IFF Reports Strong Fourth Quarter and Full Year 2013 Results

  IFF Reports Strong Fourth Quarter and Full Year 2013 Results

Fourth Quarter Local Currency Sales Growth of 7% and Adjusted EPS Increase of
                                 11% to $0.92

   Full Year Local Currency Sales Growth of 5%; Reported Sales Growth of 5%

        Full Year Adjusted Earnings per Share Increase of 12% to $4.46

Business Wire

NEW YORK -- February 13, 2014

International Flavors & Fragrances Inc. (NYSE:IFF), a leading global creator
of flavors and fragrances for consumer products, today reported financial
results for the fourth quarter and full year ended December 31, 2013.

Fourth Quarter 2013 Results

  *Reported revenue increased $44 million, or 7%, to $725 million from $681
    million in the prior year quarter. Local currency sales increased 7%
    reflecting solid sales growth in both the Flavor and Fragrance business
    units, fueled by double-digit growth in the emerging markets. In the
    fourth quarter, our expanding footprint in the emerging markets accounted
    for 50% of consolidated sales.
  *Reported net income for the quarter totaled $61.5 million, or $0.75 per
    share, compared with net income of $68.1 million, or $0.83 per share, in
    the prior year quarter. Net income in the fourth quarter of 2013 included
    a $9.1 million after-tax Spanish capital tax charge, a $1.9 million
    after-tax loss on the sale of a non-operating asset, and other costs
    associated with previously announced restructuring or improvement
    initiatives.
  *Excluding the Spanish capital tax charge and other costs included in the
    Reconciliation of Income table from the current year’s results, adjusted
    net income increased 11% to $75.5 million from $68.1 million in the prior
    year quarter, and adjusted earnings per share (EPS) increased 11% to $0.92
    per share from $0.83 per share in the prior year quarter.

Full Year 2013 Results

  *Reported revenue for the full year increased 5% to $3.0 billion. Local
    currency sales increased 5% for the full year, reflecting strong growth
    from new business wins and positive volume on existing business. On a
    like-for-like basis (LFL), which excludes the exit of Flavors low-margin
    sales activities, local currency sales increased 6%. The emerging markets
    grew by 10% and accounted for 49% of full year sales.
  *Reported net income for the full year totaled $353.5 million, or $4.29 per
    share, compared with net income of $254.1 million, or $3.09 per share, in
    the prior year. The current year’s net income included charges of $22.9
    million related to a Spanish capital tax charge and other costs associated
    with the recently announced restructuring and operational improvement
    programs. These charges were partially offset by an $8.5 million after-tax
    net gain on the sale of non-operating assets. The prior year’s net income
    included charges of $73.4 million (or $0.89 per share), primarily related
    to the Spanish income tax settlement.
  *Excluding these charges from both years’ operating results, adjusted net
    income increased 12% to $368.0 million from $327.5 million in 2012 and
    full year adjusted EPS increased 12% to $4.46 from $3.98 in the prior
    year.
  *Cash flows from operations for the full year were $407.6 million, or 13.8%
    of sales, compared with $323.8 million, or 11.5% of sales in the prior
    year. The current year’s cash flow from operations included $48 million of
    cash payments related to the Spanish tax cases and incremental U.S.
    pension contributions. The prior year cash flow from operations included a
    $105.5 million cash payment due to the Spanish income tax settlement.
    Excluding these payments from the Company’s operating cash flow, adjusted
    cash flow from operations would have increased 6% from $429 million in
    2012 to $456 million in 2013.

Subsequent Events

  *On January 16^th, IFF announced it had completed the acquisition of Aromor
    Flavors and Fragrances, Ltd, a privately-held manufacturer and marketer of
    complex specialty ingredients. Aromor would have represented approximately
    $35 million of incremental sales to IFF’s 2013 results on a pro-forma
    basis. Aromor is expected to be accretive to IFF’s earnings per share in
    2014. The acquisition of Aromor, with its strong R&D capabilities,
    supports IFF’s strategic focus on creating consumer-preferred Fragrance
    Compounds using specialized, value-added, cost-effective molecules.

Management Commentary

“We are very pleased with our fourth quarter performance, which benefited
significantly from the diversity of our businesses and end-use categories in
both the developed and emerging markets,” said Doug Tough, Chairman and CEO of
IFF. “The emerging markets continue to be a primary driver of our topline
growth, and accounted for half of our consolidated sales and a majority of our
top line local currency sales increase. This strong, continued growth further
validates our emerging market strategy and is yet one more data point that
underpins our commitment to these markets.”

