International Flavors & Fragrances Inc. (IFF): Business Model Canvas [Dec-2025 Updated]

You're trying to get a clear picture of how International Flavors & Fragrances Inc. is structuring itself for the latter half of the decade, especially after all the recent portfolio shuffling. Honestly, this is a complex B2B engine focused on integrated Taste, Scent, and Health & Biosciences solutions, projecting sales between $10.6 billion and $10.9 billion for the full year 2025, supported by a disciplined cost structure and leverage target near 2.5x net debt/EBITDA. I've broken down the entire nine-block model, showing you exactly where they invest-like in high-value R&D-and where the revenue actually lands, including that exciting double-digit growth expected in Fine Fragrance this year. Keep reading to see the precise map of their operations and strategic focus.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Key Partnerships

You're looking at the core external relationships International Flavors & Fragrances Inc. (IFF) relies on to execute its strategy, especially following its recent portfolio reshaping. These partnerships are crucial for both securing inputs and driving innovation.

Strategic Divestiture Partners

IFF is actively streamlining its portfolio, which involves creating transactional partnerships for asset sales. The most recent major example involves Bunge Global S.A. for non-core food ingredient assets.

Here's a look at the financial context surrounding IFF's recent portfolio optimization moves:

Divested/Divesting Unit	Partner	Expected Close Date	2024 Revenue (Approximate)	Status/Context
Soy Crush, Concentrates & Lecithin Business	Bunge Global S.A.	Year-end 2025	$240 million	Part of Food Ingredients portfolio refinement.
Pharma Solutions Segment	(Divested)	May 1, 2025	Q2 2025 Adjusted Operating EBITDA: $22 million	Divestiture completed to focus on core segments.

This strategic shift supports IFF's reaffirmed full-year 2025 guidance:

• Sales expected in the range of $10.6 billion to $10.9 billion.
• Adjusted operating EBITDA expected in the range of $2 billion to $2.15 billion.

Also, the Board authorized a new share repurchase program valued at $500 million.

Global Raw Material and Specialty Chemical Suppliers

International Flavors & Fragrances Inc. relies on a network of vendors to ensure continuity of supply, which they view as an unbeatable competitive advantage when blended with innovation and risk management. While specific supplier names and contract values aren't public, the framework for these relationships is clear.

The terms governing these relationships emphasize compliance and quality:

• Purchase orders are governed by IFF's terms and conditions of purchase of goods or services.
• Pricing is fixed and cannot be increased by the Seller without the written consent of International Flavors & Fragrances Inc.
• The company requires specific invoice information, including the IFF Purchase Order number, to ensure smooth payment processing.

The overall freight and logistics market, which impacts raw material transport, is estimated at $6.37 trillion in 2025, showing the scale of the environment International Flavors & Fragrances Inc. operates within.

Academic and Biotech Research Collaborators

Innovation is frequently co-created with external scientific bodies. A key example from late 2025 involves a collaboration focused on sustainable biomaterials.

The partnership with BASF, announced on October 21, 2025, is designed to:

• Accelerate development of IFF's Designed Enzymatic Biomaterials™ technology platform.
• Create next-generation enzyme technologies for fabric, dish, and personal care applications.
• Combine BASF's advanced chemical capabilities with IFF's expertise in biotechnology and protein engineering.

Research partnerships generally aim to reconcile divergent priorities, with academics often prioritizing open knowledge dissemination and industry focusing on faster, scalable product development.

Co-development with Major CPG Customers

International Flavors & Fragrances Inc. emphasizes being inclusive and collaborating to win for its customers, which implies deep, often proprietary, co-development work with major Consumer Packaged Goods (CPG) companies. This is where IFF's ingredients are tailored to specific product needs.

The focus is on creating market-driven solutions that deliver sustainable value. For instance, the Q2 2025 comparable currency neutral sales growth of 3% was led by broad-based growth, including mid-single digit performances in Taste and Health & Biosciences, indicating successful customer-facing innovation.

