IFF raises full-year 2026 guidance on continuing ops basis
IFF reported strong Q2 2026 results with 6% sales growth and 6% EBITDA growth in continuing operations, driven by volume and productivity. Management raised the low end of full-year guidance, announced a $2.5 billion buyback, and detailed plans to eliminate stranded costs from the food ingredients divestiture. Continuing operations sales grew 6% to ~$2B in Q2, with EBITDA growing 6% to ~$548M on a combined basis
Buzzberg readIFF raises full-year 2026 guidance on continuing ops basisIFF reported strong Q2 2026 results with 6% sales growth and 6% EBITDA growth in continuing operations, driven by volume and productivity. Management raised the low end of full-year guidance, announced a $2.5 billion buyback, and detailed plans to eliminate stranded costs from the food ingredients divestiture. Continuing operations sales grew 6% to ~$2B in Q2, with EBITDA growing 6% to ~$548M on a combined basisRead full analysisCollapse analysis
IFF reported strong Q2 2026 results with 6% sales growth and 6% EBITDA growth in continuing operations, driven by volume and productivity. Management raised the low end of full-year guidance, announced a $2.5 billion buyback, and detailed plans to eliminate stranded costs from the food ingredients divestiture. Continuing operations sales grew 6% to ~$2B in Q2, with EBITDA growing 6% to ~$548M on a combined basis
Scent segment led with 8% growth, driven by over 20% growth in fragrance ingredients
Company raised full-year 2026 sales growth guidance to 2-4% and EBITDA growth to 4-8% on a continuing operations basis
Announced $2.5B share repurchase program, with $500M expected in H2 2026
CONTINUING_OPERATIONS revenue$2B
reported
Revenue$1.954B
-29% QoQ
EPS$0.82
-34% QoQ
Gross margin43.65%
reported
What changed this quarter
01
Guidance
IFF raises full-year 2026 guidance on continuing ops basis
Guidance · revenue to $7.5B
02
Costs
Stranded cost plan: 2/3 eliminated within 12 months, rest by second year
Continuing operations sales grew 6% to ~$2B in Q2, with EBITDA growing 6% to ~$548M on a combined basis
03
Capital Allocation
$2.5B buyback authorized; $500M expected in H2 2026 pre-close
Scent segment led with 8% growth, driven by over 20% growth in fragrance ingredients
04
Portfolio
Food ingredients divestiture closes by Q2 2027; 10% stake retained
Company raised full-year 2026 sales growth guidance to 2-4% and EBITDA growth to 4-8% on a continuing operations basis
Demand & capex
Demand
Bookings & conversion
Volume growth was broad-based across all segments, with continued resilience in consumer demand despite macro uncertainties. The company expects second-half growth to moderate to low single-digit, with fine fragrance softer in Q3 due to Middle East conflict and tough comparisons, but recovering in Q4.
Capex
Investment and capacity
CapEx is expected to be in the 5% to 6% of sales range, with the upper end targeted over the next one to two years due to critical high-return initiatives. Management emphasized continued reinvestment in R&D (now ~9% of sales vs 7% prior) to drive growth and differentiation.
Tone · Confident
Management expressed confidence in executing their transformation, highlighted strong first-half results, and reiterated full-year guidance despite macro uncertainties.
Supply-chain alpha
A1
IFF's fragrance ingredients business grew over 20% in Q2, in part by leveraging its synthetics portfolio to capture sales due to supply chain disruptions and higher crude prices, but this is expected to normalize as the environment settles.
“the team strategically leveraged the synthetics portfolio to capture more sales due to the macroeconomic environment, including some of the supply chain disruptions and higher Brent crude prices.”
IFF's business unit margins are temporarily pressured by ~$100 million in stranded costs following the food ingredients divestiture, with a plan to eliminate two-thirds in the first 12 months post-close and the rest by the end of year two.
“we expect to eliminate about two-thirds of these costs within the first 12 months following the transaction close and the remaining within the second full year post transaction close.”
IFF expects a working capital headwind potentially reaching a couple hundred million dollars in the second half of 2026, driven by required unwind of factoring agreements and inventory builds ahead of the food ingredients separation.
“that could be a couple hundred million dollars. And so that is a little bit of a change, but still year over year we will get improvement in free cash flow.”
P&G's move into probiotics via Thorne validates the market opportunity and could benefit IFF's health and biosciences segment by raising awareness and demand.
“We're encouraged by what we see as the increased need for the health benefits probiotics provide and interest by strong companies like For example, Procter & Gamble's announced intention to acquire Thorne as a great example.”
Thanks for the question, Lisa. We see continued growth in our health business outside the U.S., but continued market challenges in the U.S. But we are very encouraged for getting back to growth over time, both for the market and for IFF health in the United States. And we're encouraged by what we see as the increased need for the health benefits probiotics provide and interest by strong companies like For example, Procter & Gamble's announced intention to acquire Thorne as a great example. So what we're doing is we've got a great team on the field now. We're strengthening our R&D pipeline. We're strengthening our commercial capabilities, engaging directly with customers, I would say, with more passion and more drive. And so over time, we will see the benefits of that.
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