International Flavors And Fragrances Inc.

Overview Key strengths Key risks Global leader in food, scent, and pharmaceutical ingredients and solutions manufacturing. Highly acquisitive and aggressively leveraged, following its 2021 acquisition of DuPont?s Nutrition&Biosciences (N&B) business. Broad product, end-market, and geographic diversification. The company?s business portfolio is currently under review by new management and may have financial policy implications depending on the timing and use of any asset sale proceeds. Strong margins. Input cost inflation continues to delay deleveraging. Good research and development capabilities (R&D) that support strong customer retention rates. Favorable growth outlook for many of the company?s ingredient solutions. We had previously expected the company to reduce leverage below 4x midway through fiscal 2022 but continued input cost inflation has pressured EBITDA

...Input cost inflation has delayed International Flavors & Fragrances' (IFF's) deleveraging. We had previously expected the company to reduce leverage below 4x midway through fiscal 2022 but continued input cost inflation has pressured EBITDA margins, resulting in lower-than-expected post-acquisition EBITDA levels. Adjusted EBITDA margins at fiscal year-end 2021 of 21.6% were 200 basis points below our initial expectations at the time of the N&B acquisition and have further contracted to 21% for the trailing 12 months...

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