International Flavors & Fragrances (IFF) 10-K risk factor changes: FY2023 vs FY2022

- Inflationary [removed: trends,] [added: trends and pricing uncertainty,] including in the price of our input costs, such as raw materials, transportation and energy, could adversely affect our business and financial results in the short term and result in uncertainties in the long term.

- Supply chain disruptions, geopolitical developments, including the Russia-Ukraine [removed: conflict,] [added: war, the Israel-Hamas war and wider Middle East developments (including disruptions to the Red Sea passage] or [removed: climate change] [added: such conflicts spreading further in the relevant regions), or climate-change] events (including severe weather events) may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.

- If we are unable to successfully execute the next phase of our strategic transformation, [added: including our portfolio optimization,] it may have a material adverse effect on our business, results of operations and financial condition.

- We have a substantial amount of indebtedness that could materially adversely [removed: affect] [added: affect, among other things,] our financial [removed: condition and] [added: condition,] our [removed: degree of leverage could adversely affect] [added: ability to return capital to] our [added: shareholders, needed investments into our business, and our] credit ratings.

- If we fail to successfully enter into or close [removed: strategic transactions] [added: collaborations, joint ventures, partnerships] or [removed: divestments,] [added: acquisitions,] or successfully manage [removed: acquisitions, collaborations, joint ventures or partnerships,] [added: such transactions,] it could adversely affect our business and growth opportunities.

- Our business is highly competitive, and if we are unable to compete [removed: effectively,] [added: effectively] our sales and results of operations will suffer.

- Our success depends on attracting and retaining talented people within our [removed: business.][added: business and our management team.]

[removed: Significant] [added: Changes to management, including turnover of our top executives, and significant] shortfalls in [removed: recruitment or] [added: recruitment,] retention [added: or transition of employees or our management team] could adversely affect our ability to compete and achieve our strategic goals.

- [removed: Natural] [added: International conflicts (such as the Russia-Ukraine war and the Israel-Hamas war), geopolitical events, natural] disasters, public health crises (such as the COVID-19 pandemic), [removed: international conflicts (such as the Russia-Ukraine conflict), geopolitical events,] [added: trade wars,] terrorist acts, labor strikes, political or economic crises (such as [removed: the] uncertainty related to protracted U.S. federal [removed: debt ceiling] [added: government funding] negotiations), accidents and other events could adversely affect our business and financial [removed: results] [added: results, including] by disrupting development, manufacturing, distribution or sale of our products.

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

- Our results of operations may be negatively impacted by the outcome of uncertainties related to [removed: litigation.][added: legal claims, disputes, investigations and litigation, including the ongoing antitrust and competition investigations and related class actions lawsuits.]

Inflationary [removed: trends,] [added: trends and pricing uncertainty,] including in the price of our input costs, such as raw materials, transportation and energy, could adversely affect our business and financial results in the short term and result in uncertainties in the long term.

[removed: In addition, central banks may continue to increase interest rates or conduct] [added: These and] other monetary policies to counter [removed: inflation, which] [added: inflation] could negatively affect our borrowing costs and those of our customers and suppliers, as well as exchange rates and other macroeconomic factors.

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

Further, we may not be able to accurately predict [added: or hedge for price fluctuations of input costs, or predict] the volume impact of [added: the] price [removed: increases, especially if] [added: increases in] our [added: products, while our] competitors [removed: are] [added: may be] able to more successfully adjust to such input cost volatility.

Increased cost volatility trends may also impact the business and financial situation of our [removed: customer] [added: customers] or suppliers, which could in turn affect the demand or supply, respectively, by such parties.

Supply chain disruptions, geopolitical developments, including the Russia-Ukraine [removed: conflict,] [added: war, the Israel-Hamas war and wider Middle East developments (including disruptions to the Red Sea passage] or [added: such conflicts spreading further in the relevant regions), or] climate-change events (including severe weather events) may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.

