Reaffirms Full Year 2025 Financial Guidance

IFF (NYSE: IFF) reported financial results for the third quarter ended September 30, 2025.

Third Quarter 2025 Consolidated Summary:

First Nine Months 2025 Consolidated Summary:

Management Commentary

“Our third quarter results demonstrate continued execution in a tough operating environment,” said Erik Fyrwald, CEO of IFF. “Sales momentum in Scent and Taste remain solid, supported by strong new win contributions. This performance helped offset short-term pressures in Health and Biosciences - which we are addressing by strengthening our innovation and commercial capabilities - and a sales reduction in Food Ingredients as we focus on driving higher margins.”

“Profitability in the quarter improved high-single digits year-over-year, with margin expansion driven predominantly by productivity. By maintaining a disciplined focus on operational excellence, we are driving sustained profitability while investing in IFF for long-term success.”

“In a more challenging environment, we’re doing what we said we would do - maintaining the financial guidance we shared in February and advancing our growth strategy. At the same time, we are progressing our portfolio optimization efforts to unlock the full potential of our portfolio and create lasting value for shareholders.”

Third Quarter 2025 Consolidated Financial Results

• Reported net sales for the third quarter were $2.69 billion, a decrease of 8% versus the prior-year period. On a comparable basis², currency neutral sales¹ were flat versus the prior-year period, against a strong 9% year ago comparable, led by mid-single digit growth in Scent and a low-single digit performance in Taste. On a two-year average basis, comparable currency neutral sales² grew mid-single digits.
• Income before taxes on a reported basis for the third quarter was $56 million. Adjusted operating EBITDA¹ for the third quarter was $519 million. On a comparable basis², currency neutral adjusted operating EBITDA¹ improved 7% versus the prior-year period, led by productivity gains and favorable net pricing.
• Reported earnings per share (EPS) for the third quarter was $0.16 per diluted share. Adjusted EPS excluding amortization¹ was $1.05 per diluted share.
• Cash flows from operations for the first nine months of the year was $532 million, and free cash flow¹ defined as cash flows from operations less capital expenditures totaled $126 million. Total debt to trailing twelve months net loss at the end of the third quarter was (13.5)x. Net debt to credit adjusted EBITDA¹ at the end of the third quarter was 2.5x.

Third Quarter 2025 Segment Summary: Growth vs. Prior Year

Taste Segment

• On a reported basis, third quarter sales were $635 million. On a comparable basis², currency neutral sales¹ increased 2% against a very strong double-digit comparable in the year ago period. Growth was led by increases in Latin America and EAME which was partially offset by softness in North America.
• Taste adjusted operating EBITDA¹ was $128 million and adjusted operating EBITDA margin¹ was 20.2% in the third quarter. On a comparable basis², currency neutral adjusted operating EBITDA¹ increased 2% led primarily by favorable net pricing and cost discipline.

Health & Biosciences Segment

• On a reported basis, third quarter sales were $577 million. On a comparable basis², currency neutral sales¹ were flat against a strong double-digit comparable in the year ago period. Performance was driven by growth in Food Biosciences, Home & Personal Care and Animal Nutrition that was primarily offset by Health, specifically in North America.
• Health & Biosciences adjusted operating EBITDA¹ was $150 million and adjusted operating EBITDA margin¹ was 26.0% in the third quarter. On a comparable basis², currency neutral adjusted operating EBITDA¹ increased 3% led primarily by productivity gains.

Scent Segment

• On a reported basis, third quarter sales were $652 million. On a comparable basis², currency neutral sales¹ increased 5% against a strong double-digit comparable in the year ago period. Fine Fragrance growth remained strong - growing 20% vs prior year - and Consumer Fragrances grew low single-digits. Fragrance Ingredients declined low single-digits as growth in Specialties was more than offset by declines in Commodities.
• Scent adjusted operating EBITDA¹ was $135 million and adjusted operating EBITDA margin¹ was 20.7% in the third quarter. On a comparable basis², currency neutral adjusted operating EBITDA¹ increased 6% driven primarily by volume growth.

Food Ingredients Segment

• On a reported basis, third quarter sales were $830 million. On a comparable basis², currency neutral sales¹ decreased (3)% as growth in Inclusions was offset primarily by softness in Protein Solutions.
• Food Ingredients adjusted operating EBITDA¹ was $106 million and adjusted operating EBITDA margin¹ was 12.8% in the third quarter. On a comparable basis², currency neutral adjusted operating EBITDA¹ increased 24% driven by productivity gains and margin improvement initiatives.