Mr. Tough continued, “We once again delivered local currency sales growth and
adjusted operating profit improvements that exceeded our long-term targets,
while continuing to make important investments in our people and portfolio to
strengthen our company and position IFF for continued success.”

Mr. Tough added, “2013 was an extremely productive year for IFF. By executing
on our three strategic priorities, we have delivered on our long-term growth
targets for full year 2013, achieving 5% local currency growth (6% LFL), 11%
adjusted operating profit growth and 12% adjusted EPS growth, while having the
financial flexibility to invest in the future growth of IFF, and return
capital to our shareholders.”

“We are very excited about the future profitable growth of IFF and believe we
are well-positioned to deliver another strong year in 2014.”

Fourth Quarter 2013 Operating Highlights

  *Local currency sales increased 7%, supported by 12% growth in Greater Asia
    and 10% growth in both Latin America and EAME.
  *Gross profit margins, as a percent of sales, improved to 43.2% from 42.2%
    in the fourth quarter of 2012. Excluding previously announced
    restructuring and other improvement initiative costs from cost of goods
    sold, the adjusted gross profit margin increased 160 basis points to 43.8%
    from 42.2% in the prior year quarter. The improved performance reflects
    moderating input costs combined with the implementation of our strategic
    initiatives, including mix, innovation and cost reductions.
  *Research, selling and administrative (RSA) expenses, as a percent of
    sales, were 30.1% in the fourth quarter of 2013 compared with 27.6% in the
    fourth quarter of 2012. The current quarter RSA expense includes a $13
    million pre-tax charge related to the Spanish capital tax case. Excluding
    the impact of the Spanish capital tax charge, adjusted RSA, as a percent
    of sales, increased 70 basis points to 28.3% compared with 27.6% in the
    prior year quarter, reflecting increased investment in R&D, increased
    incentive compensation accruals resulting from our strong full year 2013
    performance, as well as $5 to $6 million of non-structural expenses.
  *Operating profit in the fourth quarter totaled $94.9 million, compared
    with $99.2 million in the prior year quarter. Excluding $17.2 million of
    expenses primarily related to the Spanish capital tax case and other
    costs, adjusted operating profit increased approximately $13 million, or
    13%, to $112 million from $99.2 million in the prior year quarter.
    Operating profit benefited from strong sales growth and gross margin
    enhancements, which offset higher RSA and incentive compensation accruals
    related to our strong 2013 performance. Adjusted operating profit margin
    increased 80 basis points to 15.4% from 14.6% in the prior year quarter.
  *Interest expense increased by $0.7 million in the fourth quarter compared
    with the prior year quarter, primarily reflecting new long-term borrowings
    from our senior note offering in the second quarter of 2013 to take
    advantage of attractive borrowing rates and maintain efficiency and
    flexibility in our capital structure.
  *The effective tax rate for the quarter was 25.9% compared with 23.2% in
    the prior year quarter. Excluding the impact of the pre-tax Spanish
    capital tax charge and other previously announced restructuring and
    operational improvement costs, the adjusted effective tax rate for the Q4,
    2013 would have been 26.1%. The quarter-over-quarter increase in the
    adjusted effective tax rate reflects a higher cost of repatriation and
    loss provisions, partially offset by a favorable mix of earnings and the
    reinstatement of the U.S. federal R&D tax credit in 2013.