Logistics and Distribution Network Providers

Managing the flow of ingredients and finished products globally requires extensive reliance on third-party logistics (3PL) providers. The environment in 2025 is characterized by volatility in freight rates and geopolitical disruptions.

Key aspects of this partnership category include:

• Leveraging vetted networks for small package, truckload, and less-than-truckload services.
• Securing warehousing support for flexible storage and order fulfillment.
• Utilizing technology partners for AI and IoT integration for route optimization.

The freight transport segment of the overall logistics market held 61.97% of the revenue share in 2024, showing the dominance of moving goods that International Flavors & Fragrances Inc. must manage effectively.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Key Activities

High-value R&D for new molecules and ingredient systems

International Flavors & Fragrances Inc. (IFF) continues to reinvest in its innovation pipeline to drive growth beyond 2027. The company is focused on leveraging its strong R&D pipeline to win with a broader set of customers. For the first nine months of 2025, reported Sales totaled $8.3 billion. The company's full-year 2025 sales guidance remains in the range of $10.6 billion to $10.9 billion. Capital Expenditures (CapEx) in the first quarter of 2025 were $179 million, which is roughly 6% of sales. The company is committed to investing in high-return businesses.

Global manufacturing and supply chain management

International Flavors & Fragrances Inc. (IFF) manages a global manufacturing footprint while actively mitigating supply chain risks. The company noted a gross exposure to tariffs of approximately $100 million in 2025, which it is mitigating via sourcing shifts and pricing surcharges. The Health & Biosciences segment reported an Adjusted Operating EBITDA margin of 26.2% in the second quarter of 2025. The Scent segment delivered net sales of $652 million in the third quarter of 2025, up 5% year-over-year.

Portfolio optimization via divestitures and acquisitions

Portfolio optimization is a cornerstone of the strategy, focusing on shedding non-core assets to improve capital efficiency and focus on higher-margin segments. International Flavors & Fragrances Inc. (IFF) completed the divestiture of its Pharma Solutions business on May 1, 2025. The Pharma Solutions business generated sales of $103 million in the second quarter of 2025, with a comparable currency neutral sales increase of 21%. The company also entered into a definitive agreement to divest its soy crush, concentrates, and lecithin business, which generated approximately $240 million in revenue in 2024 and employs around 250 people globally, with an expected close by year-end 2025. These divestitures are expected to have an approximately 7% adverse impact on sales growth and an approximately 8% adverse impact on adjusted operating EBITDA growth for the full year 2025. The Net Debt to Credit Adjusted EBITDA ratio was reduced to 2.5x at the end of the second quarter of 2025. The company also announced a $500 million share repurchase authorization.

The impact of divestitures on the full-year 2025 guidance is summarized below:

Metric	Divestiture Impact (Adverse)	Full Year 2025 Guidance Range
Sales Growth (Reported)	Approximately 7%	$10.6 billion to $10.9 billion
Adjusted Operating EBITDA Growth (Reported)	Approximately 8%	$2 billion to $2.15 billion

Sensory science and application center services

The performance of the Taste and Scent segments reflects the output from sensory science and application centers. In the first quarter of 2025, the Taste segment delivered comparable currency neutral sales growth of 7% and a comparable currency neutral Adjusted Operating EBITDA increase of 22%. The Scent segment achieved 4% comparable currency neutral sales growth in the first quarter of 2025. For the third quarter of 2025, Taste sales increased 2% to $635 million, with profitability gains of roughly 2% driven by favorable net pricing and cost discipline.

