International Flavors & Fragrances (IFF) 10-K risk factor changes: FY2021 vs FY2020

[removed: - The] [added: The] integration of the N&B Business may [added: continue to] present significant challenges, and we may not realize anticipated synergies and other benefits of the N&B [removed: Transaction.][added: Transaction.]

- We have a substantial amount of indebtedness [removed: following the N&B Transaction, which] [added: that] could materially adversely affect our financial condition.

Any [removed: adverse changes in] [added: of] these [removed: relationships] [added: occurrences] could [added: materially and] adversely affect [removed: the] our [removed: business,] [added: borrowing costs,] financial [removed: condition or] [added: condition, and] results of operations.

[removed: - Failure] [added: Failure] to successfully establish and manage acquisitions, collaborations, joint ventures or [removed: partnerships] [added: partnerships, or the failure to close strategic transactions or divestments,] could adversely affect our [removed: growth.][added: growth.]

- Natural disasters, public health crises (such as the COVID-19 [removed: outbreak),] [added: pandemic),] international conflicts, terrorist acts, labor strikes, political crisis, accidents and other events could adversely affect our business and financial results by disrupting development, manufacturing, distribution or sale of our products.

- Economic [removed: uncertainty] [added: uncertainty, including increased inflation,] may adversely affect demand for our products which may have a negative impact on our operating results and future growth.

- [removed: Increasing awareness of health and wellness are driving changes in the consumer products industry, and if] [added: If] we are unable to react in a timely and cost-effective [removed: manner,] [added: manner to changes in consumer trends, such as increasing awareness of health and wellness,] our results of operations and future growth may be adversely affected.

- We are subject to increasing customer, [removed: consumer] [added: consumer, shareholder] and regulatory focus on [removed: sustainability issues,] [added: sustainability,] which may result in additional costs in order to meet new requirements or integrate the N&B Business and Frutarom with our sustainability practices.

- We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act or similar U.S. or foreign anti-bribery and anti-corruption laws and regulations [added: or applicable sanctions laws and regulations] in the jurisdictions in which we operate.

- Defects, quality [removed: issues,] [added: issues (including product recalls),] inadequate disclosure or misuse with respect to the products and capabilities could adversely affect our business, reputation and results of operations.

[removed: Government] [added: Since then, government and local] authorities, including those in countries where we have manufacturing and other operations, have taken various measures to [removed: try to] contain [removed: this spread, such as] the [added: spread of the pandemic, including the] closure of non-essential businesses, reduced travel, the closure of retail establishments, the promotion of social distancing and remote working policies where appropriate.

The COVID-19 pandemic has subjected [added: and may continue to subject] our operations, financial condition and results of operations to a number of risks, including, but not limited to, those discussed below:

While we are following the requirements of governmental authorities and taking additional [removed: preventative and] protective measures [added: (such as mandatory site guidelines and return-to-workplace protocols)] to ensure the safety of our workforce, [removed: there can be no assurance that these measures will be successful, and] to the extent that employees in our manufacturing or distribution centers contract COVID-19, we may [removed: be required] [added: need] to temporarily close those facilities, which may result in reduced production hours, [removed: more rigorous cleaning processes and other preventative] [added: inability to deliver products to our customers] and [removed: protective measures for employees.][added: reduced sales.]

[removed: In addition, as] [added: - *Supply chain-related risks:* As] a result of disruptions or uncertainty relating to the [removed: Covid-19] [added: COVID-19] pandemic, we are experiencing, and may continue to experience, increased costs, delays or limited availability related to raw materials, [added: strain on] shipping and transportation resources, [added: and higher energy prices,] which [removed: has] [added: have] negatively impacted, and may continue to negatively impact, our margins and operating results.

- *Customer-related [removed: risks*:] [added: risks:*] We [removed: are experiencing,] [added: experienced,] and may [removed: continue to experience,] [added: experience in the future,] changes in the demand and volume for certain of our products, including due to consumption or stocking behavior [removed: changes.][added: changes related to the COVID-19 pandemic.]

For example, ingredients used in products sold mainly in retail outlets, such as fine fragrances or [removed: taste] products used in retail food services, [removed: have seen] [added: experienced] a decrease in demand as these outlets [removed: have] closed due to COVID-19 related restrictions.

[removed: In addition, we have] [added: We] received requests for extensions in payment terms from some customers in select markets whose products [removed: are experiencing] [added: experienced] reduced demand.

Although we do not currently anticipate any impairment charges related to COVID-19, the continuing effects of a prolonged pandemic could result in increased risk to us of asset write-downs and impairments, including, but not limited to, [removed: equity investments,] [added: property, plant and equipment,] goodwill and [removed: intangibles.][added: other intangibles, and equity investments.]

The [removed: scope] [added: scope, location] and timing of [removed: any] such [removed: reinstatements] [added: restrictions or disruptions (if any)] are difficult to predict and may materially impact our operations in the future.

The [removed: COVID-19] pandemic may also affect our operating and financial results in a manner that is not presently known to us or that we currently do not expect to present significant risks.

[removed: The] [added: - The] integration of the N&B Business may [added: continue to] present significant challenges, and we may not [added: fully] realize anticipated synergies and other benefits of the N&B [removed: Transaction.][added: Transaction.]

The failure to meet the challenges involved in integrating the businesses and to realize the anticipated benefits of the transaction could [removed: cause an interruption of, or] [added: result in] a [removed: loss of momentum in,] [added: material adverse impact on] our business [removed: activities] and [removed: could adversely affect our] results of operations.

The [removed: overall] combination with the N&B Business may also result in material unanticipated problems, expenses, liabilities, competitive responses, employee turnover and loss of customer and other business relationships.

The difficulties of integration [added: or realizing the full benefits of the N&B Transaction] include, among others:

- the diversion of [removed: management] [added: management’s] attention to integration matters;

- integrating operations and systems, including [removed: intellectual property and] communications systems, administrative and information technology infrastructure and financial reporting and internal control systems, some of which may prove to be incompatible;

- retaining [removed: existing, and obtaining] [added: relationships with existing or] new customers and suppliers;

- [added: liabilities that are larger than expected or] potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the [removed: transaction.][added: transaction;]

[removed: The] [added: We have a] substantial amount of indebtedness that [removed: we incurred in connection with the N&B Transaction] could materially adversely affect our financial condition.

As of December 31, [removed: 2020,] [added: 2021,] our total debt [removed: consisted of $4.4] [added: was $11.400] billion.

[removed: These] [added: -] restrictions [added: until February 2023 that] may limit our ability to pursue certain strategic [removed: transactions or engage in other] transactions, including [removed: using] [added: issuing] IFF common stock [removed: to make] [added: for] acquisitions and [removed: in connection with] equity capital market [removed: transactions] [added: transactions,] or disposing of certain businesses that [removed: might] [added: would otherwise] increase the value of our [removed: business.][added: business, if such transaction(s) could cause certain aspects of the N&B Transaction and certain DuPont historic transactions to fail to qualify as tax-free transactions;]

[removed: Our business, financial condition and results of operations may be adversely affected following the N&B Transaction if we cannot] [added: - our ability to] negotiate terms that are as favorable as those DuPont [removed: has received when] [added: had received, as] we replace [added: or renew] contracts [removed: after] [added: following] the [removed: closing] [added: N&B Transaction and the loss] of the [added: DuPont brand recognition for the] N&B [removed: Transaction.][added: Business.]

[removed: Based] [added: With the completion of the N&B Transaction, our customer base has further increased significantly and, based] on [removed: 2020] [added: 2021] sales, we had approximately [removed: 33,000] [added: 42,000] customers, approximately [removed: 65%] [added: 59%] of which are small and mid-sized companies.

This substantial increase in and diversity of our customer base [removed: requires] [added: has required] us [added: and may continue] to [added: require us to] adjust, among other things, our product development, manufacturing, distribution, marketing, customer relationship and sales strategy as well as adapt corporate, information technology, finance and administrative infrastructures to support different go-to-market models.

[removed: Failure] [added: - Failure] to successfully establish and manage acquisitions, collaborations, joint ventures or [removed: partnerships] [added: partnerships, or the failure to close or delays in closing strategic transactions or divestments,] could adversely affect our [removed: growth.][added: growth.]

We may also incur asset impairment charges related to acquisitions [removed: that] [added: if we fail to maintain and integrate the acquired businesses and such impairments charges would] reduce our earnings.

[removed: Additionally, we] [added: We] also evaluate and enter into collaborations, joint ventures or partnerships from time to time to enhance our research and development efforts or expand our product portfolios and technology.

[added: We may not be able to] successfully negotiate such arrangements or the terms of the arrangements may not be as favorable as anticipated.

We face vigorous competition from companies throughout the world, including multi-national and specialized companies active in flavors, fragrances, enzymes, pharmaceutical excipients, nutrition and specialty ingredients, as well as consumer product companies which may develop their own [removed: flavors, fragrances or ingredients.][added: competing products.]

[removed: In] [added: For instance, in] the flavors industry, we [removed: also] face increasing competition from ingredient suppliers that have expanded their portfolios to include flavor offerings.

- Inflationary trends in the price of our input costs, such as raw materials, transportation and energy, could adversely affect our business and financial results.

- Supply chain disruptions, geopolitical developments or climate change events may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.

Inflationary trends in the price of our input costs, such as raw materials, transportation and energy, could adversely affect our business and financial results.

We have experienced, and may continue to experience, volatility and increases in the price of certain raw materials, transportation and energy costs as a result of global market and supply chain disruptions and the broader inflationary environment.

Increases in prices of our products to customers or the impact of the broader inflationary environment on our customers and may lead to declines in demand and sales volumes.

Further, we may not be able to accurately predict the volume impact of price increases, especially if our competitors are able to more successfully adjust to such input cost volatility.

Supply chain disruptions, geopolitical developments or climate-change events may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.

Supply chain disruptions, such as the ones related to the COVID-19 pandemic, may impair or delay our ability to obtain sufficient quantities of certain raw materials through our ordinary supply channels and cause us to incur higher costs by procuring raw materials from other sources in order to compensate for such delays or lack of availability.

At the same time, climate-change related disruptions, like the February 2021 winter storm in Texas, may affect the availability, quality and pricing of raw materials.

Climate related policies and energy production restrictions and pricing may exacerbate such negative impacts.

More generally, as we source many of our raw materials globally to help ensure quality control or to mitigate supply chain disruptions, we are subject to additional risks related to the increases to energy or transportation costs.

For instance, the Russia-Ukraine conflict could adversely impact, among other things, our raw material, energy and transportation costs, as well as certain of our suppliers and local markets, global and local macroeconomic conditions, and cause further supply chain disruptions.

On March 11, 2020, the World Health Organization designated COVID-19 as a global pandemic.

While increase in vaccination rates and new treatment measures have proven effective to date, the COVID-19 pandemic remains a serious threat to the health of the world's population and certain countries and regions continue to suffer from outbreaks or have seen a resurgence of infections, especially with the emergence of new variants of the virus.

The continuing uncertainty related to the COVID-19 pandemic leads to continued volatility and risk of new government restrictions or market disruptions.

While conditions have since improved, any resurgence of COVID-19, new variants, or new government measures imposed, including new vaccine mandates, to manage the spread of the pandemic could further exacerbate this risk.

- *Operations-related risks:* Although our sites have restored operations to historical levels, there is a risk that our operations may be affected if employees are infected at high rates or if new restrictions are reintroduced.

Additionally, compliance with vaccine mandates to the extent they are imposed in the jurisdictions in which we operate may lead to employee absences, resignations, or labor shortages.

Any such mandates may also affect our suppliers, which could disrupt our access to raw materials and exacerbate supply-chain related risks.

- successfully exiting transitional services agreement entered into with DuPont in connection with the N&B Transaction without impacting the continuity or quality of such services or incurring materially increased costs; and

Furthermore, even if successfully integrated, the acquisition target may fail to further the Company’s business strategy as anticipated, expose the Company to increased competition or other challenges with respect to the Company’s products or geographic markets, and expose the Company to additional liabilities associated with the acquired business, technology or other asset or arrangement.

In addition, from time to time we may enter into other strategic transactions or we may sell or divest certain non-core assets as part of our portfolio optimization strategy, such as the sale of the Microbial Control business which we expect will close in the second quarter of 2022, subject to customary closing conditions.

The failure to complete or potential delays in closing any such transaction could adversely affect the development of our portfolio optimization strategy and our future growth.

Attracting, developing, and retaining talented employees is essential to the successful delivery of our products and has become more difficult and costly in the current labor market with historically high employee resignations.

For instance, the Russia-Ukraine conflict could adversely impact, among other things, certain of our local markets and suppliers, global and local macroeconomic conditions, foreign exchange rates and financial markets, raw material, energy and transportation costs, and cause further supply chain disruptions.

Changes in the global, regional or local economic conditions have, and may in the near future, adversely impact demand for consumer products at a regional or global level.

Such parameters include, but are not limited to, increased inflation, unemployment and underemployment, salaries and wage rates stagnation, and low growth rates.

Increased shareholder activism with respect to sustainability or other governance issues or management concerns could also lead to increased costs.

Current supply-chain related issues could also lead to raw material shortages and inventory depletion, which may adversely affect our operations.

It was unclear at that time whether or not LIBOR would cease to exist, if new methods of calculating LIBOR would be established such that it continues to exist after 2021 or if replacement conventions would be developed.

