International Flavors & Fragrances (IFF) Q3 2024 earnings summary

Executive summary

• Achieved solid Q3 2024 results with 4% reported sales growth to $2.93B, high single-digit volume gains, and double-digit adjusted EBITDA growth across all business units, leading to increased full-year 2024 guidance.

• Net income attributable to shareholders more than doubled to $59M, with adjusted EPS (ex amortization) up 17% to $1.04.

• Opened a creative center in Shanghai and began investments in Mexico City and India to expand innovation capabilities.

• Employee engagement improved significantly over the last 10 months, highlighted by a global celebration of 135 years.

• Pharma Solutions divestiture remains on track for completion in H1 2025.

Financial highlights

• Q3 2024 revenue was $2.93B, up 4% year-over-year; comparable currency-neutral sales grew 9%.

• Adjusted operating EBITDA increased 16% to $568M, with margin improving to 19.4%, up 180 basis points year-over-year.

• Gross profit rose 14% to $1.05B (36.0% margin); operating profit surged 66% to $249M.

• Adjusted EPS (excluding amortization) was $1.04, up 17% year-over-year.

• Year-to-date, cash flow from operations totaled $702M, free cash flow was $399M, and $411M was distributed in dividends.

Outlook and guidance

• Full-year 2024 net sales expected between $11.3B–$11.4B, nearly $100M above prior guidance.

• Adjusted operating EBITDA targeted near the high end of $2.1B–$2.17B.

• Volume growth for 2024 now expected at 5%-6%, up from 3%-5%; pricing expected to be flat due to FX in emerging markets.

• Free cash flow guidance unchanged due to higher working capital needs from increased sales.

• Net debt-to-credit-adjusted EBITDA targeted below 3x post-Pharma Solutions divestiture in 2025.