International Flavors & Fragrances (IFF) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales were $2.89B, down 1% year-over-year, but currency neutral sales rose 7%, led by Scent, Health & Biosciences, and Nourish segments.

• Adjusted operating EBITDA grew 22% year-over-year to $588M, with margin expanding to 20.4%.

• Net income attributable to shareholders was $170M, up from $27M in Q2 2023; diluted EPS was $0.66.

• Strategic refresh and business-led operating model underway, focusing on innovation, operational excellence, and customer-centricity.

• Raised full-year sales and adjusted operating EBITDA guidance due to strong first-half results and improved volume and productivity.

Financial highlights

• Q2 2024 revenue was $2.89B, down 1% year-over-year; comparable currency neutral sales increased 7%.

• Adjusted operating EBITDA margin improved by 310 basis points to 20.4%.

• Q2 gross profit increased 14% to $1.07B; operating profit up 32% to $191M.

• Free cash flow in Q2 was $136M, up from $85M a year ago; cash from operations totaled $336M.

• Paid $309M in dividends YTD; cash and equivalents at $674M; reduced gross debt by over $900M sequentially.

Outlook and guidance

• Full-year 2024 sales guidance raised to $11.1B–$11.3B; adjusted operating EBITDA guidance increased to $2.1B–$2.17B.

• Volume growth now expected at 3–5% for the year; pricing contribution expected at -1% to +1%, mainly due to FX-related actions.

• Foreign exchange expected to have a 3–4% adverse impact on sales growth.

• Q3 sales expected at $2.75–2.85B, with adjusted operating EBITDA of $520–540M.

• CapEx for 2024 expected at $575M, ramping up in the second half; capital spending projected at 5–6% of sales.