In addition, our suppliers, similar to us, are subject to risks, inherent in agriculture, manufacturing and distribution on a global scale, including industrial accidents, environmental events, climate change, strikes and other labor disputes, disruptions in supply chain or information systems, disruption or loss of key research or manufacturing sites, product quality control, safety and environmental compliance issues, licensing requirements and other regulatory issues, as well as natural disasters, global or [removed: local health crises, international conflicts, terrorist acts, geopolitical developments, trade wars, and other external factors over which neither they nor we have control.]

Geopolitical developments, such as [added: trade wars,] the Russia-Ukraine [removed: conflict,] [added: war, the Israel-Hamas war and wider Middle East developments (including disruptions to the Red Sea passage or such conflicts spreading further in the relevant regions),] could adversely impact, among other things, our raw material, energy and transportation costs, [removed: as well as] certain of our [removed: suppliers] [added: suppliers, distributors, customers] and local markets, global and local macroeconomic conditions, and cause further supply chain [removed: disruptions.][added: disruptions (including by delaying the delivery times of raw materials needed for our business or our products to customers).]

As the Russia-Ukraine [removed: conflict] [added: war] has prolonged, it continues to impact our sourcing of certain raw materials for future years, and we continue to look for alternative suppliers or adjust the types of raw materials used in our products.

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

If we are unable to successfully execute the next phase of our strategic transformation, [added: including our portfolio optimization,] it may have a material adverse effect on our business, results of operations and financial condition.

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

In addition, even [removed: if] [added: though] the operations of the N&B Business are [removed: integrated successfully,] [added: being integrated,] the full benefits of the transaction may not be realized, including, among others, the synergies, cost savings or revenue growth that are expected.

These benefits may not be achieved within the anticipated time frame or at [removed: all.][added: all, which could result in a material adverse impact on our business and results of operations.]

We have a substantial amount of indebtedness that could materially adversely [removed: affect] [added: affect, among other things,] our financial [removed: condition and] [added: condition,] our [removed: degree of leverage could adversely affect] [added: ability to return capital to] our [added: shareholders, needed investments into our business and our] credit ratings.

As of December 31, [removed: 2022,] [added: 2023,] our total debt was [removed: $10.970] [added: $10.071] billion.

In addition, our existing [removed: Amended] Revolving Credit Facility and Term Loans have pricing grids that are based on credit rating, such that our cost of borrowing may increase as our [removed: credit] [added: public debt] rating decreases.

[removed: In addition, our] [added: Our] current level of leverage could increase our vulnerability to sustained, adverse macroeconomic weakness, limit our ability to obtain further financing, [added: lead to a reduction or suspension of our dividend payments,] decrease our flexibility in responding to or preparing for changes in the industry in which we operate and our ability to pursue certain operational and strategic [added: projects or] opportunities, including [added: necessary investments into our business or] large acquisitions.

Our level of indebtedness, as well as [removed: our] [added: a] failure to comply with covenants under our debt instruments, could adversely affect our business, results of operation and financial condition or our ability to return capital to our shareholders and [added: any] additional debt [added: modifications,] instruments [added: or covenant reliefs] may subject us to additional [removed: covenants.][added: covenants and restrictions.]

If we fail to successfully enter into or close [removed: strategic transactions] [added: collaborations, joint ventures, partnerships] or [removed: divestments,] [added: acquisitions,] or successfully manage [removed: acquisitions, collaborations, joint ventures or partnerships,] [added: such transactions,] it could adversely affect our business and growth opportunities.

[removed: For instance, during] [added: During] the third quarter of [removed: 2022, we completed the divestiture of our Microbial Control business and during the fourth quarter of 2022,] [added: 2023,] we announced that we entered into an agreement for the sale [added: of] our [removed: Savory Solutions] [added: Cosmetics Ingredients] business, which is expected to close in the [removed: second] [added: first] quarter of [removed: 2023,] [added: 2024,] subject to customary closing conditions.

Any failure to [added: enter into,] complete or potential delays in closing any such [removed: transaction] [added: transaction, any failure to mitigate or manage the associated costs of such transactions, or obtain appropriate terms for ancillary agreements,] could adversely affect the [removed: development] [added: implementation] of our portfolio optimization strategy as well as our financial [removed: condition.][added: condition, including our leverage ratio.]

