IFF Reports First Quarter 2014 Local Currency Sales Growth of 7% and Adjusted EPS Increase of 11% to $1.32 per diluted Share

  IFF Reports First Quarter 2014 Local Currency Sales Growth of 7% and
  Adjusted EPS Increase of 11% to $1.32 per diluted Share

  Local Currency Sales Growth Includes 1% of Growth from Aromor Acquisition

Business Wire

NEW YORK -- May 6, 2014

International Flavors & Fragrances Inc. (NYSE:IFF), a leading global creator
of flavors and fragrances for consumer products, today reported financial
results for the first quarter ended March 31, 2014.

First Quarter 2014 Results

  *Reported net sales for the first quarter totaled $770 million, an increase
    of 6% from $728 million in the first quarter of 2013. Excluding the impact
    of foreign currency, local currency sales increased 7%. As expected, our
    January 15^th acquisition of Aromor contributed approximately 1% of growth
    to the sales increase.
  *Net income totaled $106.7 million, or $1.30 per diluted share, for the
    first quarter, compared with net income of $90.7 million, or $1.10 per
    diluted share, in the prior year first quarter.
  *Adjusted EPS excludes the impact of restructuring and operational
    improvement initiative costs from the current year quarter, and a Spanish
    tax charge and other items impacting comparability from the prior year
    quarter. Adjusted EPS increased 11% to $1.32 per diluted share in the
    first quarter, up from an adjusted $1.19 per diluted share in the first
    quarter of 2013.

Please see the information and schedules at the end of this release for
reconciliations of GAAP to non-GAAP financial metrics.

Management Commentary

Doug Tough, Chairman and CEO of IFF, said “We are pleased with our strong
operating results in the first quarter. Our 7% local currency sales growth
reflects balanced growth between our Flavors and Fragrances businesses and
includes a percentage point of growth from our Aromor acquisition completed in
January. We delivered solid emerging and developed market local currency sales
growth of 7% and 5%, respectively, indicating the strength and diversity of
our portfolio supported by a high level of technology-driven wins in
attractive end-use categories.

“Our 7% local currency sales growth resulted in a 14% adjusted operating
profit improvement and an 11% increase in adjusted EPS, as a result of our
strong operating performance. These year-over-year gains reflect the diligent
and collaborative efforts of our people to leverage our consumer insights, R&D
and creative capabilities to provide outstanding results to our customers and
shareholders.”

Mr. Tough continued, “This quarter we completed the acquisition of Aromor, and
we are pleased to welcome their talented teams to our organization and excited
about the opportunities that lie ahead. Our R&D, commercial and financial
teams are working closely with Aromor to ensure a smooth integration, which is
proceeding on plan and contributing to our improved results this quarter. We
expect the addition of their specialty ingredients to our portfolio to enhance
our creative processes and result in higher win rates. Their expertise in R&D
is a real benefit to the entire organization and our joint programs will lead
to a stronger IFF.”

“Given our robust performance in the first quarter of 2014, our outlook for
the full year remains unchanged,” concluded Mr. Tough. “We expect to achieve
5-7% top line growth, which includes a percentage point of growth from Aromor,
and expect to deliver double-digit growth in adjusted operating profit and
adjusted EPS. We remain highly focused on leveraging our geographic reach,
strengthening our innovation platform and maximizing our portfolio to better
serve our customers with high performance products and drive profitable growth
for our shareholders. At the same time, we are making important strategic
investments in technology, research and talent development that will support
our people in serving our customers and open new avenues of growth for our
Company.”

First Quarter 2014 Operating Highlights

  *Local currency sales growth was 7% in the emerging markets and 5% in the
    developed markets. Sales to the emerging markets accounted for 49% of
    total company sales.
  *Gross profit, as a percent of sales, was 44.3% compared with 42.8% in the
    prior year quarter. The 150 basis point adjusted gross margin improvement
    was due to a high level of new wins and favorable end-use category mix,
    the favorable net impact of price to input costs, and cost savings
    initiatives.
  *Research, selling and administrative (RSA) expenses, as a percent of
    sales, increased 10 basis points to 24.0% compared with 23.9% in the first
    quarter of 2013. The modest RSA increase this quarter primarily reflects
    the inclusion of Aromor’s results and higher incentive compensation
    accruals.
  *Operating profit increased 13%, or $18.5 million, to $156.1 million from
    $137.6 million. Adjusted operating profit increased 14%, or $20.0 million,
    to $158.8 million from $138.8 million in the first quarter of 2013. The
    improvement in adjusted operating profit was primarily due to strong
    volume growth combined with gross margin expansion. Adjusted operating
    profit margin increased 150 basis points to 20.6% from 19.1% in the prior
    year. The results of Aromor were not significant to the consolidated
    financial results of the Company for the first quarter of 2014.
  *Excluding items impacting comparability, the adjusted effective tax rate
    was 25.5%, or 150 basis points higher than the prior year adjusted
    effective tax rate of 24.0%. The increase in the adjusted effective tax
    rate was primarily driven by the absence of the U.S. R&D tax credit in the
    current quarter.
  *Cash flow from operations was $35.0 million, or 4.5% of sales, compared
    with $18.7 million, or 2.6% of sales in the prior year quarter. The
    increased cash flow from operations reflects the absence of a $30 million
    pension contribution which was made in the first quarter of 2013, offset
    by higher incentive compensation payments in the first quarter of 2014.

