IFF Raises 2026 Guidance Floor After Q3 Growth

International Flavors & Fragrances Inc. raised the lower end of its full-year 2026 revenue and adjusted operating EBITDA guidance after third-quarter sales and earnings increased across its continuing operations, although the company expects higher costs and reinvestment—particularly in Health & Biosciences—to weigh on fourth-quarter profitability.

IFF now expects 2026 revenue of $7.5 billion to $7.6 billion, compared with its previous range of $7.4 billion to $7.6 billion. The company also lifted the bottom of its adjusted operating EBITDA range to $1.55 billion from $1.53 billion, leaving the upper end unchanged at $1.6 billion.

On a comparable currency-neutral basis, IFF forecasts full-year sales growth of 3% to 4%, narrowing the prior 2% to 4% range, and adjusted operating EBITDA growth of 5% to 8%, versus 4% to 8% previously. Foreign exchange is expected to contribute about one percentage point to sales growth and two points to adjusted operating EBITDA growth.

Volume growth supports third-quarter results

Third-quarter revenue rose 4% to $1.94 billion. Comparable currency-neutral sales, which exclude divestiture effects and currency translation, increased 5%, with growth across Taste, Scent and Health & Biosciences. IFF attributed the increase primarily to volume, including new customer wins and higher volumes from existing business.

Adjusted operating EBITDA increased 5% to $403 million, or 6% on a comparable currency-neutral basis. Adjusted operating EBITDA margin expanded 30 basis points on a reported basis to 20.8%, while comparable currency-neutral margin increased 20 basis points.

The GAAP results were affected by portfolio-related and other charges. IFF reported a third-quarter net loss from continuing operations attributable to the company of $127 million, or $0.50 per diluted share, compared with net income of $99 million, or $0.39 per share, a year earlier. The 2026 quarter included a $188 million after-tax loss on assets classified as held for sale, as well as goodwill impairment, regulatory, divestiture and strategic initiative costs.

Adjusted net income increased to $152 million, or $0.58 per diluted share, from $131 million, or $0.51 per share, in the prior-year quarter. Adjusted EPS excluding acquisition-related intangible amortization was $0.83, up from $0.76.

Taste and Scent lead segment growth

Taste generated $687 million of third-quarter sales, with comparable currency-neutral growth of 6%. Growth occurred in every region and was led by double-digit performance in Greater Asia. Adjusted operating EBITDA increased 7% on the same basis to $128 million, supported by higher volumes.

Scent sales were $689 million and also grew 6% on a comparable currency-neutral basis. Consumer Fragrance delivered high-single-digit growth, while Fine Fragrance and Fragrance Ingredients each recorded mid-single-digit increases. Adjusted operating EBITDA rose 10% to $139 million, primarily reflecting volume growth.

Health & Biosciences posted sales of $566 million, up 1% on a comparable currency-neutral basis. Mid-single-digit growth in Food Biosciences and Grain Processing more than offset a decline in Health. Adjusted operating EBITDA increased 2% to $136 million, with the improvement split evenly between volume and favorable net pricing relative to input costs.

For the first nine months of 2026, comparable currency-neutral sales rose 4% and adjusted operating EBITDA increased 7%. The adjusted operating EBITDA margin expanded 50 basis points. On a GAAP basis, nine-month net income attributable to IFF from continuing operations was $60 million, or $0.23 per diluted share, while adjusted net income was $474 million, or $1.84 per share.

Cash flow improves as portfolio reshaping continues

Cash flow from operations totaled $820 million for the first nine months, while capital expenditures were $449 million, or about 5.4% of sales. Free cash flow reached $371 million, an increase of $245 million from the prior year, helped by improved net working capital.

IFF returned $306 million through dividends and $584 million through share repurchases during the nine-month period. The company also completed a $500 million repurchase program under its previously announced $2.5 billion authorization.

At September 30, cash and cash equivalents stood at $519 million and gross debt was $6.31 billion. Net debt totaled $5.79 billion, and the ratio of net debt to trailing 12-month credit-adjusted EBITDA was 2.75 times.

The company is continuing to simplify its portfolio around Taste, Scent and Health & Biosciences. It announced an agreement to sell its Food Ingredients business for about $4.3 billion, completed the divestiture of Soy Crush, Concentrates & Lecithin, and agreed to sell several other non-strategic product groups. IFF expects to use more than $1 billion of proceeds from the Food Ingredients transaction to reduce debt.

Management said it expects solid fourth-quarter volumes but softer profitability because of higher costs and continued reinvestment, particularly in Health & Biosciences. The company is working with customers on pricing while pursuing productivity measures and investing in its commercial and innovation pipelines.

The outlook remains subject to macroeconomic uncertainty, input-cost volatility, tariffs and trade actions, supply-chain disruptions, foreign-exchange movements and execution risks associated with the company’s divestitures and broader portfolio transformation. IFF also identified ongoing fragrance-business investigations, working-capital management and customer demand trends among the factors that could affect results.