IFF reported financial results for the second quarter ended June 30, 2024, at $2.89 billion, a decrease of 1% versus the prior-year period. Below are sales report highlights in F&F applicable segments.
- Income before taxes on a reported basis for the second quarter was $183 million. Adjusted operating EBITDA1 for the second quarter was $588 million. On a comparable basis, adjusted operating EBITDA improved 22% versus the prior-year period, led by volume growth and productivity gains.
- Reported earnings per share (EPS) for the second quarter was $0.66. Adjusted EPS excluding amortization1 was $1.16 per diluted share.
- Cash flows from operations at the end of the second quarter was $336 million, and free cash flow defined as cash flows from operations less capital expenditures totaled $136 million.
- Total debt to trailing twelve months net loss at the end of the second quarter was (4.0)x. Net debt to credit adjusted EBITDA at the end of the second quarter was 4.0x.
Nourish Segment
- On a reported basis, second-quarter sales were $1.48 billion. On a comparable basis, currency-neutral sales increased 4% driven by double-digit growth in Flavors. Functional Ingredients performance continued to improve sequentially and delivered high-single-digit volume growth, yet sales declined low-single digits against the year-ago period as a result of pricing actions.
- Nourish adjusted operating EBITDA was $232 million and adjusted operating EBITDA margin was 15.7% in the second quarter. On a comparable basis, adjusted operating EBITDA increased 36% led by volume growth, productivity gains and the benefit of the Locust Bean Kernel write-down in the prior year period.
Health & Biosciences Segment
- On a reported basis, second-quarter sales were $558 million. On a comparable basis, currency-neutral sales increased by 9% driven by strong performances across all businesses. Health also returned to growth driven by a strong performance in Probiotics.
- Health & Biosciences adjusted operating EBITDA was $165 million and adjusted operating EBITDA margin was 29.6% in the second quarter. On a comparable basis, adjusted operating EBITDA improved 14% led by volume growth and productivity gains.
Scent Segment
- On a reported basis, second-quarter sales were $603 million. On a comparable basis, currency-neutral sales increased 16% led by strong double-digit growth in Consumer Fragrance and Fragrance Ingredients as well as a mid-single-digit increase in Fine Fragrance.
- Scent adjusted operating EBITDA was $137 million and the adjusted operating EBITDA margin1 was 22.7% in the second quarter. On a comparable basis, adjusted operating EBITDA increased 38% led primarily by volume growth and productivity gains.
"We are pleased with our performance through the first half of the year, as it represents a marked improvement over our prior year lows," said IFF CEO Erik Fyrwald. "Our efforts to drive volume growth across all our business units, combined with enhanced productivity initiatives, have resulted in solid profit improvements compared to the same period last year. Given our performance to date and our cautiously optimistic outlook for the remainder of the year, we are raising both our sales and adjusted operating EBITDA guidance for the full year."
"We are energized by the progress we are making in the development of our customer focused and innovation led strategy. The entire IFF team is rallying behind this strategic refresh, and while we still have more work to do, we have identified significant growth opportunities. We have started to increase our investments in R&D, commercial efforts, and capacity in flavors, scent, and health and biosciences as well as increasing investments to strengthen our digital systems. At the same time, we are rapidly addressing our functional ingredients business by implementing additional productivity initiatives to improve our margin while we target attractive customer segments. We believe these actions will deliver stronger value creation for our customers, employees, and shareholders over time."
