IFF Reports Second Quarter 2026 Results; Announces Use of Proceeds Plan for Food Ingredients Divestiture

IFF (NYSE: IFF) reported financial results for the second quarter ended June 30, 2026. Results are presented on a continuing operations basis, excluding the Food Ingredients business and other minor perimeter adjustments (the “Food Ingredients disposal group”), and the Soy Crush, Concentrates, and Lecithin businesses (the “SCL disposal group”). The Food Ingredients disposal group and the SCL disposal group are reported as discontinued operations.

Management Commentary

“IFF delivered a strong first half of 2026 on a continuing operations basis,” said Erik Fyrwald, CEO of IFF. “Performance was driven by volume growth, disciplined margin execution and robust free cash flow generation. These results reflect the strength of our commercial and innovation pipelines and the actions underway to improve efficiency and cash flow across the company.”

“This quarter marked a defining step in our portfolio transformation with the announced agreement to divest Food Ingredients. The transaction sharpens IFF's focus on Taste, Scent, and Health & Biosciences, creating a simpler, higher-growth, higher-margin company with enhanced cash generation. As part of this transformation, we are taking decisive action to eliminate related stranded costs and will execute with urgency.”

“We are also providing greater clarity on our intended use of proceeds from the divestiture of the Food Ingredients business through a sequenced capital allocation framework. Our objective is to maintain a strong balance sheet and financial flexibility to deliver our growth ambitions with leverage in the range of 2.0x to 2.5x net debt to EBITDA. Therefore we will apply net proceeds to reduce outstanding debt by over $1 billion. The Board has also authorized an enhanced $2.5 billion share repurchase program, beginning with $500 million to be executed in the second half of 2026, reflecting our confidence in IFF’s long-term value creation opportunity and the compelling return profile of repurchases at current valuation levels. We expect to execute the remaining $2.0 billion of the authorization following the anticipated transaction close, with completion of this repurchase program targeted by the end of 2027.”

“With Food Ingredients now reported as discontinued operations, we are introducing full-year 2026 guidance on a continuing operations basis. The underlying performance in the three business units is consistent with previous guidance given. The new presentation provides greater visibility into the growth and margin profile of our go-forward portfolio, reinforcing the outlook for IFF’s continuing operations and our ability to create long-term shareholder value.”

Second Quarter 2026 Consolidated Financial Results¹

• Reported net sales for the second quarter were $1.95 billion, an increase of 2% versus the prior-year period. On a comparable basis³, currency neutral sales² increased 6% versus the prior-year period led by broad-based growth including high-single digit performance in Scent and mid-single digit growth in Taste and Health & Biosciences. Inclusive of discontinued operations net sales of $827 million, net sales for the second quarter were $2.78 billion.
• Income from continuing operations before taxes on a reported basis for the second quarter was $64 million. Adjusted operating EBITDA² for the second quarter was $408 million. On a comparable basis³, currency neutral adjusted operating EBITDA² improved 6% versus the prior-year period, driven primarily by volume growth and productivity gains. Inclusive of discontinued operations adjusted operating EBITDA² of $140 million, adjusted operating EBITDA² for the second quarter was $548 million.
• Reported earnings per share (EPS) for the second quarter was $0.13 per diluted share. Adjusted EPS excluding amortization² was $0.82 per diluted share.
• Cash flows from operations for the first six months of the year for continuing and discontinued operations was $679 million, increasing $311 million year-over-year, and free cash flow², defined as cash flows from operations less capital expenditures, totaled $378 million, increasing $284 million year-over-year. Total debt to trailing twelve months net income at the end of the second quarter was 22.6x. Net debt to credit adjusted EBITDA² at the end of the second quarter was 2.5x, and includes the effects of both continuing and discontinued operations.

Taste Segment

• On a reported basis, second quarter sales were $688 million. On a comparable basis³, currency neutral sales² increased 4% with broad-based growth in all regions.
• Taste adjusted operating EBITDA² was $124 million and adjusted operating EBITDA margin² was 18.0% in the second quarter. On a comparable basis³, currency neutral adjusted operating EBITDA² increased 6% driven primarily by volume growth and favorable net pricing.