Fourth Quarter 2013 Segment Results

Fragrances Business Unit

  *Reported revenue increased 8% to $382 million in the fourth quarter of
    2013 compared with $354 million in the fourth quarter of 2012.
  *Local currency sales growth of 7% in the fourth quarter of 2013 benefited
    from strong growth in the emerging and developed markets, and follows 13%
    growth in the fourth quarter of 2012.
  *Fragrance Compounds, including both Fine Fragrance and Beauty Care and
    Functional Fragrances, achieved sales growth of 9%, as volume growth from
    new business wins more than offset volume erosion on existing business.
    This growth was on top of 15% growth in the prior year quarter.
  *Fragrance Compounds growth was supported by double-digit growth in Greater
    Asia and EAME and solid growth in both Latin America and North America.
  *Fragrance Ingredients had a small decline of 3% this quarter, driven by
    the planned transition of some volume from Ingredients to Compounds.
    Excluding the transition, Fragrance Ingredients would have experienced
    positive growth for the second consecutive quarter.
  *Fine Fragrance and Beauty Care achieved 9% local currency sales growth,
    due to strong growth in Fine Fragrance owing to strong new business wins
    in EAME. Functional Fragrance achieved 10% local currency sales growth due
    to strong growth in Fabric Care, supported by our proprietary
    encapsulation technology.
  *Fragrances gross margins improved over the prior year quarter primarily
    due to moderating input costs and other strategic initiatives including
    mix, innovation and cost reductions.
  *Segment profit increased 16%, or $9 million, to $62 million in the fourth
    quarter of 2013 compared with $53 million in the fourth quarter of 2012.
    The improved segment profit is due to strong sales growth combined with
    further gross margin expansion and cost discipline. These gains more than
    offset increased incentive compensation expenses and higher research and
    development expenses this quarter. Segment profit margin increased 110
    basis points to 16.2%, up from 15.1% in 2012.

Flavors Business Unit

  *Reported revenue increased 5%, or $16.5 million, to $343.0 million in the
    fourth quarter from $326.5 million in the prior year quarter.
  *Local currency sales increased 7% in the fourth quarter driven by
    double-digit growth in the emerging markets, and accounted for 53% of
    Flavors sales.
  *Sales growth this quarter was supported by growth from new business wins
    and increased volume on existing business. The Savory, Beverages and Sweet
    end-use categories all experienced low- to mid-single digit sales growth.
  *Flavors achieved the highest regional growth in Latin America. Other
    strong regions included EAME and Greater Asia.
  *Flavors gross margins improved over the prior year quarter primarily due
    to the net benefit of moderating input costs versus pricing, as well as
    other strategic initiatives to improve efficiency.
  *Segment profit increased 12%, or $8 million, to $70 million compared with
    $62 million in the prior year quarter. Segment profit growth reflects
    strong sales growth combined with further gross margin enhancements, which
    offset increased incentive compensation and higher allocated expenses for
    shared corporate resources. Segment profit margin increased 130 basis
    points to 20.3% from 19.0%.

Full Year 2013 Operating Highlights

  *Local currency sales increased 5% to $3 billion, reflecting 10% growth in
    emerging markets and 2% growth in the developed markets. On a LFL basis,
    which excludes the exit of low-margin sales activities, local currency
    sales increased 6%.
  *Gross margins, as a percent of sales, increased 180 basis points to 43.5%
    from 41.7% in 2012. Excluding previously announced restructuring charges
    and operational improvement initiative costs, adjusted gross margins
    increased 210 basis points to 43.8% from 41.7% in the prior year. The
    improved performance reflects moderating input costs combined with other
    strategic initiatives to improve efficiency.
  *RSA expenses, as a percent of sales, were 25.9% compared with 24.4% in
    2012. Excluding the impact of the 2013 Spanish capital tax charge included
    in administrative expense, adjusted RSA, as a percent of sales, increased
    110 points to 25.5% from 24.4% in 2012 primarily as a result of higher
    incentive compensation accruals.
  *Operating profit totaled $516 million in 2013 compared with $487 million
    in 2012. Excluding the Spanish capital tax charge and restructuring costs
    from the current year’s results as well as previously announced
    restructuring charges from the prior year’s results, the adjusted
    operating profit would have increased 11%, or $52 million, to $540 million
    in 2013 from $488 million in 2012. Adjusted operating profit margins
    increased 100 basis points to 18.3% from 17.3% in 2012.
  *Interest expense increased by $5 million year-over-year, primarily
    reflecting new long-term borrowings from our senior note offering in the
    second quarter of 2013 to take advantage of attractive borrowing rates and
    maintain efficiency and flexibility in our capital structure.
  *The effective tax rate was 27.1% in 2013 compared to a rate of 42.7% in
    the prior year. Excluding the impact of the 2012 and 2013 items previously
    noted, including the 2012 Spanish income tax settlement and the 2013
    pre-tax Spanish capital tax charge, the adjusted effective tax rate in
    2013 was 25.7% compared with 26.4% in the prior year. The year-over-year
    reduction reflects the reinstatement of the U.S. federal R&D tax credit in
    2013, partially offset by a higher cost of repatriation.

