International Flavors & Fragrances Q2 Earnings Call Highlights

International Flavors & Fragrances NYSE: IFF reported higher second-quarter sales and earnings across its continuing operations, supported by volume growth, productivity gains and improved working capital management, while outlining capital-allocation plans tied to the pending sale of its Food Ingredients business.

Chief Executive Officer Erik Fyrwald said the company generated volume growth across its businesses and improved free cash flow during the first half of 2026. On a continuing-operations basis, first-half sales rose 4% and EBITDA increased 8%. Free cash flow totaled $378 million, up $284 million from the prior-year period.

“IFF delivered volume growth across the board, disciplined margin execution, and robust free cash flow generation,” Fyrwald said.

For the second quarter, IFF reported continuing-operations revenue of just under $2 billion, up about 6% on a comparable currency-neutral basis. Adjusted operating EBITDA rose 6% to $408 million.

Michael DeVeau, IFF’s CFO, said growth was volume-driven, reflecting new customer wins and higher sales within existing business. He noted that U.S. tariff refunds, netted against customer pass-throughs, benefited results, while higher incentive compensation accruals tied to the company’s first-half performance weighed on year-over-year EBITDA growth. Excluding those factors, he said underlying EBITDA growth would have been stronger.

Taste: Sales increased 4% to $688 million, led by double-digit growth in Asia. EBITDA rose 6% to $124 million, supported by volume growth and favorable net pricing.

Health & Biosciences: Sales rose 5% to $601 million, with growth across businesses and notable gains in Grain Processing, Food Biosciences and Animal Nutrition. EBITDA increased 6% to $150 million, primarily due to volume leverage.

Scent: Sales grew 8% to $665 million and EBITDA increased 5% to $134 million. Fragrance Ingredients grew more than 20%, while Consumer Fragrances posted high-single-digit growth. DeVeau said Fragrance Ingredients benefited partly from an easier comparison, as the business had declined by more than 10% in the year-earlier period. He also cited the company’s use of its synthetic fragrance portfolio to capture sales amid supply-chain disruptions and higher Brent crude prices. The company expects that growth to normalize in the second half as the mix shifts toward higher-value ingredients. Fine Fragrances increased slightly in the quarter despite the Middle East conflict, compared with IFF’s prior expectation for a mid-single-digit decline. However, the company expects softer Fine Fragrances performance in the third quarter, partly ...