01—Abstract
Summary
Summary of the 10-K filed February 28, 2025. Cited figures are marked; the original filing is the authoritative source.
International Flavors & Fragrances Inc. (IFF) reported net sales of $11.484 billiona for 2024, essentially flat versus $11.479 billion in 2023.
Currency neutral sales rose 3%, and comparable currency neutral sales rose 6%, driven by volume increases. Reported gross profit increased 12% to $4.124 billionb (35.9% of sales), and operating profit was $766 million, compared with an operating loss of $2.110 billion in 2023, which included a $2.623 billion goodwill impairment. Net income attributable to IFF shareholders was $243 million, or $0.95 per share, versus a loss of $2.567 billion in 2023.
Adjusted operating EBITDA rose to $2.205 billionc from $1.980 billion. The company is in the middle of a portfolio optimization strategy. It completed the divestitures of its Cosmetic Ingredients business (April 2, 2024) and its Flavors and Essences UK business (September 1, 2024).
Agreements to sell the Pharma Solutions disposal group and the nitrocellulose business are expected to close in the second quarter of 2025. IFF also expects a material goodwill and long-lived asset impairment charge of $1.0 billion to $1.5 billiond in the first quarter of 2025, tied to the reorganization of Nourish into Taste and Food Ingredients segments effective January 1, 2025. Balance sheet and cash flow pressures remain significant.
Total debt was $8.977 billion at December 31, 2024, and cash flow from operating activities fell to $1.070 billion from $1.439 billion. The company remains in compliance with its credit agreements, which operate under a financial covenant relief period through December 31, 2025, and dividends per share were reduced to $1.60 in 2024 from $3.24 in 2023. Antitrust investigations in the United States and Europe into its fragrance businesses, along with related class action lawsuits, remain unresolved.
02—Key points
Key Highlights
- Net sales of $11.484 billion in 2024, flat versus 2023; currency neutral sales increased 3% and comparable currency neutral sales increased 6%.
- Operating profit of $766 million in 2024 versus an operating loss of $2.110 billion in 2023, which included a $2.623 billion goodwill impairment.
- Net income attributable to IFF shareholders of $243 million, or $0.95 per share, compared with a loss of $2.567 billion in 2023.
- Adjusted operating EBITDA of $2.205 billion in 2024, up from $1.980 billion in 2023; Scent adjusted operating EBITDA rose 12% on a reported basis.
- Total debt of $8.977 billion at December 31, 2024; net debt to credit adjusted EBITDA ratio of 3.84 to 1.0, operating within a covenant relief period through December 31, 2025.
- Expected first-quarter 2025 material impairment charge of $1.0 billion to $1.5 billion following the Nourish segment restructuring into Taste and Food Ingredients.
- Pending sales of the Pharma Solutions disposal group and nitrocellulose business, both expected to close in the second quarter of 2025.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2024, International Flavors & Fragrances kept $0.02.
- Revenue$11.48B100.0%
- Cost of revenue−$7.36B64.1%
- Gross profit$4.12B35.9%
- Operating costs−$3.36B29.2%
- Operating income$766.0M6.7%
- Interest, other & tax−$503.0M4.4%
- Net income$263.0M2.3%
Where FY2024 revenue went
$11.48B- Cost of revenue: $7.36B, 64% of revenue
- SG&A: $2.00B, 17% of revenue
- Net income: $263.0M, 2.3% of revenue
- R&D: $671.0M, 5.8% of revenue
- Other operating costs: $692.0M, 6.0% of revenue
- Interest, other & tax: $503.0M, 4.4% of revenue
Kept 2.3% as net incomeNet income $263.0M · 2.3%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2024filed February 28, 2025Financial Statements
FY2024 against FY2023
| Line item | FY2024FY2023 | Change |
|---|---|---|
| Revenue | $11.48B$11.48B | 0.0% |
| Cost of Revenue | $7.36B$7.80B | −5.6% |
| Gross Profit | $4.12B$3.68B | +12.0% |
| R&D Expenses | $671.00M$636.00M | +5.5% |
| SG&A Expenses | $2.00B$1.79B | +11.6% |
| Operating Income | $766.00M-$2.11B | +136.3% |
| Net Income | $263.00M-$2.59B | +110.2% |
| EPS (Basic) | $1.04$-10.14 | +110.3% |
| EPS (Diluted) | $1.04$-10.14 | +110.3% |
| Shares Outstanding (Basic) | 256.00M255.00M | +0.4% |
| Shares Outstanding (Diluted) | 256.00M255.00M | +0.4% |
05—Questions
Frequently Asked Questions
Why did IFF report a net income in 2024 after large losses in 2023 and 2022?
The 2023 and 2022 results included goodwill impairment charges of $2.623 billion and $2.250 billion, respectively. In 2024, the goodwill impairment was $64 million, related to the Pharma Solutions disposal group, and the company recorded a $346 million net gain on business disposals, mainly from the Cosmetic Ingredients sale. These were partly offset by a $347 million loss on assets classified as held for sale and a $130 million pension settlement loss within other expense.
How is IFF's debt position and dividend policy changing?
Total debt was $8.977 billion at December 31, 2024, with $1.413 billion due within 12 months. Cash dividends declared per share fell to $1.60 in 2024 from $3.24 in 2023. Under the credit amendments, dividends are capped at $0.81 per share per quarter and share repurchases are prohibited during the covenant relief period through December 31, 2025. Management states its capital allocation strategy is primarily focused on debt repayment to maintain its investment grade rating.
What portfolio changes is IFF making?
IFF completed the divestitures of its Cosmetic Ingredients business on April 2, 2024, and its Flavors and Essences UK business on September 1, 2024. It agreed to sell the Pharma Solutions disposal group, expected to close in the second quarter of 2025, and its nitrocellulose business, also expected to close in the second quarter of 2025. Proceeds from the Pharma Solutions sale must be used to repay borrowings under the 2026 Term Loan Facility.
What legal risks does IFF face?
IFF is subject to antitrust and competition investigations in the United States and Europe, as well as the Canada, United States and related class action lawsuits concerning its fragrance businesses. The filing states the company is unable to predict the scope, duration or outcome of these investigations and lawsuits. It also discloses a securities class action in Israel and a related claim concerning a bonus paid to a former Frutarom executive. The company states an adverse outcome could result in significant fines or payments.
How did cash generation trend in 2024?
Cash flows provided by operating activities were $1.070 billion in 2024, or 9.3% of sales, compared with $1.439 billion, or 12.5% of sales, in 2023. The decrease was primarily driven by an increase in working capital, largely trade receivables and inventories. Capital spending in 2025 is expected to be approximately 6% of sales.
06—Continue