In March 2021, the FCA confirmed that publication of all of the LIBOR settings for Euro, Sterling and Swiss Franc and some of the LIBOR settings for Japanese Yen and US dollars ceased in December 2021 and the remainder of the LIBOR settings for US dollars will cease in June 2023.

To identify a successor rate for LIBOR, financial regulators in various countries, including the United States, the United Kingdom, the European Union and Switzerland, have formed working groups with the aim of recommending alternatives to LIBOR denominated in their local currencies.

Some of the financial regulators have identified the Secured Overnight Financing Rate (“SOFR”) as their preferred alternative rate for LIBOR.

SOFR is observed and backward-looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members.

Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR).

Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question.

Although certain financial regulators have indicated their preference for SOFR as the preferred replacement rate for LIBOR, it is unclear if other benchmarks may emerge or if other rates will be adopted.

As such, the future of LIBOR is uncertain.

Even if the financial instruments transition to using alternative benchmarks like SOFR successfully, the new benchmarks are likely to differ from LIBOR, as the alternative benchmark rate may be calculated differently.

Further, transitioning to an alternative benchmark rate, such as SOFR, may result in us incurring expense and legal risks, as renegotiation and changes to documentation may be required in effecting the transition.

- We have incurred, and will incur, substantial direct and indirect costs as a result of the N&B Transaction.

- In connection with the N&B Transaction, we are required to abide by potentially significant restrictions which could limit our ability to undertake certain corporate actions (such as the issuance of common stock or the undertaking of a merger or consolidation) that otherwise could be advantageous.

- We may be unable to provide (or obtain from third-parties) the same types and level of services to the N&B Business that historically have been provided by DuPont, or may be unable to provide (or obtain) them at the same cost.

- Our business, financial condition and results of operations may be adversely affected if we cannot negotiate terms that are as favorable as those DuPont has received when we replace contracts after the closing of the N&B Transaction.

- Our success will also depend on relationships with third parties and our pre-existing customers and the pre-existing customers of the N&B Business, which relationships may be affected by customer or third-party preferences or public attitudes about the N&B Transaction.

- A disruption in our supply chain, including the inability to obtain ingredients and raw materials from third parties, could adversely affect our business and financial results.

- Volatility and increases in the price of raw materials, energy and transportation, including due to climate change, could harm our profits.

COVID-19 was identified in China in late 2019 and since then has spread globally.

These measures have impacted and may further impact our workforce and operations, and the operations of our customers, vendors and suppliers.

- *Operations-related risks:* Our manufacturing plants continue to operate world-wide in compliance with the orders and restrictions imposed by government authorities in each of our locations, and we are working with our customers to meet their specific shipment needs.

Most plants have restored operations to historical levels, notwithstanding that certain restrictions imposed to ensure safe operations remain in place.

In some instances, the N&B Business's manufacturing sites have reduced certain operations or furloughed employees in response to government measures, employee welfare concerns and the impact of COVID-19 on the global demand and supply chain.

Some of our research and development and creative applications centers are operating on limited schedules or with a reduced workforce of essential employees as a result of certain safety measures implemented by us to limit the number of the on-site workforce.

Our ability to continue to supply our products is highly dependent on our ability to maintain the safety of our workforce.

The ability of employees to work may be significantly impacted by individuals contracting or being exposed to COVID-19, and our operations and financial results may be negatively affected as a result.

We have developed return-to-workplace protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location and to promote an orderly and phased return for employees who have been working from home.

Workforce disruptions of this nature may significantly impact our ability to maintain our operations and may adversely impact our financial results.

Resolving such operational challenges has increased certain costs, such as labor, shipping, and cleaning, and the failure to resolve such challenges may result in our inability to deliver products to our customers and reduce sales.

- *Supply chain-related risks:* We have experienced some disruption, primarily regarding distribution of certain raw materials and transport logistics in markets where governments have implemented the strictest regulations.

More significant disruptions may occur if the COVID-19 pandemic continues to impact markets around the world.

Similarly, the N&B Business experienced COVID-19 related declines in demand from food service distribution channels and for products for the oil and gas and select industrial end-markets, including for biorefinery and microbial control.

- *Integration execution risks*: The travel and operational restrictions related to Covid-19 have changed the way we operate, interact and collaborate internally and externally.

If these restrictions persist, they may impact our ability to prepare and implement detailed integration plans in connection with the N&B Business needed to achieve our revenue and cost synergy targets.

- *Market-related risks:* The funding obligations for our pension plans will be impacted by the performance of the financial markets, particularly the equity markets and interest rates.

Lower interest rates and lower expected asset valuations and returns can materially impact the calculation of long-term liabilities such as pension liabilities.

In addition, the volatility in financial and commodities markets may have adverse impacts on other asset valuations such as the value of the investment portfolios supporting pension obligations.

If the financial markets do not provide the long-term returns that are expected, we could be required to make larger contributions.

In addition to the risks noted above, COVID-19 may also heighten other risks described herein, including, but not limited to, risks related to a decrease in global demand for consumer products, manufacturing disruptions, disruption or cost increases in the supply chain, price volatility for raw materials, level of indebtedness, currency fluctuations and impairment of long-lived assets.

The magnitude of the impact of the COVID-19 pandemic, including the extent of its impact on our operating and financial results, will be determined by the length of time that the pandemic continues, and while government authorities’ measures relating to COVID-19 may be relaxed if and when COVID-19 abates, these measures may be reinstated as the pandemic continues to evolve.

As COVID-19 continues to adversely impact the broader global economy, including negatively impacting economic growth and creating disruption and volatility in the global financial and capital markets, which increases the cost of capital and adversely impacts the availability of and access to capital, this could negatively affect our liquidity, which could in turn negatively affect our business, results of operations and financial condition.

Designing and building our combined operating models along with the necessary business processes, systems and infrastructure in connection with our combination with the N&B Business may divert significant management attention and resources and disrupt our legacy business.

- contingent liabilities that are larger than expected; and

Many of these factors are outside of our complete control and/or will be outside the control of the N&B Business, and any one of them could result in lower revenues, higher costs and diversion of management time and energy, which could materially impact the business, financial condition and results of operations of our business.

We bear full responsibility for any and all N&B liabilities and issues with N&B assets following the closing of the N&B Transaction even if related to a breach of a representation under the Merger Agreement.

To the extent any such N&B liabilities are larger than anticipated, or an issue with an N&B asset prohibits the N&B Business from performing as planned, it could have an adverse impact on our business, results of operations and financial condition.

Further, additional unanticipated costs may be incurred in the integration of the N&B Business.

All of these factors could cause dilution to our earnings per share, decrease or delay the projected accretive effect of the N&B Transaction, and negatively impact the price of IFF common stock following the N&B Transaction.

In connection with the N&B Transaction, our consolidated indebtedness and that of our subsidiaries include the indebtedness incurred by N&B in the debt financings completed prior to the N&B Transaction, increasing our indebtedness by $7.5 billion.

We have incurred, and will incur, substantial direct and indirect costs as a result of the N&B Transaction.

We have incurred, and will incur, substantial expenses or required investments in connection with and as a result of completing the N&B Transaction, including financial advisory, legal, accounting, consulting and other integration related advisory fees and expenses, regulatory filings and filing and printing fees.

[removed: Following the recent closing of the N&B Transaction, our business is] [added: We are now] organized in four [removed: business] segments: Nourish, [removed: Scent,] Health & [removed: Biosciences] [added: Biosciences, Scent,] and Pharma Solutions.

Our [removed: global] Scent [removed: business] [added: segment] creates fragrance [removed: compounds and] [added: compounds,] fragrance ingredients [added: and cosmetic ingredients] that are integral elements in the world’s finest perfumes and best-known household and personal care products.

Various policies and initiatives have been implemented around the world to reduce the global transmission of [removed: COVID-19, including the closure of non-essential businesses, reduced travel, the closure of retail establishments, the promotion of social distancing and remote working policies where appropriate.][added: COVID-19.]

[removed: Accordingly, although] [added: Although] there continue to be minor [added: operational] disruptions, all of IFF’s manufacturing facilities remain open and continue to manufacture products.

The COVID-19 pandemic remains a serious threat to the health of the [removed: world's] [added: world’s] population and certain countries and regions continue to suffer from outbreaks or have seen a recurrence of [removed: infections.][added: infections, especially with the emergence of new variants of the virus.]

Accordingly, the Company continues to take the threat from COVID-19 [removed: seriously even as the adverse financial impact of COVID-19 on the Company has lessened.][added: seriously.]

The impact that COVID-19 will have on our consolidated results of operations [removed: in 2021] [added: for the remainder of 2022] remains uncertain.

[removed: Based on] [added: Due to] the length and severity of COVID-19, [removed: we experience] [added: there is] continued volatility as a result of retail and travel, consumer shopping and consumption behavior.

Although IFF [added: has not experienced and] does not currently anticipate any impairment charges related to COVID-19, the continuing effects of a prolonged pandemic could result in increased risk of asset write-downs and [removed: impairments, including, but not limited to, equity investments, goodwill and intangibles.][added: impairments.]

On February 1, 2021, [removed: pursuant to the Merger Agreement with DuPont, a] [added: one of our] wholly owned [removed: subsidiary of IFF] [added: subsidiaries] merged with and into the N&B [removed: Business.][added: Business (the “Merger”), pursuant to a Merger Agreement with DuPont.]

See Note 3 to the Consolidated Financial Statements for additional information [removed: relating] [added: related] to the N&B Transaction.

[removed: 2020] [added: 2021] Financial Performance Overview

Scent sales [added: in 2021 also] increased [removed: 2% on a reported basis and 3%] [added: 8%] on a currency neutral basis.

Our 25 largest customers accounted for approximately [removed: 39%] [added: 29%] of total sales in [removed: 2020.][added: 2021.]

In [removed: 2020,] [added: 2021,] no customer accounted for more than 10% of sales.

We are on the core supplier lists of a large majority of our global and strategic [removed: customers within Taste and Scent.][added: customers.]

[removed: *Operating profit*][added: | Operating profit | | | 585 | | | | | | 566 | | | | | | 665 | | | | | | 3 | | % | | | | (15) | | % |]

| *(DOLLARS IN [removed: THOUSANDS] [added: MILLIONS] EXCEPT PER SHARE AMOUNTS)* | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | | | | | [removed: 2019] [added: 2020] vs. [removed: 2018] [added: 2019] | | |

| Restructuring and [removed: other charges, net | | | 17,295 | | | | | | 29,765 | | | | | | 5,079 | | |] [added: Other Charges] | | | [removed: (41.9)] [added: (41)] | | [removed: %] | | | | [removed: NMF] [added: (17)] | | |

| [removed: Losses (gains)] [added: (Gains) losses] on sale of fixed assets | | | [removed: 3,784] [added: (1)] | | | | | | [removed: 2,367] [added: 4] | | | | | | [removed: (1,177)] [added: 3] | | | | | | [removed: 59.9] [added: (125)] | | % | | | | [removed: NMF] [added: 33] | | [added: %] |

| Income before taxes | | | [removed: 441,371] [added: 354] | | | | | | [removed: 557,452] [added: 441] | | | | | | [removed: 447,757] [added: 557] | | | | | | [added: (20)] | | [added: %] | | | | [added: (21)] | | [added: %] |

| Net income | | | [removed: $] [added: 279] | [removed: 367,372] | | | | | [removed: $] [added: 367] | [removed: 460,268] | | | | | [removed: $] [added: 460] | [removed: 339,781] | | | | | [added: (24)] | | [added: %] | | | | [added: (20)] | | [added: %] |

| Net income attributable to noncontrolling interest | | | [removed: 4,144] [added: 9] | | | | | | [removed: 4,395] [added: 4] | | | | | | [removed: 2,479] [added: 4] | | | | | | [removed: (5.7)] [added: 125] | | % | | | | [removed: 77.3] [added: —] | | % |

| Net income attributable to IFF stockholders | | | [removed: 363,228] [added: $] | [added: 270] | | | | | [removed: 455,873] [added: $] | [added: 363] | | | | | [removed: 337,302] [added: $] | [added: 456] | | | | | [added: (26)] | | [added: %] | | | | [added: (20)] | | [added: %] |

| Net income per share — diluted | | | $ | [removed: 3.21] [added: 1.10] | | | | | $ | [removed: 4.00] [added: 3.21] | | | | | $ | [removed: 3.79] [added: 4.00] | | | | | [removed: (19.8)] [added: (66)] | | % | | | | [removed: 5.5] [added: (20)] | | % |

| Gross margin | | | [removed: 41.0] [added: 32.0] | | % | | | | [removed: 41.1] [added: 41.0] | | % | | | | [removed: 42.3] [added: 41.1] | | % | | | | [removed: (10)] [added: NMF] | | [removed: bps] | | | | [removed: (120)] [added: (10)] | | bps |

| R&D as a percentage of sales | | | [removed: 7.0] [added: 5.4] | | % | | | | [removed: 6.7] [added: 7.0] | | % | | | | [removed: 7.8] [added: 6.7] | | % | | | | [removed: 30] [added: (160)] | | bps | | | | [removed: (110)] [added: 30] | | bps |

| S&A as a percentage of sales | | | [removed: 18.7] [added: 15.0] | | % | | | | [removed: 17.0] [added: 18.7] | | % | | | | [removed: 17.8] [added: 17.0] | | % | | | | [removed: 170] [added: NMF] | | [removed: bps] | | | | [removed: (80)] [added: 170] | | bps |

| Operating margin | | | [removed: 11.1] [added: 5.0] | | % | | | | [removed: 12.9] [added: 11.1] | | % | | | | [removed: 14.7] [added: 12.9] | | % | | | | [removed: (180)] [added: NMF] | | [removed: bps] | | | | (180) | | bps |

| Effective tax rate | | | [removed: 16.8] [added: 21.2] | | % | | | | [removed: 17.4] [added: 16.8] | | % | | | | [removed: 24.1] [added: 17.4] | | % | | | | [removed: (60)] [added: NMF] | | [removed: bps] | | | | [removed: NMF] [added: (60)] | | [added: bps] |

[removed: *NMF:] [added: NMF:] Not [removed: meaningful*][added: meaningful]

| | | | % Change in Sales - [removed: 2020] [added: 2021] vs. [removed: 2019] [added: 2020] | | | | | | | | |

| [removed: Scent] [added: Scent] | | | [removed: 2] [added: 9] | | [removed: %] [added: %] | | | | [removed: 3] [added: 8] | | [removed: %] [added: %] |

(1)Currency neutral sales growth is calculated by translating [removed: prior] [added: current] year [removed: sales] [added: invoiced sale amounts] at the exchange rates for the corresponding [removed: 2020] [added: prior year] period.