Fragrances Business Unit

  *Reported net sales increased 9% to $403.7 million in the first quarter of
    2014 compared with $371.5 million in the first quarter of 2013.
  *Excluding the impact of foreign currency, local currency sales growth was
    8%. Local currency sales growth was high single-digit in the developed
    markets and low single-digit in the emerging markets. The recent
    acquisition of Aromor contributed two percentage points of growth to the
    Fragrance business unit’s local currency sales growth of 8%.
  *Fragrance Compounds consists of two newly-defined market categories; Fine
    Fragrance and Consumer Fragrances. Consumer Fragrances consists of five
    end-use categories: Fabric Care, Home Care, Personal Wash, Hair Care and
    Toiletries.
  *Fragrance Compounds achieved local currency sales growth of 6% this
    quarter, reflecting double-digit growth in Greater Asia and North America,
    and solid growth in the EAME region, offset by a single-digit decline in
    Latin America.
  *Fine Fragrance delivered double-digit local currency growth of 10% due to
    a high level of new wins and strong sales of our classic fragrances,
    particularly in the developed markets.
  *Consumer Fragrance delivered solid local currency growth of 4% this
    quarter, compared with growth of 9% in the prior year quarter. Hair Care
    achieved double-digit growth and Fabric Care delivered high single-digit
    growth due to the continued demand for our encapsulation technology,
    particularly in the emerging markets.
  *Fragrance Ingredients local currency sales growth of 22% this quarter
    includes 14% growth associated with our Aromor acquisition and 8% local
    currency growth excluding Aromor. Strong sales of specialty ingredients
    within Fragrance Ingredients, which includes the benefit of the Aromor
    acquisition, drove increased growth. Excluding the planned migration of
    modest volume to Fragrance Compounds, Fragrance Ingredients achieved
    growth of 12%.
  *Fragrances gross margins improved over the prior year quarter primarily
    due to strong volume growth and favorable end-use category mix, the
    favorable net impact of price to input costs, and ongoing cost reduction
    initiatives.
  *Fragrance segment profit increased 28%, or $18.8 million, to $87.2 million
    in the first quarter of 2014, up from $68.4 million in the first quarter
    of 2013. Segment profit margin increased 320 basis points to 21.6%. The
    improvement is due to strong volume growth, gross margin expansion, and
    increased cost discipline.

Flavors Business Unit

  *Reported net sales increased 3% to $366.5 million, compared with $356.4
    million in the first quarter of 2013.
  *Excluding the impact of foreign currency, Flavors local currency sales
    growth was 5% this quarter, reflecting strong volume growth from a
    continued high level of wins.
  *Flavors achieved double-digit local currency growth in the emerging
    markets, which accounted for 52% of total Flavors sales.
  *On a regional basis, Latin America delivered 23% local currency sales
    growth due to a very high level of new wins in Beverage. Greater Asia and
    EAME both delivered solid local currency growth of 8% and 4%,
    respectively, reflecting positive single-digit growth across all end-use
    categories, more than offsetting weakness in North America.
  *Gross margins in the Flavors business increased over the prior year
    quarter reflecting higher volume and favorable end-use category mix, the
    favorable net impact of price to input costs, and ongoing manufacturing
    efficiencies.
  *Flavors segment profit increased 6% to $88.1 million in the first quarter
    of 2014, up from $83.0 million in the prior year quarter. Flavors segment
    profit margin increased 70 basis points to 24.0% from 23.3% in the prior
    year quarter, as a result of strong volume growth from new wins, gross
    margin improvement and disciplined cost control.

