International Flavors & Fragrances Reports Flat Sales of $11.484 Billion for Fiscal Year 2024

International Flavors & Fragrances Inc. (IFF) reported flat sales of $11.484 billion for the fiscal year 2024, a slight increase from $11.479 billion in 2023. On a currency-neutral basis, sales rose by 3%, driven by volume increases across various business lines. The company noted that exchange rate fluctuations negatively impacted net sales by 3%. The Nourish segment, which includes ingredients and flavors, saw a 3% decline in sales to $5.871 billion, while the Health & Biosciences segment experienced a 6% increase to $2.212 billion. The Scent segment also reported a 2% increase in sales to $2.440 billion, and Pharma Solutions grew by 2% to $961 million.

In terms of profitability, IFF's gross profit increased by 12% to $4.124 billion, representing 35.9% of sales, compared to 32.1% in the previous year. This growth was attributed to volume increases and productivity gains, despite the adverse effects of exchange rate variations and divestitures. The company recorded a significant reduction in impairment charges, with goodwill impairment dropping to $64 million in 2024 from $2.623 billion in 2023. Operating profit improved to $766 million, a substantial recovery from a loss of $2.110 billion in the prior year.

Strategically, IFF has undergone significant organizational changes, including the planned restructuring of its Nourish segment into two new business units: Taste and Food Ingredients, effective January 1, 2025. This restructuring aims to enhance operational efficiency and better align with market demands. Additionally, IFF has been active in divesting non-core businesses, including the sale of its Cosmetic Ingredients and Flavor Specialty Ingredients businesses, which are expected to close in 2025. These divestitures are part of a broader strategy to optimize the company's portfolio and focus on high-growth areas.

Operationally, IFF reported a total employee count of approximately 22,400 as of December 31, 2024, with a significant portion of its workforce engaged in research and development activities. The company emphasized its commitment to innovation, investing approximately 5.8% of sales in R&D, which is critical for developing new products that meet evolving consumer preferences. IFF's customer base has expanded significantly, now serving around 18,300 customers, with a notable increase in small and mid-sized companies.

Looking ahead, IFF anticipates continued challenges from inflationary pressures and supply chain disruptions, which may impact its cost structure and pricing strategies. The company is focused on maintaining its investment-grade credit rating while prioritizing debt repayment and capital investments to support long-term growth. IFF's management remains optimistic about its ability to navigate these challenges and capitalize on emerging market opportunities, particularly in health and wellness sectors.