[removed: Scent Sales][added: *Scent*]

Research and Development [removed: (R&D)][added: (R&D) Expenses]

Overall R&D expenses, as a percentage of sales, [removed: increased to 7.0%] [added: decreased 1.6%] in [removed: 2020] [added: 2021 to 5.4%] compared to [removed: 6.7%] [added: 7.0%] in [removed: 2019.][added: 2020.]

Selling and Administrative [removed: (S&A)][added: (S&A) Expenses]

[removed: Operating] [added: Segment Adjusted Operating EBITDA] Results by Business Unit

See Note [removed: 15] [added: 9] to the Consolidated Financial Statements for [removed: the reconciliation to Income before taxes.][added: additional information.]

As a result of the N&B Transaction, and following our 2018 acquisition of Frutarom Industries Ltd., we have expanded our global leadership positions, which now include high-value ingredients and solutions in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key Taste, Texture, Scent, Nutrition, Enzymes, Cultures, Soy Proteins, Pharmaceutical Excipients, Biocides and Probiotics categories.

The Company’s consolidated financial information for the year ended December 31, 2021 reflects the results of N&B effective February 1, 2021, whereas the Company’s consolidated financial information for the year ended December 31, 2020 and 2019 do not include amounts related to N&B.

Our Nourish segment consists of most of our legacy Taste segment combined with N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division.

Our Nourish business spans a diversified portfolio across natural and plant-based specialty food ingredients, flavor compounds, and savory solutions and inclusions.

Our Health & Biosciences segment consists of a biotechnology-driven portfolio of enzymes, food cultures, probiotics and specialty ingredients for food, home and personal care, and health and wellness applications.

Our Health & Biosciences business comprises N&B’s Health & Biosciences division (except the food protection business which is part of Nourish) in combination with the Natural Product Solutions business of legacy IFF.

Health & Biosciences is comprised of six business units: Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition, Grain Processing and Microbial Control.

Our Scent business consists of our legacy Scent segment as well as our Flavor Ingredients business, formerly part of our legacy Taste business.

The Scent segment is comprised of three business units: Fragrance Compounds, Fragrance Ingredients and Cosmetic Actives.

Our Pharma Solutions segment produces a vast portfolio of cellulosics and seaweed-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharmaceutical formulations.

Pharma Solutions is comprised of N&B’s Pharma Solutions business.

Financial Measures — Currency Neutral

Our financial results include the impact of foreign currency exchange rates.

We provide currency neutral calculations in this report to remove the impact of these items.

We use currency neutral results in our analysis of subsidiary or segment performance.

We also use currency neutral numbers when analyzing our performance against our competitors and believe the change in method better allows us to do so.

Due to the Merger with N&B, for the fiscal year 2021 we will not be presenting currency neutral impacts for the Nourish, Health & Biosciences and Pharma Solutions operating segments as the performance in these operating segments includes effects of N&B in 2021, while the 2020 period does not and thus the period’s results are not comparable.

We present the currency neutral impacts for the Scent operating segment as this operating segment does not have any effects of N&B.

Moreover, as a result of disruptions or uncertainty relating to the COVID-19 pandemic, we are experiencing, and may continue to experience, increased costs, delays or limited availability related to raw materials, strain on shipping and transportation resources, and higher energy prices, which have negatively impacted, and may continue to negatively impact, our margins and operating results.

For more detailed information about risks related to COVID-19, refer to Item 1A, “Risk Factors” - *The COVID-19 pandemic may materially and adversely impact our operations, financial condition, results of operations and cash flows.*

Sales in 2021 increased $6.572 billion, or 129% on a reported basis, to $11.656 billion compared to $5.084 billion in the 2020 period.

Performance was primarily driven by $6.084 billion of incremental sales that were attributable to the inclusion of N&B, which was merged and consolidated into our results of operations effective February 1, 2021.

In addition, sales performance was driven by volume increases across the Nourish, Health & Biosciences and Scent operating segments and price increases in the Nourish segment.

*Gross Profit*

Gross profit in 2021 increased $1.649 billion, or 79% on a reported basis, to $3.735 billion (32.0% of sales) compared to $2.086 billion (41.0% of sales) in the 2020 period.

The increase in gross profit was primarily driven by the inclusion of N&B, along with sales volume increases in the business.

The decrease in gross profit margin, as a percentage of sales, was due to higher input costs and difference in product portfolio mix of the new N&B Business compared to the historical IFF product portfolio mix.

Adjusted operating EBITDA in 2021 increased $1.370 billion, or 130% on a reported basis, to $2.425 billion (20.8% of sales) compared to $1.055 billion (20.8% of sales) in the 2020 period.

The increase in adjusted operating EBITDA was primarily driven by the inclusion of N&B, along with sales volume increases in the business.

| Net sales | | | $ | 11,656 | | | | | $ | 5,084 | | | | | $ | 5,140 | | | | | 129 | | % | | | | (1) | | % |

| Cost of goods sold | | | 7,921 | | | | | | 2,998 | | | | | | 3,027 | | | | | | 164 | | % | | | | (1) | | % |

| Gross profit | | | 3,735 | | | | | | 2,086 | | | | | | 2,113 | | | | | | 79 | | % | | | | (1) | | % |

| Research and development (R&D) expenses | | | 629 | | | | | | 357 | | | | | | 346 | | | | | | 76 | | % | | | | 3 | | % |

| Selling and administrative (S&A) expenses | | | 1,749 | | | | | | 949 | | | | | | 876 | | | | | | 84 | | % | | | | 8 | | % |

| Amortization of acquisition-related intangibles | | | 732 | | | | | | 193 | | | | | | 193 | | | | | | 279 | | % | | | | — | | % |

| Interest expense | | | 289 | | | | | | 132 | | | | | | 138 | | | | | | 119 | | % | | | | (4) | | % |

| Other income, net | | | (58) | | | | | | (7) | | | | | | (30) | | | | | | NMF | | | | | | (77) | | % |

| Provision for income taxes | | | 75 | | | | | | 74 | | | | | | 97 | | | | | | 1 | | % | | | | (24) | | % |

| Nourish | | | $ | 6,264 | | | | | $ | 2,886 | | | | | $ | 2,978 | | | | | 117 | | % | | | | (3) | | % |

| Health & Biosciences | | | 2,329 | | | | | | 134 | | | | | | 129 | | | | | | NMF | | | | | | 4 | | % |

We are a leading innovator of sensory, food & beverage, pharmaceutical, health & wellness, home & personal care integrated solutions and ingredients that move the world.

Our creative capabilities, global footprint, regulatory and technological know-how provide us a competitive advantage in meeting the demands of our global, regional and local customers around the world.

Beginning in the first quarter of fiscal year 2020, we operated our business across two segments: Taste and Scent.

As a leading creator of flavor offerings, we help our customers deliver on the promise of delicious and healthy foods and drinks that appeal to consumers.

While we are a global leader, our Taste business operates regionally in nature, with different formulas that reflect local taste preferences.

Consequently, we manage our Taste business geographically, creating products in our regional creative centers which allows us to satisfy local taste preferences, while also helping to ensure regulatory compliance and production standards.

We believe our unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, deep consumer insight and customer intimacy make us a market leader in scent products.

IFF has been designated an essential business in most locations given that both its Taste and Scent products are used in the manufacture of food products as well as the manufacture of a range of cleaning and hygiene products.

For 2020, revenue was largely flat but this overall performance reflected strength in Consumer Fragrances, offset by declines in Fine Fragrances and most Taste categories, especially those in the food service area.

Transaction with Nutrition & Biosciences, Inc.

The N&B Business is an innovation-driven and customer-focused business that provides solutions for the global food and beverage, dietary supplements, home and personal care, energy, animal nutrition and pharma markets.

Sales in 2020 decreased 1% on a reported basis and were flat on a currency neutral basis (which excludes the effects of changes in currency by restating exchange ratios in effect for the current year based on the currency of the underlying transaction).

Taste sales decreased 3% on a reported basis and 2% on a currency neutral basis.

The change in consolidated reported and currency neutral sales was driven by strength in Consumer Fragrances and a slight increase in Fragrance Ingredients, offset by volume reductions in most Taste product categories and Fine Fragrances.

The year-on-year declines in sales of many product categories was partially due to travel and shelter-in-place restrictions, in certain regions, as a result of COVID-19.

The additional week of sales, or a 53rd week, in 2019 also contributed to the year-on-year decline in sales.

Exchange rate variations had an unfavorable impact on net sales for 2020 of approximately 1%.

The effect of exchange rates can vary by business and region, depending upon the mix of sales priced in U.S. dollars as compared to other currencies.

*Gross Margin*

Gross margin decreased to 41.0% in 2020 from 41.1% in 2019, principally driven by unfavorable price versus input costs and mix and sales volume reductions on existing business due, principally, to COVID-19, largely offset by the impact of productivity, integration and cross selling initiatives.

Operating profit decreased $98.8 million to $566.5 million (11.1% of sales) in 2020 compared to $665.3 million (12.9% of sales) in 2019.

Foreign currency had a 2% unfavorable impact on operating profit in both the 2020 and 2019 periods.

Adjusted operating profit was $729.7 million (14.4% of sales) for 2020, a decrease from $793.1 million (15.4% of sales) for 2019, principally driven by unfavorable price versus input costs and mix and sales volume reductions on existing business due, principally, to COVID-19, partially offset by the impact of productivity, integration and cross selling initiatives.

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Net sales | | | $ | 5,084,239 | | | | | $ | 5,140,084 | | | | | $ | 3,977,539 | | | | | (1.1) | | % | | | | 29.2 | | % |

| Cost of goods sold | | | 2,998,373 | | | | | | 3,027,336 | | | | | | 2,294,832 | | | | | | (1.0) | | % | | | | 31.9 | | % |

| Gross profit | | | 2,085,866 | | | | | | 2,112,748 | | | | | | 1,682,707 | | | | | | | | | | | | | | |

| Research and development (R&D) expenses | | | 356,863 | | | | | | 346,128 | | | | | | 311,583 | | | | | | 3.1 | | % | | | | 11.1 | | % |

| Selling and administrative (S&A) expenses | | | 948,833 | | | | | | 876,121 | | | | | | 707,461 | | | | | | 8.3 | | % | | | | 23.8 | | % |

| Amortization of acquisition-related intangibles | | | 192,607 | | | | | | 193,097 | | | | | | 75,879 | | | | | | (0.3) | | % | | | | 154.5 | | % |

| Operating profit | | | 566,484 | | | | | | 665,270 | | | | | | 583,882 | | | | | | | | | | | | | | |

| Interest expense | | | 131,802 | | | | | | 138,221 | | | | | | 132,558 | | | | | | (4.6) | | % | | | | 4.3 | | % |

| Loss on extinguishment of debt | | | — | | | | | | — | | | | | | 38,810 | | | | | | — | | % | | | | (100.0) | | % |

| Other income, net | | | (6,689) | | | | | | (30,403) | | | | | | (35,243) | | | | | | (78.0) | | % | | | | (13.7) | | % |

| Taxes on income | | | 73,999 | | | | | | 97,184 | | | | | | 107,976 | | | | | | (23.9) | | % | | | | (10.0) | | % |

| Adjusted operating margin | | | 14.4 | | % | | | | 15.4 | | % | | | | 17.0 | | % | | | | (100) | | bps | | | | (160) | | bps |

| Taste | | | $ | 3,109,781 | | | | | $ | 3,200,520 | | | | | $ | 2,091,635 | | | | | (2.8) | | % | | | | 53.0 | | % |

| Scent | | | 1,974,458 | | | | | | 1,939,564 | | | | | | 1,885,904 | | | | | | 1.8 | | % | | | | 2.8 | | % |

| Consolidated | | | $ | 5,084,239 | | | | | $ | 5,140,084 | | | | | $ | 3,977,539 | | | | | | | | | | | | | |

_______________________

For the year ended December 31, [removed: 2020,] [added: 2021,] our exposure to market risk was estimated using sensitivity analyses, which illustrate the change in the fair value of a derivative financial instrument assuming hypothetical changes in foreign exchange rates and interest rates.