Driving productivity gains and cost discipline

Disciplined execution and focus on operational excellence are driving margin expansion. Comparable currency neutral Adjusted Operating EBITDA for International Flavors & Fragrances Inc. (IFF) improved 7% in the third quarter of 2025 versus the prior-year period, led by productivity gains. The Food Ingredients segment saw its comparable currency neutral Adjusted Operating EBITDA increase 24% in the third quarter of 2025, driven by productivity gains and margin improvement initiatives. The company is on track to achieve its mid-teen Adjusted Operating EBITDA margin profile for the Food Ingredients business, which saw a 170 basis point improvement in margin in the third quarter of 2025 compared to the prior year. Full-year 2025 comparable currency neutral Adjusted Operating EBITDA growth is expected to be 5% to 10%, near the midpoint of this range.

Key financial metrics for the first nine months of 2025 include:

• Cash flows from operations: $532 million
• Free cash flow: $126 million
• Reported EPS: $(1.53)
• Adjusted EPS excluding amortization: $3.41

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Key Resources

You're looking at the core assets International Flavors & Fragrances Inc. (IFF) relies on to operate and compete in late 2025. These aren't just line items; they are the engine of their value creation.

The financial outlook for the year remains anchored to the guidance provided earlier. Here's the quick math on the expected profitability level for the full year 2025:

Metric	2025 Guidance Range
Adjusted Operating EBITDA	$2.0 billion to $2.15 billion
Total Sales (Reported)	$10.6 billion to $10.9 billion
Comparable Currency-Neutral Sales Growth	1% to 4%
Comparable Currency-Neutral Adjusted Operating EBITDA Growth	5% to 10%

This guidance reflects the impact of the Pharma Solutions divestiture, which closed on May 1, 2025, resulting in an approximately 7% adverse impact to sales growth and an approximately 8% adverse impact to adjusted operating EBITDA growth for the full year.

The physical and intellectual infrastructure supporting IFF's operations is vast. They maintain a robust global network of R&D centers, creative labs, and manufacturing facilities across over 40 countries, allowing them to tailor solutions to local regulatory environments.

The proprietary flavor and fragrance compound libraries are a significant competitive moat. IFF produces thousands of individual flavors and fragrances. Central to this is a living fragrance library database, which is used by their perfumers worldwide to ensure the recreation and consistency of scents.

Intellectual property (IP) and patents in biotechnology are a focus area, particularly as the company pivots toward higher-value specialties. R&D investments in areas like GLP-1-aligned products have increased by 5-10%, validating the strategic focus on these science-driven opportunities. The company's core purpose centers on applying science and creativity, which is underpinned by this IP portfolio.

The human capital is arguably the most critical resource. International Flavors & Fragrances Inc. brought together more than 24,000 employees worldwide following the 2021 merger. This specialized talent pool is organized to drive innovation and commercial success across segments.

The highly specialized scientific and commercial talent includes key roles necessary for product creation and market delivery:

• Perfumers and Flavorists creating proprietary combinations.
• Fragrance Evaluators ensuring sensory quality.
• Consumer Science and Consumer Insights experts.
• Technical Application Experts for customer product integration.
• Scientists rapidly engineering proteins and microbial metabolic pathways for industrial scale bio-molecules.

Finance: draft 13-week cash view by Friday.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Value Propositions

You're looking at the core promises International Flavors & Fragrances Inc. (IFF) makes to its customers and shareholders as of late 2025. This isn't just about selling ingredients; it's about delivering integrated solutions backed by financial discipline and strategic portfolio shaping.

Integrated Taste, Scent, and Health & Biosciences solutions

IFF positions itself as a comprehensive partner, blending its core capabilities. The performance across these segments in 2025 shows where the momentum is. For the third quarter of 2025, reported net sales were $2.69 billion. On a comparable basis, currency-neutral sales were flat against a strong prior-year comparison, but Scent delivered mid-single digit growth, and Taste saw low-single digit performance. Over a two-year average, comparable currency-neutral sales grew by a mid-single digit percentage. The Health & Biosciences division, for instance, showed strong traction, with a 21.3% revenue increase in the second quarter of 2025, largely fueled by demand for GLP-1-related ingredients. To give you a clearer picture of the business mix, in Q2 2025, the Taste division generated $631 million in revenue, while Scent brought in $603 million, and Health & Biosciences reported $577 million. The company has historically seen its Taste and Scent segments each contribute approximately 25% to profits, with Health & Biosciences accounting for 30% of profits. That's a lot of science under one roof.

