"We are very pleased to report financial results that are strong and slightly above the preliminary projections we announced in March," said Doug Tough, chairman and CEO. "We continued to see solid momentum throughout the quarter as both our Flavor and Fragrance teams did an excellent job capitalizing on new business opportunities. The combination of this strong commercial performance as well as some elements of customer restocking and favorable year-over-year comparisons, allowed us to deliver strong local currency sales growth that resulted in a substantial increase in our adjusted EPS."
Fragrance Business Unit
Local currency sales in the 1Q increased 18 percent over the prior-year period as all categories reported strong results. The accelerated performance in the emerging markets continued, particularly Greater Asia, where every Fragrance Compound category experienced double-digit growth. In the Fine Fragrance and Beauty Care category, Fine Fragrance reversed its recent trends, growing at a very strong double-digit rate. While new business gains helped support the strong Fine Fragrance results, a portion of the improvement can be attributed to favorable comparisons as well as some elements of customer restocking. Beauty Care performance continued to build momentum, growing at a double-digit rate, as both Hair Care and Toiletries drove results. Functional Fragrance once again performed very well as Fabric Care performance continued to accelerate. Fragrance Ingredients sales also improved, as local currency sales increased 21 percent, reflecting an underlying improvement in demand and favorable comparison versus the year-ago period.
Operating profit increased by $19 million to $56 million in the 1Q, including a $5 million expense related to ongoing restructuring efforts in Europe. Excluding this item, adjusted operating profit grew an impressive 66 percent, or $24 million, to $61 million. As a result, adjusted operating profit margin for the quarter increased 470 bps to 17.2 percent, as higher volumes, moderating input costs and benefits from previous cost reduction initiatives drove results.