results.”

The gross profit grew by 21.5% to US$138.4 million, EBITDA grew by 27.2% to US$ 71.1 million, the net income grew by 26.7% to US$ 40.8million; 11.4% and earnings per share grew by 26.5%.

The cash flow from operating activity grew by 52.7% and reached a record US$ 63.5 million.

“Following the accelerated internal growth and ten acquisitions made since the beginning of 2017, Frutarom’s run rate in sales is approaching US$1.5 billion.

After examining our strong competitive position, accelerated rate of internal growth, our latest acquisitions, our pipeline for future acquisitions and the contribution of the streamlining and global procurement activity, we are raising our target sales for 2020 to US$2.25 billion and EBITDA margin from our core businesses to 23%.”

Yehudai also said that continued improvement in the product mix with continued rapid growth in both the flavors activity and the specialty fine ingredients activity, while focusing on unique and innovative natural products that combine taste and health and address the current and future preferences of billions of consumers throughout the world.

“Number two is developing and furnishing unique added value solutions to our large multinational customers while providing our local, medium-sized and private label customers a full and comprehensive portfolio of solutions in the areas of taste and health.

Number three; capitalizing to the utmost on the many cross-selling opportunities between our varied activities to which are also contributing the acquisitions we have and will carry out.”

“Number four; continued improvement to margins and profits by exploiting our resources to the fullest, following the acquisitions as well, with the generating of significant operational savings and the strengthening of our global procurement and supply chain platform.

Number five; Continued improvement of our geographic sales mix by significantly increasing the percentage of sales in North America and in the growing emerging markets.”

He also added that supporting and building the global market leadership in natural herbal extracts would help in the stepping up among their customers and in switching from the use of raw materials that are synthetic to those that are natural.