Natural, sustainable, and clean-label ingredient innovation

The market is clearly pushing toward cleaner profiles, and IFF's value proposition includes meeting this demand. While specific revenue attribution for natural ingredients isn't explicitly broken out, the focus on innovation in this space is clear through strategic investments. Analysts noted concerns about rising inflation specifically impacting input categories like natural ingredients, which confirms their high usage and importance in IFF's cost structure and product offerings. The company is actively investing in R&D to support this pipeline, with a planned investment of $100 million for 2025 across the business, targeting capacity expansion and growth projects.

Speed-to-market for new product development with CPGs

For Consumer Packaged Goods (CPG) companies, time to shelf is everything. IFF supports this with strong commercial execution. In Q3 2025, management noted that sales momentum in Scent and Taste was supported by strong new win contributions. A concrete example of this collaborative success is the joint venture with Kemira and the successful commercialization of DEB technology in a new laundry detergent for a major multinational CPG company. This shows the ability to move from concept to large-scale market deployment.

Deep sensory science expertise for consumer preference

Translating consumer desire into tangible product attributes requires deep science. IFF is reinforcing this expertise through physical infrastructure. Strategic progress in 2025 included opening a Scent creative center in Dubai and a Citrus Innovation Center in Florida. This investment in dedicated centers helps them stay ahead of evolving sensory preferences.

Portfolio optimization for margin expansion

This is where the financial strategy directly supports the value proposition-shedding lower-margin businesses to focus on higher-value, profitable growth. IFF has been aggressive here, completing the divestitures of its Pharma Solutions business (closed May 1, 2025) and Nitrocellulose. They also announced the divestiture of the Soy Crush, Concentrates, and Lecithin business. These moves are expected to have an adverse impact of approximately -7% on full-year 2025 sales growth and -8% on adjusted EBITDA growth due to the lost revenue base. The goal is margin expansion, and the results are starting to show in the remaining core. In Q3 2025, the Adjusted Operating EBITDA margin reached 19.3%, and the Food Ingredients segment, despite lower sales, saw its Adjusted Operating EBITDA increase by 24% year-over-year, with margin improvement of 230 basis points. This focus has also dramatically improved the balance sheet, with the Net Debt to Credit Adjusted EBITDA ratio reaching 2.5x by Q3 2025, ahead of earlier targets. The company is also returning capital via a $500 million share repurchase authorization.

Here's a look at the key financial targets and segment performance underpinning this strategy:

Metric/Segment	2025 Full Year Guidance/Target	Q3 2025 Actual Result
Total Sales Guidance	$10.6 billion to $10.9 billion	$2.69 billion (Reported Net Sales)
Adjusted Operating EBITDA Guidance	$2 billion to $2.15 billion	$519 million (Adjusted Operating EBITDA)
Comparable Currency Neutral Adj. EBITDA Growth	5% to 10%	7% Improvement Year-over-Year
Net Debt to Credit Adjusted EBITDA	Target < 3x (Achieved 2.5x in Q3)	2.5x (as of Q3 end)
Taste Segment Adj. EBITDA Margin	N/A	20.9% (Q1 2025)
Scent Segment Adj. EBITDA Margin	N/A	23.5% (Q1 2025)

The company is definitely focused on driving profitability through these structural changes. Cash flow is also a focus, with cash flows from operations for the first nine months of the year totaling $532 million, and free cash flow at $126 million for the quarter.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Customer Relationships

International Flavors & Fragrances Inc. (IFF) operates on a direct sales model, utilizing in-house sales teams for engagement with its business-to-business (B2B) clientele across food, beverage, cosmetics, and pharmaceutical industries. This direct approach is particularly effective for complex or high-value product offerings, helping to foster strong client relationships. The company's 2025 financial guidance projects total sales between $10.6 billion and $10.9 billion.

