Business Wire | Nov 8, 2021 04:15PM EST

IFF Reports Third Quarter 2021 Results

Nov. 08, 2021

NEW YORK--(BUSINESS WIRE)--Nov. 08, 2021--International Flavors & Fragrances Inc. (NYSE: IFF) reported financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Consolidated Summary:

Reported Adjusted(GAAP) (Non-GAAP)^1

Sales Income Before EPS Operating Operating EPS ex Taxes EBITDA EBITDA Margin Amortization

$3.1 B $250 M $0.76 $648 M 21.1% $1.47

First Nine Months2021 Consolidated Summary:

Reported Adjusted(GAAP) (Non-GAAP)^1

Sales Income Before EPS Operating Operating EPS ex Taxes EBITDA EBITDA Margin Amortization

$8.6 B $240 M $0.75 $1.9 B 22.0% $4.56

Management Commentary

"We are pleased by the strong demand trends we've seen in our business and proud that we achieved double-digit sales growth for a second consecutive quarter," said IFF Chairman and CEO Andreas Fibig. "Across a large portion of our portfolio, we are growing at an accelerated rate - all as we continue to successfully integrate and deliver on our synergy commitments. These results are indicative of our best-in-class product portfolio, industry-leading innovation and our position as an essential partner to our customers."

Mr. Fibig concluded, "In the short-term, unprecedented macro supply-chain challenges and related cost increases have impacted our profitability margin. We are confident in our team's ability to manage through these conditions and fully offset pressures over time as we increase pricing, drive additional productivity, and continue to exhibit strong cost discipline. While the global supply chain environment remains volatile, we are confident in our long-term value creation opportunity as we execute our strategy and drive our business forward."

Third Quarter 2021 Consolidated Financial Results

* Reported net sales for the third quarter were $3.07 billion, an increase of 142% compared to the prior year period, driven primarily by the incremental sales related to the merger with Nutrition & Biosciences ("N&B"). On a combined basis2, sales increased 12% or 11% on a currency neutral basis, driven by mid-teen growth in Nourish and strong increases in Scent and Health & Biosciences. * Income before taxes on a reported basis for the third quarter was $250 million. Adjusted operating EBITDA for the third quarter was $648 million, an increase of 135% from $276 million in 2020 principally driven by the incremental profit related to the merger with N&B. On a combined basis2, adjusted operating EBITDA increased 4%, as strong sales growth and continued cost discipline more than offset inflationary pressures. * Reported earnings per share (EPS) for the third quarter was $0.76. Adjusted EPS excluding amortization was $1.47 per diluted share. * Cash flow from operations for the third quarter was strong, increasing $711 million versus year-ago period, to $1.13 billion, and free cash flow defined as cash flow from operations less capital expenditures totaled $884 million. Net debt to credit adjusted EBITDA at the end of the third quarter was 4.1x.

Third Quarter 2021 Segment Summary3: Growth vs. Prior Year

Combined Combined Reported Adjusted Currency Adjusted (GAAP) (Non-GAAP) Neutral (Non-GAAP)^2 (Non-GAAP)^2

Sales Operating Sales Operating EBITDA EBITDA

Nourish 133% 121% 15% 19%

Health & NMF NMF 5% (12)%Biosciences

Scent 10% 10% 9% 10%

Pharma Solutions NMF NMF (2)% (34)%

Nourish Segment

* On a reported basis, third quarter sales were $1.66 billion. On a combined basis2, currency neutral sales improved 15% led by broad-based double-digit growth across all segments. * Nourish adjusted operating EBITDA was $327 million. On a combined basis2, adjusted operating EBITDA grew 19% led by strong volume growth, price increases, productivity and cost management, and adjusted operating EBITDA margin expanded by 30bps to 19.7%.

Health & Biosciences Segment

* On a reported basis, third quarter sales were $618 million. On a combined basis2, currency neutral sales increased 5% with growth across nearly all segments led by a double-digit increase in Home & Personal Care and strong increases in Cultures & Food Enzymes and Grain Processing. * Health & Biosciences adjusted operating EBITDA was $151 million. On a combined basis2, adjusted operating EBITDA decreased 12% and adjusted operating EBITDA margin declined by 530bps to 24.4% due to inflationary pressures and higher logistics costs to balance demand with capacity.

Scent Segment

* On a reported basis, third quarter sales were $580 million. On a combined basis2, currency neutral sales increased 9% against a strong high-single digit year ago comparison. Results were led by strong double-digit growth in Fine Fragrances, Cosmetic Actives and Fragrance Ingredients as well as modest growth in Consumer Fragrances. * Scent adjusted operating EBITDA was $130 million. On a combined basis2, adjusted operating EBITDA increased 10% led by strong volume growth and favorable mix, while adjusted operating EBITDA margin declined by 10bps to 22.4% principally due to higher raw material & logistic costs.

Pharma Solutions Segment

* On a reported basis, third quarter sales were $211 million. On a combined basis2, currency neutral sales were down 2% as continued challenges related to raw material availability and logistics have limited the company's ability to meet strong customer demand. * Pharma Solutions adjusted operating EBITDA was $40 million. On a combined basis2, adjusted operating EBITDA declined 34%, and adjusted operating EBITDA margin declined by 940bps to 19.0% driven by higher sourcing and logistics costs as well as increased manufacturing costs.

Financial Guidance

The Company updates its 2021 financial guidance on a combined basis due to the ongoing macro inflationary environment. Combined 2021 financial guidance is defined as a full 12 months of legacy IFF results, and 11 months (excludes January) of N&B results, in the 2021 period, in light of the merger completion on February 1, 2021.

Previous Current Guidance Guidance

Combined Combined FY 2021 FY 2021 (excl. N&B Jan)^4 (excl. N&B Jan)^4

Sales ~11.55B ~11.55B

Year-Over-Year Growth > 8% > 8%

FX Impact ~2% ~2%

Adjusted Operating EBITDA Margin^5 ~21.5% ~21.0%

Audio Webcast

A live webcast to discuss the Company's third quarter 2021 financial results will be held on November 9, 2021, at 10:00 a.m. ET. The webcast and accompanying slide presentation may be accessed on the Company's IR website at ir.iff.com. For those unable to listen to the live webcast, a recorded version will be made available on the Company's website approximately one hour after the event and will remain available on IFF's website for one year.