At December 31, [removed: 2020,] [added: 2021,] our foreign currency exposures pertaining to derivative contracts exist with the [removed: Euro, Japanese Yen, British Pound, Australian Dollar and Indonesian Rupiah.][added: Euro.]

Based on a hypothetical decrease or increase of 10% in the applicable balance sheet exchange rates (primarily against the U.S. dollar), the estimated fair value of our foreign currency forward contracts would increase by approximately [removed: $7.0] [added: less than $1] million.

As of December 31, [removed: 2020,] [added: 2021,] these swaps were in a net liability position with an aggregate fair value of [removed: $23.4] [added: $5] million.

Based on a hypothetical decrease or increase of 10% in the value of the U.S. dollar against the Euro, the estimated fair value of our cross currency swaps would change by approximately [removed: $34.7] [added: $32] million.

At December 31, [removed: 2020,] [added: 2021,] the fair value of our EUR fixed rate debt was [removed: €2.1] [added: $1.545] billion.

Based on a hypothetical decrease or increase of 10% in foreign exchange rates, the estimated fair value of our EUR fixed rate debt would change by approximately [removed: $216.3] [added: $160] million.

At December 31, [removed: 2020,] [added: 2021,] the fair value of our USD fixed rate debt was [removed: $2.5] [added: $8.603] billion.

Based on a hypothetical decrease or increase of 10% in interest rates, the estimated fair value of our US fixed rate debt would change by approximately [removed: $245.5] [added: $860] million.

On February 1, 2021, pursuant to an Agreement and Plan of Merger (the [removed: "Merger Agreement")] [added: “Merger Agreement”)] with DuPont de Nemours, Inc. [removed: ("DuPont"),] [added: (“DuPont”),] a wholly owned subsidiary of IFF merged with and into Nutrition & Biosciences, Inc. (“N&B”), a subsidiary of DuPont [removed: formed to hold the] [added: holding its] Nutrition and Biosciences business (the “N&B [removed: Business”,] [added: Business,”] and such transaction, the [removed: "N&B Transaction").][added: “N&B Transaction”).]

As a [removed: result of the N&B Transaction, and following our 2018 acquisition of Frutarom Industries Ltd.,] [added: result,] we [removed: have expanded our] [added: hold] global leadership [removed: positions, which now include high-value ingredients and solutions] [added: positions] in the Food & Beverage, Home & Personal Care and Health & Wellness markets, and across key [removed: Taste, Texture, Scent,] [added: Tastes, Textures, Scents,] Nutrition, Enzymes, Cultures, Soy Proteins, Pharmaceutical Excipients, Biocides and Probiotics categories.

Based on [removed: 2020] [added: 2021] sales, approximately [removed: 35%] [added: 41%] were [added: to] global consumer products companies and approximately [removed: 65%] [added: 59%] were [added: to] small and mid-sized companies.

During [removed: 2020,] [added: 2021,] our 25 largest customers accounted for [removed: 39%] [added: 29%] of our sales.

In [removed: 2020,] [added: 2021,] no customer accounted for more than 10% of sales.

Our business is geographically diverse, with sales in the U.S. representing approximately [removed: 20%] [added: 28%] of sales in [removed: 2020.][added: 2021.]

No other country represented more than [removed: 6%] [added: 7%] of sales.

[removed: As a result of the N&B Transaction, our] [added: Our] business [removed: is now organized in] [added: consists of] four [removed: business] segments: [removed: Nourish (a combination of IFF’s Taste business with N&B’s Food & Beverage business), Scent,] [added: Nourish,] Health & [removed: Biosciences] [added: Biosciences, Scent] and Pharma Solutions.

As a leading creator of [removed: flavor offerings,] [added: ingredients and solutions,] we help our customers deliver on the promise of [removed: delicious and] healthy [added: and delicious] foods and drinks that appeal to consumers.

While we are a global leader, our [removed: Taste] [added: Nourish] business operates [removed: regionally in nature,] [added: regionally,] with different formulas that reflect local taste preferences.

[removed: Consequently, we manage our Taste business geographically, creating] [added: We create] products in our regional creative centers which allows us to satisfy local [removed: taste] preferences, while also helping to ensure regulatory compliance and production standards.

We develop thousands of different [removed: flavors and taste] [added: Nourish] offerings for our customers, most of which are tailor-made, and we continually develop new formulas to meet changing consumer preferences and customer needs.

Our [removed: Taste] [added: Nourish] business [removed: comprises] [added: spans] a diversified portfolio across [added: natural and plant-based specialty food ingredients,] flavor compounds, [added: and] savory [removed: solutions, inclusions, nutrition] [added: solutions] and [removed: specialty ingredients] [added: inclusions] and [removed: flavor ingredients.][added: consists of three business units: Ingredients, Flavors and Food Designs.]

[removed: *Flavor Compounds.* Our] [added: *Flavors* include a range of] flavor compounds [removed: provide unique flavors] [added: and natural taste solutions] that are ultimately used by our customers in savory products (soups, sauces, meat, fish, poultry, snacks, etc.), beverages (juice drinks, carbonated or flavored beverages, spirits, etc.), sweets (bakery products, candy, cereal, chewing gum, [removed: etc.)] [added: etc.),] and dairy products (yogurt, ice cream, cheese, etc.).

[removed: *Inclusions.* Inclusions] [added: Additionally, Food Designs] provide [added: inclusion products that help with] taste and texture by, among other things, combining flavorings with fruit, vegetables and other natural ingredients for a wide range of food products, such as health snacks, baked goods, cereals, pastries, ice cream and other dairy products.

[added: Natural] food protection ingredients consist of natural antioxidants and anti-microbials used for natural food preservation and [removed: shelf life] [added: shelf-life] extension [removed: to] [added: for] beverages, cosmetic and healthcare products, [removed: and] pet food and feed additives.

[removed: *Flavor Ingredients.* The flavor] [added: Flavor] ingredients [removed: market includes] [added: include] natural flavor extracts, specialty botanical extracts, distillates, essential oils, citrus products, aroma chemicals and natural gums and resins.

Our [removed: global] Scent business creates fragrance [removed: compounds and] [added: compounds,] fragrance ingredients [added: and cosmetic ingredients] that are integral elements in the world’s finest perfumes and best-known household and personal care products.

[removed: We believe] [added: Consumer insights science and creativity are at the heart of] our [added: Scent business, and, along with our] unique portfolio of natural and synthetic ingredients, global footprint, innovative technologies and know-how, [removed: deep consumer insight] and customer [removed: intimacy] [added: intimacy, we believe] make us a market leader in scent products.

[removed: Fragrance compounds] [added: *Fragrance Compounds*] are unique and proprietary combinations of multiple [added: fragrance] ingredients that are ultimately used by our customers in their consumer goods.

[added: *Fragrance Ingredients.*] Fragrance ingredients [removed: consist of] [added: are] natural and synthetic, and active and functional ingredients that are used internally and sold to third parties, including competitors, for use in the preparation of compounds.

While the principal role of our fragrance ingredients facilities is to support our fragrance compounds business, we utilize [removed: our] excess manufacturing capacity to manufacture and sell certain fragrance ingredients to third [removed: parties.][added: parties, enabling us to leverage our fixed costs while maintaining the security of our supply for our perfumers and ultimately our customers.]

[removed: The] [added: Our] Nourish segment consists of most of our legacy Taste [removed: segment,] [added: segment combined with] N&B’s Food & Beverage division and the food protection business of N&B’s Health & Biosciences division.

[removed: The] [added: Our] Scent [removed: segment] [added: business] consists of our legacy Scent segment as well [removed: as, effective January 2, 2021,] [added: as] our Flavor Ingredients [added: business, formerly part of our legacy Taste] business.

[removed: This segment is the biotechnology driven] [added: Our Health & Biosciences business consists of a biotechnology-driven] portfolio of [removed: the N&B Business, where] enzymes, food cultures, probiotics and specialty ingredients for [removed: food] [added: food, home] and [removed: non-food applications are developed] [added: personal care,] and [removed: produced.][added: health and wellness applications.]

[removed: The Pharma Solutions segment consists of N&B’s] [added: Our] Pharma Solutions [removed: division, which is one of the world’s largest producers of] [added: business produces a vast portfolio including] cellulosics and [removed: alginates-based] [added: seaweed-based] pharma excipients, [removed: and is] used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and [removed: enable] [added: enabling] the development of more effective [removed: pharma solutions.][added: pharmaceutical finished dosage formats.]

We believe that the first step to creating an innovative and unique product experience begins with gaining insight into the consumer and emerging [added: industry] trends.

By aligning our capabilities and resources to these platforms, we ensure the proper support and focus for each program so that [removed: they] [added: our products] can be further developed and eventually accepted for commercial application.

As of December 31, [removed: 2020,] [added: 2021,] we have been granted [removed: 430] [added: 1,346] patents in the United States, since 2000, and have [removed: 564] [added: 608] pending patent applications.

We have developed many unique molecules and delivery systems for our customers that are used as the foundations of successful [removed: flavors and fragrances] [added: products] around the world.

[removed: We have historically conducted] [added: At those locations,] our [removed: principal basic research and development activities in Union Beach, New Jersey, where we employ] scientists and application [removed: engineers who collaborate] [added: engineers, while collaborating] with our other research and development centers around the world, [removed: to] support the:

[removed: Following the N&B Transaction, we expect that our] [added: Our] principal basic research and development activities [removed: will continue] [added: are located] in Union Beach, New [removed: Jersey, as well as in] [added: Jersey;] Wilmington, [removed: Delaware,] [added: Delaware;] Palo Alto, [removed: California, Barbrand, Denmark,] [added: California; Brabrand, Denmark;] and Leiden, The Netherlands.

[removed: The N&B Business has] [added: We have] strong product and application development pipelines built upon a global network that includes research and development, as well as regulatory and product stewardship capabilities.

Through our global network of creative centers and application laboratories, we create or adapt the basic [removed: flavors or fragrances compounds] [added: Nourish, Health & Biosciences, Scent and Pharma Solutions] that we have developed in the research and development process to commercialize for use in our customers’ consumer products.

Our global creative teams consist of [removed: perfumers, fragrance evaluators and flavorists, as well as] marketing, consumer science, consumer insights and technical application experts, from a wide range of cultures and nationalities.

In close partnership with our customers’ product development groups, our creative teams create the [removed: sensory] experiences that our customers are seeking in order to satisfy consumer demands in each of their respective markets.

New [removed: flavor and fragrance] [added: product] development is driven by a variety of sources including requests from our customers, who are in need of specific [removed: flavors and fragrances] [added: products] for use in a new or modified consumer product, or as a result of internal initiatives stemming from our consumer insights program.

Our product development team works in partnership with our scientists and researchers to optimize the consumer appeal and relevance of our [removed: flavors and fragrances.][added: offerings.]

We use a collaborative process between our researchers, our product development team and our customers to perfect [removed: the flavors and fragrances] [added: our offerings] so they are ready to be included in the final consumer product.

In addition to creating new [removed: flavors and fragrances,] [added: products,] our researchers and product development teams advise customers on ways to improve their existing products by moderating or substituting current ingredients with more readily accessible or less expensive materials enhancing their yield.

We are a leading creator and manufacturer of food, beverage, health & biosciences, scent and pharma solutions and complementary adjacent products, including cosmetic active and natural health ingredients, which are used in a wide variety of consumer products.

Our products are sold principally to manufacturers of dairy, meat, beverages, snacks, savory, sweet, baked goods and other foods, personal care products, soaps and detergents, cleaning products, perfumes and cosmetics, dietary supplements, food protection, infant and elderly nutrition, functional food, pharmaceutical and oral care products.

Sales in 2021 were approximately $11.656 billion.

Our audited consolidated financial information in this report for 2021 includes the results of the N&B Business effective February 1, 2021, whereas the Company’s consolidated financial information for the prior years do not include amounts related to N&B.

Nourish

*Ingredients* include a diversified portfolio across natural and plant-based specialty food ingredients derived from herbs and plants that provide texturizing solutions used in the food industry, food protection solutions used in food and beverage products, as well as specialty soy and pea protein with value-added formulations, emulsifiers and sweeteners.

Flavors also include value-added spices and seasoning ingredients for meat, food service, convenience, alternative protein and culinary products.

*Food Designs* include savory solution products such as spices, sauces, marinades and mixtures.

Health & Biosciences

Our Health & Biosciences business comprises N&B’s Health & Biosciences division (except the food protection business which is part of Nourish) in combination with the Natural Product Solutions business of legacy IFF.

Health & Biosciences is comprised of six business units: Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition, Grain Processing and Microbial Control.

During the third quarter of 2021, we entered into an agreement to divest the Microbial Control business.

We expect that the transaction will close in the second quarter of 2022, subject to customary closing conditions.

*Health* provides ingredients for dietary supplements, functional food and beverage, specialized nutrition and pharma.

*Cultures & Food Enzymes* provides products that aim to serve the global demand for healthy, natural, clean label and fermented food for fresh dairy, cheese, bakery and brewing products.

Such products contribute to extended shelf life and stability helping our customers to improve their product offerings.

The business's enzyme solutions also allow our customers to provide low sugar, high fiber and lactose-free dairy products.

*Home & Personal Ca*re produces enzymes for laundry and dishwashing detergents, cleaning and textiles to help enhance the product and process performance of products in the fabric and homecare, textiles and industrials and personal care markets.

