INTERNATIONAL FLAVORS & FRAGRANCES INC Q3 FY2024 earnings call

• Achievements in 2024: Currency neutral sales grew 7% primarily driven by double-digit growth in Scent and high-single-digit growth in Health & Biosciences. Comparable adjusted operating EBITDA increased 19% year-to-date. • Strategy refresh: Opened creative centers in Shanghai, Mexico City, and India. Employee engagement improved significantly. Implemented new business-led operating model, focusing on key end markets and high growth areas. • Portfolio optimization: On track to complete divestiture of Pharma Solutions business in the first half of 2025.

Nourish: Comparable currency neutral sales increased 7% and delivered an adjusted operating EBITDA increase of 18%. Health & Biosciences: Comparable currency neutral sales increased 12% and comparable adjusted operating EBITDA was $173 million, a 15% increase from the year ago period. Scent: Net sales totaled $613 million, up 10% on a comparable currency neutral basis, and adjusted operating EBITDA was $127 million, up 7% on a comparable basis. Pharma Solutions: Sales of $256 million, an 8% increase on a comparable currency neutral basis, and adjusted operating EBITDA surged over 32% to $62 million on a comparable basis.

• Net sales revised to $11.3 billion to $11.4 billion, up from previous range of $11.1 billion to $11.3 billion. • Adjusted operating EBITDA expected near the high-end of $2.1 billion to $2.17 billion. • Volumes expected 5%-6% growth vs previous 3%-5% increase. • FX impact on sales growth now expected ~3% adverse, down from prior range of 3%-4%. • Fourth quarter outlook unchanged despite Q3 performance due to macro trends.

• Uncertainty in end-market conditions for food, home, and personal care. • Potential inventory adjustments by customers at year-end affecting order phasing. • Foreign exchange rate fluctuations impacting financial results.

Q: Update to adjusted free cash flow guidance for the year?

A: Glenn Richter said full-year free cash flow expected to be largely unchanged vs previous guide due to earnings trajectory higher but offset by working capital related to higher sales.

Q: Update on Functional Ingredients turnaround, order activity?

A: Glenn Richter said Functional Ingredients turnaround progressing well with mid-single-digit volumes, gaining back half of lost volume, expanding margins, and starting global supply chain footprint restructure.

Q: Progress on R&D organization and innovation pipeline?

A: Erik Fyrwald said R&D embedded in BUs, energizing R&D people, with Scent team strengthening pipeline, benefits to be seen in 2026 and beyond but already benefiting 2025.

Q: Disconnect between strong organic growth and slower end-market?

A: Glenn Richter said bounce back from destocking explains some growth, Fine Fragrance growth due to multiple factors like new brands, social media, digital channels, and expected to continue with new opportunities.

Q: Price cost dynamics, tariff scenarios?

A: Glenn Richter said price cost dynamic flattish, deflation in some areas, and tariffs uncertain with potential impact depending on situation, but intuitively advantageous to business in some cases.

Q: Fourth quarter EBITDA down year-over-year and 2025 customer outlook?

A: Glenn Richter said year-over-year EBITDA down due to incentive comp impact, and Erik Fyrwald said not seeing strong green shoots yet but taking actions to strengthen position with customer focus and innovation.

Q: Sales growth from restocking, shift in customers?

A: Erik Fyrwald said both multi-nationals and local/regional companies important, with focus on serving all segments and investing in creative centers in growth markets.

Q: Reinvestment rates for 2025?

A: Glenn Richter said $20 million impact from incentive comp, and Erik Fyrwald said planning to continue growing topline and investing same percentage of sales in innovation, with virtuous cycle of innovation driving sales and productivity enabling more investment.

Q: Volumes in October, Functional Ingredients EBITDA margin?

A: Glenn Richter said mid-single-digit volume growth in October, Functional Ingredients EBITDA margin expected to finish 2024 north of 12% and aim for mid-teens over next two years.

Q: Growth across regions, performance in China and India?

A: Glenn Richter said all businesses performed well, Pharma lagged but back in positive territory, China choppy, India extremely strong with aggressive investments in creative centers.

Q: Growth across regions and segments, performance in China and India?

A: Glenn Richter provided general perspectives, Erik Fyrwald added aggressive investments in creative centers in growth markets like India.