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

The process of establishing and maintaining [removed: collaborative] [added: such] relationships is difficult and time-consuming to negotiate, document and implement.

If we are unable to successfully establish and manage these collaborative relationships and majority [removed: investments] [added: investments,] it could adversely affect our future growth.

With the completion of the N&B Transaction, our customer base has further increased significantly and, based on [removed: 2022] [added: 2023] sales, we had approximately [removed: 40,000] [added: 27,000] customers, approximately [removed: 58%] [added: 54%] of which are small and mid-sized companies.

As we continue to enter into adjacent markets, such as [removed: cosmetic ingredients,] functional foods, specialty fine ingredients and nutrition products, we may face greater competition-related risks in these markets than with our other businesses.

Our success depends on attracting and retaining talented people within our [removed: business.][added: business and our management team.]

[removed: Significant] [added: Changes to management, including turnover of our top executives, and significant] shortfalls in [removed: recruitment or] [added: recruitment,] retention [added: or transition of employees or our management team] could adversely affect our ability to compete and achieve our strategic goals.

- Our ability to declare and pay dividends is subject to certain considerations.

- We are subject to risks associated with the potential use of artificial intelligence (“AI”) in our own operations and by third-party partners that we may engage with.

In addition, our existing Revolving Credit Facility and Term Loans are also at variable interest rates, exposing us to potentially material interest rate risk at our current level of indebtedness.

The pricing grid rates have increased by 0.125% for the duration that financial covenant relief (as described below) is provided.

Our Revolving Credit Facility and Term Loans contain various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including the requirement for us to maintain, at the end of each fiscal quarter, a maximum ratio of net debt for borrowed money to credit adjusted EBITDA in respect of the previous four fiscal quarters.

On September 19, 2023, we entered into further amendments to our Revolving Credit Facility and Term Loans that extend certain relief with respect to this financial covenant by providing that during the relief period our leverage ratio shall not exceed as of the end of the fiscal quarter (for the period of the four fiscal quarters then ended): (i) 5.25x for any fiscal quarter ending on or before March 31, 2024, (ii) 4.75x for the fiscal quarter ending June 30, 2024, (iii) 4.50x for the fiscal quarter ending September 30, 2024, (iv) 4.25x for any subsequent fiscal quarter ending on or before March 31, 2025, (v) 4.00x for any subsequent fiscal quarter ending on or before September 30, 2025 and (vi) 3.75x for the fiscal quarter ending December 31, 2025.

The financial covenant relief provided in these most recent amendments superseded the ratios and step downs set forth in prior amendments to these credit facilities entered into on August 4, 2022 and March 23, 2023.

During the financial covenant relief period, the amendments prohibit us from (i) effecting share repurchases, (ii) declaring and paying dividends in cash on common stock in excess of $0.81 per share per fiscal quarter (for an aggregate amount of $3.24 per fiscal year) and (iii) creating liens to secure debt in excess of the greater of $300 million and 3.65% of Consolidated Net Tangible Assets, in each case subject to certain exceptions set forth in the amendments.

During the financial covenant relief period, the Term Loans are subject to a mandatory prepayment provision whereby certain asset sale proceeds must be used to pay down amounts outstanding thereunder.

See Note 9 for additional information on the amendments to the debt agreements.

As a part of our ongoing strategic transformation and our portfolio optimization strategy as discussed above, we continue to evaluate and work towards divestitures or strategic transactions.

For instance, during the third quarter of 2022, the second quarter of 2023 and the third quarter of 2023, we completed divestitures of our Microbial Control business, a portion of the Savory Solutions business and our Flavor Specialty Ingredients business, respectively.

The successful entry into and closing of such transactions is contingent on many factors, including, among other things, the performance of the underlying assets or business as well as the relevant industry dynamics overall, the interest of potential buyers and their ability to finance such transactions (which is also impacted by general economic and financial conditions and market dynamics), requisite regulatory approvals, and related separation activities.