Health & Biosciences Segment

• On a reported basis, second quarter sales were $601 million. On a comparable basis³, currency neutral sales² increased 5% with growth in all businesses, led by Grain Processing, Food Biosciences & Animal Nutrition.
• Health & Biosciences adjusted operating EBITDA² was $150 million and adjusted operating EBITDA margin² was 25.0% in the second quarter. On a comparable basis³, currency neutral adjusted operating EBITDA² increased 6% primarily driven by volume growth.

Scent Segment

• On a reported basis, second quarter sales were $665 million. On a comparable basis³, currency neutral sales² increased 8% led by double-digit growth in Fragrance Ingredients and a high single-digit performance in Consumer Fragrance. Fine Fragrance increased low-single digits compared to the prior year period as it was impacted by the Middle East conflict.
• Scent adjusted operating EBITDA² was $134 million and adjusted operating EBITDA margin² was 20.2% in the second quarter. On a comparable basis³, currency neutral adjusted operating EBITDA² increased 5% driven primarily by volume growth and productivity.

Sale of Food Ingredients Disposal Group

On May 29, 2026, IFF announced that it had entered into a definitive agreement to sell its Food Ingredients disposal group, which was included in the Food Ingredients segment, to CVC Capital Partners for net cash proceeds of approximately $3.8 billion, subject to customary transaction adjustments. The transaction is expected to close by the end of the second quarter of 2027, subject to customary closing conditions and receipt of regulatory approvals. As part of the transaction, IFF will retain an approximately 10% minority equity interest in the business enabling continued collaboration and cooperation between IFF and Food Ingredients.

Stranded costs related to this transaction represent approximately $100 million of corporate and functional expenses previously allocated to the Food Ingredients business that are expected to remain with IFF following the close of the transaction. IFF has a remediation plan in place, with actions underway, and expects to eliminate approximately two thirds of these costs within the first year following the transaction close, and substantially all within two years following transaction close.

On March 2, 2026, the Company completed the divestiture of the SCL disposal group, which was also included in the Food Ingredients segment. The divestitures were part of a combined strategy by IFF to divest the majority of its Food Ingredients segment and strengthen its portfolio.

As a result, beginning in the second quarter of 2026, the financial results of the Food Ingredients disposal group and the financial results of the SCL disposal group prior to its divestiture on March 2, 2026, are reflected in IFF’s Consolidated Financial Statements as discontinued operations, along with comparative periods.

The classification of the Food Ingredients and SCL businesses as discontinued operations reflects the Company’s continued focus on its remaining innovation-led, higher-growth and higher-margin segments: Taste, Scent and Health & Biosciences. On a continuing operations basis, the Company delivered second quarter 2026 Adjusted Operating EBITDA margin of 20.9%, an improvement compared to 19.7% including discontinued operations.

Share Repurchase Authorization

The Company announced that its Board of Directors has authorized an enhanced share repurchase authorization with a total value of $2.5 billion; this amount included approximately $400 million remaining on its prior authorization. Under the program, the Board of Directors also authorized an accelerated share repurchase of $500 million, which the Company expects to execute in the second half of 2026. The remaining $2.0 billion share repurchase is expected to be executed following the closing of the Food Ingredients disposal group divestiture, with an expected completion of the program by the end of 2027. The Board will review the share repurchase program periodically and may authorize adjustment of its term and size. The Company plans to fund repurchases from cash provided by operating activities, short-term debt and net cash proceeds provided by the divestiture of the Food Ingredients disposal group.

Financial Guidance¹

The Company has provided financial guidance to reflect the separation of the Food Ingredients disposal group and SCL disposal group as discontinued operations. For continuing operations, the Company expects full year 2026 sales to be in the range of $7.4 billion to $7.6 billion excluding approximately $3.2 billion related to discontinued operations. For the full year 2026 adjusted operating EBITDA is expected to be in the range of $1.53 billion to $1.60 billion, excluding approximately $520 million related to discontinued operations.

On a continuing operations basis, the Company expects comparable currency neutral sales growth to be between 2% to 4%, and comparable currency neutral adjusted operating EBITDA growth to be 4% to 8%.

Based on recent market foreign exchange rates, the Company continues to expect that foreign exchange will have an approximately 1% positive impact on sales growth and have an approximately 2% positive impact on adjusted operating EBITDA growth in 2026.