*Animal Nutrition* produces feed enzymes and animal health solutions that help to improve welfare, performance and sustainability of livestock animal farming.

*Grain Processing* produces yeasts and enzymes for biofuel production and carbohydrate processing.

*Microbial Control* produces biocides for controlling microbial populations for oil and gas production, home and personal care and industrial preservation markets.

The Scent segment is comprised of three business units: Fragrance Compounds, Fragrance Ingredients and Cosmetic Actives.

Our perfumers harness creativity and leverage our innovative captive molecules, sustainable natural ingredients obtained with innovative processes, biotech ingredients, data science, and consumer insights to create unique and inspiring fragrances driving consumer preferences.

Our fine fragrances focus on perfumes and colognes, creating global and local namesake brands, from high luxury to mass market, from market leading to ultra-niche products.

*Cosmetic Actives* designs, develops, manufactures and markets innovative ingredients for the cosmetics and personal care industry, while offering active ingredients, functional ingredients, and delivery systems.

Pharma Solutions

Our excipients are used in prescription and over-the-counter pharmaceuticals and dietary supplements.

Our Pharma Solutions products also serve a variety of other specialty and industrial end-uses including coatings, inks, electronics, agriculture, and consumer products.

Pharma Solutions is comprised of N&B’s Pharma Solutions business.

As of December 31, 2021, we employed approximately 3,400 people globally in research and development activities.

- entering into hedging for raw materials we purchase that can be hedged against liquid commodity assets;

Between 2019 and 2020, the Company completed the closure of 21 sites.

During 2021, the Company completed the closure of one site.

For more detailed information about risks related to our supply chain, please refer to Item 1A, “Risk Factors” – *Supply chain disruptions, geopolitical developments or climate-change events may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.*

Environmental, Social, and Governance

Since the N&B Transaction, we have been working to integrate all aspects of environmental, social and governance (ESG) topics into a combined program.

As a part of our integration with N&B, we have developed an ESG roadmap, the 2030 ‘Do More Good Plan’ (“the Plan”), which aligns with IFF’s purpose of applying science and creativity for a better world.

The Plan includes four key focus areas:

*Environmental*

Supporting environmental stewardship across our operations, including commitments to climate action, zero waste to landfill, water stewardship solutions and an acceleration of our responsible sourcing practices by promoting regenerative ecosystems and achieving zero deforestation for strategic raw material supply chains.

As the information provided throughout this report is historical, it primarily reflects information about the Company as of December 31, 2020, without giving effect to the N&B Transaction or the N&B Business.

Sales in 2020 were approximately $5.1 billion, which management believes, made us the second largest company in the taste, scent, nutrition and specialty ingredient industry during the period.

During the past few years, we have diversified our customer base and leveraged our technical expertise to significantly expand our global small and mid-sized customer base.

In 2020, we operated our business across two segments: Taste and Scent.

As of December 31, 2020, our business consisted of our Taste and Scent segments.

Taste

*Savory Solutions.* Savory solutions include marinades or powder blends of flavors, natural colors, seasonings, functional ingredients and natural anti-oxidants that are primarily designed for the meat and fish industry.

*Nutrition and Specialty Ingredients.* Our nutrition and specialty ingredients primarily consist of natural health ingredients, natural food protection, natural colors and flavor ingredients.

Natural health ingredients include natural ingredients derived from plants and herbs, which provide, or are perceived as providing, health benefits.

These ingredients are used in dietary supplements, functional food, infant and elderly nutrition, cosmetics, personal care and other over-the-counter products.

Natural

These ingredients reduce the oxidative deterioration and/or microbiology load that leads to rancidity or loss of flavor, color, and nutritional value.

Natural colors comprise a wide array of natural colors and fruit and vegetable concentrates for food, beverage and cosmetics.

Our Scent business is a vertically integrated operation, originating in our research facilities with the development of natural, synthetic and proprietary molecules and innovative delivery systems, progressing to our creative centers, application laboratories and consumer insight teams where our perfumers partner with our customers to create unique fragrance compounds for use in a variety of end-use products.

We produce these products in our manufacturing facilities in a consistent, high-quality and cost-effective manner.

We also produce cosmetic active and functional ingredients for use in cosmetics.

By providing our fragrance development teams with an extensive portfolio of innovative, high-quality and effective ingredients to support their creativity, we are able to provide our customers with a unique identity for their brands.

These ingredients or fragrance compounds can then be combined with our innovative delivery systems which are key differentiators in the growth of our consumer fragrance portfolio.

*Fragrance Compounds*.

Our fine fragrances focus on perfumes and colognes.

Our scientists and perfumers collaborate to develop new molecules, new natural extractions and innovative processes to create unique and inspiring fragrances.

We have created some of the industry-leading fine fragrance classics as well as cutting-edge niche fragrances, as evidenced by the number of top sellers and award winners.

*Ingredients*.

We believe that this business allows us to leverage our fixed costs while maintaining the security of our supply for our perfumers and ultimately our customers.

Fragrance ingredients available for sale to third parties include innovative ingredients that leverage our manufacturing experience as well as a limited amount of cost-competitive, commodity ingredients.

Fragrance ingredients also include our cosmetic active and functional ingredients, which provide biologists and cosmetic chemists with innovative solutions to address cosmetic challenges such as skin aging and hair protection.

With our separate fragrance and active and functional ingredients, plus additional botanicals and delivery systems, we believe we are a leader in the industry with the breadth of our product portfolio.

Organization in 2021, following the N&B Transaction

As a result of the N&B Transaction, we will now be organized in four segments: Nourish, Scent, Health & Biosciences, and Pharma Solutions.

This segment comprises an innovative and broad portfolio of natural-based ingredients to enhance nutritional value, texture and functionality in a wide range of beverage, dairy, bakery, confectionery and culinary applications.

The Health & Biosciences segment contains N&B’s Health & Biosciences division, with the exception of food protection, which is part of our Nourish division, as well as parts of our Nutrition and Specialty Ingredients offerings.

The Health & Biosciences business includes a biotechnology-driven probiotics portfolio, that produces cultures for use in fermented foods such as yogurt, cheese and fermented beverages.

It also uses industrial fermentation to produce enzymes and microorganisms that provide product and process performance benefits to household detergents, animal feed, ethanol production and brewing.

Our sensory experts direct research programs exploring topics such as fragrance performance, the psychophysics of sensory perception (including chemesthetic properties such as warming, cooling and tingling), the genetic basis for flavor and fragrance preference and the effects of aromas on mood, performance, health and well-being.

As of December 31, 2020, we employed approximately 2,600 people globally in research and development activities, including in key basic research and development centers in Union Beach, New Jersey, Tilburg, The Netherlands, Neuilly and Grasse, France, and Nanjing, China.

Our ingredients research program discovers molecules found in natural substances and creates new molecules that are subsequently tested for their sensorial value.

To broaden our offerings of natural, innovative and unique products, we have established a number of collaborations with research institutions and other companies throughout the world.

We may also consider acquiring companies that could provide access to new technologies.

The development of new and customized flavor and fragrance compounds is a complex process calling upon the combined knowledge of our scientists, flavorists and perfumers.

Scientists from various disciplines work in project teams with flavorists and perfumers to develop flavor and fragrance compounds with consumer preferred performance characteristics.

The Company’s material legal proceedings are described in Part II, Item 8 of this Form 10-K in the Notes to Consolidated Financial Statements in Note 19, “Commitments and Contingencies” under the heading “Litigation.”

Litigation Matters

On August 12, 2019, Marc Jansen filed a putative securities class action against IFF, its Chairman and CEO, and its then-CFO, in the United States District Court for the Southern District of New York.

The lawsuit was filed after IFF disclosed that preliminary results of investigations indicated that Frutarom businesses operating principally in Russia and Ukraine had made improper payments to representatives of customers.

On December 26, 2019, the Court appointed a group of six investment funds as lead plaintiff and Pomerantz LLP as lead counsel.

On March 16, 2020, lead plaintiff filed an amended complaint, which added Frutarom and certain former officers of Frutarom as defendants.

The amended complaint alleges, among other things, that defendants made materially false and misleading statements or omissions concerning IFF’s acquisition of Frutarom, the integration of the two companies, and the companies’ financial reporting and results.

The amended complaint asserts claims under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and under the Israeli Securities Act-1968, against all defendants, and under Section 20(a) of the Securities Exchange Act of 1934 against the individual defendants, on behalf of a putative class of persons and entities who purchased or otherwise acquired IFF securities on the New York Stock Exchange between May 7, 2018 and August 12, 2019 and persons and entities who purchased or otherwise acquired IFF securities on the Tel Aviv Stock Exchange between October 9, 2018 and August 12, 2019.

The amended complaint seeks an

award of unspecified compensatory damages, costs, and expenses.

IFF, its officers, and Frutarom filed a motion to dismiss the case on June 26, 2020.

Two motions to approve securities class actions were filed in the Tel Aviv District Court, Israel, in August 2019, similarly alleging, among other things, false and misleading statements largely in connection with IFF’s acquisition of Frutarom and the above-mentioned improper payments.

One motion ("Borg") asserts claims under the U.S. federal securities laws against IFF, its Chairman and CEO, and its former CFO.

On November 8, 2020, IFF and its officers filed their response to the Borg motion.

The other motion ("Oman") (following an initial amendment) asserted claims under the Israeli Securities Act-1968 against IFF, its Chairman and CEO, and its former CFO, and against Frutarom and certain former Frutarom officers and directors, as well as claims under the Israeli Companies Act-1999 against certain former Frutarom officers and directors.

On October 4, 2020, the Oman plaintiff filed a motion to remove IFF and its officers from the motion and to add factual allegations from the U.S. amended complaint.

Responses to the motion to amend the Oman motion were filed during November 2020.

The court granted the motion to amend the Oman motion on February 17, 2021.

On October 29, 2019, IFF and Frutarom filed a claim in the Tel Aviv District Court, Israel, against Ori Yehudai, the former President and CEO of Frutarom, and against certain former directors of Frutarom, challenging the bonus of US $20 million granted to Yehudai in 2018.

IFF and Frutarom allege, among other things, that Yehudai was not entitled to receive the bonus because he breached his fiduciary duty by, among other things, knowing of the above-mentioned improper payments and failing to prevent them from being made.

The parties agreed, pursuant to the court’s recommendation, to attempt to resolve the dispute through mediation, which is still ongoing, during which the proceedings relating to this claim are stayed.

On March 11, 2020, an IFF shareholder filed a motion to approve a class action in Israel against, among others, Frutarom, Yehudai, and Frutarom’s former board of directors, alleging that former minority shareholders of Frutarom were harmed as a result of the US $20 million bonus paid to Yehudai.

The parties to this motion agreed to attempt to resolve the dispute through mediation to take place regarding the aforesaid claim against Yehudai, which as noted is still ongoing, during which the proceedings relating to this motion are stayed.

Investigation

On June 3, 2020, the Israel Police’s National Fraud Investigation Unit and the Israeli Securities Authority commenced an investigation into Frutarom and certain of its former executives, based on suspected bribery of foreign officials, money laundering, and violations of the Israeli Securities Act-1968.

The National Fraud Investigation Unit and the Israeli Securities Authority have provided IFF and Frutarom with various orders.

IFF is working to ensure compliance with such orders, all in accordance with, and subject to, Israeli law.

| [removed: | | |] ☑ | | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

For the fiscal year ended December 31, [removed: 2020][added: 2021]

| [removed: | | |] ☐ | | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | | |

| [removed: | | | | | |] For the transition period from [removed: to] [added: _______ to _______] | | | [added: | | |]

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: [added: None]

Yes ☑ No [removed: o][added: ☐]

Yes [removed: o No] ☑ [added: No ☐]

Yes ☑ No [removed: o][added: ☐]

Yes [removed: ☑] [added: ☐] No [removed: o][added: ☑]

| Large accelerated filer | | | ☑ | | | Accelerated filer | | | [removed: o] [added: ☐] | | |

| Non-accelerated filer | | | [removed: o] [added: ☐] | | | Smaller reporting company | | | ☐ | | |

The aggregate market value of the voting stock held by non-affiliates of the Registrant was [removed: $13,567,537,235] [added: $37,208,150,825] as of June 30, [removed: 2020.][added: 2021.]

As of February [removed: 15, 2021,] [added: 21, 2022,] there were [removed: 248,726,256] [added: 254,684,699] shares of the registrant’s common stock, par value 12 1/2¢ per share, outstanding.