Cautionary Statement Under The Private Securities Litigation Reform Act of 1995

Statements in this press release, which are not historical facts or information, are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current assumptions, estimates and expectations including those concerning the impacts of COVID-19 and our plans to respond to its implications; expectations regarding sales and profit for the fiscal year 2021, including the impact of foreign exchange, pricing actions, raw materials, and sourcing, logistics and manufacturing costs; the divestiture of our microbial control business and the progress of our portfolio optimization strategy, through non-core business divestitures; our combination with N&B, including the expected cost benefits and synergies of the N&B Transaction, the success of our integration efforts and ability to deliver on our synergy commitments as well as future opportunities for the combined company; our ability to manage through supply-chain challenges and cost increases; the growth potential of the markets in which we operate, including the emerging markets, expected capital expenditures, the expected costs and benefits of our ongoing optimization of our manufacturing operations, including the expected number of closings, expected cash flow and availability of capital resources to fund our operations and meet our debt service requirements; our ability to drive reductions in expenses; our strategic investments in capacity and increasing inventory to drive improved profitability; the impact of inflation and other macroeconomic factors; our ability to innovate and execute on specific consumer trends and demands; and our ability to continue to generate value for, and return cash to, our shareholders.

These forward-looking statements should be evaluated with consideration given to the many risks and uncertainties inherent in our business that could cause actual results and events to differ materially from those in the forward-looking statements. Certain of such forward-looking information may be identified by such terms as "expect", "anticipate", "believe", "intend", "outlook", "may", "estimate", "should", "predict" and similar terms or variations thereof. Such forward-looking statements are based on a series of expectations, assumptions, estimates and projections about the Company, are not guarantees of future results or performance, and involve significant risks, uncertainties and other factors, including assumptions and projections, for all forward periods. Our actual results may differ materially from any future results expressed or implied by such forward-looking statements.

Such risks, uncertainties and other factors include, among others, the following: (1) disruption in the development, manufacture, distribution or sale of our products from COVID-19 and other public health crises; (2) risks related to the integration of N&B and the Frutarom business, including whether we will realize the benefits anticipated from the acquisitions in the expected time frame; (3) unanticipated costs, liabilities, charges or expenses resulting from the Frutarom acquisition and the N&B Transaction; risks related to the restrictions that we are required to abide by in connection with the N&B Transaction; (4) our ability to provide the same types and level of services to the N&B Business that historically have been provided by DuPont, and our ability to maintain relationships with third parties and pre-existing customers of N&B; (5) our ability to realize expected cost savings and increased efficiencies of the Frutarom integration and our ongoing optimization of our manufacturing facilities; (6) our ability to successfully establish and manage acquisitions, collaborations, joint ventures or partnership and to manage and complete divestitures or dispositions; (7) the increase in our leverage resulting from the additional debt incurred to pay a portion of the consideration for Frutarom and its impact on our liquidity and ability to return capital to its shareholders; (8) our ability to successfully market to our expanded and diverse Nourish customer base; (9) our ability to effectively compete in our market and develop and introduce new products that meet customers' needs; (10) our ability to retain key employees; (11) changes in demand from large multi-national customers due to increased competition and our ability to maintain "core list" status with customers; (12) our ability to successfully develop innovative and cost-effective products that allow customers to achieve their own profitability expectations; (13) disruption in the development, manufacture, distribution or sale of our products from natural disasters, public health crises, international conflicts, terrorist acts, labor strikes, political crisis, accidents and similar events; (14) the impact of a disruption in our supply chain, including the inability to obtain ingredients and raw materials from third parties; (15) volatility and increases in the price of raw materials, energy and transportation; (16) the impact of a significant data breach or other disruption in our information technology systems, and our ability to comply with data protection laws in the U.S. and abroad; (17) unprecedented increases and volatility in sourcing and logistics costs; (18) our ability to comply with, and the costs associated with compliance with, regulatory requirements and industry standards, including regarding product safety, quality, efficacy and environmental impact; (19) our ability to react in a timely and cost-effective manner to changes in consumer preferences and demands, including increased awareness of health and wellness; (20) our ability to meet consumer, customer and regulatory sustainability standards; (21) our ability to benefit from our investments and expansion in emerging markets; (22) the impact of currency fluctuations or devaluations in the principal foreign markets in which we operate; (23) economic, regulatory and political risks associated with our international operations; (24) the impact of global economic uncertainty on demand for consumer products; (25) our ability to comply with, and the costs associated with compliance with, U.S. and foreign environmental protection laws; (26) our ability to successfully manage our working capital and inventory balances; (27) the impact of the failure to comply with U.S. or foreign anti-corruption and anti-bribery laws and regulations, including the U.S. Foreign Corrupt Practices Act; (28) any impairment on our tangible or intangible long-lived assets, including goodwill associated with the acquisition of Frutarom; (29) our ability to protect our intellectual property rights; (30) the impact of the outcome of legal claims, regulatory investigations and litigation, including current and future developments involving tax matters in Brazil; (31) changes in market conditions or governmental regulations relating to our pension and postretirement obligations; (32) the impact of changes in federal, state, local and international tax legislation or policies, including the Tax Cuts and Jobs Act, with respect to transfer pricing and state aid, and adverse results of tax audits, assessments, or disputes; (33) the impact of the United Kingdom's departure from the European Union; (34) the impact of the phase out of the London Interbank Offered Rate (LIBOR) on interest expense; and (35) risks associated with our CEO transition, including the timely identification of a successor CEO and the impact on employee hiring and retention.

The foregoing list of important factors does not include all such factors, nor necessarily present them in order of importance. In addition, you should consult other disclosures made by the Company (such as in our other filings with the SEC or in company press releases) for other factors that may cause actual results to differ materially from those projected by the Company. Please refer to Part I. Item 1A., Risk Factors, of the Company's Annual Report on Form 10-K filed with the SEC on February 22, 2021 for additional information regarding factors that could affect our results of operations, financial condition and liquidity.

We intend our forward-looking statements to speak only as of the time of such statements and do not undertake or plan to update or revise them as more information becomes available or to reflect changes in expectations, assumptions or results. We can give no assurance that such expectations or forward-looking statements will prove to be correct. An occurrence of, or any material adverse change in, one or more of the risk factors or risks and uncertainties referred to in this press release or included in our other periodic reports filed with the SEC could materially and adversely impact our operations and our future financial results. Any public statements or disclosures made by us following this press release that modify or impact any of the forward-looking statements contained in or accompanying this press release will be deemed to modify or supersede such outlook or other forward-looking statements in or accompanying this press release.

Use of Non-GAAP Financial Measures

We provide in this press release non-GAAP financial measures, including: (i) combined currency neutral sales; (ii) adjusted operating EBITDA and combined adjusted operating EBITDA; (iii) adjusted EBITDA margin and combined adjusted operating EBITDA margin; (iv) adjusted EPS ex amortization; (v) free cash flow; and (vi) net debt to credit adjusted EBITDA.

