International Flavors & Fragrances Inc. (IFF - Free Report) has entered into a product development agreement with Neptune Wellness Solutions Inc. (NEPT - Free Report) , per which both companies will develop hemp-derived cannabidiol (“CBD’’) products for the U.S. market.
International Flavors’ formulation and technological expertise will aid Neptune to accelerate its market infiltration in the U.S. CBD market. As a leading innovator in taste, scent, nutrition and ingredients, International Flavors will help Neptune expand its core customers and also aid the expansion of consumer-packaged goods companies and fragrance houses into the CBD market.
Neptune Wellness Solutions is specialized in the extraction, purification and formulation of health and wellness products. Neptune’s wholly-owned subsidiary, 9354-7537 Québec Inc., is licensed by Health Canada to process cannabis at its facility in Sherbooke, Quebec.
International Flavors, along with Edgewell Personal Care Company (EPC - Free Report) and Purple Innovation, Inc. (PRPL - Free Report) , belongs to the Consumer Products – Staples industry.
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 cost 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, it 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.
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