Divestitures involve separation costs and efforts that may divert management’s and employees’ attention and also result in stranded costs and dis-synergies for the Company.

Moreover, divestitures often entail post-closing third party agreements, such as supply arrangements (including with “take or pay” provisions), product manufacturing, cross-licensing, transitional, or site services agreements (“ancillary agreements”), that may bind the Company for certain periods after closing, during which market or Company conditions may change.

Our ability to declare and pay dividends is subject to certain considerations.

Dividends are authorized and determined by our Board of Directors in its sole discretion and depend upon a number of factors, including:

- cash available for dividends;

- our results of operations and anticipated future results of operations;

- our financial condition, including our current or forecasted future cash flows provided by our operating activities (after deducting anticipated future capital expenditures and other commitments required to carry out our operations and business strategy);

- our operating expenses;

- restrictions in our credit agreement related to the issuance of dividends, including minimum capital requirements; and

- other general and economic conditions or other factors our Board of Directors deems to be relevant.

We expect to continue to pay dividends to our shareholders; however, our Board may reduce, suspend or discontinue the payment of dividends at any time.

Any reduction in the amount of dividends we pay to shareholders could have an adverse effect on the trading price of our common stock.

In addition, and as further described in our consolidated financial statements, we are subject to antitrust and competition investigations in the United States and Europe, as well as class action lawsuits against us and certain of our competitors in the United States and Canada, alleging violations of antitrust laws and related claims.

We may face additional civil suits in the United States or elsewhere, relating to such alleged conduct.

At this

time, we are unable to predict or determine the scope, duration, or outcome of these investigations.

Our results of operations, liquidity or financial condition could be adversely impacted by unfavorable outcomes in these or other pending or future claims, disputes, investigations or litigation.

Poor results of operations, liquidity or financial condition—particularly as we work towards implementation of our ongoing strategic transformation and our portfolio optimization strategy—may increase the likelihood of shareholder litigation.

The global economy continues to experience high rates of inflation.

Though inflation appears to be gradually declining in certain parts of the world, inflationary pressure and price uncertainty is expected to continue in 2024.

In addition, though many central banks have paused monetary policies such as increasing interest rates to counter inflation, rates remain at historical highs and may continue to remain at such levels.

local health crises, international conflicts, terrorist acts, geopolitical developments, trade wars, and other external factors over which neither they nor we have control.

In addition, as the Israel-Hamas war develops with potential implications for the wider Middle East (including the Red Sea passage), it may have similar impacts on suppliers, customers or local markets.

In addition, the loss of any member of our senior management could materially adversely affect our ability to execute our business plan and strategy.

We may not find an adequate replacement in a timely fashion, or at all and any replacement may

view the business differently than current members of management.

Future executives may make changes to our strategic focus, operations, business plans or financial guidance and outlook, with corresponding changes in how we report our results of operations.

- Global health crises, such as the COVID-19 pandemic, have had an impact on our supply chain and could have a material impact on global operations, our customers and our suppliers, which could adversely impact our business and results of operations.

- Our business may be negatively impacted as a result of the United Kingdom’s departure from the European Union.

The global economy experienced high rates of inflation in 2022, and such inflationary pressure is expected to generally continue in 2023 despite price decreases for certain materials and services that hit historical highs in 2022.

The significant spike in energy prices over the course of 2022, especially in Europe, has created cost pressures for us and may continue to impact our financial performance.

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

- the diversion of management’s attention to integration matters;

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

- conforming standards, controls, procedures and accounting and other policies, business cultures and compensation structures between the businesses;

- integrating employees and attracting and retaining key personnel, including talent;

- retaining relationships with existing or new customers and suppliers;

- integrating and managing the expanded operations of a significantly larger and more complex company;

- liabilities that are larger than expected or potential unknown liabilities, adverse consequences and unforeseen increased expenses associated with the transaction;

- restrictions until February 2023 that may limit our ability to pursue certain strategic transactions, including issuing IFF common stock for acquisitions and equity capital market transactions, or disposing of certain businesses that would otherwise increase the value of our 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;

- 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

- our ability to negotiate terms that are as favorable as those DuPont had received, as we replace or renew contracts following the N&B Transaction and the loss of the DuPont brand recognition for the N&B Business.