Our non-GAAP financial measures are defined below.

Currency Neutral metrics eliminate the effects that result from translating non-U.S. currencies to U.S. dollars. We calculate currency neutral numbers by translating current year invoiced sale amounts at the exchange rates used for the corresponding prior year period. We use currency neutral results in our analysis of subsidiary or segment performance. We also use currency neutral numbers when analyzing our performance against our competitors.

Adjusted operating EBITDA and adjusted operating EBITDA margin exclude depreciation and amortization expense, interest expense, other income (expense), net, restructuring and other charges and certain non-recurring items such as Frutarom integration related costs, gain (losses) on sale of assets, shareholder activism related costs, business divestiture costs, employee separation costs, compliance review & legal defense costs, N&B inventory step-up costs, N&B transaction related costs, N&B integration related costs and the impact of the merger with N&B.

Adjusted EPS ex Amortization excludes the impact of non-operational items including Frutarom integration related costs, restructuring and other charges, gain (losses) on sale of assets, shareholder activism related costs, business divestiture costs, employee separation costs, Frutarom acquisition related costs, compliance review and legal defense costs, N&B inventory step up costs, N&B transaction related costs, N&B integration related costs, the impact of the merger with N&B and non-cash items including the amortization of acquisition related intangible assets.

Free Cash Flow is operating cash flow (i.e. cash flow from operations) less capital expenditures.

Net debt to credit adjusted EBITDA is the leverage ratio used in our credit agreement and defined as Net debt (which is long-term debt less cash and cash equivalents) divided by the trailing 12-month credit adjusted EBITDA. Credit adjusted EBITDA is defined as income (loss) before income taxes, depreciation and amortization expense, interest expense, specified items and non-cash items.

Combined historical results for the third quarter is defined as 3 months (July, August & September) of legacy IFF and N&B results, in both the 2020 period and the current 2021 period. Combined historical results for the full year is defined as 12 months of legacy IFF results, and 11 months (excluding January) of N&B results.

These non-GAAP measures are intended to provide additional information regarding our underlying operating results and comparable year-over-year performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. In discussing our historical and expected future results and financial condition, we believe it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period-to-period comparable basis, financial amounts both including and excluding these identified items, as well as the impact of exchange rate fluctuations. These non-GAAP measures should not be considered in isolation or as substitutes for analysis of the Company's results under GAAP and may not be comparable to other companies' calculation of such metrics.

Effective in the first quarter of 2021, the Company elected to change the profit or loss measure of the Company's reportable segments from Segment Operating Profit to Segment Adjusted Operating EBITDA for internal reporting and performance measurement purposes. Segment Adjusted Operating EBITDA is defined as (Loss) Income Before Taxes before depreciation and amortization expense, interest expense, restructuring and other charges, net and certain non-recurring items. Prior period amounts have been recast to reflect these changes in segment profitability measures. Our determination of reportable segments was made on the basis of our strategic priorities within each segment and corresponds to the manner in which our chief operating decision maker reviews and evaluates operating performance to make decisions about resources to be allocated to the segment. In addition to our strategic priorities, segment reporting is also based on differences in the products and services we provide. As a result, we added two new reportable segments - Health & Biosciences and Pharma Solutions. Nourish is composed of IFF's legacy Taste segment and N&B's Food & Beverage segment. The Scent and Health & Biosciences segments include a component of the legacy Taste segment.

The Company cannot reconcile its expected Adjusted Operating EBITDA margin to Income (loss) Before Taxes under "Financial Guidance" without unreasonable effort because certain items that impact net income and other reconciling metrics are out of the Company's control and/or cannot be reasonably predicted at this time. These items include but are not limited to Frutarom integration related costs, losses on sale of assets, shareholder activism related costs, business divestiture costs, employee separation costs, compliance review & legal defense costs, N&B inventory step-up costs, N&B transaction related costs and N&B integration related costs.

Welcome to IFF

At IFF (NYSE: IFF), an industry leader in food, beverage, scent, health and biosciences, science and creativity meet to create essential solutions for a better world - from global icons to unexpected innovations and experiences. With the beauty of art and the precision of science, we are an international collective of thinkers who partners with customers to bring scents, tastes, experiences, ingredients and solutions for products the world craves. Together, we will do more good for people and planet. Learn more at iff.com, Twitter, Facebook, Instagram, and LinkedIn.

1Schedules at the end of this release contain reconciliations of reported GAAP to non-GAAP metrics. See use of non-GAAP financial measures for explanations of our non-GAAP metrics.2Combined historical results for the third quarter is defined as 3 months (July, August and September) of legacy IFF and N&B results, in both the 2020 and 2021 periods. 3 Starting in the first quarter 2021, IFF reports financial results in four segments, Nourish, Health & Biosciences, Scent and Pharma Solutions. "NMF" stands for Not Meaningful as the related segments were only created following the closing of the N&B merger.4Combined results for the full year is defined as a full 12 months of legacy IFF results, and 11 months (excludes January) of N&B results, in the 2021 period, in light of the merger completion on February 1, 2021.5See Use of Non-GAAP Financial Measures

International Flavors & Fragrances Inc.

Consolidated Income Statements

(Amounts in millions except per share data)

(Unaudited)

Three Months Ended September Nine Months Ended September 30, 30,

2021 2020 % 2021 2020 % Change Change

Net sales $ 3,071 $ 1,268 142 % $ 8,625 $ 3,814 126 %

Cost of goods sold 1,981 744 166 % 5,871 2,242 162 %

Gross profit 1,090 524 108 % 2,754 1,572 75 %

Research anddevelopment 156 89 75 % 463 256 81 %expenses

Selling andadministrative 436 235 86 % 1,299 695 87 %expenses

Amortization ofacquisition-related 195 48 NMF 547 145 277 %intangibles

Restructuring and 6 1 NMF 34 8 NMFother charges

(Gains) losses on ) )sales of fixed (1 ) 1 (200 % (1 ) 2 (150 %assets

Operating profit 298 150 99 % 412 466 (12 ) %

Interest expense 74 35 111 % 216 99 118 %

Other (income) (26 ) 10 NMF (44 ) 5 NMFexpense, net

Income before taxes 250 105 138 % 240 362 (34 ) %

Provision for 53 19 179 % 53 61 (13 )income taxes %

Net income 197 86 129 % 187 301 (38 ) %

Net incomeattributable to 3 1 200 % 7 5 40 %noncontrollinginterests

Net income )attributable to IFF 194 85 128 % 180 296 (39 %stockholders



Net income per $ 0.76 $ 0.76 $ 0.75 $ 2.68 share - basic^ (1)

Net income pershare - diluted ^ $ 0.76 $ 0.75 $ 0.75 $ 2.64 (1)



Average number ofshares outstanding 254 112 239 112 - basic

Average number ofshares outstanding 255 114 239 114 - diluted

(1) For 2021 and 2020, net income per share reflects adjustments related to the redemption value of certain redeemable noncontrolling interests. NMF Not meaningful

International Flavors & Fragrances Inc.

