Core Insights - International Flavors & Fragrances Inc. (IFF) has relocated its Global Business Services (GBS) center to a newly constructed facility in Hyderabad, India, emphasizing its commitment to innovation and a future-ready work environment [1][5]. Facility Details - The new Hyderabad facility spans 75,000 sq. ft. and can accommodate up to 600 employees, featuring an innovation studio for experimentation with automation, robotics, and AI [3][9]. - The facility is designed for collaboration and wellness, located in a prime financial district, and incorporates cutting-edge technologies to support global operations [2][4]. Sustainability and Inclusivity - IFF's new facility aims for LEED Gold certification and includes eco-friendly features such as solar lighting and rainwater harvesting [4][9]. - The design promotes adaptable workspaces tailored to various work styles, ensuring high-speed connectivity and top-notch security [4]. Financial Performance - In Q1 2025, IFF reported adjusted earnings of $1.20 per share, exceeding the Zacks Consensus Estimate of $1.12, marking a 6% improvement from the previous year [6]. - Net sales for the March-end quarter were $2.84 billion, a decrease of 1.9% year-over-year, but currency-neutral sales grew by 3%, driven by growth in several segments [7]. Stock Performance - Over the past year, IFF's shares have declined by 21.6%, contrasting with a 0.4% decline in the industry [8].

Core Insights - International Flavors & Fragrance (IFF) is a global leader in the creation of flavors and fragrances, distinguished by its proactive research approach in product development [1] Company Overview - IFF operates across multiple segments, focusing on long-term and medium-term value creation [1] Investment Focus - The company targets investments in firms with strong fundamentals, indicating a sector-agnostic investment strategy [1]

Core Insights - International Flavors (IFF) reported total revenue of $2.84 billion for the quarter ending March 2025, reflecting a decrease of 1.9% compared to previous periods [4] International Revenue Trends - Revenue from Europe, Africa, and the Middle East was $952 million, accounting for 33.49% of total revenue, which was a surprise increase of +1.02% compared to the expected $942.36 million [5] - Latin America contributed $353 million, or 12.42% of total revenue, which was a surprise decrease of -5.51% from the anticipated $373.59 million [6] - Greater Asia generated $670 million, making up 23.57% of total revenue, slightly below the consensus estimate of $671.04 million, representing a surprise of -0.16% [7] Future Revenue Expectations - Analysts project IFF's total revenue for the current fiscal quarter to be $2.81 billion, a decline of 2.9% year-over-year, with expected contributions of 34.7% from Europe, Africa, and the Middle East ($972.63 million), 13.7% from Latin America ($385.59 million), and 24.7% from Greater Asia ($692.59 million) [8] - For the full year, total revenue is projected at $10.92 billion, indicating a fall of 4.9% from the previous year, with regional contributions expected to be 33.5% from Europe, Africa, and the Middle East ($3.66 billion), 13.3% from Latin America ($1.45 billion), and 23.9% from Greater Asia ($2.61 billion) [9] Stock Performance - Over the past month, IFF's stock increased by 3.9%, while the Zacks S&P 500 composite rose by 9.1% and the Zacks Basic Materials sector increased by 5% [13] - In the past three months, IFF's stock price declined by 10.8%, compared to a 3.1% fall in the S&P 500 index and a 2.2% decline in the broader sector [13]

Core Insights - International Flavors & Fragrances Inc. (IFF) reported better-than-expected earnings for Q1, with earnings of $1.20 per share, surpassing the analyst consensus estimate of $1.14 per share [1] - The company achieved quarterly sales of $2.84 billion, exceeding the analyst consensus estimate of $2.83 billion [1] - CEO Erik Fyrwald highlighted disciplined execution and broad-based growth as key drivers of performance, along with successful divestiture of the Pharma Solutions business [2] Financial Performance - IFF's Q1 earnings per share were $1.20, beating expectations [1] - Quarterly sales reached $2.84 billion, also above analyst estimates [1] - The company affirmed its FY2025 sales guidance of $10.60 billion to $10.90 billion, compared to market estimates of $10.87 billion [2] Market Reaction - Following the earnings announcement, IFF shares dipped 7.1% to close at $73.59 [3] - Analysts adjusted their price targets for IFF after the earnings report [3] Analyst Ratings - Barclays analyst upgraded IFF from Equal-Weight to Overweight, raising the price target from $76 to $84 [8] - Baird analyst maintained an Outperform rating but lowered the price target from $110 to $100 [8]

