International Flavors & Fragrances Inc.
) hosted its Investor Day 2013 on June 5, 2013.
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International Flavors & Fragrances has grown over time and
has become a well renowned creator and supplier of flavors and
fragrances for the food, beverage and beauty industries. The
company operates in 32 countries and has a huge customer base in
as many as 100 countries.
Management has laid emphasis on new business wins, geographical
diversifications, wide product lines, continuous accomplishments
in research and intense consumer insight, all of which bode well
for the growth prospects of the company. Increasing exposure to
emerging markets is also looked upon favorably.
Talking of the financial aspects of International Flavors &
Fragrances, management provided its long-term targets (2013-2015)
which include achievement of local currency sales growth in the
range of 4%-6%, adjusted operating profit margin within 7%-9% and
adjusted EPS growth of more than 10%. Adjusted effective tax rate
is expected not to exceed 26.5% during the period.
International Flavors & Fragrances anticipates that sales
growth for the Flavors and Fragrances businesses would be 2%-3%
above industry while segmental profits would be in high
Also, core working capital as a percentage of sales are likely to
be less than 31% while adjusted return on invested capital would
be over 18%. Adjusted operating cash flow is expected to exceed
$1.0 billion while capital expenditure, as a percentage of sales,
may be roughly 4%-5% in 2013-2015 and roughly 3% in 2016-2018.
Merger and acquisitions as well as rewarding of shareholders
through dividend and share buybacks will remain a priority for
International Flavors & Fragrances.
International Flavors & Fragrances currently has a market
capitalization of $6.4 billion and carries a Zacks Rank #2 (Buy).
Other stocks to watch out for in the industry are
Nu Skin Enterprises Inc.
Avon Products Inc.
), each with a Zacks Rank #1 (Strong Buy) while
Inter Parfums Inc.
), has a Zacks Rank #2 (Buy).