The failure to meet the challenges involved in integrating the businesses and to realize the anticipated benefits of the transaction could result in a material adverse impact on our business and results of operations.

On October 13, 2022, S&P Global Ratings downgraded our Local Currency LT credit rating from “BBB” to “BBB-”.

From time to time, including as a part of our ongoing strategic transformation and our portfolio optimization strategy as discussed above, we may enter into strategic transactions or we may divest certain non-core assets.

Global health crises, such as the COVID-19 pandemic, have had an impact on our supply chain and could have a material impact on global operations, our customers and our suppliers, which could adversely impact our business and results of operations.

The continued evolution of COVID-19 and its variants, as well as periodic spikes in infection rates, local outbreaks at our facilities, or supplier, customer or vendor facilities, in spite of safety measures or vaccinations, could cause disruptions to our operations or those of our suppliers, customers or vendors.

We have also experienced and may experience in the future, changes in the demand and volume for certain of our products, including due to consumption or stocking behavior changes related to the COVID-19 pandemic.

Additionally, as new variants of the virus appear, especially variants that are more easily spread, cause more serious outcomes, or are resistant to existing vaccines, new health orders and safety protocols could further impact our on-site operations and our ability to manufacture, ship or deliver products and solutions to customers.

For example, in the third quarter of 2022, it was determined that goodwill impairment triggering events occurred for the Nourish, Health & Biosciences and Pharma Solutions reporting units.

The primary indicators that were deemed to be triggering events in the quarter for the reporting units were declines in projections across various reporting units and ongoing adverse macroeconomic impacts such as inflation, increases in interest rates and unfavorable effects from exchange rates.

As a result of the triggering events, we assessed the fair value of the reporting units 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.

We determined that the fair value of the Nourish and Pharma Solutions reporting units exceeded their carrying value, and determined that there was no impairment of goodwill relating to these reporting units.

We determined that the carrying value of the Health & Biosciences reporting unit exceeded its fair value and recorded a goodwill impairment charge of $2.250 billion in the Consolidated Statements of (Loss) Income and Comprehensive (Loss) Income for the year ended December 31, 2022.

In 2017, the United Kingdom’s Financial Conduct Authority (the “FCA”), which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021.

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.

In response to the expected phase out of LIBOR, in March 2022, Congress passed the LIBOR Act to provide a uniform solution for replacing LIBOR references in existing contracts that do not supply a fallback provision identifying an alternative benchmark rate.

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 replacement rate for LIBOR.

For example, in May 2022, the Alternative Reference Rates Committee (ARRC), a group of private-market participants convened by the U.S. Federal Reserve Board and the Federal Reserve Bank of New York, endorsed SOFR as its recommended alternative benchmark rate to replace the LIBOR settings for US dollars.

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

It is unclear if other benchmarks may emerge or if other rates will be adopted.

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.

Our business may be negatively impacted as a result of the United Kingdom’s departure from the European Union.

We currently manufacture goods in the United Kingdom for distribution in the European Union and vice-versa and therefore may continue to be adversely affected as a result of the United Kingdom’s departure from the European Union (“Brexit”) in 2020.

As a result of the N&B Transaction, and following our [added: prior] 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 and Probiotics categories.

[removed: The Company’s] [added: Our] consolidated financial information for the [removed: year] [added: years] ended December 31, [added: 2023 and] 2022 reflects the results of N&B for the full twelve months of [added: 2023 and] 2022, whereas the [removed: Company’s consolidated financial information for the] year ended December 31, 2021 [added: only] reflects the results of N&B for eleven months of [removed: 2021, and 2020 does not include any amounts related to N&B.][added: 2021.]

Our Nourish segment consists of 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 and consists of [removed: three business units:] Ingredients, Flavors and Food Designs.