Core Viewpoint - International Flavors & Fragrances Inc. (IFF) reported mixed financial results for Q1 2025, with adjusted earnings per share beating estimates, but a significant loss when including one-time items. The company continues to face challenges in net sales, particularly in the Food Ingredients segment, while showing growth in other areas like Pharma Solutions and Taste segments [1][2][12]. Financial Performance - Adjusted earnings per share for Q1 2025 were $1.20, exceeding the Zacks Consensus Estimate of $1.12, and improved by 6% year-over-year. However, including one-time items, the company reported a loss of $3.98 per share compared to earnings of $0.23 in the prior year [1]. - Net sales for the quarter were $2.84 billion, a decrease of 1.9% year-over-year, but above the Zacks Consensus Estimate of $2.83 billion. Currency-neutral sales grew by 3% year-over-year [2]. - Gross profit increased by 1.1% year-over-year to $1.03 billion, with a gross margin of 36.4%, up from 35.3% in the previous year [2]. Segment Performance - The Taste segment saw net sales rise by 1.3% year-over-year to $627 million, with adjusted operating EBITDA increasing by 12% to $131 million [4]. - The Food Ingredients segment experienced a decline in net sales by 7% year-over-year to $796 million, although adjusted operating EBITDA rose by 2.8% to $111 million [5]. - Health & Bioscience segment sales were $540 million, slightly up from $529 million year-over-year, with adjusted operating EBITDA remaining flat at $138 million [6]. - The Scent segment's sales were $614 million, down from $618 million year-over-year, with adjusted operating EBITDA falling by 14.3% to $144 million [7]. - Pharma Solutions reported sales of $266 million, up 6.4% year-over-year, with adjusted operating EBITDA increasing by 14.9% to $54 million [8]. Cash Flow and Balance Sheet - At the end of Q1 2025, IFF had cash, cash equivalents, and restricted cash totaling $650 million, an increase from $471 million at the end of 2024. Long-term debt rose slightly to $7.60 billion from $7.56 billion [11]. - The company generated $127 million in cash from operating activities in Q1 2025, compared to $99 million in the same quarter of the previous year [11]. Guidance - IFF reaffirmed its sales guidance for fiscal 2025, expecting between $10.6 billion and $10.9 billion, with adjusted EBITDA projected between $2 billion and $2.15 billion [12]. Stock Performance - Over the past year, IFF's shares have declined by 14.6%, contrasting with a 1% decline in the industry [13].