Full Year 2013 Segment Results

Fragrances Business Unit

  *Reported revenue for the full year increased 6% to $1.5 billion. The
    Fragrances segment contributed 52% of the Company’s consolidated revenue
    in 2013, up from 51% in 2012.
  *Local currency sales increased 6% for the full year, supported by
    double-digit growth in Greater Asia and Latin America and solid growth in
    EAME. For the full year, Fragrance Compounds had local currency growth of
    8%, following 7% local currency growth in 2012. This growth was supported
    by 8% growth in both Fine and Beauty Care and Functional Fragrances owing
    to strong new business wins. Fragrance Compounds benefited from solid
    growth in each end-use category, including double-digit growth in Fabric
    Care and high single-digit growth in Fine Fragrance.
  *Fragrance Ingredients local currency sales growth declined 4% for the
    year. Excluding the planned transition of volume to Fragrance Compounds,
    the Ingredients business would have been flat year-over-year.
  *Fragrances gross margins improved over the prior year primarily due to
    moderating input costs combined with productivity initiatives, including
    mix and productivity programs.
  *Segment profit margins improved 200 basis points to 18.5%, up from 16.5%
    in the prior year. Segment profit increased 19% or $45.2 million to $283.6
    million, up from $238.4 million in 2012. The improved segment profit is
    due to strong sales growth combined with further gross margin expansion
    and ongoing cost discipline, which more than offset increased incentive
    compensation accruals and increased investments in R&D.

Flavors Business Unit

  *Reported revenue for the full year increased 3% to $1.4 billion. The
    Flavors segment contributed 48% of the Company’s total consolidated
    revenue.
  *Local currency sales increased 4% for the full year. Growth from new
    business wins offset a slight sales decline on existing business and the
    exit of low-margin sales activities. Excluding the impact of exiting these
    low-margin sales activities, LFL growth would have been 6%.
  *LFL growth of 6% was due to positive growth in every region, led by
    double-digit growth in Latin America, and high single digit growth in
    Greater Asia and EAME.
  *Full year sales were supported by strong growth in the emerging markets,
    which accounted for 51% of Flavors total sales, and continued to outpace
    the growth in the developed markets. From an end-use category perspective,
    local currency sales growth was fueled by double-digit growth in Beverages
    and solid growth in Savory.
  *Flavors gross margins increased over the prior year primarily driven by
    moderating input costs and the exit of low-margin sales activities,
    combined with strategic initiatives.
  *Full year segment margin increased from 21.6% to 22.7%, or a 110 basis
    point improvement. Flavors segment profit totaled $324 million versus $298
    million in the prior year, or an increase of 9%. The improved segment
    profit reflects strong volume growth combined with further gross margin
    expansion, which more than offset investments in R&D, increased incentive
    compensation expenses, and increased corporate allocated expenses.

Audio Webcast

A live webcast to discuss the Company's fourth quarter and full year 2013
financial results, and first quarter and full year 2014 outlook will be held
today, February 13, 2014, at 10:00 a.m. EST. Investors may access the webcast
and accompanying slide presentation on the Company's website at www.iff.com
under the Investor Relations section. For those unable to listen to the live
broadcast, a recorded version of the webcast 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.

About IFF

International Flavors & Fragrances Inc. (NYSE:IFF) is a leading global creator
of flavors and fragrances used in a wide variety of consumer products.
Consumers experience these unique scents and tastes in fine fragrances and
beauty care, detergents and household goods, as well as beverages, sweet goods
and food products. The Company leverages its competitive advantages of
consumer insight, research and development, creative expertise, and customer
intimacy to provide customers with innovative and differentiated product
offerings. A member of the S&P 500 Index, IFF has more than 6,000 employees
working in 31 countries worldwide. For more information, please visit our
website at www.iff.com.