Audio Webcast

A live webcast to discuss the Company's first quarter financial results and
full year outlook will be held today, May 6, 2014, at 10:00 a.m. EDT.
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) our outlook for 2014 and benefit from our strategic investments;
and (ii) funding of investments in R&D, technologies and talent development.
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 25, 2014. 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; (14) adverse changes due to accounting rules or
regulations; and (15) the ability of the Company to successfully integrate
Aromor and realize the anticipated benefits of the Aromor acquisition on a
timely basis, or at all. 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 diluted share data)

(Unaudited)
                                 
                                    Three Months Ended March 31,
                                                           
                                    2014        2013          % Change
                                                              
Net sales                           $ 770,224   $ 727,836     6    %
Cost of goods sold                   428,812    416,476    3    %
Gross margin                          341,412     311,360     10   %
Research and development              61,504      59,101      4    %
Selling and administrative            123,733     114,653     8    %
Restructuring and other charges       122         —
Interest expense                      11,677      11,152
Other expense (income), net          1,443      (1,069  )
Pretax income                         142,933     127,523     12   %
Income taxes                         36,226     36,826     (2   )%
Net income                          $ 106,707   $ 90,697     18   %
                                                              
                                                              
                                                              
Earnings per share - basic          $ 1.31      $ 1.11
Earnings per share - diluted        $ 1.30      $ 1.10
                                                              
Average shares outstanding
Basic                                 81,053      81,291
Diluted                               81,732      82,024
                                                              

International Flavors & Fragrances Inc.

Condensed Consolidated Balance Sheet

(Amounts in thousands)

(Unaudited)
                                                         
                                               March 31,     December 31,
                                               2014          2013
Cash & cash equivalents                        $ 268,584     $  405,505
Receivables                                      574,678        524,493
Inventories                                      552,116        533,806
Other current assets                            174,473       189,099
Total current assets                             1,569,851      1,652,903
                                                             
Property, plant and equipment, net               696,234        687,215
Goodwill and other intangibles, net              759,316        696,197
Other assets                                    295,952       295,416
Total assets                                   $ 3,321,353   $  3,331,731
                                                             
Bank borrowings and overdrafts, and
current portion of long-term debt              $ 2,291       $  149
Other current liabilities                       482,250       560,217
Total current liabilities                        484,541        560,366
                                                             
Long-term debt                                   931,635        932,665
Non-current liabilities                          384,239        371,649
                                                             
Shareholders' equity                            1,520,938     1,467,051
Total liabilities and shareholders' equity     $ 3,321,353   $  3,331,731
                                                                

International Flavors & Fragrances Inc.

Consolidated Statement of Cash Flows

(Amounts in thousands)

(Unaudited)
                                              
                                                  Three Months Ended March 31,
                                                  2014            2013
Cash flows from operating activities:
                                                                   
Net income                                        $  106,707       $ 90,697
Adjustments to reconcile to net cash
provided by operations:
Depreciation and amortization                        22,830          19,405
Deferred income taxes                                8,246           12,232
Gain on disposal of assets                           (811      )     (1,085  )
Stock-based compensation                             4,695           4,523
Changes in assets and liabilities, net of
Aromor acquisition:
Current receivables                                  (41,569   )     (34,448 )
Inventories                                          (591      )     18,208
Accounts payable                                     (11,989   )     (29,339 )
Accruals for incentive compensation                  (62,282   )     (43,178 )
Other current payables and accrued expenses          1,096           (6,766  )
Changes in other assets/liabilities                 8,661         (11,530 )
Net cash provided by operating activities           34,993        18,719  
                                                                   
Cash flows from investing activities:
                                                                   
Cash paid for acquisition, net of cash
received (including $15 million of                   (102,400  )     —
contingent consideration)
Additions to property, plant and equipment           (33,836   )     (29,861 )
Proceeds from termination of life insurance          12,308          793
contracts
Maturity of net investment hedges                    (472      )     530
Proceeds from disposal of assets                    2,042         204     
Net cash used in investing activities               (122,358  )    (28,334 )
                                                                   
Cash flows from financing activities:
Cash dividends paid to shareholders                  (31,743   )     —
Net change in revolving credit facility              1,309           (352    )
borrowings and overdrafts
Proceeds from issuance of stock under stock          913             1,970
plans
Excess tax benefits on stock-based payments          315             744
Purchase of treasury stock                          (20,122   )    (14,242 )
Net cash used in financing activities               (49,328   )    (11,880 )
Effect of exchange rates changes on cash             (228      )     (2,881  )
and cash equivalents
Net change in cash and cash equivalents              (136,921  )     (24,376 )
Cash and cash equivalents at beginning of           405,505       324,422 
year
Cash and cash equivalents at end of period        $  268,584      $ 300,046 
                                                                             

International Flavors & Fragrances Inc.