Financial Guidance

The Company is reiterating its full year 2025 guidance outlined earlier this year despite a more challenging operating environment. The Company continues to expect full year 2025 sales to be in the range of $10.6 billion to $10.9 billion and full year 2025 adjusted operating EBITDA to be in the range of $2 billion to $2.15 billion.

Based on year-to-date actuals and expected fourth quarter performance, the Company is maintaining its outlook for 1% to 4% comparable currency neutral sales growth (expecting to be at the lower end of this range) and 5% to 10% growth in comparable currency neutral adjusted operating EBITDA (expecting to be near the mid-point of this range).

Based on recent market foreign exchange rates, the Company expects that foreign exchange will have an approximately 1% adverse impact to sales growth and an approximately 3% adverse impact to adjusted operating EBITDA growth in 2025.

Full year guidance includes four months of Pharma Solutions results as the divestiture closed on May 1, 2025. This results in an approximately 7% adverse impact to sales growth and an approximately 8% adverse impact to adjusted operating EBITDA growth in 2025.

Audio Webcast

A live webcast to discuss the Company’s third quarter 2025 financial results will be held on November 5, 2025, at 9:00 a.m. ET. The webcast and accompanying slide presentation may be accessed on the Company’s IR website at ir.iff.com. For those unable to listen to the live webcast, a recorded version will be made available on the Company’s website approximately one hour after the event and will remain available on IFF’s website for one year.

Cautionary Statement Under The Private Securities Litigation Reform Act of 1995

Statements in this press release, which are not historical facts or information, are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management’s current assumptions, estimates and expectations including those concerning (i) expected cash flow and availability of capital resources to fund our operations and meet our debt service requirements; (ii) our ability to execute on our strategic and financial transformation, including the progress and success of our portfolio optimization strategy, through non-core business divestitures and acquisitions, and expectations regarding the implementation of our refreshed growth-focused strategy and expectations around our business divestitures; (iii) our ability to continue to generate value for, and return cash to, our shareholders; (iv) expectations of the impact of inflationary pressures and the pricing actions to offset exposure to such impacts; (v) expectations regarding the impact of government actions including tariffs; (vi) the impact of high input costs, including commodities, raw materials, transportation and energy; (vii) the expected impact of global supply chain challenges; (viii) our ability to enhance our innovation efforts, drive cost efficiencies and execute on specific consumer trends and demands; (ix) the growth potential of the markets in which we operate, including the emerging markets; (x) expectations regarding sales and profit for the fiscal year 2025, including the impact of foreign exchange, pricing actions, raw materials, energy, and sourcing, logistics and manufacturing costs; (xi) the impact of global economic uncertainty and recessionary pressures on demand for consumer products; (xii) the success of our integration efforts, following acquisitions, and ability to deliver on our synergy commitments as well as future opportunities for the combined company; (xiii) our strategic investments in capacity and increasing inventory to drive improved profitability; (xiv) our ability to drive cost discipline measures and the ability to recover margin to pre-inflation levels; (xv) expected capital expenditures in 2025; (xvi) statements regarding the anticipated amount, duration, methods, timing, term and other aspects of our repurchase programs and any anticipated benefits or value resulting from such programs; and (xvii) and the expected costs and benefits of our ongoing optimization of our manufacturing operations, including the expected number of closings.

These forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Certain of such forward-looking information may be identified by such terms as “expect”, “anticipate”, “believe”, “intend”, “outlook”, “may”, “estimate”, “should”, “predict”, “plan”, “project”, “could”, and similar terms or variations thereof. Such forward-looking statements are based on a series of expectations, assumptions, estimates and projections about the Company, are not guarantees of future results or performance, and involve significant risks, uncertainties and other factors, including assumptions and projections, for all forward periods. Our actual results may differ materially from any future results expressed or implied by such forward-looking statements.