Dedicated B2B sales and technical service teams

IFF deploys dedicated teams to serve its diverse B2B customer base, a strategy that supports its goal of being a premier partner delivering unmatched service. The company is strategically increasing its investment in its commercial capabilities in 2025 as part of its broader strategic focus. This commitment to commercial enhancement is designed to accelerate sales opportunities by leveraging the company's comprehensive product portfolio across its core end markets. The sales structure supports a customer-centric approach, which is key to achieving the projected Adjusted Operating EBITDA guidance of $2 billion to $2.15 billion for the full year 2025.

Deep, long-term strategic collaboration with key accounts

The relationship model with key accounts is built on deep, long-term strategic collaboration rather than transactional sales. This is evident in the company's focus on holistic customer engagement across its entire product portfolio. The company maintains a vast library of solutions, with over 23,000 unique flavor and fragrance formulations available to customers. Furthermore, the emphasis on sustainability in new product development shows a commitment to long-term partner values, as 79% of new products launched in the 2023-2024 period featured a sustainability value proposition.

Here's a look at the scale of IFF's customer-facing investment and output:

Metric	2024 Actual / 2025 Guidance	Context
2025 Sales Guidance (Range)	$10.6 billion to $10.9 billion	Full-year projection reflecting market conditions and portfolio changes.
2025 Adjusted Operating EBITDA Guidance (Range)	$2 billion to $2.15 billion	Target range for operational profitability on a comparable currency-neutral basis.
2025 Capital Expenditure (CapEx) Target	Approximately 6% of sales	Investment focus includes capacity expansion and digital transformation efforts.
Q1 2025 Comparable Currency-Neutral Sales Growth	3%	Indicates underlying customer demand strength at the start of the year.
Total Unique Formulations	Over 23,000	Represents the breadth of customized solutions offered to the customer base.

High-touch, consultative R&D-driven engagement

Engagement with customers is heavily consultative and driven by the company's robust Research & Development pipeline. IFF strategically increased its investment in R&D in 2025 to strengthen its competitive advantage. This R&D focus supports the development of specialized solutions, such as the new molecule development to overindex toward specialty ingredients in the Scent segment to counteract commodity pressure. A tangible example of deepening this collaboration is the unveiling of the Hub within its Singapore Innovation Center in July 2025, specifically aimed at accelerating innovation and deepening customer collaboration. Profitability in Q3 2025 showed strong execution, with comparable currency-neutral Adjusted Operating EBITDA improving 7% year-over-year, and the margin reaching 19.3%.

Digital tools for customer-facing innovation and ordering

While the core model is direct, IFF integrates digital tools to enhance customer interaction and efficiency. The company's overall strategy includes investing in digital transformation efforts as part of its 6% of sales CapEx target for 2025. This digital push supports streamlined customer delivery through a unified operating model. The broader industry trend shows that businesses are increasingly relying on digital platforms, with global eCommerce sales projected to reach $7.5 trillion in 2025; IFF's internal digital tools must align with this customer expectation for seamless interaction.

Strong emphasis on commercial capabilities

There is a clear, stated emphasis on enhancing commercial capabilities to drive growth. Initiatives like the Center for Commercial Excellence are in place to accelerate sales opportunities. This focus is critical as the company navigates macroeconomic uncertainties and aims for comparable currency-neutral sales growth between 1% to 4% for the full year 2025. The company's success in Q1 2025, which saw 3% comparable currency-neutral sales growth, was fueled by strong volume increases across most segments, demonstrating the effectiveness of their commercial execution.

