Q1 2024 International Flavors & Fragrances Inc Earnings Call Transcript
Key Points
- International Flavors & Fragrances Inc (IFF) achieved volume growth for the first time since Q1 2022, with mid-single digit growth in Q1 2024, driven by strong contributions from Scent, Nourish, and Health & Biosciences segments.
- The company reported double-digit comparable adjusted EBITDA growth, benefiting from both volume growth and productivity gains across its businesses.
- International Flavors & Fragrances Inc (IFF) successfully closed the divestiture of its cosmetics ingredients business and announced the sale of its Pharma Solutions business, which is expected to complete in the first half of 2025, aiding in strengthening the capital structure and focusing on high-growth areas.
- The company is trending toward the upper end of its previously announced guidance ranges for the full year 2024, reflecting increased confidence in its financial outlook.
- International Flavors & Fragrances Inc (IFF) introduced a refocused operating model, which is business-led and supported by lean functions, aimed at enhancing collaboration, driving profitable growth, and improving financial performance over time.
- The CFO, Glenn Richter, announced his plan to retire at the end of 2024, initiating a succession plan that could lead to transitional challenges within the financial leadership of the company.
- Despite positive volume growth, the company noted that pricing was modestly positive and would have been negative without FX-related pricing benefits, indicating underlying challenges in pricing power.
- The company's Pharma Solutions segment experienced lower volumes due to ongoing destocking trends, which could impact short-term performance until the completion of its divestiture.
- International Flavors & Fragrances Inc (IFF) reported a negative free cash flow of $19 million in Q1 2024, although it was an improvement from the previous year, highlighting ongoing challenges in cash flow generation.
- The company's net debt to credit adjusted EBITDA ratio stood at 4.4x at quarter end, indicating a relatively high leverage that the company aims to reduce to 3x following the Pharma Solutions transaction.
At this time, I would like to welcome everyone to the IFF first quarter earnings conference call. (Operator Instructions)
I would now like to introduce Michael DeVeau, Head of Investor Relations. You may begin.
Thank you. Good morning, good afternoon and good evening, everyone. Welcome to IFF's First Quarter 2024 Conference Call. Yesterday afternoon, we issued a press release announcing our financial results. A copy of the release can be found on our IR website at ir.iff.com. Please note that this call is being recorded live and will be available for replay.
During the call, we will be making forward-looking statements about the company's performance and outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to our cautionary statement and risk factors contained in our 10-K and press release
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