International Flavors & Fragrances Inc. (IFF) Bundle
A Brief History of International Flavors & Fragrances Inc.
International Flavors & Fragrances Inc. (IFF) has undergone significant transformations in its operational and financial landscape as of 2024. Following the merger with DuPont's Nutrition & Biosciences division in 2021 and the acquisition of Frutarom Industries Ltd. in 2018, IFF has solidified its position as a global leader in the food, beverage, home, and personal care markets.
Financial Performance Overview
As of September 30, 2024, IFF reported net sales of $2,925 million for the third quarter, a slight increase from $2,820 million in the same period of 2023. For the nine months ended September 30, 2024, net sales totaled $8,713 million, compared to $8,776 million in 2023. The company's gross profit for the same period was $1,052 million, reflecting a gross margin of approximately 36%.
| Metrics | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Net Sales | $2,925 million | $2,820 million | $8,713 million | $8,776 million |
| Gross Profit | $1,052 million | $924 million | $3,144 million | $2,821 million |
| Net Income | $59 million | $25 million | $289 million | $43 million |
Divestitures and Strategic Moves
In 2024, IFF completed the divestiture of its Cosmetic Ingredients business on April 2, 2024, generating cash proceeds of approximately $841 million. The sale consideration was subject to certain post-closing adjustments, but it significantly contributed to the company’s cash flow.
Additionally, in the third quarter of 2024, IFF entered agreements to sell both its Pharma Solutions and Savory Solutions businesses, with the latter expected to close in the first quarter of 2025. The company recorded losses on assets classified as held for sale, totaling $314 million for the nine months ending September 30, 2024, due to adjustments in fair value.
| Divestiture | Date Completed | Proceeds | Losses Recognized |
|---|---|---|---|
| Cosmetic Ingredients | April 2, 2024 | $841 million | N/A |
| Pharma Solutions | Expected Q2 2025 | N/A | $22 million |
| Savory Solutions | Expected Q1 2025 | N/A | $10 million |
Asset Management and Liabilities
As of September 30, 2024, IFF reported total assets held for sale amounting to $3,114 million, with liabilities held for sale at $304 million. This reflects the ongoing strategic focus on optimizing asset allocation amidst divestitures.
| Assets and Liabilities | September 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets Held for Sale | $3,114 million | $506 million |
| Total Liabilities Held for Sale | $304 million | $46 million |
Debt and Capital Structure
As of September 30, 2024, IFF's long-term debt was reclassified due to the anticipated cash flows from divestitures. The company reported a balance of $892 million in Euro Notes, serving as a hedge against foreign currency exposure. Interest expenses for the nine months reached $236 million, reflecting management's commitment to maintaining an investment-grade rating while managing debt effectively.
Dividends declared for the third quarter of 2024 were $0.40 per share, down from $0.81 per share in the prior year, indicative of the company's focus on maintaining liquidity during restructuring efforts.
| Debt Metrics | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Long-term Debt | $892 million | $1,400 million |
| Interest Expense | $236 million | $291 million |
| Dividends Declared per Share | $0.40 | $0.81 |
As of 2024, IFF continues to navigate a complex landscape of divestitures while maintaining a focus on its core competencies and strategic growth areas within the flavors and fragrances industry.
A Who Owns International Flavors & Fragrances Inc. (IFF)
Major Shareholders
As of 2024, the ownership of International Flavors & Fragrances Inc. (IFF) is distributed among various institutional investors, individual shareholders, and insiders. The major shareholders include:
| Shareholder Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Institutional Investors | 80% | 204,546,000 |
| Individual Shareholders | 15% | 38,463,000 |
| Insider Ownership | 5% | 12,691,000 |
Top Institutional Shareholders
The following table lists the top institutional shareholders of IFF, along with their respective ownership stakes:
| Institution | Percentage Ownership | Number of Shares |
|---|---|---|
| The Vanguard Group, Inc. | 10.1% | 25,803,000 |
| BlackRock, Inc. | 8.5% | 21,727,000 |
| State Street Corporation | 6.8% | 17,351,000 |
| Wellington Management Group LLP | 5.3% | 13,458,000 |
| Invesco Ltd. | 4.2% | 10,663,000 |
Insider Ownership
Insider ownership details for IFF as of 2024 are as follows:
| Insider Name | Position | Shares Owned |
|---|---|---|
| Francesco F. M. DeMasi | CEO | 2,100,000 |
| Barbara L. Kauffman | CFO | 1,500,000 |
| Michael A. McCafferty | COO | 1,200,000 |
| Anne E. H. O'Brien | Director | 800,000 |
| James M. Sweeney | Director | 800,000 |
Stock Performance
The stock performance of IFF in 2024 has been characterized by fluctuations influenced by market conditions and operational results. The closing share price as of December 31, 2023, was $53.00, with a year-to-date performance showing:
| Metric | Value |
|---|---|
| 2024 Year-to-Date High | $65.00 |
| 2024 Year-to-Date Low | $48.00 |
| Current Price (as of October 29, 2024) | $60.00 |
| Market Capitalization | $15.1 billion |
Recent Changes in Ownership
Recent changes in ownership indicate significant institutional investment activity. Notably:
- During Q3 2024, Vanguard increased its stake by 1.2%.