Cautionary Statement Under The Private Securities Litigation Reform Act of
1995

This press release includes “forward-looking statements” under the Federal
Private Securities Litigation Reform Act of 1995, including statements
regarding (i) the accretive effect of the Aromor Flavors and Fragrances Ltd.
acquisition and (ii) expected growth in the emerging markets. These
forward-looking statements are qualified in their entirety by cautionary
statements and risk factor disclosures contained in the Company’s Securities
and Exchange Commission filings, including the Company’s Annual Report on Form
10-K filed with the Commission on February 26, 2013. The Company wishes to
caution readers that certain important factors may have affected and could in
the future affect the Company’s actual results and could cause the Company’s
actual results for subsequent periods to differ materially from those
expressed in any forward-looking statements made by or on behalf of the
Company. With respect to the Company’s expectations regarding these
statements, such factors include, but are not limited to: (1) volatility and
increases in the price of raw materials, energy and transportation; (2) the
economic climate for the Company’s industry and demand for the Company’s
products; (3) fluctuations in the quality and availability of raw materials;
(4) changes in consumer preferences or a decline in consumer confidence and
spending; (5) the Company’s ability to benefit from its investments in
emerging markets; (6) the Company’s ability to implement its business
strategy, including the achievement of anticipated cost savings,
profitability, realization of price increases and growth targets; (7) the
Company’s ability to successfully develop new and competitive products that
appeal to its customers and consumers; (8) the impact of currency fluctuations
or devaluations in the Company’s principal foreign markets; (9) the effects of
any unanticipated costs and construction delays in the expansion of the
Company’s facilities; (10) the effect of legal and regulatory proceedings, as
well as restrictions imposed on the Company, its operations or its
representatives by U.S. and foreign governments; (11) adverse changes in
federal, state, local and foreign tax legislation or adverse results of tax
audits, assessments, or disputes; (12) the direct and indirect costs and other
financial impact that may result from any business disruptions due to
political instability, armed hostilities, incidents of terrorism, natural
disasters, or the responses to or repercussion from any of these or similar
events or conditions; (13) the Company’s ability to attract and retain
talented employees; and (14) adverse changes due to accounting rules or
regulations. New risks emerge from time to time and it is not possible for
management to predict all such risk factors or to assess the impact of such
risks on the Company’s business. Accordingly, the Company undertakes no
obligation to publicly update or revise any forward-looking statements,
whether as a result of new information, future events, or otherwise.

                                                                             
International Flavors & Fragrances Inc.
Consolidated Income Statement
(Amounts in thousands except per share data)
(Unaudited)
                                                                                    
                     Three Months Ended December      Twelve Months Ended December 31,
                     31,
                     2013       2012        %        2013           2012          %
                                             Change                                 Change
                                                                                    
Net sales            $ 725,169   $ 680,558   7   %    $ 2,952,896     $ 2,821,446   5      %
Cost of goods         411,714    393,490   5   %     1,668,691     1,645,912   1      %
sold
Gross margin           313,455     287,068   9   %      1,284,205       1,175,534   9      %
Research and           70,409      62,245    13  %      259,838         233,713     11     %
development
Selling and            148,190     125,594   18  %      505,877         453,535     12     %
administrative
Restructuring
and other              46          —         —   %      2,151           1,668       29     %
charges
Interest               11,129      10,423    7   %      46,767          41,753      12     %
expense
Other (income)        723        116       523 %     (15,638   )    1,450       (1,178 )%
expense, net
Pretax income          82,958      88,690    (6  )%     485,210         443,415     9      %
Income taxes          21,479     20,571    4   %     131,666       189,281     (30    )%
Net income           $ 61,479    $ 68,119    (10 )%   $ 353,544      $ 254,134     39     %
                                                                                    
Earnings per         $ 0.75      $ 0.83               $ 4.32          $ 3.11
share - basic
Earnings per
share -              $ 0.75      $ 0.83               $ 4.29          $ 3.09
diluted
                                                                                    
Average shares
outstanding
Basic                  81,242      81,318               81,322          81,108
Diluted                81,843      81,998               81,930          81,833
                                                                                    


International Flavors & Fragrances Inc.
Condensed Consolidated Balance Sheet
(Amounts in thousands)
(Unaudited)
                                                        
                                         December 31, 2013   December 31, 2012
Cash & cash equivalents                  $    405,505        $    324,422
Receivables                                   524,493             499,443
Inventories                                   533,806             540,658
Other current assets                         222,406            208,164
Total current assets                          1,686,210           1,572,687
                                                             
Property, plant and equipment, net            687,215             654,641
Goodwill and other intangibles,               696,197             702,270
net
Other assets                                 262,109            316,594
Total assets                             $    3,331,731      $    3,246,192
                                                             
Bank borrowings and overdrafts,
and
current portion of long-term debt        $    149            $    150,071
Other current liabilities                    560,217            479,807
Total current liabilities                     560,366             629,878
                                                             
Long-term debt                                932,665             881,104
Non-current liabilities                       371,649             482,655
                                                             