Financial Data and Key Metrics Changes - IFF generated approximately $2.8 billion in sales for Q1 2025, representing a 3% comparable currency neutral growth [10] - Adjusted operating EBITDA totaled $578 million for the quarter, a strong 9% increase on a comparable currency neutral basis [10] - Comparable currency neutral adjusted operating EBITDA margin increased more than 120 basis points to 20.3% [10] Business Line Data and Key Metrics Changes - Pharma Solutions delivered $266 million in sales, an 8% year-over-year increase on a comparable currency neutral basis [11] - Taste segment sales were $627 million, a 7% year-over-year increase on a comparable currency neutral basis [13] - Food Ingredients had sales of $796 million, a 4% comparable currency neutral decrease from the prior year [13] - Health and Biosciences segment delivered a 5% increase in comparable currency neutral sales [14] - Scent achieved net sales of $614 million, up 4% year-over-year on a comparable currency neutral basis [14] Market Data and Key Metrics Changes - The company noted that broader macroeconomic dynamics remain challenging, but IFF's portfolio is grounded in resilient essential end markets [20] - The company expects approximately 2% adverse impact on revenue from foreign exchange, down from 4% previously [22] Company Strategy and Development Direction - IFF is focused on strengthening its business through consistent reinvestment in core growth drivers: R&D, commercial, digital, and capacity [20] - The company is maintaining its full-year guidance ranges despite macroeconomic uncertainties [21] - IFF completed the divestiture of Pharma Solutions, which strengthens its capital structure and helps achieve a net debt to credit adjusted EBITDA ratio of below three times [7][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the order book remaining consistent with guidance despite macroeconomic uncertainties [28] - The company is actively working with customers to mitigate impacts of tariff actions and remains disciplined in response to macroeconomic uncertainty [9] - Management acknowledged concerns about potential recessionary pressures but emphasized the resilience of 80% of its portfolio in essential products [29] Other Important Information - Cash flow from operations totaled $127 million year-to-date, with CapEx at $179 million, approximately 6% of sales [15] - Gross debt was approximately $9.3 billion, a decrease of more than $1 billion compared to the year-ago period [17] Q&A Session All Questions and Answers Question: Can you talk us through which areas of the portfolio could potentially be at risk and which parts could be more resilient in a recessionary scenario? - Management indicated that 80% of the portfolio is in essential products, which are resilient, while discretionary areas like fine fragrances may be at risk [29] Question: Can you disclose what you think the gross impact today is on your costs from tariffs? - Management noted a gross exposure of over $100 million for 2025 related to tariffs, primarily from China, but emphasized successful supply chain optimization efforts [35] Question: What were the year-ago comps for flavors and food ingredients? - Management reported that Taste grew 11% last year in Q1, while Food Ingredients declined 4% last year [40] Question: Can you elaborate on the strategic rationale for the joint venture with Chimera? - The joint venture aims to scale enzymatic biomaterials and is expected to start operations by the end of 2027, targeting high-value biodegradable polymers [44][46] Question: What drove volumes lower in protein solutions? - Management indicated that volumes were down due to weaker performance in lower-value areas and production issues in higher-value areas, which are being resolved [55] Question: How do you see the inventory cycle affecting IFF? - Management expressed that they do not believe inventory levels are elevated enough to cause a significant downtick, given the recent destocking period [88]

CAUTIONARY STATEMENT Statements in this presentation 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 expected cash flow and availability of capital resources to fund our operations and meet our debt service requirements; our ability to execute on our strategic a ...

For the quarter ended March 2025, International Flavors (IFF) reported revenue of $2.84 billion, down 1.9% over the same period last year. EPS came in at $1.20, compared to $1.13 in the year-ago quarter. The reported revenue compares to the Zacks Consensus Estimate of $2.83 billion, representing a surprise of +0.29%. The company delivered an EPS surprise of +7.14%, with the consensus EPS estimate being $1.12. View all Key Company Metrics for International Flavors here>>> Shares of International Flavors have ...

Core Viewpoint - International Flavors (IFF) reported quarterly earnings of $1.20 per share, exceeding the Zacks Consensus Estimate of $1.12 per share, and showing an increase from $1.13 per share a year ago [1][2]. Financial Performance - The earnings surprise for the quarter was 7.14%, with the company previously expected to earn $0.78 per share but actually earning $0.97, resulting in a surprise of 24.36% [2]. - Revenues for the quarter reached $2.84 billion, surpassing the Zacks Consensus Estimate by 0.29%, although this is a slight decrease from $2.9 billion in the same quarter last year [3]. - Over the last four quarters, the company has exceeded consensus EPS estimates three times and topped consensus revenue estimates four times [2][3]. Stock Performance and Outlook - Since the beginning of the year, International Flavors shares have declined by approximately 6.4%, compared to a 3.9% decline in the S&P 500 [4]. - The company's current Zacks Rank is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [7]. Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $1.17 on revenues of $2.88 billion, and for the current fiscal year, it is $4.20 on revenues of $10.96 billion [8]. - The estimate revisions trend for International Flavors is mixed, and changes in these estimates may occur following the recent earnings report [7]. Industry Context - The Chemical - Specialty industry, to which International Flavors belongs, is currently ranked in the bottom 39% of over 250 Zacks industries, indicating potential challenges ahead [9].

