International Flavors & Fragrances Inc.

On a continuing operations basis, second-quarter revenue was just under $2 billion, up roughly 6%, with growth across all businesses; adjusted operating EBITDA was $408 million, up 6% versus the prior year. In the quarter, Taste sales rose 4% to $688 million, Health & Biosciences sales rose 5% to $601 million, and Scent sales rose 8% to $665 million. For the first half of 2026, continuing operations sales were up 4%, EBITDA was up 8%, and free cash flow totaled $378 million, up $284 million year over year. Cash and cash equivalents ended the quarter at $569 million, and net debt to credit-adjusted EBITDA ended the first half at 2.5x. Full-year 2026 guidance was raised to sales of $7.4 billion-$7.6 billion and EBITDA of $1.53 billion-$1.6 billion, both on a continuing-operations basis, with FX expected to add about 1 point to sales growth and about 2% to EBITDA growth. Management said Q2 volumes drove growth, while pricing was minimal, and warned of modest input-cost inflation in the second half and working-capital headwinds of a couple hundred million dollars tied to the Food Ingredients separation.

Erik Fyrwald framed the quarter as evidence that IFF’s transformation is working: the company is shifting toward higher-growth, higher-margin Taste, Scent and Health & Biosciences while improving productivity and cash flow. He emphasized that management sees no major divestitures left after Food Ingredients and said the focus now is organic growth, bolt-ons, innovation and execution. His tone was confident and upbeat, but he repeatedly acknowledged macro uncertainty, especially around the Middle East and consumer demand.

Michael Deveau highlighted strong Q2 execution, with continuing operations revenue just under $2 billion and EBITDA of $408 million, both up 6%, plus first-half free cash flow of $378 million. He said cash flow benefited from strong net working capital improvement, but that the Food Ingredients separation will create second-half working-capital headwinds, including an unwind of factoring-related agreements and possible inventory and prepayment builds. On capital allocation, he pointed to more than $1 billion of debt reduction, a $2.5 billion buyback authorization, expected 2026 repurchases of about $500 million before close, and a target net debt to EBITDA range of 2.0x to 2.5x by end-2027.

Analysts focused on whether the Food Ingredients sale is the last portfolio move, and Fyrwald said there are no significant divestitures left and that the company is now focused on scaling the three remaining businesses. Questions also centered on guidance, volume durability, price/cost lag, stranded overheads, and cash flow; management said second-half growth should moderate but remain solid, volumes are still the main driver, and pricing will lag costs into 2027. On Scent, management said Q2 strength in Fragrance Ingredients was helped by easy comps and market conditions, but it expects normalization later; on Health & Biosciences, it said probiotics remain challenged in the U.S. but it is investing more in R&D and commercial capability.