Portions of the registrant’s proxy statement for the [removed: 2021] [added: 2022] Annual Meeting of Shareholders (the “IFF [removed: 2021] [added: 2022] Proxy Statement”) are incorporated by reference in Part III of this Form 10-K.

| ITEM 1. | | | [removed: [Business](#ic4b44061b16a422c926a191f63aecd6d_13)] [added: [Business](#ibcaddae13181485e82231a8f342b28c7_13)] | | | [removed: [3](#ic4b44061b16a422c926a191f63aecd6d_13)] [added: [3](#ibcaddae13181485e82231a8f342b28c7_13)] | | |

| ITEM 1A. | | | [Risk [removed: Factors](#ic4b44061b16a422c926a191f63aecd6d_16)] [added: Factors](#ibcaddae13181485e82231a8f342b28c7_16)] | | | [removed: [13](#ic4b44061b16a422c926a191f63aecd6d_16)] [added: [12](#ibcaddae13181485e82231a8f342b28c7_16)] | | |

| ITEM 1B. | | | [Unresolved Staff [removed: Comments](#ic4b44061b16a422c926a191f63aecd6d_19)] [added: Comments](#ibcaddae13181485e82231a8f342b28c7_19)] | | | [removed: [30](#ic4b44061b16a422c926a191f63aecd6d_19)] [added: [29](#ibcaddae13181485e82231a8f342b28c7_19)] | | |

| ITEM 2. | | | [removed: [Properties](#ic4b44061b16a422c926a191f63aecd6d_22)] [added: [Properties](#ibcaddae13181485e82231a8f342b28c7_22)] | | | [removed: [31](#ic4b44061b16a422c926a191f63aecd6d_22)] [added: [29](#ibcaddae13181485e82231a8f342b28c7_22)] | | |

| ITEM 3. | | | [Legal [removed: Proceedings](#ic4b44061b16a422c926a191f63aecd6d_25)] [added: Proceedings](#ibcaddae13181485e82231a8f342b28c7_25)] | | | [removed: [32](#ic4b44061b16a422c926a191f63aecd6d_25)] [added: [29](#ibcaddae13181485e82231a8f342b28c7_25)] | | |

| ITEM 4. | | | [Mine Safety [removed: Disclosures](#ic4b44061b16a422c926a191f63aecd6d_28)] [added: Disclosures](#ibcaddae13181485e82231a8f342b28c7_28)] | | | [removed: [33](#ic4b44061b16a422c926a191f63aecd6d_28)] [added: [29](#ibcaddae13181485e82231a8f342b28c7_28)] | | |

| ITEM 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#ic4b44061b16a422c926a191f63aecd6d_34)] [added: Securities](#ibcaddae13181485e82231a8f342b28c7_34)] | | | [removed: [33](#ic4b44061b16a422c926a191f63aecd6d_34)] [added: [29](#ibcaddae13181485e82231a8f342b28c7_34)] | | |

| ITEM 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#ic4b44061b16a422c926a191f63aecd6d_40)] [added: Operations](#ibcaddae13181485e82231a8f342b28c7_40)] | | | [removed: [36](#ic4b44061b16a422c926a191f63aecd6d_40)] [added: [31](#ibcaddae13181485e82231a8f342b28c7_40)] | | |

| ITEM 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#ic4b44061b16a422c926a191f63aecd6d_58)] [added: Risk](#ibcaddae13181485e82231a8f342b28c7_58)] | | | [removed: [51](#ic4b44061b16a422c926a191f63aecd6d_58)] [added: [46](#ibcaddae13181485e82231a8f342b28c7_58)] | | |

| ITEM 8. | | | [Financial Statements and Supplementary [removed: Data](#ic4b44061b16a422c926a191f63aecd6d_61)] [added: Data](#ibcaddae13181485e82231a8f342b28c7_61)] | | | [removed: [52](#ic4b44061b16a422c926a191f63aecd6d_61)] [added: [47](#ibcaddae13181485e82231a8f342b28c7_61)] | | |

| ITEM 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#ic4b44061b16a422c926a191f63aecd6d_64)] [added: Disclosure](#ibcaddae13181485e82231a8f342b28c7_64)] | | | [removed: [52](#ic4b44061b16a422c926a191f63aecd6d_64)] [added: [47](#ibcaddae13181485e82231a8f342b28c7_64)] | | |

| ITEM 9A. | | | [Controls and [removed: Procedures](#ic4b44061b16a422c926a191f63aecd6d_67)] [added: Procedures](#ibcaddae13181485e82231a8f342b28c7_67)] | | | [removed: [52](#ic4b44061b16a422c926a191f63aecd6d_67)] [added: [47](#ibcaddae13181485e82231a8f342b28c7_67)] | | |

| ITEM 9B. | | | [Other [removed: Information](#ic4b44061b16a422c926a191f63aecd6d_70)] [added: Information](#ibcaddae13181485e82231a8f342b28c7_70)] | | | [removed: [53](#ic4b44061b16a422c926a191f63aecd6d_70)] [added: [48](#ibcaddae13181485e82231a8f342b28c7_70)] | | |

| ITEM 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#ic4b44061b16a422c926a191f63aecd6d_76)] [added: Governance](#ibcaddae13181485e82231a8f342b28c7_76)] | | | [removed: [54](#ic4b44061b16a422c926a191f63aecd6d_76)] [added: [48](#ibcaddae13181485e82231a8f342b28c7_76)] | | |

| ITEM 11. | | | [Executive [removed: Compensation](#ic4b44061b16a422c926a191f63aecd6d_79)] [added: Compensation](#ibcaddae13181485e82231a8f342b28c7_79)] | | | [removed: [54](#ic4b44061b16a422c926a191f63aecd6d_79)] [added: [48](#ibcaddae13181485e82231a8f342b28c7_79)] | | |

| ITEM 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#ic4b44061b16a422c926a191f63aecd6d_82)] [added: Matters](#ibcaddae13181485e82231a8f342b28c7_82)] | | | [removed: [54](#ic4b44061b16a422c926a191f63aecd6d_82)] [added: [49](#ibcaddae13181485e82231a8f342b28c7_82)] | | |

| ITEM 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#ic4b44061b16a422c926a191f63aecd6d_85)] [added: Independence](#ibcaddae13181485e82231a8f342b28c7_85)] | | | [removed: [54](#ic4b44061b16a422c926a191f63aecd6d_85)] [added: [49](#ibcaddae13181485e82231a8f342b28c7_85)] | | |

| ITEM 14. | | | [Principal Accountant Fees and [removed: Services](#ic4b44061b16a422c926a191f63aecd6d_88)] [added: Services](#ibcaddae13181485e82231a8f342b28c7_88)] | | | [removed: [54](#ic4b44061b16a422c926a191f63aecd6d_88)] [added: [49](#ibcaddae13181485e82231a8f342b28c7_88)] | | |

| ITEM 15. | | | [Exhibits and Financial Statement [removed: Schedules](#ic4b44061b16a422c926a191f63aecd6d_94)] [added: Schedules](#ibcaddae13181485e82231a8f342b28c7_94)] | | | [removed: [55](#ic4b44061b16a422c926a191f63aecd6d_94)] [added: [49](#ibcaddae13181485e82231a8f342b28c7_94)] | | |

| ITEM 16. | | | [Form 10-K [removed: Summary](#ic4b44061b16a422c926a191f63aecd6d_226)] [added: Summary](#ibcaddae13181485e82231a8f342b28c7_223)] | | | [removed: [112](#ic4b44061b16a422c926a191f63aecd6d_226)] [added: [113](#ibcaddae13181485e82231a8f342b28c7_223)] | | |

| | | | | | |

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200 Powder Mill Road, Wilmington, DE 19803-2907

*(Address of principal executive offices) (Zip Code*)

| ITEM 6. | | | [\[Reserved\]](#ibcaddae13181485e82231a8f342b28c7_37) | | | [31](#ibcaddae13181485e82231a8f342b28c7_37) | | |

| ITEM 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#ibcaddae13181485e82231a8f342b28c7_1979) | | | [48](#ibcaddae13181485e82231a8f342b28c7_1979) | | |

| [SIGNATURES](#ibcaddae13181485e82231a8f342b28c7_226) | | | | | | [114](#ibcaddae13181485e82231a8f342b28c7_226) | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| 6.00% Tangible Equity Units | | | | | | IFFT | | | | | | New York Stock Exchange | | |

| 0.500% Senior Notes due 2021 | | | | | | IFF 21 | | | | | | New York Stock Exchange | | |

None

| ITEM 6. | | | [Selected Financial Data](#ic4b44061b16a422c926a191f63aecd6d_37) | | | [35](#ic4b44061b16a422c926a191f63aecd6d_37) | | |

| [SIGNATURES](#ic4b44061b16a422c926a191f63aecd6d_229) | | | | | | [113](#ic4b44061b16a422c926a191f63aecd6d_229) | | |

[removed: IFF] [added: Our] principal [added: owned and leased] properties as of December 31, [removed: 2020,] [added: 2021,] are as follows:

[removed: The IFF] [added: Our] principal executive offices [removed: and New York laboratory facilities] are located at 521 West 57th Street, New [added: York, New] York [removed: City.][added: and 200 Powder Mill Road, Wilmington, Delaware.]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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| | | | Europe, Africa & the Middle East | | | | | | | | | | | | North America | | | | | | | | | | | | Greater Asia | | | | | | | | | | | | Latin America | | | | | | | | |

| | | | Owned | | | | | | Leased | | | | | | Owned | | | | | | Leased | | | | | | Owned | | | | | | Leased | | | | | | Owned | | | | | | Leased | | |

| Plant | | | 50 | | | | | | 13 | | | | | | 22 | | | | | | 14 | | | | | | 26 | | | | | | 11 | | | | | | 17 | | | | | | 5 | | |

| Office | | | 2 | | | | | | 70 | | | | | | 2 | | | | | | 13 | | | | | | 2 | | | | | | 34 | | | | | | — | | | | | | 9 | | |

| Laboratory | | | 7 | | | | | | 16 | | | | | | — | | | | | | 11 | | | | | | — | | | | | | 13 | | | | | | 2 | | | | | | 2 | | |

| Warehouse | | | — | | | | | | 12 | | | | | | — | | | | | | 10 | | | | | | 3 | | | | | | 3 | | | | | | 3 | | | | | | 9 | | |

| Other | | | 1 | | | | | | — | | | | | | — | | | | | | — | | | | | | 3 | | | | | | — | | | | | | — | | | | | | 4 | | |

| | | | 60 | | | | | | 111 | | | | | | 24 | | | | | | 48 | | | | | | 34 | | | | | | 61 | | | | | | 22 | | | | | | 29 | | |

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| Location | | | Operation | | |

| United States | | | | | |

| Carrollton, TX(1) | | | Production of flavor compounds; flavor laboratories. | | |

| Hazlet, NJ | | | Production of fragrance compounds. | | |

| Jacksonville, FL | | | Production of fragrance ingredients. | | |

| New York, NY(1) | | | Fragrance laboratories; corporate headquarters. | | |

| South Brunswick, NJ(1) | | | Production of flavor compounds and ingredients; flavor laboratories. | | |

| Holmdel, NJ(1) | | | Research and development center. | | |

| Union Beach, NJ | | | Research and development center. | | |

| Philadelphia, PA | | | Production of flavor compounds; flavor laboratories. | | |

| France | | | | | |

| Neuilly(1) | | | Fragrance laboratories. | | |

| Grasse | | | Production of fragrance compounds and cosmetic ingredients. | | |

| Great Britain | | | | | |

| Haverhill | | | Production of flavor compounds and ingredients, and fragrance ingredients; flavor laboratories. | | |

| Netherlands | | | | | |

| Hilversum | | | Flavor and fragrance laboratories. | | |

| Tilburg | | | Production of flavor compounds and ingredients, and fragrance compounds. | | |

| Spain | | | | | |

| Benicarló | | | Production of fragrance ingredients. | | |

| Argentina | | | | | |

| Garin | | | Production of flavor and fragrance compounds; flavor and fragrance laboratories. | | |

| Brazil | | | | | |

| Rio de Janeiro | | | Production of fragrance compounds. | | |

| Taubate | | | Production of flavor compounds and ingredients. | | |

| Mexico | | | | | |

| Tlalnepantla | | | Production of flavor and fragrance compounds; flavor and fragrance laboratories. | | |

| India | | | | | |

| Mumbai(2) | | | Flavor and fragrance laboratories. | | |

| Sri City | | | Production of flavor and fragrance compounds and laboratories. | | |

| Australia | | | | | |

| Dandenong | | | Production of flavor compounds and flavor ingredients. | | |

| China | | | | | |

| Guangzhou(2) | | | Production of fragrance compounds and flavor compounds. | | |

| Shanghai(1)(2) | | | Flavor and fragrance laboratories. | | |

| Zhangjiagang(2) | | | Production of flavor compounds. | | |

| Yungpu(2) | | | Production of flavor compounds. | | |

| Jiande(2) | | | Production of fragrance ingredients. | | |

| Title of Class | | | [added: | | |] Number of shareholders of record as of February [removed: 15, 2021] [added: 21, 2022] | | |

| Common stock, par value 12 1/2¢ per share | | | [removed: 3,865] | | | [added: 3,527 | | |]

The total return assumes that dividends were reinvested daily and is based on a $100 investment on December 31, [removed: 2015.][added: 2016.]

[removed: ][added: ]

| Peer Group Companies | | | | | | [added: | | |]

| The Coca-Cola Company | | | [removed: McDonald’s Corporation] [added: The Hershey Company] | | | [added: The Procter & Gamble Company | | |]

| [added: Colgate-Palmolive Company | | |] Hormel Foods Corporation | | | Symrise AG | | |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Campbell Soup Company | | | The Estée Lauder Companies Inc. | | | McCormick & Company, Incorporated | | |

| Church & Dwight Co., Inc. | | | General Mills, Inc. | | | Nestle SA | | |

| The Clorox Company | | | Givaudan SA | | | PepsiCo, Inc. | | |

| Conagra Brands, Inc. | | | Kellogg Company | | | Unilever N.V. | | |

| Danone SA | | | L'Oreal SA | | | | | |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| | | | | | |

| --- | --- | --- | --- | --- | --- |

| Campbell Soup Company | | | Kellogg Company | | |

| Church & Dwight Co., Inc. | | | The Estée Lauder Companies Inc. | | |

| The Clorox Company | | | McCormick & Company, Incorporated | | |

| Colgate-Palmolive Company | | | Nestle SA | | |

| Conagra Brands, Inc. | | | PepsiCo, Inc. | | |

| Edgewell Personal Care Company(1) | | | The Procter & Gamble Company | | |

| General Mills, Inc. | | | Unilever N.V. | | |

| The Hershey Company | | | YUM! Brands, Inc. | | |

| Givaudan SA | | | | | |

(1)Edgewell Personal Care has been included starting from July 1, 2015 when it spun off from Energizer Holdings.