• The company is focused on driving EBITDA growth through disciplined execution and margin improvement initiatives.
• Profitability gains in the Taste segment were driven by volume growth, favorable net pricing, and productivity.
• The company is committed to building a One IFF culture that prioritizes working together in a customer-centered way.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Channels

International Flavors & Fragrances Inc. (IFF) channels its value proposition through a multi-faceted global footprint designed to serve large consumer packaged goods (CPG) and industrial clients directly, supported by specialized technical centers.

The core of the sales effort relies on a direct sales force engaging with global CPG and industrial clients across its key business segments.

The company maintains a global network of application and creative centers, which are crucial for co-creation and technical support with customers. For instance, recent activity includes plans to consolidate operations at a new site in Mexico City, Tecnoparque, which will feature labs for product creation, design, testing, and R&D, spanning 50,000 square meters of green space. This complements existing technical footprints, such as the facility in Schaumburg, Illinois, which houses culinary centers and flavor creation laboratories.

Manufacturing and distribution facilities are spread across major regions to support the global client base. The company's operations span the United States, Europe, Latin America, and Asia, including specific manufacturing sites mentioned in China and Indonesia.

Financial reporting confirms a significant international presence, with the TTM revenue ending September 30, 2025, at $11.072 Billion USD. While the exact international sales percentage is not explicitly stated in recent reports, the geographic spread of operations and sales growth in regions like Latin America and Europe in Q3 2025 indicates substantial non-US revenue streams.

The company utilizes selective third-party distributors, particularly for smaller markets, complementing the direct sales strategy.

The output from these channels is reflected in the segment sales figures from recent quarters, demonstrating the breadth of client engagement:

Segment	Example Revenue Amount	Reporting Period
Food Ingredients	$830 million	Q3 2025
Taste	$635 million	Q3 2025
Scent	$652 million	Q3 2025
Health & Biosciences	$577 million	Q2 2025
Pharma Solutions	$103 million	Q2 2025

The overall channel strategy supports the reaffirmed full-year 2025 sales guidance, projected to be in the range of $10.6 billion to $10.9 billion.

Key aspects of the channel execution include:

• Direct engagement with global CPG and industrial clients.
• Leveraging specialized labs for product creation and testing.
• Consolidating operations, such as the move in Mexico City expected by 2026.
• Focusing on core segments like Taste and Scent, which showed growth in Q3 2025.
• Utilizing a global manufacturing footprint to service regional demand.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Customer Segments

You're analyzing International Flavors & Fragrances Inc. (IFF)'s customer base, which is fundamentally a business-to-business (B2B) model, supplying essential ingredients and solutions to major global manufacturers. This structure means IFF's success is directly tied to the product success and production volumes of its diverse clientele across several key industries. The company reaffirmed its full-year 2025 sales guidance to be in the range of $10.6 billion to $10.9 billion, which frames the scale at which these customer segments operate.

The customer base is segmented by the solutions IFF provides, reflecting the company's structure following portfolio optimization efforts, such as the divestiture of Pharma Solutions.

• Global Food & Beverage manufacturers (Taste and Food Ingredients)
• Fine Fragrance and Consumer Fragrance houses (Scent)
• Health & Wellness companies (probiotics, dietary supplements)
• Home & Personal Care product manufacturers
• Animal Nutrition and Grain Processing industries

The Global Food & Beverage manufacturers are served through the Taste and Food Ingredients segments. These customers rely on IFF for flavor compounds, savory solutions, inclusions, emulsifiers, and textures. For instance, in the third quarter of 2025, the Taste segment delivered currency-neutral sales growth of 2%, with sales reaching $635 million, showing strong commercial performance in regions like Latin America and EAME (Europe, Africa, and the Middle East). Conversely, the Food Ingredients segment saw currency-neutral sales decrease by 3% in the same period, with reported sales at $830 million, reflecting softness primarily in Protein Solutions, though Inclusions provided growth.