Shareholders' equity                         1,467,051          1,252,555
Total liabilities and                    $    3,331,731      $    3,246,192
shareholders' equity
                                                                  


International Flavors & Fragrances Inc.
Consolidated Statement of Cash Flows
(Amounts in thousands)
(Unaudited)
                                          
                                              Twelve Months Ended December 31,
                                              2013              2012
Cash flows from operating activities:
                                                                 
Net income                                    $  353,544         $  254,134
Adjustments to reconcile to net cash
provided by operations:
Depreciation and amortization                    83,227             76,667
Deferred income taxes                            (484      )        (15,878  )
Gain on disposal of assets                       (17,841   )        (4,461   )
Stock-based compensation                         23,736             19,716
Pension settlement/curtailment                   215                874
Spanish tax charge                               —                  72,362
Payments pursuant to Spanish tax                 —                  (105,503 )
settlement
Changes in assets and liabilities
Current receivables                              (53,156   )        (33,056  )
Inventories                                      4,822              4,571
Accounts payable                                 10,074             (740     )
Accruals for incentive compensation              24,518             34,632
Other current payables and accrued               9,995              29,203
expenses
Changes in other assets/liabilities             (31,088   )       (8,725   )
Net cash provided by operating                  407,562          323,796  
activities
                                                                 
Cash flows from investing activities:
                                                                 
Additions to property, plant and                 (134,157  )        (126,140 )
equipment
Proceeds from disposal of assets                 27,312             1,763
Maturity/termination of net investment           646                1,960
hedges
Purchase of life insurance contracts             —                  (1,127   )
Proceeds from termination of life               793              9,283    
insurance contracts
Net cash used in investing activities           (105,406  )       (114,261 )
                                                                 
Cash flows from financing activities:
                                                                 
Cash dividends paid to shareholders              (87,347   )        (130,943 )
Net change in revolving credit facility          (283,225  )        138,756
borrowings and overdrafts
Deferred financing costs                         (2,800    )        —
Repayments of long-term debt                     (100,000  )        —
Proceeds from long-term debt                     297,786            —
Proceeds from issuance of stock under            3,799              9,211
stock plans
Excess tax benefits on stock-based               6,112              8,380
payments
Purchase of treasury stock                      (51,363   )       —        
Net cash (used in) provided by                  (217,038  )       25,404   
financing activities
Effect of exchange rates changes on              (4,035    )        1,204
cash and cash equivalents
Net change in cash and cash equivalents          81,083             236,143
Cash and cash equivalents at beginning          324,422          88,279   
of year
Cash and cash equivalents at end of           $  405,505        $  324,422  
period
                                                                             


International Flavors & Fragrances Inc.
Business Unit Performance
(Amounts in thousands)
(Unaudited)
                                            
                     Three Months Ended          Twelve Months Ended
                     December 31,                December 31,
                     2013         2012          2013           2012
Net Sales
Flavors              $ 342,953     $ 326,445     $ 1,422,739     $ 1,378,377
Fragrances            382,216     354,113     1,530,157     1,443,069 
Consolidated           725,169       680,558       2,952,896       2,821,446
                                                                 
Segment Profit
Flavors                69,507        61,867        323,562         298,326
Fragrances             62,072        53,333        283,651         238,379
Global                 (19,704 )     (15,971 )     (66,942   )     (48,419   )
Expenses
Restructuring
and other              (46     )     —             (2,151    )     (1,668    )
charges, net
Operational
improvement            (4,008  )     —             (8,770    )     —
initiative
costs
Spanish
capital tax           (13,011 )    —           (13,011   )    —         
charge
Operating              94,810        99,229        516,339         486,618
profit
                                                                 
Interest               (11,129 )     (10,423 )     (46,767   )     (41,753   )
Expense
Other
(expense)             (723    )    (116    )    15,638        (1,450    )
income, net
Income before        $ 82,958     $ 88,690     $ 485,210      $ 443,415   
taxes
                                                                 
Operating
Margin
Flavors                20.3    %     19.0    %     22.7      %     21.6      %
Fragrances             16.2    %     15.1    %     18.5      %     16.5      %
Consolidated           13.1    %     14.6    %     17.5      %     17.2      %
                                                                 


International Flavors & Fragrances Inc.
Sales Performance by Region and Category
(Unaudited)
                                                                     
