International Flavors & Fragrances Reports Mixed Q3 and 9M 2024 Financial Results

International Flavors & Fragrances Inc. (IFF) reported a mixed financial performance for the third quarter and the first nine months of 2024, with notable increases in net income and gross profit, but a slight decline in overall net sales for the nine-month period.

For the three months ended September 30, 2024, IFF achieved net sales of $2,925 million, a 4% increase from $2,820 million in the same period of 2023. Gross profit for the quarter rose to $1,052 million, up 14% from $924 million, driven by volume increases and favorable pricing, despite some negative impacts from foreign exchange rates and divestitures. Operating profit also saw a significant increase, reaching $249 million, compared to $150 million in Q3 2023, marking a 66% rise. Net income for the quarter was $60 million, a substantial increase from $27 million in the prior year, while net income attributable to IFF shareholders rose to $59 million from $25 million.

In contrast, net sales for the nine months ended September 30, 2024, totaled $8,713 million, a slight decrease from $8,776 million in the same period of 2023. The decline was attributed to divestitures impacting approximately $314 million, although volume increases across various business lines partially offset this. Gross profit for the nine-month period increased to $3,144 million from $2,821 million, and net income surged to $293 million from $46 million in the previous year.

The company’s strategic developments included the completion of several divestitures, notably the Cosmetic Ingredients business in April 2024, which generated cash proceeds of approximately $841 million. Additionally, the divestiture of the Flavors and Essences UK business in September 2024 resulted in net cash proceeds of about $28 million. IFF also announced plans to sell its Pharma Solutions business, expected to close in Q2 2025, and entered into an agreement to sell its nitrocellulose business, with expected closure in Q2 2025.

On the operational front, IFF reported a decrease in total assets to $29,928 million as of September 30, 2024, down from $30,978 million at the end of 2023. However, total current assets increased significantly to $8,423 million from $6,293 million. The company’s total liabilities and shareholders’ equity remained consistent at $29,928 million.

In terms of cash flow, IFF generated $702 million from operating activities in the first nine months of 2024, down from $795 million in the same period of 2023. The company also reported cash and cash equivalents of $567 million as of September 30, 2024, a decrease from $703 million at the end of 2023.

Overall, IFF's financial results reflect a strong recovery in profitability metrics, driven by strategic divestitures and operational efficiencies, despite challenges in overall sales figures for the nine-month period.