Health & Biosciences is comprised of [removed: five business units:] Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition and Grain Processing.

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

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

We provide currency neutral calculations in this report to remove the impact of [removed: these items.][added: foreign currency exchange rates fluctuations.]

In performing the quantitative impairment test, we determined that the fair value of [added: four of] the [removed: Nourish and Pharma Solutions] [added: five] reporting units exceeded their carrying [removed: values,] [added: values] and determined that there was no [added: further] impairment of goodwill [removed: relating to] [added: in] these reporting [removed: units.][added: units as of November 30, 2023.]

[removed: We] [added: During 2022, we] determined that the carrying value of the Health & Biosciences reporting unit exceeded its fair value and recorded a goodwill impairment charge of $2.250 billion in the Consolidated Statements of (Loss) Income and Comprehensive [removed: (Loss) Income] [added: Loss] for the year ended December 31, 2022.

Impact [removed: of] [added: related to] the [removed: Events in Russia and Ukraine][added: Russia-Ukraine War]

In [removed: 2021,] [added: 2023,] total sales to Russian customers were approximately [removed: 2%] [added: 1%] of total sales.

[removed: For the year ended December 31,] [added: In] 2022, [added: total] sales to Russian customers were [removed: also] approximately 2% of total sales.

In [removed: 2021,] [added: 2023 and 2022,] total sales to Ukrainian customers were [added: both] less than 1% of total sales.

[removed: Moreover, as] [added: As] a result of disruptions or uncertainty relating to the COVID-19 pandemic, we [removed: are experiencing,] [added: have experienced,] 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.

[removed: 2022] [added: 2023] Financial Performance Overview

Sales in [removed: 2022 increased $784] [added: 2023 decreased $961] million, or [removed: 7%] [added: 8%] on a reported basis, to [removed: $12.440] [added: $11.479] billion compared to [removed: $11.656] [added: $12.440] billion in the [removed: 2021] [added: 2022] period.

In addition, the [removed: increase] [added: decrease] in sales was primarily driven by [removed: price increases] [added: volume decreases] across various [removed: businesses, offset in part by] [added: businesses and] the net impact of the [removed: divestiture] [added: divestitures] of the Microbial Control business [removed: unit] [added: unit, the portion of the Savory Solutions business,] and [added: Flavor Specialty Ingredients (“FSI”) business and the] acquisition of Health Wright Products, Inc. [removed: (“change] [added: (collectively, the “net impact of the change] in business portfolio [removed: mix”) and volume decreases] [added: mix”), which was approximately $572 million, offset in part by price increases] across [removed: various] [added: all] businesses.

Our 25 largest customers accounted for approximately [removed: 28%] [added: 32%] of total sales in [removed: 2022.][added: 2023.]

In [removed: 2022,] [added: 2023,] no customer accounted for more than 10% of sales.

Gross profit in [removed: 2022 increased $416] [added: 2023 decreased $470] million, or 11% on a reported basis, to [removed: $4.151] [added: $3.681] billion [removed: (33.4%] [added: (32.1%] of sales) compared to [removed: $3.735] [added: $4.151] billion [removed: (32.0%] [added: (33.4%] of sales) in the [removed: 2021] [added: 2022] period.

The [removed: increase] [added: decrease] in gross profit was primarily driven by [removed: favorable net pricing across various businesses and] [added: volume decreases,] the [added: net] impact of [removed: N&B inventory step-up costs from] the [removed: prior year period, offset in part by the] change in business portfolio mix and [removed: volume decreases.][added: unfavorable manufacturing absorption primarily related to our inventory reduction program, offset in part by favorable net pricing and productivity gains.]

