IFF finds momentum across Taste and Scent as 2026 guidance floor rises

International Flavors & Fragrances (NYSE:IFF) has raised the floor under its 2026 outlook after a quarter of broad-based sales growth, but the headline improvement comes with a substantial accounting asterisk. Third-quarter sales rose 4% to US$1.942 billion, while comparable currency-neutral adjusted operating EBITDA increased 6% to US$403 million. Adjusted EPS excluding amortisation reached US$0.83.

Full-year guidance moves higher at the lower end

IFF now expects 2026 sales of US$7.5 billion to US$7.6 billion, lifting the bottom of its previous US$7.4 billion to US$7.6 billion range. The lower end of adjusted operating EBITDA guidance has also risen to US$1.55 billion from US$1.53 billion, while the top remains US$1.60 billion. Comparable currency-neutral sales growth is now expected at 3% to 4%, versus 2% to 4% previously, and adjusted EBITDA growth at 5% to 8%, versus 4% to 8%.

The operating momentum was spread across IFF’s continuing businesses. Taste generated US$687 million of sales, up 6% on a comparable currency-neutral basis, with Greater Asia delivering double-digit growth. Scent also rose 6%, led by high-single-digit growth in Consumer Fragrances, while Health & Biosciences managed 1% growth as Food Biosciences and Grain Processing offset a decline in Health. Currency-neutral adjusted EBITDA increased 7% in Taste, 10% in Scent and 2% in Health & Biosciences.

GAAP loss exposes the cost of portfolio restructuring

Reported numbers were considerably less comfortable. IFF recorded a US$134 million loss before tax from continuing operations and a US$0.50 continuing-operations loss per diluted share, compared with US$130 million of pre-tax income and US$0.39 EPS a year earlier. The quarter included a US$236 million loss on assets classified as held for sale, a US$23 million goodwill impairment and US$34 million of regulatory costs, primarily linked to ongoing fragrance-business investigations.

That gap explains why the company is emphasising adjusted results, but it should not be ignored. Cash flow from operations across continuing and discontinued operations reached US$820 million in the first nine months, up US$288 million year-on-year, while free cash flow rose to US$371 million. IFF also completed a US$500 million accelerated share repurchase. Net debt to credit-adjusted EBITDA stood at 2.75 times, with the calculation including both continuing and discontinued operations.

Food Ingredients sale carries a US$2.45 million executive incentive

The Food Ingredients separation remains on track to close by the end of the second quarter of 2027, according to IFF. The board has approved US$2.45 million in one-time transaction incentives for four senior executives: US$700,000 in restricted stock units for chief executive Erik Fyrwald, US$700,000 in cash for chief financial officer Michael DeVeau, US$700,000 for Health & Biosciences president Leticia Gonçalves Lourenço and US$350,000 for Taste president and chief commercial officer Yuvraj Arora.

The awards are conditional on the transaction closing. Fyrwald’s award vests after three years, while the cash awards are payable three months after closing if the executives remain employed. IFF also amended its bylaws to permit fully remote shareholder meetings and remote participation in physical meetings, a procedural change that is less consequential than the transaction-linked compensation but adds another signpost to the company’s ongoing reshaping.

Management has warned that fourth-quarter profitability will be softer, particularly in Health & Biosciences, because of higher costs and reinvestment in the business. The next test is whether the improved volumes and guidance floor can absorb those pressures, while the Food Ingredients sale proceeds without further impairments, delays or leverage complications.