Such risks, uncertainties and other factors include, among others, the following: (1) our substantial amount of indebtedness and its impact on our liquidity, credit rating and ability to return capital to its shareholders; (2) our ability to successfully execute our strategic transformation; (3) the impact of regulatory, consumer, and economic trends for consumer products; (4) the impact of the outcomes of legal claims, disputes, regulatory investigations and litigation; (5) supply chain disruptions, geopolitical developments, climate change events, natural disasters, public health crises, tariffs and trade wars, and other events that may affect our suppliers or procurement of raw materials, and our development, manufacturing, distribution or sale of our products, and thus may impact our productivity, business and financial results; (6) inflationary trends, including in the price of our input costs, such as raw materials, transportation and energy; (7) our ability to successfully manage our working capital and inventory balances; (8) our ability to attract and retain key employees, and manage turnover of top executives; (9) our ability to successfully market to our expanded and diverse customer base; (10) our ability to effectively compete in our market and develop and introduce new products that meet customers’ needs; (11) changes in demand from large multi-national customers due to increased competition and our ability to maintain “core list” status with customers; (12) our ability to successfully develop innovative and cost-effective products that allow customers to achieve their own profitability expectations; (13) the impact of a significant data breach or other disruption in our information technology systems; (14) our ability to benefit from our investments and expansion in emerging markets; (15) the impact of currency fluctuations or devaluations in the principal foreign markets in which we operate; (16) economic, regulatory and political risks associated with our international operations; (17) our ability to declare and pay dividends which is subject to certain considerations; (18) our ability to react in a timely and cost-effective manner to changes in consumer preferences and demands, including increased awareness of health and wellness; (19) our ability to meet increasing customer, consumer, shareholder and regulatory focus on sustainability; (20) any impairment on our tangible or intangible long-lived assets; (21) our ability to enter into or close strategic transactions or divestments, or successfully establish and manage acquisitions, collaborations, joint ventures or partnerships; (22) changes in market conditions or governmental regulations relating to our pension and postretirement obligations; (23) our ability to comply with, and the costs associated with compliance with, regulatory requirements and industry standards, including regarding product safety, quality, efficacy and environment impact; (24) defects, quality issues (including product recalls), inadequate disclosure or misuse with respect to the products and capabilities; (25) our ability to comply with, and the costs associated with compliance with, U.S. and foreign environmental protection laws; (26) the impact of our or our counterparties’ failure to comply with the U.S. Foreign Corrupt Practices Act, similar U.S. or foreign anti-bribery and anti-corruption laws and regulations, applicable sanctions or competition laws and regulations in the jurisdictions in which we operate or ethical business practices and related laws and regulations; (27) our ability to protect our intellectual property rights; (28) changes in business and operations related to the adoption of artificial intelligence; (29) the impact of changes in federal, state, local and international tax legislation or policies and adverse results of tax audits, assessments, or disputes; (30) the impact of any tax liability resulting from the N&B Transaction; and (31) our ability to comply with data protection laws in the U.S. and abroad.

The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by the Company (such as in our other filings with the SEC or in company press releases) for other factors that may cause actual results to differ materially from those projected by the Company. Please refer to Part I. Item 1A., Risk Factors, of the Company’s Annual Report on Form 10-K filed with the SEC on February 28, 2025 for additional information regarding factors that could affect our results of operations, financial condition and liquidity.

We intend our forward-looking statements to speak only as of the time of such statements and do not undertake or plan to update or revise them as more information becomes available or to reflect changes in expectations, assumptions or results, whether as a result of new information, future events or otherwise. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this press release or included in our other periodic reports filed with the SEC could materially and adversely impact our operations and our future financial results. Any public statements or disclosures made by us following this press release that modify or impact any of the forward-looking statements contained in or accompanying this press release will be deemed to modify or supersede such outlook or other forward-looking statements in or accompanying this press release.

Revision of Previously Issued Financial Statements

In preparing the Consolidated Financial Statements as of and for the three and nine months ended September 30, 2025, Management identified certain income tax-related adjustments impacting historical interim and annual financial statements, which we determined not to be material to any previously issued financial statements, that primarily relate to the understatement of income tax expense due to errors in the accounting for transfer pricing, the correction of deferred tax liabilities on goodwill recorded in purchase accounting, and other income tax entries that impacted prior interim and annual financial statements. We assessed the materiality of the errors on prior period interim and annual consolidated financial statements in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99, “Materiality,” codified in ASC 250, Accounting Changes and Error Corrections (“ASC 250”). Based on this assessment, in consideration of both quantitative and qualitative factors, we determined that the related impacts were not material to any previously issued interim or annual financial statements. However, if the corrections were recorded in the three months ended September 30, 2025, they would be material to that period. As such, we will revise the previously issued consolidated financial statements for the three and nine months ended September 30, 2024 to correct for the errors in our Form 10-Q for the quarterly period ended September 30, 2025. In conjunction with the revision, we will also correct certain other errors that were previously identified and concluded to be immaterial, individually and in the aggregate, to the Company’s consolidated financial statements as of and for the relevant periods. This press release reflects revised prior period financial information to correct for these errors. See Note 18 of the Notes to Consolidated Financial Statements included in our Form 10-Q for the quarterly period ended September 30, 2025, expected to be filed by November 10, 2025, for revised financial information reflecting the corrections to prior periods.

Use of Non-GAAP Financial Measures

We provide in this press release non-GAAP financial measures, including: (i) comparable currency neutral sales; (ii) adjusted operating EBITDA and comparable adjusted operating EBITDA; (iii) adjusted operating EBITDA margin; (iv) adjusted EPS ex amortization; (v) free cash flow; and (vi) net debt to credit adjusted EBITDA.