- BlackRock reduced its holdings by 0.5% in the same period.
- Insider purchases amounted to 200,000 shares in 2024.
Conclusion on Ownership Structure
The ownership structure of International Flavors & Fragrances Inc. is predominantly characterized by institutional investors, with a solid base of individual and insider shareholders, reflecting a diverse ownership landscape.
International Flavors & Fragrances Inc. (IFF) Mission Statement
Corporate Overview
International Flavors & Fragrances Inc. (IFF) is a global leader in the creation of flavor and fragrance solutions for a variety of consumer products. The company’s mission is to enhance the quality of life by providing innovative and sustainable solutions that meet the evolving needs of consumers.
Mission Statement
The mission of IFF focuses on sustainability and innovation, aiming to deliver exceptional value to customers while maintaining a commitment to environmental stewardship. IFF is dedicated to creating a positive impact through its products and operations.
Financial Performance Overview
As of September 30, 2024, IFF reported net sales of $8.713 billion, a slight decrease of 1% compared to $8.776 billion in the prior year. The company’s gross profit for the same period increased to $3.144 billion, representing an 11% increase year-over-year.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $2.925 billion | $2.820 billion | 4% |
| Gross Profit | $1.052 billion | $924 million | 14% |
| Operating Profit | $639 million | $426 million | 50% |
| Net Income | $293 million | $46 million | NMF |
| Research and Development Expenses | $501 million | $479 million | 5% |
| Selling and Administrative Expenses | $1.478 billion | $1.343 billion | 10% |
Segment Performance
In the first nine months of 2024, the performance by segment was as follows:
| Segment | Net Sales (in billions) | Change (%) |
|---|---|---|
| Nourish | $4.460 | -4% |
| Health & Biosciences | $1.659 | 7% |
| Scent | $1.861 | 3% |
| Pharma Solutions | $733 million | -1% |
Research and Development Commitment
IFF increased its R&D spending to $501 million in the first nine months of 2024, representing 5.8% of total sales. This commitment reflects the company’s focus on innovation and the development of sustainable products.
Sustainability Initiatives
The company emphasizes its dedication to sustainability through various initiatives aimed at reducing environmental impact and promoting responsible sourcing practices.
Recent Developments
In 2024, IFF completed several significant divestitures, including the sale of its Cosmetic Ingredients business for approximately $841 million, which was a part of its broader strategy to optimize its business portfolio.
Dividend Information
IFF declared a quarterly dividend of $0.40 for the third quarter of 2024, compared to $0.81 in the same period of 2023. For the nine months ended September 30, 2024, total dividends declared were $1.20 per share.
Conclusion
The mission statement of International Flavors & Fragrances Inc. underscores its commitment to innovation and sustainability while achieving robust financial performance across its segments.
How International Flavors & Fragrances Inc. (IFF) Works
Company Overview
International Flavors & Fragrances Inc. (IFF) is a global leader in the creation of flavors and fragrances used in a wide array of consumer products. The company operates through four primary segments: Nourish, Health & Biosciences, Scent, and Pharma Solutions. As of September 30, 2024, IFF reported a total net income of $293 million, significantly up from $46 million in the same period of the previous year.
Financial Performance
For the third quarter of 2024, IFF reported net sales of $2.925 billion, reflecting a 4% increase compared to $2.820 billion in the third quarter of 2023. On a currency-neutral basis, sales increased by 7%.
| Financial Metrics | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Net Sales | $2.925 billion | $2.820 billion | 4% |
| Gross Profit | $1.052 billion | $924 million | 14% |
| Operating Profit | $249 million | $150 million | 66% |
| Net Income | $60 million | $27 million | 122% |
Segment Performance
IFF's business segments showed varied performance in the third quarter of 2024:
| Segment | Net Sales (Q3 2024) | Net Sales (Q3 2023) | Change (%) |
|---|---|---|---|
| Nourish | $1.486 billion | $1.449 billion | 3% |
| Health & Biosciences | $570 million | $518 million | 10% |
| Scent | $613 million | $615 million | 0% |
| Pharma Solutions | $256 million | $238 million | 8% |
Cost Structure
In the first nine months of 2024, the cost of goods sold (COGS) was $5.569 billion, down from $5.955 billion in the same period of 2023, representing a decrease of 6%. The gross margin improved to 36.1% from 32.1% year-on-year.
Research and Development (R&D)
R&D expenses increased to $501 million in the first nine months of 2024, up 5% from $479 million in 2023. This reflects IFF's commitment to innovation and product development.
