International Flavors & Fragrances Inc (IFF)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 35.91% | 32.07% | 33.37% | 32.04% | 41.03% |
| Operating profit margin | 6.67% | 5.33% | 8.76% | 5.02% | 11.14% |
| Pretax margin | 2.42% | -21.94% | -13.06% | 3.04% | 8.68% |
| Net profit margin | 2.12% | -22.35% | -14.76% | 2.30% | 7.18% |
International Flavors & Fragrances Inc's gross profit margin has shown a fluctuating trend over the past five years, starting at 41.03% in 2020 and reaching its lowest point at 32.04% in 2021 before gradually improving to 35.91% in 2024. This indicates the company's ability to control its production costs and generate profits from its core operations, although there was a temporary dip in 2021.
Looking at the operating profit margin, there has been a similar pattern of fluctuation. It stood at 11.14% in 2020, dropped to 5.02% in 2021, and then gradually increased to 6.67% in 2024. This margin reveals the company's efficiency in managing its operating expenses and indicates the impact of cost-saving measures or changes in revenue streams on profitability.
The pretax margin paints a more concerning picture, showing a significant decline from 8.68% in 2020 to -21.94% in 2023, before recovering slightly to 2.42% in 2024. The negative margins in 2022 and 2023 suggest that the company may have experienced challenges or incurred losses before making a partial recovery in 2024. This ratio reflects the impact of non-operating items and one-time charges on the company's overall profitability.
Lastly, the net profit margin also experienced a sharp decrease from 7.18% in 2020 to -22.35% in 2023, indicating that after accounting for all expenses and taxes, the company was operating at a loss during that year. The improvement to 2.12% in 2024 suggests a turnaround in profitability, albeit at a modest level. This ratio is a key indicator of the company's bottom-line performance and its ability to generate profits for shareholders.
In conclusion, while International Flavors & Fragrances Inc has shown resilience in its gross and operating profit margins, the significant declines in pretax and net profit margins in 2022 and 2023 raise concerns about the company's overall financial health and the need for further analysis to understand the reasons behind these fluctuations.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 2.67% | 1.98% | 3.08% | 1.47% | 4.18% |
| Return on assets (ROA) | 0.85% | -8.28% | -5.19% | 0.68% | 2.69% |
| Return on total capital | 4.20% | -14.63% | -7.27% | 3.04% | 9.05% |
| Return on equity (ROE) | 1.75% | -17.56% | -10.35% | 1.27% | 5.77% |
The profitability ratios of International Flavors & Fragrances Inc show fluctuations over the years.
1. Operating return on assets (Operating ROA) has shown a decreasing trend from 4.18% in 2020 to 1.47% in 2021, followed by an increase to 3.08% in 2022, a decrease to 1.98% in 2023, and a slight rise to 2.67% in 2024. This ratio indicates that the company's operating income generated per dollar of assets has been fluctuating over the years.
2. Return on assets (ROA) also displays variability, starting at 2.69% in 2020, dropping to 0.68% in 2021, turning negative at -5.19% in 2022 and -8.28% in 2023, and improving slightly to 0.85% in 2024. The negative ROA in 2022 and 2023 may signify that the company's net income is not sufficient to cover its total assets.
3. Return on total capital has been inconsistent, ranging from 9.05% in 2020 to -14.63% in 2023, with a slight recovery to 4.20% in 2024. This ratio indicates the return the company generates on the total capital employed, including both debt and equity.
4. Return on equity (ROE) follows a similar pattern, starting at 5.77% in 2020, dwindling to -10.35% in 2022, hitting -17.56% in 2023, and then rising to 1.75% in 2024. The negative ROE in 2022 and 2023 suggests that the company may not be effectively utilizing shareholder equity to generate profits.
Overall, the profitability ratios of International Flavors & Fragrances Inc reflect a mixed performance with fluctuations in profitability metrics over the years, indicating the need for further analysis into the company's financial health and operational efficiency.