Second Quarter 2026
Filed Aug 4, 2026IFF Reports Second Quarter 2026 Results; Announces Use of Proceeds Plan for Food Ingredients Divestiture
Continuing-operations sales increased 2% on a reported basis and 6% on a comparable currency neutral basis, while adjusted operating EBITDA reached $408 million and free cash flow increased $284 million year-over-year for the first six months. All three continuing segments posted comparable currency neutral sales and adjusted operating EBITDA growth, alongside a $2.5 billion enhanced share repurchase authorization.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net sales, second quarter, continuing operationsGAAP | $1.95 billion | – | 2% |
| Comparable currency neutral sales, second quarter, continuing operationsnon-GAAP | : increased 6% | – | 6% |
| Net sales, second quarter, inclusive of discontinued operationsGAAP | $2.78 billion | – | – |
| Income from continuing operations before taxes, second quarterGAAP | $64 million | – | – |
| Adjusted operating EBITDA, second quarter, continuing operationsnon-GAAP | $408 million | – | – |
| Comparable currency neutral adjusted operating EBITDA, second quarter, continuing operationsnon-GAAP | : improved 6% | – | 6% |
| Adjusted operating EBITDA margin, second quarter, continuing operationsnon-GAAP | 20.9% | – | – |
| Adjusted operating EBITDA, second quarter, discontinued operationsnon-GAAP | $140 million | – | – |
| Adjusted operating EBITDA, second quarter, inclusive of discontinued operationsnon-GAAP | $548 million | – | – |
| Reported EPS, second quarterGAAP | $0.13 per diluted share | – | – |
| Adjusted EPS excluding amortization, second quarternon-GAAP | $0.82 per diluted share | – | – |
| Sales, first six months, continuing operationsGAAP | $3.9 B | – | – |
| Income before taxes, first six months, continuing operationsGAAP | $260 M | – | – |
| EPS, first six months, continuing operationsGAAP | $0.73 | – | – |
| Adjusted operating EBITDA, first six months, continuing operationsnon-GAAP | $841 M | – | – |
| Adjusted operating EBITDA margin, first six months, continuing operationsnon-GAAP | 21.8% | – | – |
| EPS excluding amortization, first six months, continuing operationsnon-GAAP | $1.74 | – | – |
| Cash flows from operations, first six months, continuing and discontinued operationsother | $679 million | – | increasing $311 million year-over-year |
| Free cash flow, first six months, continuing and discontinued operationsnon-GAAP | $378 million | – | increasing $284 million year-over-year |
| Total debt to trailing twelve months net income, end of second quarterother | 22.6x | – | – |
| Net debt to credit adjusted EBITDA, end of second quarternon-GAAP | 2.5x | – | – |
| Adjusted operating EBITDA margin, second quarter, including discontinued operationsnon-GAAP | 19.7% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| TasteBroad-based growth in all regions. Comparable currency neutral adjusted operating EBITDA increased primarily due to volume growth and favorable net pricing. | $688 million | – | 5% reported sales growth; 4% comparable currency neutral sales growth; 6% adjusted operating EBITDA growth; 6% comparable currency neutral adjusted operating EBITDA growth |
| Health & BiosciencesGrowth in all businesses, led by Grain Processing, Food Biosciences & Animal Nutrition. Comparable currency neutral adjusted operating EBITDA increased primarily due to volume growth. | $601 million | – | 8% reported sales growth; 5% comparable currency neutral sales growth; 8% adjusted operating EBITDA growth; 6% comparable currency neutral adjusted operating EBITDA growth |
| ScentDouble-digit growth in Fragrance Ingredients and a high single-digit performance in Consumer Fragrance. Fine Fragrance increased low-single digits compared to the prior year period as it was impacted by the Middle East conflict. | $665 million | – | 10% reported sales growth; 8% comparable currency neutral sales growth; 11% adjusted operating EBITDA growth; 5% comparable currency neutral adjusted operating EBITDA growth |
Full year 2026, continuing operations outlook
- Revenue$7.4 billion to $7.6 billion
- NoteAdjusted operating EBITDA: $1.53 billion to $1.60 billion
- Noteexcluding approximately $3.2 billion related to discontinued operations
Capital returns
- Enhanced share repurchase authorization with a total value of $2.5 billion, including approximately $400 million remaining on its prior authorization.
- Accelerated share repurchase of $500 million expected to be executed in the second half of 2026.
- Remaining $2.0 billion share repurchase expected to be executed following the closing of the Food Ingredients disposal group divestiture, with expected completion by the end of 2027.
- The Company plans to fund repurchases from cash provided by operating activities, short-term debt and net cash proceeds provided by the divestiture of the Food Ingredients disposal group.
What drove it
- Reported net sales increased 2% versus the prior-year period, while comparable currency neutral sales increased 6%, led by broad-based growth including high-single digit performance in Scent and mid-single digit growth in Taste and Health & Biosciences.
- Comparable currency neutral adjusted operating EBITDA improved 6%, driven primarily by volume growth and productivity gains.
- The Food Ingredients disposal group and the SCL disposal group are reported as discontinued operations, leaving Taste, Scent and Health & Biosciences as continuing operations.
- IFF expects to eliminate approximately two thirds of stranded costs within the first year following transaction close and substantially all within two years following transaction close.
Concerns
- Fine Fragrance was impacted by the Middle East conflict.
- Stranded costs related to the Food Ingredients transaction represent approximately $100 million of corporate and functional expenses previously allocated to the Food Ingredients business that are expected to remain with IFF following the close.
