International Flavors & Fragrances Tops Q3 Estimates, Discloses Continuation Of Cooperation Agreement With Icahn Capital

International Flavors & Fragrances Inc (NYSE: IFF) reported Q3 FY23 revenue of $2.82 billion (down 8% Y/Y), beating the consensus of $2.77 billion.

On a comparable basis, currency-neutral sales fell 3% Y/Y due to weakness in Nourish (-7% Y/Y) and Pharma Solutions (-9% Y/Y) business. 

Operating cash flow at the end of the third quarter was $795 million, and FCF totaled $405 million.

Segment Adjusted operating EBITDA declined to $506 million from $612 million a year ago. 

Adjusted EPS of $0.89, beating the street view of $0.75.

As of September 30, 2023, cash, cash equivalents, and restricted cash stood at $639 million. 

Dividend: IFF declared a quarterly cash dividend per share of $0.81, payable on January 8, 2024, to shareholders of record as of December 28, 2023.

FY23 Outlook: The company reiterated its outlook for sales at $11.3 billion-$11.6 billion (vs. consensus $11.4 billion).

Also, it now expects adjusted operating EBITDA at the mid to high-end of the guidance range of $1.85 billion-$2.0 billion, assuming favorable price to inflation and improved productivity. 

The company expects the foreign exchange to have around 2% adverse impact on sales growth and about a 6% negative impact on adjusted operating EBITDA growth in 2023.

Also Read: Analyst Downgrades IFF: Cites Concerns Over Volume Trends And Management Credibility

Frank Clyburn, CEO, said, "Our volume performance improved sequentially across the majority of our business, and we continued to benefit from our pricing actions and productivity initiatives....We also continue to execute our portfolio optimization efforts with the announced sale of Lucas Meyers Cosmetics. Additionally, we are rapidly pursuing divestitures within our portfolio to further reduce our outstanding debt and strengthen our capital structure."

In conjunction with earnings, IFF disclosed the continuation of the cooperation agreement with Icahn Capital and agreed to renominate one Icahn Director and one mutually agreed director to the board for the 2024 proxy season. 

Also Read: Best-Owner Mindset - IFF Divests Cosmetic Ingredients Business To Swiss Chemical Company Clariant For $810M

Price Action: IFF shares closed lower by 0.51% at $72.34 on Monday.