Customers in the Fine Fragrance and Consumer Fragrance houses fall under the Scent segment, a clear growth engine for International Flavors & Fragrances Inc. In the third quarter of 2025, this segment achieved currency-neutral sales growth of 5%. Fine Fragrance, specifically, showed outsized demand, growing 20% versus the prior year. The reported sales for the Scent segment in Q3 2025 were $652 million, supported by volume growth and a strategic shift toward higher-value specialties within Fragrance Ingredients.

The Health & Wellness, Home & Personal Care, and Animal Nutrition and Grain Processing industries are largely grouped within the Health & Biosciences segment. This segment's Q3 2025 reported sales were $577 million, with currency-neutral sales flat year-over-year. Growth in Food Biosciences, Home & Personal Care, and Animal Nutrition helped offset expected softness in the Health business, particularly in North America. Management noted that recovery in the North American Health & Biosciences area is anticipated from the second half of 2026.

Here's a quick look at the segment revenue contribution based on the third quarter of 2025 reported figures, which helps you see the relative size of these customer groups:

Customer-Aligned Segment	Q3 2025 Reported Sales ($ Millions)	Currency Neutral Sales YoY Change (%)	Q3 2025 Adjusted Operating EBITDA ($ Millions)
Taste (Food & Beverage)	635	2%	128
Food Ingredients (Food & Beverage)	830	-3%	106
Scent (Fragrance Houses)	652	5%	135
Health & Biosciences (H&W, Home/Personal Care, Animal Nutrition/Grain)	577	Flat	150

You should note that the profitability profile varies significantly across these customer groups. For example, in Q3 2025, the Health & Biosciences segment delivered the highest adjusted operating EBITDA margin at 26.0%, while Food Ingredients, despite a sales decline, achieved a 24% increase in adjusted operating EBITDA, reaching $106 million, driven by margin repair initiatives.

Finance: draft 13-week cash view by Friday.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Cost Structure

The cost structure for International Flavors & Fragrances Inc. (IFF) is heavily influenced by input costs, strategic investments, and financial obligations from its capital structure.

High cost of raw materials and specialty ingredients represents a primary driver of operating expenses. The Cost of Revenue line item on the Income Statement captures these significant material purchases, which are subject to market volatility and tariff impacts. Management cited approximately $100 million gross tariff exposure for 2025, which the company mitigates through sourcing shifts and pricing surcharges. Depreciation is recorded within the Cost of Sales calculation when determining segment Adjusted Operating EBITDA.

Significant R&D investment for long-term growth is a necessary, ongoing expenditure. Research And Development Expenses are a key component of the operating cost base, reflecting the science and creativity required to maintain market leadership. Depreciation is also recorded within the Research & Development Expenses.

Manufacturing and operational expenses include significant capital outlays for facilities and equipment. Capital Expenditures (CapEx) for the first nine months of 2025 totaled $406 million. This represented roughly 5% of sales year-to-date for 2025. For comparison, Q1 2025 CapEx stepped up to $179 million, which was approximately 6% of sales for that quarter.

You can see the recent CapEx spending relative to sales below:

Period/Metric	CapEx Amount (Millions USD)	CapEx as % of Sales
Full Year 2024	$463	Approximately 4%
Q1 2025	$179	~6%
First Nine Months 2025	$406	Roughly 5%

Restructuring costs for portfolio and operational optimization are treated as non-recurring, specified items when calculating Adjusted Operating EBITDA. Costs for 2025 specifically represent severance payments tied to the IFF Productivity Program. These charges, along with divestiture and integration costs, are excluded from recurring operational metrics.

Interest expense from substantial debt load is a material financial cost. International Flavors & Fragrances Inc. (IFF) reported its gross debt was approximately $6 billion as of the end of the third quarter of 2025. The balance sheet strengthened, with long-term debt falling to $4,741 million by the end of Q3 2025. This leverage is monitored closely, with the Net debt to credit adjusted EBITDA ratio at the end of the third quarter standing at 2.5x. The definition of Credit adjusted EBITDA excludes interest expense, taxes, depreciation, amortization, specified items, and non-cash items.

