IFF Reports Q2 2026 Financial Results and Outlines Food Ingredients Divestiture Proceeds Strategy
International Flavors & Fragrances Inc. (NYSE: IFF) reported solid financial results for the second quarter ended June 30, 2026, highlighting strong operational execution, continued volume growth, and significant progress in its strategic transformation. The company also outlined its planned use of proceeds from the pending sale of its Food Ingredients business, reaffirming its commitment to strengthening its balance sheet, enhancing shareholder returns, and focusing on its higher-growth businesses.
The quarter marked a major milestone for IFF as it continued reshaping its portfolio around its core Taste, Scent, and Health & Biosciences businesses. Following the announced divestiture of its Food Ingredients business and the earlier sale of its Soy Crush, Concentrates, and Lecithin (SCL) operations, both businesses are now classified as discontinued operations. As a result, IFF’s reported financial performance reflects only its continuing operations, providing investors with a clearer picture of the company’s future business structure.
Chief Executive Officer Erik Fyrwald said IFF delivered a strong first half of 2026 through disciplined execution across its operations. He attributed the company’s performance to healthy volume growth, improved margins, and strong free cash flow generation, while emphasizing that ongoing investments in innovation and commercial capabilities continue to support long-term growth.
According to Fyrwald, the sale of the Food Ingredients business represents a defining moment in IFF’s strategic transformation. The transaction will simplify the company’s portfolio, allowing management to focus on businesses with stronger growth potential, higher margins, and better cash generation. He also noted that the company has already begun implementing initiatives to eliminate stranded corporate costs associated with the divestiture.
For the second quarter, IFF reported net sales from continuing operations of $1.95 billion, representing a 2% increase compared with the same period last year. On a comparable currency-neutral basis, sales increased 6%, supported by broad-based demand across all three operating segments. Including discontinued operations, total company sales reached $2.78 billion.
Income from continuing operations before taxes totaled $64 million, while adjusted operating EBITDA reached $408 million. Comparable currency-neutral adjusted operating EBITDA increased 6% year over year, reflecting stronger volumes, productivity improvements, and disciplined cost management. When including discontinued operations, adjusted operating EBITDA totaled $548 million.
Reported earnings per diluted share came in at $0.13, while adjusted earnings excluding amortization reached $0.82 per diluted share.
IFF also delivered a significant improvement in cash generation during the first half of the year. Cash flow from operations, including continuing and discontinued businesses, increased to $679 million, up $311 million from the prior year. Free cash flow reached $378 million, improving by $284 million year over year. The company’s balance sheet also remained healthy, with net debt to credit-adjusted EBITDA standing at 2.5 times, consistent with management’s long-term leverage objectives.
Taste Business Delivers Broad-Based Growth
IFF’s Taste segment continued to benefit from healthy customer demand across multiple regions.
Quarterly sales reached $688 million, while comparable currency-neutral sales increased 4% compared with the prior-year quarter. Growth was broad-based across all geographic markets as customers continued launching new products and expanding existing offerings.
The segment generated $124 million in adjusted operating EBITDA, producing an adjusted EBITDA margin of 18.0%. Profitability improved primarily due to higher sales volumes and favorable pricing actions, demonstrating the segment’s ability to balance growth with margin expansion.
Health & Biosciences Continues Strong Momentum
The Health & Biosciences division remained another major contributor to IFF’s quarterly performance.
Sales totaled $601 million, with comparable currency-neutral growth of 5%. Performance was led by strong demand in Grain Processing, Food Biosciences, and Animal Nutrition, while growth extended across all major business lines.
Adjusted operating EBITDA reached $150 million, representing a margin of 25.0%, one of the highest among IFF’s operating segments. Improved volumes remained the primary driver of earnings growth during the quarter.
Scent Business Posts Highest Sales Growth
IFF’s Scent segment delivered the strongest sales growth among the company’s continuing businesses.
Quarterly revenue reached $665 million, while comparable currency-neutral sales increased 8%. The business benefited from double-digit growth in Fragrance Ingredients and high single-digit expansion in Consumer Fragrance. Fine Fragrance also recorded modest growth despite temporary market disruption related to geopolitical tensions in the Middle East.
The segment generated $134 million in adjusted operating EBITDA with an operating margin of 20.2%. Higher production volumes and productivity improvements supported continued profitability.
Food Ingredients Divestiture Advances
A central focus of IFF’s strategic transformation remains the planned sale of its Food Ingredients business.
Earlier this year, the company signed a definitive agreement to sell the Food Ingredients disposal group to CVC Capital Partners for approximately $3.8 billion in net cash proceeds, subject to customary closing adjustments. The transaction is expected to close by the end of the second quarter of 2027 following regulatory approvals and other customary conditions.
Following completion of the transaction, IFF will retain an approximately 10% minority equity interest in the business, enabling continued collaboration with the new owners.
Management acknowledged that approximately $100 million of corporate and functional expenses currently allocated to Food Ingredients will remain after the sale. However, the company has already initiated a remediation plan and expects to eliminate roughly two-thirds of those stranded costs within the first year after closing, with substantially all remaining costs expected to be removed within two years.
The divestiture follows the successful sale of the Soy Crush, Concentrates, and Lecithin businesses, completed on March 2, 2026, further streamlining IFF’s portfolio.
Capital Allocation Prioritizes Debt Reduction and Shareholder Returns
IFF also unveiled a comprehensive capital allocation strategy tied to proceeds from the Food Ingredients sale.
The company intends to use more than $1 billion of net proceeds to reduce outstanding debt and maintain a leverage ratio between 2.0x and 2.5x net debt to EBITDA, preserving financial flexibility for future growth opportunities.
In addition, the Board of Directors approved an expanded $2.5 billion share repurchase authorization, which includes approximately $400 million remaining under the previous authorization.
The first phase of the program will include a $500 million accelerated share repurchase, expected during the second half of 2026. The remaining $2.0 billion is planned following completion of the Food Ingredients divestiture, with the entire repurchase program expected to conclude by the end of 2027.
Management said the authorization reflects confidence in IFF’s long-term value creation potential and current market valuation.
Updated Outlook Reflects Continuing Operations
With the Food Ingredients and SCL businesses now classified as discontinued operations, IFF introduced updated financial guidance focused solely on continuing operations.
For full-year 2026, the company expects sales between $7.4 billion and $7.6 billion, excluding approximately $3.2 billion associated with discontinued operations.
Adjusted operating EBITDA is projected to range from $1.53 billion to $1.60 billion, excluding approximately $520 million related to discontinued operations.
IFF also expects comparable currency-neutral sales growth of 2% to 4% during the year, while comparable currency-neutral adjusted operating EBITDA is forecast to increase between 4% and 8%.
Based on current foreign exchange rates, management anticipates currency movements will contribute approximately 1% to annual sales growth and roughly 2% to adjusted operating EBITDA growth.
Looking ahead, IFF believes its streamlined portfolio, stronger balance sheet, and disciplined capital allocation strategy position the company for sustainable long-term growth. By concentrating resources on its Taste, Scent, and Health & Biosciences businesses while enhancing cash generation and returning capital to shareholders, IFF aims to strengthen its competitive position and create greater long-term value for investors.
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