Financial Performance - In Q1 2025, the company's sales decreased by $56 million, or 2%, to $2.843 billion compared to $2.899 billion in Q1 2024, with a currency neutral sales increase of 2%[151]. - Gross profit for Q1 2025 increased by $11 million, or 1%, to $1.035 billion, representing 36.4% of sales, up from 35.3% in Q1 2024[152]. - The operating loss for Q1 2025 was $903 million, compared to a profit of $199 million in Q1 2024, primarily due to goodwill impairment[154]. - For the twelve months ended March 31, 2025, the company reported a net loss of $835 million and a credit adjusted EBITDA of $2,207 million[199]. - Total Segment Adjusted Operating EBITDA remained flat at $578 million in Q1 2025, with notable increases in the Taste segment by 12% to $131 million[178][179]. Segment Performance - The Taste segment reported sales of $627 million, a 1% increase on a reported basis, while Food Ingredients sales decreased by 7% to $796 million[156]. - Health & Biosciences sales increased by $11 million, or 2%, to $540 million, while Scent sales decreased by $31 million, or 5%, to $614 million[161][163]. - Pharma Solutions sales increased by $16 million, or 6%, to $266 million, driven by changes in the distribution model and volume growth[164]. Expenses and Charges - R&D expenses decreased by $2 million to $164 million, representing 5.8% of sales in Q1 2025[166]. - Selling and Administrative (S&A) expenses decreased by $29 million to $461 million, representing 16.2% of sales in Q1 2025, compared to $490 million or 16.9% in Q1 2024[167]. - Restructuring and other charges increased to $17 million in Q1 2025 from $3 million in Q1 2024, driven by higher severance costs related to the IFF Productivity Program[168]. - Amortization expenses decreased to $143 million in Q1 2025 from $168 million in Q1 2024, primarily due to the classification of certain intangible assets as "held for sale"[169]. - Interest expense decreased to $71 million in Q1 2025 from $83 million in Q1 2024, attributed to debt repayments made during the previous year[171]. Tax and Debt - The effective tax rate for Q1 2025 was -2.3%, compared to 47.0% in Q1 2024, reflecting significant changes in income tax provisions[154]. - The effective tax rate for Q1 2025 was (2.3)%, a significant decrease from 47.0% in Q1 2024, primarily due to the non-tax deductible goodwill impairment[173]. - As of March 31, 2025, the total debt was $9,319 million, resulting in a net debt of $8,669 million after accounting for cash and cash equivalents of $650 million[200]. - As of March 31, 2025, the net debt to credit adjusted EBITDA ratio was 3.93 to 1.0, compliant with financial covenants[198]. - The company has $8.515 billion in senior unsecured notes, with effective interest rates ranging from 1.22% to 5.12% and maturities from October 1, 2025, to December 1, 2050[201]. Cash Flow - Cash flows provided by operating activities increased to $127 million (4.5% of sales) in Q1 2025, up from $99 million (3.4% of sales) in Q1 2024[187]. - Cash flows used in investing activities rose to $157 million in Q1 2025 from $78 million in the prior year, driven by higher spending on property, plant, and equipment[188]. Strategic Initiatives - The company implemented a reorganization effective January 1, 2025, creating new reportable segments: Taste and Food Ingredients[145]. - The divestiture of the Pharma Solutions business closed on May 1, 2025, with another divestiture expected in Q2 2025[150]. - The company is focused on executing its strategic transformation, including portfolio optimization through divestitures and acquisitions[211]. - The company plans to enhance innovation efforts and drive cost efficiencies to meet consumer trends and demands[211]. - The company is committed to sustainability and addressing increasing regulatory and consumer focus on environmental impact[217]. Risks and Challenges - The company anticipates ongoing inflationary pressures and is implementing pricing actions to mitigate these impacts[211]. - The company faces risks related to supply chain disruptions, geopolitical developments, and economic uncertainties that could affect its operations and financial results[217]. - As of March 31, 2025, the company had cross currency swaps with a liability position of approximately $122 million, which could change by approximately $138 million with a hypothetical 10% fluctuation in the U.S. dollar against the Euro[216].