Key elements impacting the cost base include:

• Severance costs under the IFF Productivity Program for 2025.
• Depreciation recorded within Cost of Sales and R&D expenses.
• Tariff exposure mitigation costs for 2025.
• Interest expense associated with the gross debt of approximately $6 billion.

Finance: review the Q4 2025 operating expense forecast against the YTD 9-month CapEx run rate by next Tuesday.

International Flavors & Fragrances Inc. (IFF) - Canvas Business Model: Revenue Streams

You're looking at the top-line drivers for International Flavors & Fragrances Inc. (IFF) as we head into the end of 2025. The expected total revenue range for the full year 2025 is between $10.6 billion and $10.9 billion. This guidance reflects the impact of portfolio changes, like the earlier-than-anticipated divestiture of Pharma Solutions on May 1, 2025.

The revenue streams are fundamentally built around the core divisions, which, following portfolio separation, are primarily Scent, Taste, Health & Biosciences, and Food Ingredients. Here's how the key components contributed based on the latest figures from the third quarter of 2025.

The sales of Taste compounds and food ingredients are now split across the Taste segment and the Food Ingredients segment. For the third quarter of 2025, the Taste segment delivered sales of $635 million, showing a 2% increase on a reported basis, with strong growth in Latin America and Europe Africa and the Middle East. On a two-year average basis, Taste growth was approximately 8.5%. Conversely, the Food Ingredients segment saw reported sales of $830 million, which was down 3% versus the year-ago period, primarily due to softness in Protein Solutions.

For Scent compounds and fragrance ingredients, the Scent segment posted reported sales of $652 million in the third quarter of 2025, a 5% increase on a comparable currency-neutral basis against a strong prior-year comparable. This growth was significantly powered by the Fine Fragrance business. Revenue from Fine Fragrance growing double-digits in 2025 is confirmed by the Q3 performance, which showed a 20% increase year-over-year. Consumer Fragrance growth was in the low single-digits, while Fragrance Ingredients declined low single-digits as specialty growth was offset by commodity declines.

The Health & Biosciences products (e.g., cultures, enzymes) stream saw reported sales of $577 million in the third quarter of 2025, with comparable currency-neutral sales being flat against a strong double-digit comparable in the prior year. Performance here was driven by growth in Food Biosciences, Home & Personal Care, and Animal Nutrition, which was mostly offset by softness in Health, particularly in North America.

Here's a quick look at the third quarter 2025 segment sales and growth drivers to map out the revenue mix:

Segment	Reported Sales (Q3 2025)	Comparable Currency Neutral Sales Growth (YoY)	Key Driver/Comment
Taste	$635 million	2% (Reported)	Strong growth in Latin America and EAME.
Food Ingredients	$830 million	(3)%	Softness in Protein Solutions offset by Inclusions growth.
Scent	$652 million	5%	Driven by Fine Fragrance at +20%.
Health & Biosciences	$577 million	Flat	Offset by North America Health softness.

The overall comparable currency-neutral sales growth for the full year 2025 is expected to be at the lower end of the 1% to 4% range, with Scent and Taste being the primary growth engines offsetting softness elsewhere.

You should keep an eye on the following specific revenue stream dynamics:

• Sales of Taste compounds and food ingredients are segmented post-Nourish split.
• Scent revenue is anchored by Fine Fragrance, which grew 20% in Q3 2025.
• Health & Biosciences revenue growth was flat on a comparable currency-neutral basis in Q3 2025.
• Full-year 2025 sales guidance is reiterated at $10.6 billion to $10.9 billion.
• Fine Fragrance growth is definitely in the double-digits for 2025, based on the 20% Q3 result.

Finance: draft 13-week cash view by Friday.