INTERNATIONAL FLAVORS & FRAGRANCES INC.

QUARTERLY FINANCIAL DATA

(UNAUDITED)

*This data should be read in conjunction with the Consolidated Financial Statements and Notes thereto, and with Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.*

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Fiscal Year Ended December 31, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| *(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)* | | | First Quarter | | | | | | Second Quarter | | | | | | Third Quarter | | | | | | Fourth Quarter | | | | | | Total Year | | |

| Net Sales | | | $ | 1,347,317 | | | | | $ | 1,198,773 | | | | | $ | 1,268,076 | | | | | $ | 1,270,073 | | | | | $ | 5,084,239 | |

| Gross Profit* | | | 565,867 | | | | | | 481,842 | | | | | | 524,427 | | | | | | 513,730 | | | | | | 2,085,866 | | |

| Income before taxes | | | 153,508 | | | | | | 103,065 | | | | | | 105,500 | | | | | | 79,298 | | | | | | 441,371 | | |

| Net income | | | 127,211 | | | | | | 87,366 | | | | | | 86,231 | | | | | | 66,564 | | | | | | 367,372 | | |

| Net income attributable to IFF stockholders* | | | 124,607 | | | | | | 86,204 | | | | | | 84,828 | | | | | | 67,589 | | | | | | 363,228 | | |

| Net income per share — basic* | | | 1.16 | | | | | | 0.75 | | | | | | 0.76 | | | | | | 0.57 | | | | | | 3.25 | | |

| Net income per share — diluted* | | | 1.15 | | | | | | 0.74 | | | | | | 0.75 | | | | | | 0.57 | | | | | | 3.21 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Fiscal Year Ended December 31, 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| *(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)* | | | First Quarter | | | | | | Second Quarter | | | | | | Third Quarter | | | | | | Fourth Quarter | | | | | | Total Year | | |

| Net Sales | | | $ | 1,297,402 | | | | | $ | 1,291,568 | | | | | $ | 1,267,345 | | | | | $ | 1,283,769 | | | | | $ | 5,140,084 | |

| Gross Profit* | | | 531,259 | | | | | | 546,239 | | | | | | 533,088 | | | | | | 502,162 | | | | | | 2,112,748 | | |

| Income before taxes | | | 134,576 | | | | | | 169,481 | | | | | | 156,866 | | | | | | 96,529 | | | | | | 557,452 | | |

| Net income | | | 111,214 | | | | | | 138,869 | | | | | | 129,807 | | | | | | 80,378 | | | | | | 460,268 | | |

| Net income attributable to IFF stockholders* | | | 108,829 | | | | | | 136,377 | | | | | | 127,124 | | | | | | 83,543 | | | | | | 455,873 | | |

| Net income per share — basic* | | | 0.97 | | | | | | 1.21 | | | | | | 1.15 | | | | | | 0.71 | | | | | | 4.05 | | |

| Net income per share — diluted* | | | 0.96 | | | | | | 1.20 | | | | | | 1.13 | | | | | | 0.70 | | | | | | 4.00 | | |

_______________________

The key variances quarter-over-quarter relate to the volume of restructuring, acquisition and integration related charges which are included in the total of Non-GAAP adjustments.

Refer to the Non-GAAP reconciliation in Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional information.*

See index to Consolidated Financial Statements on page [removed: 55.][added: [49](#ibcaddae13181485e82231a8f342b28c7_91).]

See Item 6 on page 35 for supplemental quarterly data.

Management assessed the effectiveness of our internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2021.

Based on this assessment, management determined that, as of [removed: January 1,] [added: December 31,] 2021, our internal control over financial reporting was effective.

PricewaterhouseCoopers LLP, our independent registered public accounting firm, has audited the effectiveness of our internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2021 as stated in their report which is included herein.

| | | | | | |

| --- | --- | --- | --- | --- | --- |

PART III

None.

PART III

The information relating to directors and nominees of the Company is set forth in the IFF [removed: 2021] [added: 2022] Proxy Statement and is incorporated by reference herein.

The information relating to Section 16(a) beneficial ownership reporting compliance that appears in the IFF [removed: 2021] [added: 2022] Proxy Statement is also incorporated by reference herein.

The information regarding the Company’s Audit Committee and its designated audit committee financial experts is set forth in the IFF [removed: 2021] [added: 2022] Proxy Statement and such information is incorporated by reference herein.

The information concerning procedures by which shareholders may recommend director nominees is set forth in the IFF [removed: 2021] [added: 2022] Proxy Statement and such information is incorporated by reference herein.

The items required by Part III, Item 11 are incorporated herein by reference from the IFF [removed: 2021] [added: 2022] Proxy Statement to be filed on or before [removed: May 1, 2021.][added: April 29, 2022.]

The items required by Part III, Item 12 are incorporated herein by reference from the IFF [removed: 2021] [added: 2022] Proxy Statement to be filed on or before [removed: May 1, 2021.][added: April 29, 2022.]

The items required by Part III, Item 13 are incorporated herein by reference from the IFF [removed: 2021] [added: 2022] Proxy Statement to be filed on or before [removed: May 1, 2021.][added: April 29, 2022.]

The items required by Part III, Item 14 are incorporated herein by reference from the IFF [removed: 2021] [added: 2022] Proxy Statement to be filed on or before [removed: May 1, 2021.][added: April 29, 2022.]

| [Report of Independent Registered Public Accounting [removed: Firm](#ic4b44061b16a422c926a191f63aecd6d_97)] [added: Firm](#ibcaddae13181485e82231a8f342b28c7_97) (PCAOB ID: 238)] | | | [removed: [56](#ic4b44061b16a422c926a191f63aecd6d_97)] [added: [50](#ibcaddae13181485e82231a8f342b28c7_97)] | | |

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| [Consolidated Balance [removed: Sheet as] [added: Sheet](#ibcaddae13181485e82231a8f342b28c7_103)[s](#ibcaddae13181485e82231a8f342b28c7_103) [as] of December 31, [removed: 2020 and 2019](#ic4b44061b16a422c926a191f63aecd6d_103)] [added: 202](#ibcaddae13181485e82231a8f342b28c7_103)[1](#ibcaddae13181485e82231a8f342b28c7_103) [and](#ibcaddae13181485e82231a8f342b28c7_103) [20](#ibcaddae13181485e82231a8f342b28c7_103)[20](#ibcaddae13181485e82231a8f342b28c7_103)] | | | [removed: [59](#ic4b44061b16a422c926a191f63aecd6d_103)] [added: [54](#ibcaddae13181485e82231a8f342b28c7_103)] | | |

| [Consolidated [removed: Statement of] [added: Statement](#ibcaddae13181485e82231a8f342b28c7_109)[s](#ibcaddae13181485e82231a8f342b28c7_109) [of] Cash Flows for the years ended December 31, [removed: 2020, 2019 and 2018](#ic4b44061b16a422c926a191f63aecd6d_109)] [added: 202](#ibcaddae13181485e82231a8f342b28c7_109)[1](#ibcaddae13181485e82231a8f342b28c7_109)[, 20](#ibcaddae13181485e82231a8f342b28c7_109)[20](#ibcaddae13181485e82231a8f342b28c7_109) [and 201](#ibcaddae13181485e82231a8f342b28c7_109)[9](#ibcaddae13181485e82231a8f342b28c7_109)] | | | [removed: [60](#ic4b44061b16a422c926a191f63aecd6d_109)] [added: [55](#ibcaddae13181485e82231a8f342b28c7_109)] | | |

| [Consolidated [removed: Statement of] [added: Statement](#ibcaddae13181485e82231a8f342b28c7_112)[s](#ibcaddae13181485e82231a8f342b28c7_112) [of] Shareholders’ Equity for the years ended December 31, [removed: 2020, 2019 and 2018](#ic4b44061b16a422c926a191f63aecd6d_112)] [added: 202](#ibcaddae13181485e82231a8f342b28c7_112)[1](#ibcaddae13181485e82231a8f342b28c7_112)[, 20](#ibcaddae13181485e82231a8f342b28c7_112)[20](#ibcaddae13181485e82231a8f342b28c7_112) [and 201](#ibcaddae13181485e82231a8f342b28c7_112)[9](#ibcaddae13181485e82231a8f342b28c7_112)] | | | [removed: [61](#ic4b44061b16a422c926a191f63aecd6d_112)] [added: [56](#ibcaddae13181485e82231a8f342b28c7_112)] | | |

| [Notes to Consolidated Financial [removed: Statements](#ic4b44061b16a422c926a191f63aecd6d_118)] [added: Statements](#ibcaddae13181485e82231a8f342b28c7_118)] | | | [removed: [62](#ic4b44061b16a422c926a191f63aecd6d_118)] [added: [57](#ibcaddae13181485e82231a8f342b28c7_118)] | | |

| [Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, [removed: 2020, 2019 and 2018](#ic4b44061b16a422c926a191f63aecd6d_232)] [added: 202](#ibcaddae13181485e82231a8f342b28c7_229)[1](#ibcaddae13181485e82231a8f342b28c7_229)[, 20](#ibcaddae13181485e82231a8f342b28c7_229)[20](#ibcaddae13181485e82231a8f342b28c7_229) [and 201](#ibcaddae13181485e82231a8f342b28c7_229)[9](#ibcaddae13181485e82231a8f342b28c7_229)] | | | [removed: [S](#ic4b44061b16a422c926a191f63aecd6d_232)[\-1](#ic4b44061b16a422c926a191f63aecd6d_232)] [added: [S-1](#ibcaddae13181485e82231a8f342b28c7_229)] | | |

We have audited the accompanying consolidated balance sheets of International Flavors & Fragrances Inc. and its subsidiaries (the “Company”) as of [removed: January 1,] [added: December 31,] 2021 and January [removed: 3, 2020,] [added: 1, 2021,] and the related consolidated statements of income and comprehensive [removed: income,] [added: income (loss),] of shareholders' equity and of cash flows for each of the three years in the period ended [removed: January 1,] [added: December 31,] 2021, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”).

We also have audited the Company's internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2021, based on criteria established in Internal Control [removed: -Integrated] [added: - Integrated] Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of [removed: January 1,] [added: December 31,] 2021 and January [removed: 3, 2020,] [added: 1, 2021,] and the results of its operations and its cash flows for each of the three years in the period ended [removed: January 1,] [added: December 31,] 2021 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of [removed: January 1,] [added: December 31,] 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that (i) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

*Goodwill Impairment Assessment - [removed: Savory and Natural Product] [added: Pharma] Solutions Reporting [removed: Units*][added: Unit*]

As described in Notes 1 and 5 to the consolidated financial statements, the Company’s [removed: consolidated] goodwill balance was [removed: $5.6] [added: $16.414] billion as of [removed: January 1,] [added: December 31,] 2021, and the goodwill [removed: associated with] [added: related to] the [removed: Savory and Natural Products] [added: Pharma] Solutions [removed: Reporting Units (“the Reporting Units”)] [added: reporting unit] was [removed: $1.21 billion and $851.4 million, respectively.][added: $1.282 billion.]

The principal considerations for our determination that performing procedures relating to the goodwill impairment assessment of the [removed: Reporting Units] [added: Pharma Solutions reporting unit] is a critical audit matter are (i) the significant judgment by management when [removed: developing] [added: determining] the fair value [removed: measurement] of the [removed: Reporting Units;] [added: Pharma Solutions reporting unit;] (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and [removed: in] evaluating [removed: audit evidence relating to] management’s significant assumptions related to [removed: the] revenue growth [removed: rates, profit margins] [added: rates] and [removed: the specific weighted-average cost of capital used to discount future cash flows;] [added: gross margins;] and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over [removed: the] [added: management’s] valuation of the [removed: Reporting Units.][added: Pharma Solutions reporting unit.]

These procedures also included, among [removed: others,] [added: others] (i) testing management’s process for [removed: developing] [added: determining] the fair value [removed: estimate;] [added: of the Pharma Solutions reporting unit;] (ii) evaluating the appropriateness of the discounted cash flow [removed: model;] [added: method;] (iii) testing the completeness and accuracy of [added: the] underlying data used in the [removed: model;] [added: discounted cash flow method;] and (iv) evaluating the [added: reasonableness of the] significant assumptions used by management related to [removed: the] revenue growth [removed: rates, profit margins] [added: rates] and [removed: the specific weighted-average cost of capital used to discount future cash flows.][added: gross margins.]

Evaluating management’s [added: significant] assumptions related to [removed: the] revenue growth rates and [removed: profit] [added: gross] margins involved evaluating whether the [added: significant] assumptions used by management were reasonable considering (i) the current and past performance of [removed: the Reporting Units;] [added: N&B;] (ii) the consistency with external market and industry data; and (iii) whether [removed: the] [added: these significant] assumptions were consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in [added: evaluating] the [removed: evaluation] [added: appropriateness] of the [removed: Company’s] discounted cash flow [removed: model and the specific weighted-average cost of capital assumption used to discount future cash flows.][added: method.]