                       Fourth Quarter 2013 vs. 2012
                       Percentage Change in Sales by Region of Destination
                       Fine &                              Total
                       Beauty  Functional  Ingredients  Frag.  Flavors  Total
                       Care
                                          
North   Reported       -6%      8%           -10%          -2%     -8%       -5%
America
                                                                             
EAME    Reported       29%      5%           0%            12%     14%       13%
        Local          24%      2%           -3%           8%      13%       10%
        Currency
                                                                             
Latin   Reported       -2%      14%          0%            6%      15%       9%
America
        Local          -1%      15%          0%            6%      19%       10%
        Currency
                                                                             
Greater Reported       10%      16%          12%           14%     4%        8%
Asia
        Local          12%      18%          19%           17%     9%        12%
        Currency
                                                                             
Total   Reported       10%      10%          -2%           8%      5%        7%
        Local          9%      10%         -3%          7%     7%       7%
        Currency
                                                                             
                                                                             
                       Full Year 2013 vs. Full Year 2012
                       Percentage Change in Sales by Region of Destination
                       Fine &                              Total
                       Beauty  Functional  Ingredients  Frag.  Flavors  Total
                       Care
                                                                             
North   Reported       -3%      3%           -6%           -2%     -2%       -2%
America
                                                                             
EAME    Reported       12%      6%           -4%           6%      7%        6%
        Local          10%      3%           -6%           4%      6%        5%
        Currency
                                                                             
Latin   Reported       9%       12%          -5%           9%      5%        8%
America
        Local          11%      14%          -5%           11%     8%        10%
        Currency
                                                                             
Greater Reported       9%       14%          3%            11%     4%        7%
Asia
        Local          10%      15%          8%            13%     7%        9%
        Currency
                                                                             
Total   Reported       8%       9%           -4%           6%      3%        5%
        Local          8%      8%          -4%          6%     4%       5%
        Currency
                                                                             

Note:  Local currency sales growth is calculated by translating prior year
        sales at the exchange rates used for the corresponding 2013 period
        

                   International Flavors & Fragrances Inc.
                 Reconciliation of Like-for-Like Sales Growth
                                 (Unaudited)

The following information and schedules provide reconciliation information
between reported GAAP amounts and certain adjusted amounts. This information
and schedules 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.

                                                             
% Change in Sales for the Twelve Months Ended December 31, 2013
                                                       
                
                    Reported       Local          Exit of Low-   Like-For-Like
                Sales         Currency      Margin Sales  Sales Growth
                    Growth         Sales Growth   Activities     ^(2)
                                   ^(1)
Total Company    5%            5%            1%            6%
                                                                 
Flavors:
North America       -2%            -2%            5%             3%
EAME                7%             6%             1%             7%
Latin America       5%             8%             3%             11%
Greater Asia        4%             7%             0%             7%
Total Flavors       3%             4%             2%             6%
                                                       

(1)  Local currency sales growth is calculated by translating prior year
      sales at the exchange rates used for the corresponding 2013 period
      
(2)   Like-for-like is a non-GAAP metric that excludes the impact of exiting
      low-margin sales activities and foreign exchange
      

                   International Flavors & Fragrances Inc.
                           Reconciliation of Income
                            (Amounts in thousands)
                                 (Unaudited)

The following information and schedules provide reconciliation information
between reported GAAP amounts and certain adjusted amounts. This information
and schedules 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.

                                                                                                      
                     Fourth quarter 2013
                     Items Impacting Comparability
                                                                                                 
                                 Restructuring          Operational                               Gain on
                     Reported    and Other              Improvement          Spanish Tax          Asset            Adjusted
                     (GAAP)      Charges                Initiative           Charges              Sale             (Non-GAAP)
                                                        Costs
                                                                                                                   
Net Sales              725,169
Cost of Goods          411,714      (2,250  )    ^(a)      (1,759 )   ^(b)
Sold
Gross Profit           313,455      2,250                  1,759                                                      317,464
Research and           70,409
Development
Selling and            148,190                             (152   )   ^(b)     (13,011 )   ^(c)                       135,027
Administrative
RSA Expense            218,599
Restructuring
and other              46           (46     )    ^(a)
charges, net
Operating              94,810       2,296                  1,911               13,011                                 112,028
Profit
Interest               11,129
Expense
Other (Income)         723                                                                          1,938   ^(d)
expense, net
Income before          82,958       2,296                  1,911               13,011               1,938             102,114
taxes
Taxes on               21,479       804                    478                 3,903                —                 26,664
Income
Net Income            61,479     1,492             1,433          9,108           1,938         75,450
                                                                                                                   