Condensed Consolidated Balance Sheets

(Amounts in millions)

(Unaudited)

September December 31, 30,

2021 2020

Cash, cash equivalents, and restricted cash $ 794 $ 657

Receivables, net 1,975 929

Inventories 2,401 1,132

Other current assets 1,962 342

Total current assets 7,132 3,060



Property, plant and equipment, net 4,295 1,458

Goodwill and other intangibles, net 27,549 8,320

Other assets 1,276 717

Total assets $ 40,252 $ 13,555



Short-term borrowings $ 708 $ 634

Other current liabilities 2,871 1,270

Total current liabilities 3,579 1,904



Long-term debt 10,818 3,779

Non-current liabilities 4,277 1,452



Redeemable noncontrolling interests 105 98



Shareholders' equity 21,473 6,322

Total liabilities and shareholders' equity $ 40,252 $ 13,555

International Flavors & Fragrances Inc.

Consolidated Statements of Cash Flows

(Amounts in millions)

(Unaudited)

Nine Months Ended September 30,

2021

2020

Cash flows from operating activities:

Net income

$

187

$

301

Adjustments to reconcile to net cash provided by operating activities

Depreciation and amortization

861

244

Deferred income taxes

(148

)

(37

)

(Gains) Losses on sale of assets

(1

)

2

Stock-based compensation

44

27

Pension contributions

(21

)

(19

)

Amortization of inventory step-up

363

-

Changes in assets and liabilities, net of acquisitions:

Trade receivables

(214

)

(94

)

Inventories

(230

)

(43

)

Accounts payable

256

22

Accruals for incentive compensation

43

19

Other current payables and accrued expenses

99

60

Other assets/liabilities, net

(113

)

(67

)

Net cash provided by operating activities

1,126

415

Cash flows from investing activities:

Additions to property, plant and equipment

(242

)

(124

)

Additions to intangible assets

(4

)

-

Proceeds from life insurance contracts

-

2

Maturity of net investment hedges

-

(15

)

Proceeds from disposal of assets

13

18

Cash provided by the Merger with N&B

193

-

Proceeds received in advance of sale of business

115

-

Net cash provided by (used in) investing activities

75

(119

)

Cash flows from financing activities:

Cash dividends paid to shareholders

(466

)

(240

)

Decrease in revolving credit facility and short-term borrowings

(105

)

(1

)

Deferred financing costs

-

(3

)

Proceeds from issuance of commercial paper

200

-

Repayments of long-term debt

(628

)

(335

)

Contingent consideration paid

(14

)

(9

)

Purchases of redeemable noncontrolling interest

-

(22

)

Proceeds from issuance of long-term debt

3

200

Proceeds from issuance of stock in connection with stock options

8

-

Employee withholding taxes paid

(20

)

(8

)

Net cash used in financing activities

(1,022

)

(418

)

Effect of exchange rates changes on cash, cash equivalents and restricted cash

(44

)

(18

)

Net change in cash, cash equivalents and restricted cash

135

(140

)

Cash, cash equivalents and restricted cash at beginning of year

660

624

Cash, cash equivalents and restricted cash at end of period

$

795

$

484

The following table reconciles cash, cash equivalents and restricted cash between the Company's statement of cash flows for the periods ended September 30, 2021 and September 30, 2020 to the amounts reported in the Company's balance sheet:

International Flavors & Fragrances Inc.

Consolidated Statements of Cash Flows

(Amounts in millions)

(Unaudited)

Nine Months Ended September 30,

2021 2020

Cash flows from operating activities:

Net income $ 187 $ 301

Adjustments to reconcile to net cash provided by operating activities

Depreciation and amortization 861 244

Deferred income taxes (148 ) (37 )

(Gains) Losses on sale of assets (1 ) 2

Stock-based compensation 44 27

Pension contributions (21 ) (19 )

Amortization of inventory step-up 363 -

Changes in assets and liabilities, net of acquisitions:

Trade receivables (214 ) (94 )

Inventories (230 ) (43 )

Accounts payable 256 22

Accruals for incentive compensation 43 19

Other current payables and accrued expenses 99 60

Other assets/liabilities, net (113 ) (67 )

Net cash provided by operating activities 1,126 415

Cash flows from investing activities:

Additions to property, plant and equipment (242 ) (124 )

Additions to intangible assets (4 ) -

Proceeds from life insurance contracts - 2

Maturity of net investment hedges - (15 )

Proceeds from disposal of assets 13 18

Cash provided by the Merger with N&B 193 -

Proceeds received in advance of sale of business 115 -

Net cash provided by (used in) investing activities 75 (119 )

Cash flows from financing activities:

Cash dividends paid to shareholders (466 ) (240 )

Decrease in revolving credit facility and short-term (105 ) (1 )borrowings

Deferred financing costs - (3 )

Proceeds from issuance of commercial paper 200 -

Repayments of long-term debt (628 ) (335 )

Contingent consideration paid (14 ) (9 )

Purchases of redeemable noncontrolling interest - (22 )

Proceeds from issuance of long-term debt 3 200

Proceeds from issuance of stock in connection with 8 - stock options

Employee withholding taxes paid (20 ) (8 )

Net cash used in financing activities (1,022 ) (418 )

Effect of exchange rates changes on cash, cash (44 ) (18 )equivalents and restricted cash

Net change in cash, cash equivalents and restricted 135 (140 )cash

Cash, cash equivalents and restricted cash at beginning 660 624 of year

Cash, cash equivalents and restricted cash at end of $ 795 $ 484 period

The following table reconciles cash, cash equivalents and restricted cash between the Company's statement of cash flows for the periods ended September 30, 2021 and September 30, 2020 to the amounts reported in the Company's balance sheet:

September December September DecemberAMOUNTS IN MILLIONS 30, 31, 2020 30, 31, 2019 2021 2020

Current assets

Cash and cash equivalents $ 672 $ 650 $ 470 $ 607

Restricted cash 122 7 13 17

Noncurrent assets

Restricted cash included in 1 3 1 - Other assets

Cash, cash equivalents and $ 795 $ 660 $ 484 $ 624 restricted cash

International Flavors & Fragrances Inc.