Our non-GAAP financial measures are defined below.

Currency neutral metrics eliminate the effects that result from translating non-U.S. currencies to U.S. dollars. We calculate currency neutral numbers by translating current year invoiced sale amounts at the exchange rates used for the corresponding prior year period. We use currency neutral results in our analysis of subsidiary or segment performance. We also use currency neutral numbers when analyzing our performance against our competitors.

Adjusted operating EBITDA and adjusted operating EBITDA margin exclude depreciation and amortization, interest expense, other expense, net, and certain non-recurring or unusual items that are not part of recurring operations such as, restructuring and other charges, impairment of goodwill, losses (gains) on business disposals, loss on assets classified as held for sale, divestiture and integration costs, strategic initiatives costs, regulatory costs, gain on debt extinguishment, and other items.

Adjusted EPS ex Amortization excludes the impact of non-operational items including, restructuring and other charges, impairment of goodwill, divestiture and integration costs, (losses) gains on business disposals, loss on assets classified as held for sale, strategic initiatives costs, regulatory costs, gain on debt extinguishment, and other items that are not a part of recurring operations.

Free Cash Flow is operating cash flow (i.e. cash flow from operations) less capital expenditures.

Net debt to credit adjusted EBITDA is the leverage ratio used in our credit agreements and defined as net debt (which is debt for borrowed money less cash and cash equivalents) divided by the trailing 12-month credit adjusted EBITDA. Credit adjusted EBITDA is defined as income (loss) before interest expense, income taxes, depreciation and amortization, specified items and non-cash items.

Comparable results for the third quarter exclude the impact of divestitures.

These non-GAAP measures are intended to provide additional information regarding our underlying operating results and comparable year-over-year performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. In discussing our historical and expected future results and financial condition, we believe it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period-to-period comparable basis, financial amounts both including and excluding these identified items, as well as the impact of exchange rate fluctuations. These non-GAAP measures should not be considered in isolation or as substitutes for analysis of the Company’s results under GAAP and may not be comparable to other companies’ calculation of such metrics.

We have also presented a non-GAAP measure, adjusted operating EBITDA, in the Financial Guidance provided above. Adjusted operating EBITDA is defined in the previous section of this release and we believe this measure is useful in understanding the Financial Guidance for the same reasons mentioned in that section. The comparable GAAP metric would be Net income (loss), which we do not provide guidance on. Reconciliations from such estimated GAAP metric to the presented non-GAAP metric would also require unreasonable effort because such reconciliations would depend upon events which are uncertain in timing or amounts, and activities which are not completely controlled by us. This includes, by way of illustration, possible transactions and related costs and amounts, known and unknown matters involving regulatory and other bodies and future events involving third parties.

Welcome to IFF

At IFF (NYSE: IFF), an industry leader in food, beverage, scent, health and biosciences, science and creativity meet to create essential solutions for a better world – from global icons to unexpected innovations and experiences. With the beauty of art and the precision of science, we are an international collective of thinkers who partners with customers to bring scents, tastes, experiences, ingredients and solutions for products the world craves. Together, we will do more good for people and planet. Learn more at iff.com, Twitter, Facebook, Instagram, and LinkedIn.

The following table reconciles cash, cash equivalents and restricted cash between the Company's statement of cash flows for the periods ended September 30, 2025 and September 30, 2024 to the amounts reported on the Company's balance sheet:

International Flavors & Fragrances Inc.

GAAP to Non-GAAP Reconciliation

(Unaudited)

The following information and schedules provide reconciliation information between GAAP and non-GAAP amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

International Flavors & Fragrances Inc.

GAAP to Non-GAAP Reconciliation

(Unaudited)

The following information and schedules provide reconciliation information between GAAP and non-GAAP amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

International Flavors & Fragrances Inc.

GAAP to Non-GAAP Reconciliation

(Unaudited)

The following information and schedules provide reconciliation information between GAAP and non-GAAP amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

International Flavors & Fragrances Inc.

GAAP to Non-GAAP Reconciliation

(Unaudited)

The following information and schedules provide reconciliation information between GAAP and non-GAAP amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

International Flavors & Fragrances Inc.

Debt Covenants

(Amounts in millions)

(Unaudited)

The following information and schedules provide reconciliation information between GAAP and non-GAAP amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

International Flavors & Fragrances Inc.

Comparable Reportable Segment Performance

(Amounts in millions)

(Unaudited)

The following information and schedule provides reconciliation information between GAAP and non-GAAP amounts. This information and schedule is not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.