08 Aug 2024 --- International Flavors & Fragrances (IFF) beats analyst estimates in its second quarter 2024 financial results, revealing net sales of US$2.89 billion, a 1% decrease compared to the prior-year period.
On a comparable basis, currency-neutral sales increased by 7% versus the prior-year period, led by growth in Scent, Health & Biosciences and Nourish. Volume grew by single digits and improved sequentially across nearly all businesses.
For the Scent segment, sales reached US$603 million on a reported basis. On a comparable basis, currency-neutral sales increased 16%, led by strong double-digit growth in Consumer Fragrance and Fragrance Ingredients and a mid-single-digit increase in Fine Fragrance.
Scent’s adjusted operating EBITDA was US$137 million, and the adjusted operating EBITDA margin was 22.7% in the second quarter. On a comparable basis, adjusted operating EBITDA increased 38%, primarily due to volume growth and productivity gains.
Overall results
The scent manufacturers’ income before taxes on a reported basis for the second quarter was US$183 million. Adjusted operating EBITDA for the second quarter was US$588 million.
On a comparable basis, adjusted operating EBITDA improved 22% versus the prior-year period, led by volume growth and productivity gains.
“We are pleased with our performance through the first half of the year, as it represents a marked improvement over our prior year lows,” says IFF CEO Erik Fyrwald.
“Our efforts to drive volume growth across all our business units, combined with enhanced productivity initiatives, have resulted in solid profit improvements compared to last year. Given our performance to date and our cautiously optimistic outlook for the remainder of the year, we are raising our sales and adjusted operating EBITDA guidance for the full year.”
The second quarter’s reported earnings per share (EPS) was US$0.66. Adjusted EPS excluding amortization was US$1.16 per diluted share.
At the end of the second quarter, cash flows from operations totaled US$336 million, and free cash flow, defined as cash flows from operations less capital expenditures, totaled US$136 million.
“The entire IFF team is rallying behind this strategic refresh, and while we still have more work to do, we have identified significant growth opportunities. We have started to increase our investments in R&D, commercial efforts, and capacity in flavors, scent, and health and biosciences, as well as increase investments to strengthen our digital systems,” highlights Fyrwald.
“At the same time, we are rapidly addressing our functional ingredients business by implementing additional productivity initiatives to improve our margin while we target attractive customer segments. We believe these actions will deliver stronger value creation for our customers, employees and shareholders over time.”