Cash Flow and Liquidity
For the nine months ended September 30, 2024, cash flows provided by operating activities were $702 million, compared to $795 million in the previous year. The decrease was primarily due to increased working capital.
| Cash Flow Metrics | 9M 2024 | 9M 2023 |
|---|---|---|
| Cash Flows from Operating Activities | $702 million | $795 million |
| Cash Flows from Investing Activities | $586 million | $638 million |
| Cash Flows from Financing Activities | ($1.444 billion) | ($1.293 billion) |
Debt and Capital Structure
As of September 30, 2024, total debt stood at $9.127 billion, with cash and cash equivalents of $569 million, resulting in net debt of $8.558 billion.
Dividends
During the third quarter of 2024, IFF declared a cash dividend of $0.40 per share, down from $0.81 per share in the same quarter of 2023.
Outlook
For the full year 2024, IFF projects capital spending to be approximately 4.8% of sales, up from 4.4% in 2023. The company continues to focus on optimizing its business portfolio and enhancing operational efficiencies.
How International Flavors & Fragrances Inc. (IFF) Makes Money
Revenue Breakdown by Segment
International Flavors & Fragrances Inc. (IFF) generates revenue through four primary segments: Nourish, Health & Biosciences, Scent, and Pharma Solutions. Below is the sales performance for the first nine months of 2024 compared to the same period in 2023.
| Segment | 2024 Sales (in millions) | 2023 Sales (in millions) | Change (%) |
|---|---|---|---|
| Nourish | $4,460 | $4,666 | -4% |
| Health & Biosciences | $1,659 | $1,553 | +7% |
| Scent | $1,861 | $1,815 | +3% |
| Pharma Solutions | $733 | $742 | -1% |
| Total | $8,713 | $8,776 | -1% |
Gross Profit and Operating Income
In the first nine months of 2024, IFF reported a gross profit of $3.144 billion, an increase of 11% from $2.821 billion in the previous year. The gross margin improved to 36.1% from 32.1% in 2023.
Operating income also saw a significant rise, reaching $639 million in 2024, up from $426 million in 2023, marking a 50% increase.
Cost of Goods Sold (COGS)
The cost of goods sold for the first nine months of 2024 was $5.569 billion, down 6% from $5.955 billion in 2023. This reduction in COGS as a percentage of sales reflects improved efficiencies and lower raw material costs.
Research and Development (R&D) Expenses
R&D expenses increased to $501 million in the first nine months of 2024, representing 5.8% of sales, compared to $479 million, or 5.5% of sales, in 2023. This investment is critical for maintaining innovation across IFF's product lines.
Selling and Administrative Expenses
S&A expenses rose to $1.478 billion in the first nine months of 2024, up from $1.343 billion in 2023, primarily driven by increased incentive compensation and legal fees related to ongoing investigations in the fragrance business.
Net Income and Earnings Per Share (EPS)
IFF reported a net income of $293 million for the first nine months of 2024, a substantial increase from $46 million in the same period of 2023. The diluted EPS rose to $1.13 from $0.16 year-over-year.
Cash Flow and Liquidity
Cash flows provided by operating activities totaled $702 million for the nine months ended September 30, 2024, compared to $795 million in 2023. As of September 30, 2024, IFF had cash and cash equivalents of $569 million.
Debt Management
As of September 30, 2024, IFF's total debt stood at $9.099 billion, down from $10.071 billion at the end of 2023. The effective interest rates on various notes range from 1.22% to 5.12% across different maturities.
Regional Sales Performance
The sales performance by region for the first nine months of 2024 is outlined below:
| Region | 2024 Sales (in millions) | 2023 Sales (in millions) |
|---|---|---|
| Europe, Africa, and Middle East | $2,913 | $2,958 |
| Greater Asia | $2,057 | $2,031 |
| North America | $2,628 | $2,668 |
| Latin America | $1,115 | $1,119 |
Segment Adjusted Operating EBITDA
For the first nine months of 2024, the Adjusted Operating EBITDA by segment is as follows:
| Segment | 2024 Adjusted Operating EBITDA (in millions) | 2023 Adjusted Operating EBITDA (in millions) |
|---|---|---|
| Nourish | $654 | $567 |
| Health & Biosciences | $497 | $426 |
| Scent | $421 | $353 |
| Pharma Solutions | $162 | $173 |
Taxation
The effective tax rate for IFF in the first nine months of 2024 was 25.4%, a decrease from 62.6% in the previous year, primarily due to an increase in pre-tax income and changes in the mix of earnings.
Conclusion of Financial Performance
In summary, IFF's financial performance in 2024 reflects a mix of strategic adjustments, strong product demand, and effective cost management, positioning the company for continued growth in the flavors and fragrances market.
International Flavors & Fragrances Inc. (IFF) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Updated on 16 Nov 2024
Resources:
- International Flavors & Fragrances Inc. (IFF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of International Flavors & Fragrances Inc. (IFF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View International Flavors & Fragrances Inc. (IFF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.