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- **Q3 2025 Results**: Flat revenue ($2.7 billion) with 7% EBITDA growth ($519 million). Scent (+5%), Taste (+2%), and Fine Fragrance (+20%) offset Food Ingredients softness.
- **Strategic Progress**: New R&D centers, DEB technology partnerships, and $500 million share buyback authorization.
- **2026 Outlook**: Cautious on near-term growth but optimistic on margin expansion and H&B recovery in 2026-2027.
- **Key Wins**: Miu Miu fragrance launch and major CPG laundry detergent reformulation with ENVIROCAP technology.

**【CEO Summary Section】**
- **Q3 2025 Performance**: Revenue of $2.7 billion, flat year-over-year but up 4.5% on a 2-year average basis. Adjusted operating EBITDA grew 7% to $519 million, with a margin improvement of 130 basis points to 19.3%.
- **Segment Growth**: Scent (+5% YoY), Taste (+2% YoY), and Health & Biosciences (flat YoY) offset softness in Food Ingredients. Fine Fragrance sales surged 20% YoY.
- **Strategic Initiatives**: Opened Scent creative centers in Dubai and Florida, expanded LMR Natural site in France. Collaborated with BASF on DEB technology and formed a joint venture with Kemira for sustainable ingredients.
- **Portfolio Optimization**: Completed divestitures of Pharma Solutions, Nitrocellulose, and Soy Crush businesses. Progressing Food Ingredients divestiture with Bunge, expected to close in Q4 2025.
- **Financial Position**: Reduced net debt to EBITDA ratio to 2.5x, with $621 million in cash and $6 billion in gross debt.

**【CFO Financial Commentary】**
- **Segment Breakdown**: 
  - **Taste**: $635 million in sales (+2% YoY), driven by Latin America and EAME. Adjusted EBITDA up 2%.
  - **Food Ingredients**: $830 million in sales (-3% YoY), with adjusted EBITDA margin improving 230 basis points YoY.
  - **Health & Biosciences**: $577 million in sales (flat YoY), adjusted EBITDA up 3%.
  - **Scent**: $652 million in sales (+5% YoY), adjusted EBITDA up 6%.
- **Cash Flow**: Year-to-date free cash flow of $126 million, with CapEx at $406 million (5% of sales). Reiterated full-year guidance for sales ($10.6-10.9 billion) and EBITDA ($2-2.15 billion).
- **2026 Outlook**: Cautiously optimistic on growth acceleration, with focus on improving profitability through productivity initiatives and portfolio optimization.

**【Q&A Highlights】**
- **Health & Biosciences**: North America softness expected to improve in 2026, with new leadership and innovation pipeline driving recovery. 2027 target for full recovery.
- **Food Ingredients Divestiture**: $110 million gross proceeds from Bunge deal, netting ~$90 million after taxes. Progressing strategic alternatives for remaining portfolio.
- **Free Cash Flow**: 2025 free cash flow expected modestly below $500 million due to inventory builds and one-time costs. 2026 focus on improving net working capital.
- **Scent Growth**: Fine Fragrance wins (e.g., Miu Miu by L'Oreal) and Dubai creative center expansion to drive mid- to late-2026 growth. 20% Q3 Fine Fragrance growth attributed to innovation and regional demand.
- **Macroeconomic Impact**: North America volume challenges offset by innovation and private-label growth. Global key accounts focus on cleaner labels and reformulation.

International Flavors & Fragrances Inc. (IFF) Q3 2025 Earnings Call Transcript

Revenue

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IFF

IFF fundamentals

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