Business Unit Performance

(Amounts in thousands)

(Unaudited)
                                          
                                             Three Months Ended March 31,
                                             2014            2013
Net Sales
Flavors                                      $  366,505       $ 356,361
Fragrances                                     403,719       371,475 
Consolidated                                    770,224         727,836
                                                              
Segment Profit
Flavors                                         88,063          83,039
Fragrances                                      87,166          68,354
Global Expenses                                 (16,435  )      (12,589 )
Restructuring and other charges, net            (122     )      —
Operational improvement initiative costs       (2,619   )     (1,198  )
Operating profit                                156,053         137,606
                                                              
Interest Expense                                (11,677  )      (11,152 )
Other income (expense), net                    (1,443   )     1,069   
Income before taxes                          $  142,933      $ 127,523 
                                                              
Operating Margin
Flavors                                         24.0     %      23.3    %
Fragrances                                      21.6     %      18.4    %
Consolidated                                    20.3     %      18.9    %
                                                                        

International Flavors & Fragrances Inc.

Sales Performance by Region and Category

(Unaudited)
                                                                          
                   First Quarter 2014 vs. 2013
                   Percentage Change in Sales by Region of Destination
                   Fine         Consumer     Fragrance     Total        Total     Total
                   Fragrances  Fragrances  Ingredients  Fragrances  Flavors  Consolidated
                                (*)
                                                                                  
North   Reported   29     %     6     %      -1     %      8     %      -4   %    2      %
America
                                                                                  
EAME    Reported   22     %     0     %      46     %      15    %      5    %    10     %
        Local      19     %     -2    %      43     %      12    %      4    %    9      %
        Currency
                                                                                  
Latin   Reported   -19    %     -1    %      -6     %      -6    %      19   %    1      %
America
        Local      -16    %     0     %      -6     %      -5    %      23   %    3      %
        Currency
                                                                                  
Greater Reported   -4     %     12    %      37     %      14    %      2    %    6      %
Asia
        Local      -4     %     13    %      43     %      16    %      8    %    11     %
        Currency
                                                                                  
Total   Reported   11     %     4     %      22     %      9     %      3    %    6      %
        Local      10     %     4     %      22     %      8     %      5    %    7      %
        Currency
                                                                                  
* Consumer Fragrances consists of five end-use categories: Fabric Care, Home Care, Personal
Wash, Hair Care and Toiletries.

Note: Local currency sales growth is calculated by translating prior year
sales at the exchange rates used for the corresponding 2014 period.

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 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.
                     
                         First Quarter 2014
                         Items Impacting Comparability
                         
                                     Restructuring   Operational
                         Reported   and Other      Improvement   Adjusted
                         (GAAP)      Charges         Initiative     (Non-GAAP)
                                                     Costs
                                                                    
                                                                    
Net Sales                770,224
Cost of Goods            428,812     (2,250  ) (a)   (369   ) (b)
Sold
Gross Profit             341,412     2,250           369            344,031
Research and             61,504
Development
Selling and              123,733
Administrative
RSA Expense              185,237
Restructuring
and other                122         (122    )
charges, net
Operating                156,053     2,372           369            158,794
Profit
Interest                 11,677
Expense
Other (Income)           1,443
expense, net
Income before            142,933     2,372           369
taxes
Taxes on                 36,226      831             90             37,147
Income
Net Income               106,707   1,541        279         108,527
                                                                    
Earnings per
share -                  $ 1.30      $ 0.02          $ 0.00         $ 1.32
diluted
                                                                    
                   (a)   Costs related to the Fragrance Ingredients
                         Rationalization.
                   (b)   Related to plant closing in Europe and several
                         locations in Asia.
                                                                    
                                                                    
                         First Quarter 2013
                         Items Impacting Comparability
                         
                                     Operational     Spanish
                         Reported    Improvement     Tax            Adjusted
                         (GAAP)      Initiative      Charge         (Non-GAAP)
                                     Costs
                                                                    
                                                                    
Net Sales                727,836
Cost of Goods            416,476     (1,198  )                      415,278
Sold
Gross Profit             311,360     1,198     (a)                  312,558
Research and             59,101                                     59,101
Development
Selling and              114,653
Administrative
RSA Expense              173,754
Restructuring
and other                —
charges, net
Operating                137,606     1,198                          138,804
Profit
Interest                 11,152
Expense
Other (Income)           (1,069  )
expense, net
Income before            127,523     1,198                          128,721
taxes
Taxes on                 36,826      279             (6,230 ) (b)   30,875
Income
Net Income               90,697    919          6,230       97,846
                                                                    
Earnings per
share -                  $ 1.10      $ 0.01          $ 0.08         $ 1.19
diluted
                                                                    
                   (a)   Related to plant closings in Europe and Asia.
                   (b)   Spanish tax charge related to the 2002-2003 ruling.

Contact:

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