Business Unit Performance

(Amounts in millions)

(Unaudited)

Three Months Ended September 30,

Nine Months Ended September 30,

2021

2020

2021

2020

Net Sales

Nourish

$

1,662

$

712

$

4,638

$

2,174

Health & Biosciences

618

31

1,683

99

Scent

580

525

1,699

1,541

Pharma Solutions

211

-

605

-

Consolidated

$

3,071

$

1,268

$

8,625

$

3,814

Segment Adjusted Operating EBITDA

Nourish

$

327

$

148

$

921

$

466

Health & Biosciences

151

10

469

29

Scent

130

118

375

323

Pharma Solutions

40

-

131

-

Total

648

276

1,896

818

Depreciation & Amortization

(297

)

(83

)

(861

)

(244

)

Interest Expense

(74

)

(35

)

(216

)

(99

)

Other income (expense), net

26

(10

)

44

(5

)

Frutarom Integration Related Costs

(1

)

(2

)

(3

)

(9

)

Restructuring and Other Charges

(6

)

(1

)

(34

)

(8

)

Gains (Losses) on Sale of Assets

1

(1

)

1

(2

)

Shareholder Activism Related Costs

-

-

(7

)

-

Business Divestiture Costs

(16

)

-

(21

)

-

Employee Separation Costs

(22

)

-

(28

)

-

Frutarom Acquisition Related Costs

-

(1

)

-

(1

)

Compliance Review & Legal Defense Costs

-

(1

)

-

(2

)

N&B Inventory Step-Up Costs

14

-

(363

)

-

N&B Transaction Related Costs

-

(8

)

(91

)

(24

)

N&B Integration Related Costs

(23

)

(29

)

(77

)

(62

)

Income Before Taxes

$

250

$

105

$

240

$

362

Segment Adjusted Operating EBITDA Margin

Nourish

19.7

%

20.8

%

19.9

%

21.4

%

Health & Biosciences

24.4

%

32.3

%

27.9

%

29.3

%

Scent

22.4

%

22.5

%

22.1

%

21.0

%

Pharma Solutions

19.0

%

-

%

21.7

%

-

%

Consolidated

21.1

%

21.8

%

22.0

%

21.4

%

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

International Flavors & Fragrances Inc.

Business Unit Performance

(Amounts in millions)

(Unaudited)

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Net Sales

Nourish $ 1,662 $ 712 $ 4,638 $ 2,174

Health & Biosciences 618 31 1,683 99

Scent 580 525 1,699 1,541

Pharma Solutions 211 - 605 -

Consolidated $ 3,071 $ 1,268 $ 8,625 $ 3,814

Segment Adjusted Operating EBITDA

Nourish $ 327 $ 148 $ 921 $ 466

Health & Biosciences 151 10 469 29

Scent 130 118 375 323

Pharma Solutions 40 - 131 -

Total 648 276 1,896 818

Depreciation & Amortization (297 ) (83 ) (861 ) (244 )

Interest Expense (74 ) (35 ) (216 ) (99 )

Other income (expense), net 26 (10 ) 44 (5 )

Frutarom Integration Related (1 ) (2 ) (3 ) (9 )Costs

Restructuring and Other (6 ) (1 ) (34 ) (8 )Charges

Gains (Losses) on Sale of 1 (1 ) 1 (2 )Assets

Shareholder Activism Related - - (7 ) - Costs

Business Divestiture Costs (16 ) - (21 ) -

Employee Separation Costs (22 ) - (28 ) -

Frutarom Acquisition Related - (1 ) - (1 )Costs

Compliance Review & Legal - (1 ) - (2 )Defense Costs

N&B Inventory Step-Up Costs 14 - (363 ) -

N&B Transaction Related - (8 ) (91 ) (24 )Costs

N&B Integration Related (23 ) (29 ) (77 ) (62 )Costs

Income Before Taxes $ 250 $ 105 $ 240 $ 362

Segment Adjusted Operating EBITDA Margin

Nourish 19.7 % 20.8 % 19.9 % 21.4 %

Health & Biosciences 24.4 % 32.3 % 27.9 % 29.3 %

Scent 22.4 % 22.5 % 22.1 % 21.0 %

Pharma Solutions 19.0 % - % 21.7 % - %

Consolidated 21.1 % 21.8 % 22.0 % 21.4 %

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Gross Profit

Third Quarter

(DOLLARS IN MILLIONS) 2021 2020

Reported (GAAP) $ 1,090 $ 524

Employee Separation Costs (c) 1 -

N&B Inventory Step-Up Costs (14 ) -

N&B Integration Related Costs (h) 3 -

Adjusted (Non-GAAP) $ 1,080 $ 524

Reconciliation of Selling and Administrative Expenses

Third Quarter

(DOLLARS IN MILLIONS)

2021

2020

Reported (GAAP)

$

436

$

235

Frutarom Integration Related Costs (a)

(1

)

(2

)

Business Divestiture Costs (b)

(16

)

-

Employee Separation Costs (c)

(20

)

-

Frutarom Acquisition Related Costs (e)

-

(1

)

Compliance Review & Legal Defense Costs (f)

-

(1

)

N&B Transaction Related Costs (g)

-

(8

)

N&B Integration Related Costs (h)

(20

)

(29

)

Adjusted (Non-GAAP)

$

379

$

194

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Selling and Administrative Expenses

Third Quarter

(DOLLARS IN MILLIONS) 2021 2020

Reported (GAAP) $ 436 $ 235

Frutarom Integration Related Costs (a) (1 ) (2 )

Business Divestiture Costs (b) (16 ) -

Employee Separation Costs (c) (20 ) -

Frutarom Acquisition Related Costs (e) - (1 )

Compliance Review & Legal Defense Costs (f) - (1 )

N&B Transaction Related Costs (g) - (8 )

N&B Integration Related Costs (h) (20 ) (29 )

Adjusted (Non-GAAP) $ 379 $ 194

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Net Income

Third Quarter

2021 2020

(DOLLARS IN Provision ProvisionMILLIONS Income for Net Income Diluted Income for Net Income DilutedEXCEPT PER before income Attributable EPS (l) before income Attributable EPS (l)SHARE taxes taxes (j) to IFF (k) taxes taxes (j) to IFF (k)AMOUNTS)

Reported $ 250 $ 53 $ 194 $ 0.76 $ 105 $ 19 $ 85 $ 0.75 (GAAP)

FrutaromIntegration 1 - 1 - 2 - 2 0.01 Related Costs(a)

Restructuringand Other 6 1 5 0.02 1 - 1 0.01 Charges

(Gains)Losses on (1 ) - (1 ) - 1 - 1 - Sale ofAssets

BusinessDivestiture 16 4 12 0.05 - - - - Costs (b)