[removed: |] /s/ PricewaterhouseCoopers LLP [removed: | | |]

[removed: |] New York, New York [removed: | | |]

CONSOLIDATED [removed: STATEMENT] [added: STATEMENTS] OF INCOME AND COMPREHENSIVE [removed: INCOME][added: INCOME (LOSS)]

| *(DOLLARS IN [removed: THOUSANDS] [added: MILLIONS] EXCEPT PER SHARE AMOUNTS)* | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Net sales | | | $ | [removed: 5,084,239] [added: 11,656] | | | | | $ | [removed: 5,140,084] [added: 5,084] | | | | | $ | [removed: 3,977,539] [added: 5,140] | |

| Cost of goods sold | | | [removed: 2,998,373] [added: 7,921] | | | | | | [removed: 3,027,336] [added: 2,998] | | | | | | [removed: 2,294,832] [added: 3,027] | | |

| Research and development expenses | | | [removed: 356,863] [added: 629] | | | | | | [removed: 346,128] [added: 357] | | | | | | [removed: 311,583] [added: 346] | | |

| Selling and administrative expenses | | | [removed: 948,833] [added: 1,749] | | | | | | [removed: 876,121] [added: 949] | | | | | | [removed: 707,461] [added: 876] | | |

| Restructuring and other [removed: charges, net] [added: charges] | | | [removed: 17,295] [added: 41] | | | | | | [removed: 29,765] [added: 17] | | | | | | [removed: 5,079] [added: 30] | | |

| Amortization of acquisition-related intangibles | | | [removed: 192,607] [added: 732] | | | | | | [removed: 193,097] [added: 193] | | | | | | [removed: 75,879] [added: 193] | | |

| [removed: Losses (gains)] [added: (Gains) losses] on sale of fixed assets | | | [removed: 3,784] [added: (1)] | | | | | | [removed: 2,367] [added: 4] | | | | | | [removed: (1,177)] [added: 3] | | |

| Operating profit | | | [removed: 566,484] [added: 585] | | | | | | [removed: 665,270] [added: 566] | | | | | | [removed: 583,882] [added: 665] | | |

| Interest expense | | | [removed: 131,802] [added: 289] | | | | | | [removed: 138,221] [added: 132] | | | | | | [removed: 132,558] [added: 138] | | |

| Other income, net | | | [removed: (6,689)] [added: (58)] | | | | | | [removed: (30,403)] [added: (7)] | | | | | | [removed: (35,243)] [added: (30)] | | |

| Income before taxes | | | [removed: 441,371] [added: 354] | | | | | | [removed: 557,452] [added: 441] | | | | | | [removed: 447,757] [added: 557] | | |

| Net income | | | [removed: 367,372] [added: 279] | | | | | | [removed: 460,268] [added: 367] | | | | | | [removed: 339,781] [added: 460] | | |

| Net income attributable to noncontrolling interests | | | [removed: 4,144] [added: 9] | | | | | | [removed: 4,395] [added: 4] | | | | | | [removed: 2,479] [added: 4] | | |

| Net income attributable to IFF stockholders | | | [removed: 363,228] [added: 270] | | | | | | [removed: 455,873] [added: 363] | | | | | | [removed: 337,302] [added: 456] | | |

| Other comprehensive [removed: income:] [added: income (loss):] | | | | | | | | | | | | | | | | | |

| Foreign currency translation adjustments | | | [removed: 88,132] [added: (848)] | | | | | | [removed: 23,953] [added: 88] | | | | | | [removed: (99,580)] [added: 24] | | |

| [(a)(3) EXHIBITS](#ibcaddae13181485e82231a8f342b28c7_220) | | | [109](#ibcaddae13181485e82231a8f342b28c7_220) | | |

*Merger with Nutrition & Biosciences, Inc. - Valuation of the Customer Relationships Intangible Assets*

As described in Note 3 to the consolidated financial statements, on February 1, 2021, the Company completed the merger with Nutrition & Biosciences, Inc. (“N&B”) for total purchase consideration of $15.942 billion.

The acquisition resulted in $6.734 billion of customer relationships intangible assets being recorded.

The fair value of the intangible assets is generally determined using an income method (specifically, for customer relationships, the multi-period excess earnings method), which is based on forecasts of the expected future cash flows attributable to the respective assets.

Significant estimates and assumptions inherent in the valuations reflect a consideration of other market participants, and include the amount and timing of future cash flows (including revenue growth rates, gross margins, and operating expenses), customer attrition rates, a brand’s relative market position and the discount rates applied to the cash flows.

The principal considerations for our determination that performing procedures relating to the valuation of the customer relationships intangible assets acquired in connection with the merger with N&B is a critical audit matter are (i) the significant judgment by management when determining the fair value of the customer relationships intangible assets acquired; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to revenue growth rates, gross margins, customer attrition rates, and the discount rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships intangible assets.

These procedures also included, among others (i) reading the merger agreement; (ii) testing management’s process for determining the fair value of the customer relationships intangible assets acquired; (iii) evaluating the appropriateness of the multi-period excess earnings method; (iv) testing the completeness and accuracy of the underlying data used in the multi-period excess earnings method; and (v) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, gross margins, customer attrition rates, and the discount rates.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the multi-period excess earnings method and (ii) the reasonableness of the significant assumptions related to customer attrition rates and the discount rates.

If a reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge based on that difference.

Management assessed the fair value of the reporting units primarily using an income approach.

Under the income approach, management determines the fair value by using a discounted cash flow method at a rate of return that reflects the relative risk of the projected future cash flows of each reporting unit, as well as a terminal value.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

Evaluating management’s significant assumptions related to revenue growth rates and gross margins involved evaluating whether the significant assumptions used by management were reasonable considering (i) the current and past performance of the Pharma Solutions reporting unit; (ii) the consistency with external market and industry data; and (iii) whether these significant assumptions were consistent with evidence obtained in other areas of the audit.

February 28, 2022

| Gross profit | | | 3,735 | | | | | | 2,086 | | | | | | 2,113 | | |

| Provision for income taxes | | | 75 | | | | | | 74 | | | | | | 97 | | |

| Other comprehensive income (loss) | | | (725) | | | | | | 19 | | | | | | (15) | | |

| *(DOLLARS IN MILLIONS)* | | | 2021 | | | | | | 2020 | | |

| Cash and cash equivalents | | | $ | 711 | | | | | $ | 650 | |

| Trade | | | 1,952 | | | | | | 950 | | |

| Inventories | | | 2,516 | | | | | | 1,132 | | |

| Assets held for sale | | | 1,122 | | | | | | — | | |

| Total Current Assets | | | 6,987 | | | | | | 3,060 | | |

| Goodwill | | | 16,414 | | | | | | 5,593 | | |

| Commercial paper | | | 324 | | | | | | — | | |

| Accounts payable | | | 1,532 | | | | | | 556 | | |

| Accrued payroll and bonus | | | 335 | | | | | | 133 | | |

| Liabilities held for sale | | | 101 | | | | | | — | | |

| Total Current Liabilities | | | 3,633 | | | | | | 1,904 | | |

| Operating lease liabilities | | | 670 | | | | | | 265 | | |

| Other liabilities | | | 462 | | | | | | 268 | | |

| Cumulative translation adjustments | | | (1,133) | | | | | | (285) | | |

| Total Shareholders’ Equity | | | 21,082 | | | | | | 6,310 | | |

| Deferred income taxes | | | (236) | | | | | | (68) | | | | | | (59) | | |

| Amortization of inventory step-up | | | 368 | | | | | | — | | | | | | — | | |

| Trade receivables | | | (169) | | | | | | (61) | | | | | | 60 | | |

| Inventories | | | (363) | | | | | | 18 | | | | | | (62) | | |

| Accounts payable | | | 419 | | | | | | 28 | | | | | | 55 | | |

| | | | | | |

| | | | | | |

| [(a)(3) EXHIBITS](#ic4b44061b16a422c926a191f63aecd6d_223) | | | [108](#ic4b44061b16a422c926a191f63aecd6d_223) | | |

| | | | | | |

Fair value is estimated by management using a discounted cash flow model.

Management determines the fair value of reporting units, including the Reporting Units, using key assumptions including revenue growth rates, profit margins and the specific weighted-average cost of capital used to discount future cash flows.

| | | |

| --- | --- | --- |

| February 22, 2021 | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Gross profit | | | 2,085,866 | | | | | | 2,112,748 | | | | | | 1,682,707 | | |

| Loss on extinguishment of debt | | | — | | | | | | — | | | | | | 38,810 | | |

| Taxes on income | | | 73,999 | | | | | | 97,184 | | | | | | 107,976 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | December 31, | | | | | | | | |

| Trade | | | 950,350 | | | | | | 892,625 | | |

| Inventories | | | 1,131,856 | | | | | | 1,123,068 | | |

| | | | | | | | | | | | |

| Total Current Assets | | | 3,059,799 | | | | | | 2,942,544 | | |

| Goodwill | | | 5,593,252 | | | | | | 5,497,596 | | |

| Other assets | | | 717,260 | | | | | | 608,416 | | |

| | | | | | | | | | | | |

| Accounts payable | | | 555,687 | | | | | | 510,372 | | |

| | | | | | | | | | | | |

| | | | | | | | | | | | |

| Total Current Liabilities | | | 1,903,726 | | | | | | 1,552,190 | | |

| | | | | | | | | | | | |

| Other liabilities | | | 532,135 | | | | | | 502,366 | | |

| Cumulative translation adjustments | | | (284,911) | | | | | | (373,043) | | |

| Total Shareholders’ Equity | | | 6,311,153 | | | | | | 6,217,304 | | |

| Loss on extinguishment of debt | | | — | | | | | | — | | | | | | 38,810 | | |

| Gain on deal contingent derivatives | | | — | | | | | | — | | | | | | (12,505) | | |

| Trade receivables | | | (60,979) | | | | | | 59,555 | | | | | | (49,958) | | |

| Inventories | | | 17,924 | | | | | | (62,129) | | | | | | (117,641) | | |

| Other assets | | | 14,709 | | | | | | (66,650) | | | | | | (19,219) | | |

| Other liabilities | | | (27,340) | | | | | | (7,860) | | | | | | 11,754 | | |

| Additions to property, plant and equipment | | | (191,794) | | | | | | (235,978) | | | | | | (170,094) | | |

| Proceeds from disposal of subsidiaries, net of cash held | | | — | | | | | | — | | | | | | 10,157 | | |

| Cash dividends paid to shareholders | | | (322,584) | | | | | | (313,510) | | | | | | (230,218) | | |

Dated: February [removed: 22, 2021][added: 28, 2022]

| /s/ [removed: Andreas Fibig] [added: Frank Clyburn] | | | | | | [removed: Chairman of the Board,] Chief Executive Officer and Director (Principal Executive Officer) | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ [removed: Rustom Jilla] [added: Glenn Richter] | | | | | | Executive Vice President and Chief Financial Officer (Principal Financial Officer) | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Robert Anderson | | | | | | Senior Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Kathryn J. Boor | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Edward D. Breen | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Carol Anthony (John) Davidson | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Michael Ducker | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Roger W. Ferguson, Jr. | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ John F. Ferraro | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Christina Gold | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Ilene Gordon | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Matthias Heinzel | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Dale F. Morrison | | | | | | [added: Chairman of the Board,] Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Kåre Schultz | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| /s/ Stephen Williamson | | | | | | Director | | | | | | February [removed: 22, 2021] [added: 28, 2022] | | |

| | | | Balance at beginning of period | | | | | | Additions charged to costs and expenses | | | | | | Acquisitions | | | | | | Accounts written off | | | | | | Translation adjustments | | | | | | [removed: Other(2)] [added: Other] | | | | | | Balance at end of period | | |

| Allowance for doubtful accounts | | | $ | [removed: 16,428] [added: 21] | | | | | $ | [removed: 5,918] [added: 6] | | | | | $ | — | | | | | $ | [removed: (825)] [added: (1)] | | | | | $ | [removed: (513)] [added: —] | | | | | $ | [removed: —] [added: 20] | | | | | $ | [removed: 21,008] [added: 46] | |

| Valuation allowance on credit and operating loss carryforwards and other net deferred tax assets | | | [removed: 203,765] [added: 257] | | | | | | [removed: 35,555] [added: (18)] | | | | | | [removed: —] [added: 9] | | | | | | — | | | | | | [removed: 17,851] [added: (16)] | | | | | | — | | | | | | [removed: 257,171] [added: 232] | | |

| | | | Balance at beginning of period | | | | | | Additions (deductions) charged to costs and expenses | | | | | | Acquisitions | | | | | | Accounts written off | | | | | | Translation adjustments | | | | | | [removed: Other(2)] [added: Other(1)] | | | | | | Balance at end of period | | |

| Allowance for doubtful accounts | | | $ | [removed: 9,173] [added: 16] | | | | | $ | [removed: 1,262] [added: 6] | | | | | $ | — | | | | | $ | [removed: (2,024)] [added: (1)] | | | | | $ | [removed: (180)] [added: —] | | | | | $ | [removed: 8,197] [added: —] | | | | | $ | [removed: 16,428] [added: 21] | |