- The Food Ingredients disposal group sale is subject to customary closing conditions and receipt of regulatory approvals, and is expected to close by the end of the second quarter of 2027.
- Net debt to credit adjusted EBITDA was 2.5x at the end of the second quarter and includes the effects of both continuing and discontinued operations.
What to watch
- Execution of the $500 million accelerated share repurchase in the second half of 2026.
- Progress toward the expected close of the Food Ingredients disposal group sale by the end of the second quarter of 2027.
- Execution of the remediation plan for approximately $100 million of stranded costs.
- Delivery against full-year continuing-operations sales guidance of $7.4 billion to $7.6 billion and adjusted operating EBITDA guidance of $1.53 billion to $1.60 billion.
Balance sheet and cash flow
- Cash flows from operations for the first six months of the year for continuing and discontinued operations was $679 million, increasing $311 million year-over-year.
- Free cash flow, defined as cash flows from operations less capital expenditures, totaled $378 million, increasing $284 million year-over-year.
- Total debt to trailing twelve months net income at the end of the second quarter was 22.6x.
- Net debt to credit adjusted EBITDA at the end of the second quarter was 2.5x, and includes the effects of both continuing and discontinued operations.
- Food Ingredients disposal group sale has net cash proceeds of approximately $3.8 billion, subject to customary transaction adjustments.
Analysis
IFF reported a strong second quarter on a continuing-operations basis. Reported net sales were $1.95 billion, up 2% versus the prior-year period, while comparable currency neutral sales increased 6%. Management attributed growth to broad-based demand, including high-single digit performance in Scent and mid-single digit growth in Taste and Health & Biosciences. Each continuing segment delivered comparable currency neutral sales growth, led by Scent at 8%.
Profitability advanced with adjusted operating EBITDA of $408 million and a 20.9% adjusted operating EBITDA margin. Comparable currency neutral adjusted operating EBITDA improved 6%, driven primarily by volume growth and productivity gains. Segment profitability was supported by volume growth and favorable net pricing in Taste, volume growth in Health & Biosciences, and volume growth and productivity in Scent. Continuing-operations adjusted operating EBITDA margin was higher than the 19.7% margin including discontinued operations.
Cash generation was a major feature of the first half. Cash flows from operations for continuing and discontinued operations were $679 million, increasing $311 million year-over-year, and free cash flow totaled $378 million, increasing $284 million year-over-year. At quarter-end, total debt to trailing twelve months net income was 22.6x, while net debt to credit adjusted EBITDA was 2.5x. The latter ratio includes the effects of both continuing and discontinued operations.
Portfolio transformation is central to the reported outlook and capital-allocation framework. The planned Food Ingredients disposal group sale carries net cash proceeds of approximately $3.8 billion, subject to customary transaction adjustments, and is expected to close by the end of the second quarter of 2027. IFF plans to apply net proceeds to reduce outstanding debt by over $1 billion, while its Board authorized a $2.5 billion repurchase program that includes a $500 million accelerated share repurchase expected in the second half of 2026. The transaction also leaves approximately $100 million of stranded costs, with remediation actions intended to eliminate approximately two thirds within the first year after close and substantially all within two years.
IFF introduced full-year 2026 continuing-operations guidance for sales of $7.4 billion to $7.6 billion and adjusted operating EBITDA of $1.53 billion to $1.60 billion. The new basis excludes approximately $3.2 billion related to discontinued operations. The key operational items are delivery of broad-based volume growth and productivity, the impact of the Middle East conflict on Fine Fragrance, execution against stranded-cost remediation, and completion of the Food Ingredients divestiture and associated capital-return plan.
Management, verbatim
IFF delivered a strong first half of 2026 on a continuing operations basis. Performance was driven by volume growth, disciplined margin execution and robust free cash flow generation. These results reflect the strength of our commercial and innovation pipelines and the actions underway to improve efficiency and cash flow across the company.
Erik Fyrwald, CEO of IFF
This quarter marked a defining step in our portfolio transformation with the announced agreement to divest Food Ingredients. The transaction sharpens IFF's focus on Taste, Scent, and Health & Biosciences, creating a simpler, higher-growth, higher-margin company with enhanced cash generation. As part of this transformation, we are taking decisive action to eliminate related stranded costs and will execute with urgency.
Erik Fyrwald, CEO of IFF
With Food Ingredients now reported as discontinued operations, we are introducing full-year 2026 guidance on a continuing operations basis. The underlying performance in the three business units is consistent with previous guidance given. The new presentation provides greater visibility into the growth and margin profile of our go-forward portfolio, reinforcing the outlook for IFF’s continuing operations and our ability to create long-term shareholder value.
Erik Fyrwald, CEO of IFF
Not in the filing
stated, not guessed- Full financial guidance text following the reported adjusted operating EBITDA range was truncated in the provided filing text.
- GAAP net income for the second quarter and first six months was not provided in the supplied text.
- Gross margin, operating income, operating margin, tax rate, cash balance, total debt balance, and capital expenditures were not provided in the supplied text.
- Prior-year absolute values for most reported metrics were not provided in the supplied text.
- Prior-quarter comparisons were not provided in the supplied text.
- Segment prior-year revenue amounts and prior-quarter segment comparisons were not provided in the supplied text.
- A dividend amount or dividend declaration was not provided in the supplied text.
- Guidance on gross margin, operating expenses, tax rate, EPS, free cash flow, capital expenditures, and cash flow was not provided in the supplied text.
- Previous-release outlook was not provided, so reported results cannot be compared with prior guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.