Audio Webcast

A live webcast to discuss the Company’s second quarter 2026 financial results will be held on August 5, 2026, 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

This press release includes statements that are not historical facts and 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 with respect to our financial and operational outlook (sales, adjusted operating EBITDA and cash flow), portfolio optimization initiatives (including the pending divestiture for our Food Ingredients segment), pricing, productivity and cost-discipline actions, capital allocation, future operations, growth potential, strategic investments and the expected effects of foreign exchange. These statements reflect management’s present views, are based on a series of expectations, assumptions, estimates and projections about the Company, are subject to change, and involve uncertainties that could cause actual results to differ materially.

Certain of such forward-looking information may be identified by such terms as “expect”, “anticipate”, “believe”, “intend”, “outlook”, “may”, “will”, “would”, “estimate”, “should”, “predict”, “plan”, “project”, “could”, “potential”, “seek”, “target”, “continue”, “future”, and similar terms or variations thereof. These statements are not guarantees of future performance and are subject to risks and uncertainties that could lead to materially different outcomes.

Such risks, uncertainties and other factors include, among others, the following: (1) demand trends, competitive dynamics and customer concentration in our end markets; (2) execution of our strategic transformation and other strategic transactions, divestitures, acquisitions, collaborations and joint ventures; (3) working capital and inventory management; (4) outcomes of legal claims, disputes, regulatory investigations and litigation; (5) tariffs and trade actions, supply chain disruptions and macro events, including geopolitical developments, climate events, natural disasters, public health crises; (6) volatility in input costs (such as raw materials, transportation and energy); (7) attraction, retention and turnover of key employees and executives; (8) product innovation, time-to-market, product safety and quality; (9) cybersecurity incidents, artificial intelligence related risks, data privacy and compliance with data protection laws; (10) exposure to emerging markets, foreign currency fluctuations and international regulatory and political risks; (11) capital allocation, dividend policy and potential impairments of tangible or intangible assets; (12) our indebtedness, credit rating, liquidity, and access to capital; (13) pension and postretirement obligations; (14) compliance with federal, state, local and international rules and regulations, and regulatory, environmental, anti-corruption and sanctions laws and related ethical business practices; (15) protection and enforcement of intellectual property; (16) changes in tax laws and policies, tax audits and outcomes, including potential tax liabilities related to prior transactions; and (17) changes in federal, state, local and international rules and regulations.

The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. Important factors are described under “Risk Factors” in our most recent Annual Report on Form 10-K and in our subsequent filings with the SEC, and those disclosures are incorporated herein by reference.

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.

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 currency neutral 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. Unless otherwise noted, all amounts and percentages in this press release reflect the results from continuing operations, with the exception of the Statements of Cash Flows and net debt to credit adjusted EBITDA which are presented on a combined continuing and discontinued basis.

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 segment performance. We also use currency neutral numbers when analyzing our performance against that of our competitors.

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

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 impairment of goodwill, restructuring and other charges, losses (gains on business disposals, loss on assets classified as held for sale, divestiture costs, strategic initiatives costs, regulatory costs, gain on debt extinguishment, entity realignment and other items.

Adjusted EPS ex Amortization excludes the impact of non-operational items including restructuring and other charges, divestiture costs, losses (gains) on business disposals, strategic initiatives costs, regulatory costs 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.

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.

The Company cannot reconcile its expected adjusted operating EBITDA under "Financial Guidance" without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time. These items include but are not limited to divestiture costs, gains (losses) on business disposals, and regulatory costs.

Welcome to IFF

At IFF (NYSE: IFF), we make joy through science, creativity and heart. As the global leader in flavors, fragrances, and health and biosciences, we deliver groundbreaking, sustainable innovations that elevate everyday products—advancing wellness, delighting the senses and enhancing the human experience. Learn more at iff.com, LinkedIn, Instagram and Facebook.

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1Unless otherwise noted, results are presented on a continuing operations basis, now reflecting the Food Ingredients disposal group and the SCL disposal group as discontinued operations. See pages 5-6 for further information, including the basis of presentation included in this release.

2Schedules at the end of this release contain reconciliations of reported GAAP to Non-GAAP metrics. See Use of Non-GAAP Financial Measures for explanations of our Non-GAAP metrics.

3Comparable results for the second quarter exclude the impact of divestitures.

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