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International Flavors (IFF) Affiliate LMC Acquires Speximo

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International Flavors & Fragrances Inc. (IFF - Free Report) and its affiliate Lucas Meyer Cosmetics (“LMC”) recently acquired a Swedish technology company — Speximo AB. The company develops next-gen stabilization and encapsulation products for sustainable cosmetic and personal care products.

Speximo’s innovative technology platform offers services related to the creation of creams, powders and sprays used in personal care and cosmetics. The technology protects active ingredients, while also enhances texture. Speximo’s exclusive technology strives to align with the UN sustainable development goals (SDGs), and considers the ethical aspects of raw materials, production, and consumption.

The Speximo acquisition supports consumers’ desire for products with a greener profile. Speximo’s highly-regarded technologies will provide competitive advantage to LMC, along with its sustainable multi-functional emulsifiers and texturing ingredients. Also, natural and biodegradable products enable customers to formulate environmentally-friendly transformative textures.

International Flavors’ shares have lost 11% in the past year compared with the industry’s 15.6% decline.



International Flavors is likely to gain from growth in the flavors and fragrances’ global market, aided by surge in demand for a variety of consumer products, containing flavors and fragrances. Notably, the flavors and fragrances market is projected to be up approximately 2-3% by 2021, primarily driven by anticipated growth in emerging markets. Further, International Flavors’ focus on driving efficiencies through costs and productivity initiatives, margin improvement, acquisition-related synergies and favorable taxes will boost overall profit.

The company’s latest business wins and a diversified product portfolio will be conducive to its growth. Over time, the company has made acquisitions, which helped expand its offerings and profitability. Last October, International Flavors completed the acquisition of Frutarom. Together, International Flavors and Frutarom have created a global leader in natural taste, scent and nutrition, with a broader customer base, more diversified product offerings, and greater exposure to end markets. The company’s Frutarom division has also acquired several companies like Mighty, Leagel and Wiberg, and expanded its product offerings.

During the June-end quarter’s earnings call, International Flavors updated its guidance for 2019. Sales are projected at $5.15-$5.25 billion, indicating year-over-year growth of 3-5%. Adjusted earnings per share are expected in the band of $4.85-$5.05, reflecting year-over-year growth of 8-11% in 2019. Adjusted earnings excluding amortization are anticipated between $6.15 and $6.35 compared with the previous projection of $6.30-$6.50. The company expects to achieve cost savings of $40 million this year.

International Flavors & Fragrances Inc. Price and Consensus

 

Zacks Rank & Key Picks

International Flavors currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Consumer Staples space are Helen of Troy Limited (HELE - Free Report) , Hershey Company (HSY - Free Report) ,  and The Estee Lauder Companies (EL - Free Report) .

Helen of Troy, with a Zacks Rank #1 (Strong Buy), has long-term earnings growth rate of 6.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hershey presently has a Zacks Rank #2 (Buy) and long-term EPS growth rate of 8%.

Estee Lauder , with long-term earnings growth rate of 13%, carries a Zacks Rank #2.

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