EmployeeSeparation 22 1 21 0.08 - - - - Costs (c)

PensionIncome (17 ) (4 ) (13 ) (0.05 ) - - - - Adjustment(d)

FrutaromAcquisition - - - - 1 1 - 0.01 Related Costs(e)

ComplianceReview & - - - - 1 - 1 0.01 Legal DefenseCosts (f)

N&B Inventory (14 ) (3 ) (11 ) (0.04 ) - - - - Step-Up Costs

N&BTransaction - - - - 8 - 8 0.07 Related Costs(g)

N&BIntegration 23 5 18 0.07 29 7 22 0.20 Related Costs(h)

Redemptionvalue - - - - - - - (0.01 )adjustment toEPS (i)

Adjusted $ 286 $ 57 $ 226 $ 0.88 $ 148 $ 27 $ 120 $ 1.06 (Non-GAAP)

Reconciliation of Adjusted (Non-GAAP) EPS ex. Amortization

Third Quarter

(DOLLARS AND SHARE AMOUNTS IN MILLIONS)

2021

2020

Numerator

Adjusted (Non-GAAP) Net Income

$

226

$

120

Amortization of Acquisition related Intangible Assets

195

48

Tax impact on Amortization of Acquisition related Intangible Assets (j)

44

9

Amortization of Acquisition related Intangible Assets, net of tax (m)

151

39

Adjusted (Non-GAAP) Net Income ex. Amortization

$

377

$

159

Denominator

Weighted average shares assuming dilution (diluted)

255

114

Adjusted (Non-GAAP) EPS ex. Amortization

$

1.47

$

1.40

Reconciliation of Adjusted (Non-GAAP) EPS ex. Amortization

Third Quarter

(DOLLARS AND SHARE AMOUNTS IN MILLIONS) 2021 2020

Numerator

Adjusted (Non-GAAP) Net Income $ 226 $ 120

Amortization of Acquisition related Intangible Assets 195 48

Tax impact on Amortization of Acquisition related 44 9 Intangible Assets (j)

Amortization of Acquisition related Intangible Assets, net 151 39 of tax (m)

Adjusted (Non-GAAP) Net Income ex. Amortization $ 377 $ 159



Denominator

Weighted average shares assuming dilution (diluted) 255 114

Adjusted (Non-GAAP) EPS ex. Amortization $ 1.47 $ 1.40

(a)

Represents costs related to the integration of the Frutarom acquisition. For 2021, costs primarily related to performance stock awards. For 2020, costs primarily related to advisory services, retention bonuses and performance stock awards.

(b)

Represents costs related to the Company's planned sales of businesses, primarily legal and professional fees.

(c)

Represents costs related to severance, including accelerated stock compensation expense, for certain employees and executives who have been separated or will separate from the Company.

(d)

Represents catch-up of net pension income from prior periods that had been excluded from their respective periods.

(e)

Represents transaction-related costs and expenses related to the acquisition of Frutarom. For 2020, amount primarily includes earn-out payments, net of adjustments, amortization for inventory "step-up" costs and transaction costs principally related to the 2019 Acquisition Activity.

(f)

Costs related to reviewing the nature of inappropriate payments and review of compliance in certain other countries. In addition, includes legal costs for related shareholder lawsuits.

(g)

Represents transaction costs and expenses related to the transaction with N&B, primarily includes legal and professional fees.

(h)

Represents costs primarily related to advisory services for the integration of the transaction with N&B, primarily consulting fees.

(i)

Represents the adjustment to EPS related to the excess of the redemption value of certain redeemable noncontrolling interests over their existing carrying value.

(j)

The income tax effects of non-GAAP adjustments are calculated based on the applicable statutory tax rate for the relevant jurisdiction, except for those items which are non-taxable or subject to valuation allowances for which the tax expense (benefit) was calculated at 0%. The tax benefit for amortization is calculated in a similar manner as the tax effects of the non-GAAP adjustments.

(k)

For 2021 and 2020, net income is reduced by income attributable to noncontrolling interest of $3 million and $1 million, respectively.

(l)

The sum of these items does not foot due to rounding.

(m)

Represents all amortization of intangible assets acquired in connection with acquisitions, net of tax.

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Represents costs related to the integration of the Frutarom acquisition.(a) For 2021, costs primarily related to performance stock awards. For 2020, costs primarily related to advisory services, retention bonuses and performance stock awards.

(b) Represents costs related to the Company's planned sales of businesses, primarily legal and professional fees.

Represents costs related to severance, including accelerated stock(c) compensation expense, for certain employees and executives who have been separated or will separate from the Company.

(d) Represents catch-up of net pension income from prior periods that had been excluded from their respective periods.

Represents transaction-related costs and expenses related to the(e) acquisition of Frutarom. For 2020, amount primarily includes earn-out payments, net of adjustments, amortization for inventory "step-up" costs and transaction costs principally related to the 2019 Acquisition Activity.

Costs related to reviewing the nature of inappropriate payments and review(f) of compliance in certain other countries. In addition, includes legal costs for related shareholder lawsuits.

(g) Represents transaction costs and expenses related to the transaction with N &B, primarily includes legal and professional fees.

(h) Represents costs primarily related to advisory services for the integration of the transaction with N&B, primarily consulting fees.

Represents the adjustment to EPS related to the excess of the redemption(i) value of certain redeemable noncontrolling interests over their existing carrying value.

The income tax effects of non-GAAP adjustments are calculated based on the applicable statutory tax rate for the relevant jurisdiction, except for(j) those items which are non-taxable or subject to valuation allowances for which the tax expense (benefit) was calculated at 0%. The tax benefit for amortization is calculated in a similar manner as the tax effects of the non-GAAP adjustments.

(k) For 2021 and 2020, net income is reduced by income attributable to noncontrolling interest of $3 million and $1 million, respectively.

(l) The sum of these items does not foot due to rounding.

(m) Represents all amortization of intangible assets acquired in connection with acquisitions, net of tax.