                                                                                                                   
Earnings per
share -              $ 0.75      $  0.02                $  0.02              $ 0.11               $ 0.02           $  0.92
diluted
                                                                                                                   

          (a)  Costs related to the Fragrance Ingredients
                          Rationalization
                    (b)   Related to plant closings in Europe and several
                          locations in Asia.
                    (c)   Spanish capital tax charge
                    (d)   Represents a loss on sale of a non-operating asset
                          

In the fourth quarter of 2012, there were no items impacting comparability.


                   International Flavors & Fragrances Inc.
                           Reconciliation of Income
                            (Amounts in thousands)
                                 (Unaudited)

The following information and schedules provide reconciliation information
between reported GAAP amounts and certain adjusted amounts. This information
and schedules 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.

                                                                                                                    
                     Full year 2013
                     Items Impacting Comparability
                                                                                                              
                                            Restructuring          Operational                               Gain on              Adjusted
                     Reported               and Other              Improvement          Spanish Tax          Asset                (Non-
                     (GAAP)                 Charges                Initiative           Charges              Sale                 GAAP)
                                                                   Costs
                                                                                                                                  
Net Sales              2,952,896
Cost of Goods          1,668,691               (5,250  )    ^(a)      (3,520 )   ^(b)
Sold
Gross Profit           1,284,205               5,250                  3,520                                                         1,292,975
Research and           259,838
Development
Selling and            505,877                                        (152   )   ^(b)     (13,011 )   ^(c)                          492,714
Administrative
RSA Expense            765,715
Restructuring
and other              2,151                   (2,151  )    ^(a)
charges, net
Operating              516,339                 7,401                  3,672               13,011                                    540,423
Profit
Interest               46,767
Expense
Other (Income)         (15,638   )                                                                             14,155      ^(d)
expense, net
Income before          485,210                 7,401                  3,672               13,011               (14,155 )            495,139
taxes
Taxes on               131,666                 2,590                  891                 (2,327  )   ^(c)     (5,633  )            127,187
Income
Net Income            353,544            4,811             2,781          15,338          (8,522  )        367,952
                                                                                                                                  
Earnings per
share -              $ 4.29          ^(e)   $  0.06         ^(e)   $  0.03       ^(e)   $ 0.19        ^(e)   $ (0.10   )   ^(e)   $ 4.46
diluted
                                                                                                                                  

         (a)  Costs related to the Fragrance Ingredients
                        Rationalization
                  (b)   Related to plant closings in Europe and several
                        locations in Asia.
                  (c)   Spanish capital tax charge and Spanish tax charge
                        related to the 2002-2003 ruling
                  (d)   Represents a net gain on the sale of non-operating
                        assets
                  (e)   The sum of these items do not foot due to rounding

                                                                      
                     Full year 2012
                     Items Impacting Comparability
                                                                     
                     Reported      Spanish Tax          Restructuring          Adjusted
                     (GAAP)        Settlement           and Other              (Non-
                                                        Charges                GAAP)
                                                                               
                                                                               
Net Sales              2,821,446     —
Cost of Goods          1,645,912     —
Sold
Gross Profit           1,175,534     —
Research and           233,713       —
Development
Selling and            453,535       —
Administrative
RSA Expense            687,248       —
Restructuring
and other              1,668         —                      (1,668 )    ^(a)
charges, net
Operating              486,618       —                      1,668                488,286
Profit
Interest               41,753        —
Expense
Other (Income)         1,450         —
expense, net
Income before          443,415       —                      1,668                445,083
taxes
Taxes on               189,281       (72,362 )   ^(b)       621                  117,540
Income
Net Income            254,134     72,362            1,047           327,543
                                                                               
Earnings per
share -              $ 3.09        $ 0.88               $   0.01               $ 3.98
diluted
                                                                               

          (a)  Related to restructuring program announced in Q1
                          2012
                          Pursuant to the Spanish tax settlement; includes a
                    (b)   $0.71 per share charge to net income covering the
                          fiscal years 2004-2010 and a $0.17 per share accrual
                          for uncertain tax positions for years not settled.

Contact:

Investor Relations:
International Flavors & Fragrances Inc.
Shelley Young, 212-708-7271
Director, Investor Relations
 
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