International Flavors & Fragrances Inc. - Unit (1Prpd Stk Pur contrct

Q2 & H1 performance (continuing ops) beats and momentum is real - Revenue: Q2 ~$2.0B, +~6% YoY (volume-driven; new wins and volume in existing business). - EBITDA: Q2 adjusted operating EBITDA $408M, +6% YoY (productivity + volume). - Segment highlights (Q2): - Taste: $688M, +4%; EBITDA $124M, +6%. - Health & Biosciences: $601M, +5%; EBITDA $150M, +6%. - Scent: $665M, +8%; EBITDA $134M, +5%. - H1 (continuing ops): Sales +4% and EBITDA +8%; Free cash flow (FCF) $378M vs +$284M YoY driven by net working capital improvements.

Guidance: updated full-year 2026 for the reshaped company (continuing operations) - Sales: $7.4B–$7.6B (+2% to +4% YoY), implying moderation vs early momentum (Q2 was stronger). - EBITDA: $1.53B–~$1.6B (+4% to +8% YoY). - FX assumption (full-year): about +1pp to sales growth and +2% to EBITDA growth. - Comparable base reference (adjusted 2025): ~$7.2B sales and ~$1.44B EBITDA for continuing operations. - Key challenge/risk acknowledged: macro volatility—especially Middle East conflict impacts market conditions and segments like Fine Fragrance.

Big “portfolio transformation” surprise/inflection: Food Ingredients sale is progressing; stranded costs are the near-term drag - Food Ingredients divestiture to CVC announced milestone: valued at ~$4.3B (~10x EV/EBITDA). - Timing: on track to close by end of Q2 2027 (progress “well”). - Post-close structure: remaining focus on Taste, Scent, Health & Biosciences (higher growth / higher margin). - Stranded costs: about $100M of corporate/function costs expected to remain with IFF, temporarily pressuring business unit margins. - Remediation plan: eliminate ~2/3 within first 12 months and the remainder in the second full year post-close (expect medium-term EBITDA margin expansion as costs roll off). - Important operational note: in Q2 they discussed a temporary margin headwind from stranded costs; investors should treat this as a bridge item, not a permanent margin reset.