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Gross Profit

Third Quarter Year-to-Date

(DOLLARS IN MILLIONS) 2021 2020

Reported (GAAP) $ 2,754 $ 1,572

Employee Separation Costs (d) 1 -

Frutarom Acquisition Related Costs (f) - 1

N&B Inventory Step-Up Costs 363 -

N&B Integration Related Costs (i) 3 -

Adjusted (Non-GAAP) $ 3,121 $ 1,573

Reconciliation of Selling and Administrative Expenses

Third Quarter Year-to-Date

(DOLLARS IN MILLIONS)

2021

2020

Reported (GAAP)

$

1,299

$

695

Frutarom Integration Related Costs (a)

(2

)

(8

)

Restructuring and Other Charges

(1

)

-

Shareholder Activism Related Costs (b)

(7

)

-

Business Divestiture Costs (c)

(21

)

-

Employee Separation Costs (d)

(26

)

-

Frutarom Acquisition Related Costs (f)

-

(1

)

Compliance Review & Legal Defense Costs (g)

-

(2

)

N&B Transaction Related Costs (h)

(91

)

(24

)

N&B Integration Related Costs (i)

(74

)

(62

)

Adjusted (Non-GAAP)

$

1,077

$

598

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Selling and Administrative Expenses

Third Quarter Year-to-Date

(DOLLARS IN MILLIONS) 2021 2020

Reported (GAAP) $ 1,299 $ 695

Frutarom Integration Related Costs (a) (2 ) (8 )

Restructuring and Other Charges (1 ) -

Shareholder Activism Related Costs (b) (7 ) -

Business Divestiture Costs (c) (21 ) -

Employee Separation Costs (d) (26 ) -

Frutarom Acquisition Related Costs (f) - (1 )

Compliance Review & Legal Defense Costs (g) - (2 )

N&B Transaction Related Costs (h) (91 ) (24 )

N&B Integration Related Costs (i) (74 ) (62 )

Adjusted (Non-GAAP) $ 1,077 $ 598

International Flavors & Fragrances Inc. GAAP to Non-GAAP Reconciliation (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Net Income

Third Quarter Year-to-Date

2021 2020

(DOLLARS IN Provision ProvisionMILLIONS Income for Net Income Diluted Income for Net Income DilutedEXCEPT PER before income Attributable EPS (m) before income Attributable EPS (m)SHARE taxes taxes (k) to IFF (l) taxes taxes (k) to IFF (l)AMOUNTS)

Reported $ 240 $ 53 $ 180 $ 0.75 $ 362 $ 61 $ 296 $ 2.64 (GAAP)

FrutaromIntegration 3 - 3 0.01 9 2 7 0.06 Related Costs(a)

Restructuringand Other 34 7 27 0.11 8 2 6 0.06 Charges

(Gains)Losses on (1 ) - (1 ) - 2 1 1 0.01 Sale ofAssets

ShareholderActivism 7 2 5 0.02 - - - - Related Costs(b)

BusinessDivestiture 21 5 16 0.07 - - - - Costs (c)

EmployeeSeparation 28 2 26 0.11 - - - - Costs (d)

PensionIncome (17 ) (4 ) (13 ) (0.05 ) - - - - Adjustment(e)

FrutaromAcquisition - - - - 1 (1 ) 2 0.02 Related Costs(f)

ComplianceReview & - - - - 2 - 2 0.01 Legal DefenseCosts (g)

N&B Inventory 363 79 284 1.19 - - - - Step-Up Costs

N&BTransaction 91 19 72 0.30 24 1 23 0.21 Related Costs(h)

N&BIntegration 77 18 59 0.25 62 14 48 0.42 Related Costs(i)

Redemptionvalue - - - 0.01 - - - (0.04 )adjustment toEPS (j)

Adjusted $ 846 $ 181 $ 658 $ 2.75 $ 470 $ 80 $ 385 $ 3.38 (Non-GAAP)

Reconciliation of Adjusted (Non-GAAP) EPS ex. Amortization

Third Quarter Year-to-Date

(DOLLARS AND SHARE AMOUNTS IN MILLIONS)

2021

2020

Numerator

Adjusted (Non-GAAP) Net Income

$

658

$

385

Amortization of Acquisition related Intangible Assets

547

145

Tax impact on Amortization of Acquisition related Intangible Assets (k)

113

31

Amortization of Acquisition related Intangible Assets, net of tax (n)

434

114

Adjusted (Non-GAAP) Net Income ex. Amortization

$

1,092

$

499

Denominator

Weighted average shares assuming dilution (diluted)

239

114

Adjusted (Non-GAAP) EPS ex. Amortization

$

4.56

$

4.39

Reconciliation of Adjusted (Non-GAAP) EPS ex. Amortization

Third Quarter Year-to-Date

(DOLLARS AND SHARE AMOUNTS IN MILLIONS) 2021 2020

Numerator

Adjusted (Non-GAAP) Net Income $ 658 $ 385

Amortization of Acquisition related Intangible Assets 547 145

Tax impact on Amortization of Acquisition related 113 31 Intangible Assets (k)

Amortization of Acquisition related Intangible Assets, 434 114 net of tax (n)

Adjusted (Non-GAAP) Net Income ex. Amortization $ 1,092 $ 499



Denominator

Weighted average shares assuming dilution (diluted) 239 114

Adjusted (Non-GAAP) EPS ex. Amortization $ 4.56 $ 4.39

(a)

Represents costs related to the integration of the Frutarom acquisition. For 2021, costs primarily related to performance stock awards. For 2020, costs primarily related to advisory services, retention bonuses and performance stock awards.

(b)

Represents shareholder activist related costs, primarily professional fees.

(c)

Represents costs related to the Company's planned sales of businesses, primarily legal and professional fees.

(d)

Represents costs related to severance, including accelerated stock compensation expense, for certain employees and executives who have been separated or will separate from the Company.

(e)

Represents catch-up of net pension income from prior periods that had been excluded from their respective periods.

(f)

Represents transaction-related costs and expenses related to the acquisition of Frutarom. For 2020, amount primarily includes earn-out payments, net of adjustments, amortization for inventory "step-up" costs and transaction costs principally related to the 2019 Acquisition Activity.

(g)

Costs related to reviewing the nature of inappropriate payments and review of compliance in certain other countries. In addition, includes legal costs for related shareholder lawsuits.

(h)

Represents transaction costs and expenses related to the transaction with N&B, primarily includes legal and professional fees.

(i)

Represents costs primarily related to advisory services for the integration of the transaction with N&B, primarily consulting fees.

(j)

Represents the adjustment to EPS related to the excess of the redemption value of certain redeemable noncontrolling interests over their existing carrying value.

(k)

The income tax effects of non-GAAP adjustments are calculated based on the applicable statutory tax rate for the relevant jurisdiction, except for those items which are non-taxable or subject to valuation allowances for which the tax expense (benefit) was calculated at 0%. The tax benefit for amortization is calculated in a similar manner as the tax effects of the non-GAAP adjustments.

(l)

For 2021 and 2020, net income is reduced by income attributable to noncontrolling interest of $7 million and $5 million, respectively.

(m)

The sum of these items does not foot due to rounding.

(n)

Represents all amortization of intangible assets acquired in connection with acquisitions, net of tax.

