IFF reveals first quarter sales dip but fragrance businesses leave good smell

07 May 2024 --- International Flavors & Fragrances (IFF) has reported a net sales decrease for the first quarter of the year, but company CEO Erik Fyrwald points to “good results across the majority of our business.” The Scent segment increased currency-neutral sales, driven by growth in its fragrance businesses.

The reported net sales for the first quarter were US$2.9 billion, a decrease of 4% versus the prior year period. On a comparable basis, currency-neutral sales increased 5% versus the prior year period, led by growth in Scent, Health & Biosciences and Nourish.

“In the first quarter, we delivered volume growth and productivity gains, which resulted in solid top-and-bottom-line results on a comparable basis. We are off to a good start, yet recognize that it is still early in the year and uncertainty remains,” says Fyrwald.

“Based on our performance to date and outlook for the balance of the year, we believe results will likely trend toward the higher end of our previously announced guidance ranges.”

First quarter sales in Scent were US$645 million. On a comparable basis, currency-neutral sales in this segment increased 16%, led by strong double-digit growth in Consumer Fragrance and a mid-single digit increase in Fine Fragrance, with balanced contributions from volume and price.

Scent adjusted operating EBITDA was US$157 million and adjusted operating EBITDA margin was 24.3%. On a comparable basis, adjusted operating EBITDA increased 55% led primarily by volume growth and productivity gains.

“We also took important steps in our portfolio optimization strategy by reaching an agreement to sell our Pharma Solutions business and completing the previously announced divestiture of our Cosmetic Ingredients business,” adds Fyrwald.

“These actions, along with the rightsizing of our dividend earlier this year, represent significant steps toward our commitment to strengthen our capital structure and improve our debt leverage ratio.”

IFF’s overall volume grew mid-single digits and continued to improve sequentially across nearly all businesses.

Total income before taxes on a reported basis for the first quarter was US$115 million. Adjusted operating EBITDA for the first quarter was US$578 million. On a comparable basis, operating EBITDA improved 20% against the prior year period, led by volume growth and productivity gains.

Edited by Joshua Poole