International Flavors & Fragrances Inc. Debt Covenants (Amounts in millions) (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Represents costs related to the integration of the Frutarom acquisition.(a) For 2021, costs primarily related to performance stock awards. For 2020, costs primarily related to advisory services, retention bonuses and performance stock awards.

(b) Represents shareholder activist related costs, primarily professional fees.

(c) Represents costs related to the Company's planned sales of businesses, primarily legal and professional fees.

Represents costs related to severance, including accelerated stock(d) compensation expense, for certain employees and executives who have been separated or will separate from the Company.

(e) Represents catch-up of net pension income from prior periods that had been excluded from their respective periods.

Represents transaction-related costs and expenses related to the(f) acquisition of Frutarom. For 2020, amount primarily includes earn-out payments, net of adjustments, amortization for inventory "step-up" costs and transaction costs principally related to the 2019 Acquisition Activity.

Costs related to reviewing the nature of inappropriate payments and review(g) of compliance in certain other countries. In addition, includes legal costs for related shareholder lawsuits.

(h) Represents transaction costs and expenses related to the transaction with N &B, primarily includes legal and professional fees.

(i) Represents costs primarily related to advisory services for the integration of the transaction with N&B, primarily consulting fees.

Represents the adjustment to EPS related to the excess of the redemption(j) value of certain redeemable noncontrolling interests over their existing carrying value.

The income tax effects of non-GAAP adjustments are calculated based on the applicable statutory tax rate for the relevant jurisdiction, except for(k) those items which are non-taxable or subject to valuation allowances for which the tax expense (benefit) was calculated at 0%. The tax benefit for amortization is calculated in a similar manner as the tax effects of the non-GAAP adjustments.

(l) For 2021 and 2020, net income is reduced by income attributable to noncontrolling interest of $7 million and $5 million, respectively.

(m) The sum of these items does not foot due to rounding.

(n) Represents all amortization of intangible assets acquired in connection with acquisitions, net of tax.

International Flavors & Fragrances Inc. Debt Covenants (Amounts in millions) (Unaudited)

The following information and schedules provide reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedules are not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Reconciliation of Credit Adjusted EBITDA to Net Income

(DOLLARS IN MILLIONS) Twelve Months Ended September 30, 2021

Net income $ 54

Interest expense 301

Income taxes 19

Depreciation and amortization 1,430

Specified items ^(1)(3) 792

Non-cash items ^(2)(3) 54

Credit Adjusted EBITDA $ 2,650

_______________________

Specified items for the 12 months ended September 30, 2021 of $792 million, consisted of Frutarom integration related costs, restructuring and other charges, shareholder activism related costs, business(1) divestiture costs, employee separation costs, pension income adjustment, pension settlement, Frutarom acquisition related costs, compliance review & legal defense costs, N&B inventory step-up costs, N&B transaction related costs, N&B integration related costs and other N&B specified items.

Non-cash items represent all other adjustments to reconcile net income to(2) net cash provided by operations as presented on the Statement of Cash Flows, including losses on disposal of assets and stock-based compensation.

(3) Specified and non-cash items may not include all eligible add-back items from the Merger with N&B, for the purposes of the Credit Adjusted EBITDA calculation, due to availability of the information.

Net Debt to Total Debt

(DOLLARS IN MILLIONS) September 30, 2021

Total debt^(1) $ 11,542

Adjustments:

Cash and cash equivalents 672

Net debt $ 10,870

_______________________

(1) Total debt used for the calculation of Net debt consists of short-term debt, long-term debt, short-term finance lease obligations and long-term finance lease obligations.

International Flavors & Fragrances Inc. Combined Business Unit Performance (Amounts in millions) (Unaudited)

The following information and schedule provides reconciliation information between reported GAAP amounts and non-GAAP certain adjusted amounts. This information and schedule is not intended as, and should not be viewed as, a substitute for reported GAAP amounts or financial statements of the Company prepared and presented in accordance with GAAP.

Three Months Ended Nine Months Ended September 30, September 30,

2021 2020 2021 2020

Net Sales

Nourish $ 1,662 $ 1,418 $ 4,638 $ 4,144

Health & Biosciences 618 579 1,683 1,594

Scent 580 525 1,699 1,541

Pharma Solutions 211 215 605 591

Consolidated $ 3,071 $ 2,737 $ 8,625 $ 7,870

Segment Adjusted Operating EBITDA

Nourish $ 327 $ 275 $ 921 $ 833

Health & Biosciences 151 172 469 484

Scent 130 118 375 323

Pharma Solutions 40 61 131 165

Total 648 626 1,896 1,805

Depreciation & Amortization (297 ) (83 ) (861 ) (244 )

Interest Expense (74 ) (35 ) (216 ) (99 )

Other income (expense), net 26 (10 ) 44 (5 )

Frutarom Integration Related (1 ) (2 ) (3 ) (9 )Costs

Restructuring and Other (6 ) (1 ) (34 ) (8 )Charges

Gains (Losses) on Sale of 1 (1 ) 1 (2 )Assets

Shareholder Activism Related - - (7 ) - Costs

Business Divestiture Costs (16 ) - (21 ) -

Employee Separation Costs (22 ) - (28 ) -

Frutarom Acquisition Related - (1 ) - (1 )Costs

Compliance Review & Legal - (1 ) - (2 )Defense Costs

N&B Inventory Step-Up Costs 14 - (363 ) -

N&B Transaction Related - (8 ) (91 ) (24 )Costs

N&B Integration Related (23 ) (29 ) (77 ) (62 )Costs

Impact of Merger with N&B ^ - (350 ) - (987 )(1)

Income Before Taxes $ 250 $ 105 $ 240 $ 362

Segment Adjusted Operating EBITDA Margin

Nourish 19.7 % 19.4 % 19.9 % 20.1 %

Health & Biosciences 24.4 % 29.7 % 27.9 % 30.4 %

Scent 22.4 % 22.5 % 22.1 % 21.0 %

Pharma Solutions 19.0 % 28.4 % 21.7 % 27.9 %

Consolidated 21.1 % 22.9 % 22.0 % 22.9 %

______________________

Information related to the amounts included from merger with N&B was received directly from DuPont and management believes such information is reliable. DuPont has not provided the underlying adjustments for the(1) amounts included, but based on management's review of financial statement and other scheduled information provided, we believe the amounts reflected are reasonable. For the three and nine months ended September 30, 2020, amounts include N&B results for July through September and February through September, respectively, to reflect the same period N&B is included in IFF results in 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211108006085/en/

CONTACT: Michael DeVeau Chief Investor Relations & Communications Officer 212.708.7164 Michael.DeVeau@iff.com