| *(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)* | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] | | | | | | [removed: 2021] [added: 2022] vs. [removed: 2020] [added: 2021] | | |

| Net sales | | | $ | [removed: 12,440] [added: 11,479] | | | | | $ | [removed: 11,656] [added: 12,440] | | | | | $ | [removed: 5,084] [added: 11,656] | | | | | [removed: 7] [added: (8)] | | % | | | | [removed: 129] [added: 7] | | % |

| Cost of goods sold | | | [removed: 8,289] [added: 7,798] | | | | | | [removed: 7,921] [added: 8,289] | | | | | | [removed: 2,998] [added: 7,921] | | | | | | [removed: 5] [added: (6)] | | % | | | | [removed: 164] [added: 5] | | % |

| Gross profit | | | [removed: 4,151] [added: 3,681] | | | | | | [removed: 3,735] [added: 4,151] | | | | | | [removed: 2,086] [added: 3,735] | | | | | | [removed: 11] [added: (11)] | | % | | | | [removed: 79] [added: 11] | | % |

| Research and development (R&D) expenses | | | [removed: 603] [added: 636] | | | | | | [removed: 629] [added: 603] | | | | | | [removed: 357] [added: 629] | | | | | | [removed: (4)] [added: 5] | | % | | | | [removed: 76] [added: (4)] | | % |

| Selling and administrative (S&A) expenses | | | [removed: 1,768] [added: 1,787] | | | | | | [removed: 1,749] [added: 1,768] | | | | | | [removed: 949] [added: 1,749] | | | | | | 1 | | % | | | | [removed: 84] [added: 1] | | % |

| Restructuring and [removed: other charges | | | 12 | | | | | | 41 | | | | | | 17 | | |] [added: Other Charges] | | | [removed: (71)] [added: (68)] | | [removed: %] | | | | [removed: 141] [added: (12)] | | [removed: %] |

| Amortization of acquisition-related intangibles | | | [removed: 727] [added: 680] | | | | | | [removed: 732] [added: 727] | | | | | | [removed: 193] [added: 732] | | | | | | [removed: (1)] [added: (6)] | | % | | | | [removed: 279] [added: (1)] | | % |

| Impairment of goodwill | | | [removed: 2,250] [added: 2,623] | | | | | | [removed: —] [added: 2,250] | | | | | | — | | | | | | [removed: NMF] [added: 17] | | [added: %] | | | | NMF | | |

| Impairment of long-lived assets | | | [removed: 120] [added: —] | | | | | | [removed: —] [added: 120] | | | | | | — | | | | | | [removed: NMF] [added: (100)] | | [added: %] | | | | NMF | | |

| [removed: (Gains) losses] [added: Gains] on sale of [removed: fixed] assets | | | (3) | | | | | | [removed: (1)] [added: (3)] | | | | | | [removed: 4] [added: (1)] | | | | | | [removed: 200] [added: —] | | % | | | | [removed: (125)] [added: 200] | | % |

| Operating (loss) profit | | | [removed: (1,326)] [added: (2,110)] | | | | | | [removed: 585] [added: (1,326)] | | | | | | [removed: 566] [added: 585] | | | | | | [removed: NMF] [added: 59] | | [added: %] | | | | [removed: 3] [added: NMF] | | [removed: %] |

| Interest expense | | | [removed: 336] [added: 380] | | | | | | [removed: 289] [added: 336] | | | | | | [removed: 132] [added: 289] | | | | | | [removed: 16] [added: 13] | | % | | | | [removed: 119] [added: 16] | | % |

[removed: | Other income, net | | | (37) | | | | | | (58) | | | | | | (7) | | | | | | (36) | | % | | | | NMF | | |][added: Other Expense (Income), Net]

| (Loss) income before taxes | | | [removed: (1,625)] [added: (2,518)] | | | | | | [removed: 354] [added: (1,625)] | | | | | | [removed: 441] [added: 354] | | | | | | [removed: NMF] [added: 55] | | [added: %] | | | | [removed: (20)] [added: NMF] | | [removed: %] |

| Provision for income taxes | | | [removed: 239] [added: 45] | | | | | | [removed: 75] [added: 239] | | | | | | [removed: 74] [added: 75] | | | | | | [removed: 219] [added: (81)] | | % | | | | [removed: 1] [added: 219] | | % |

| Net (loss) income | | | [removed: (1,864)] [added: (2,563)] | | | | | | [removed: 279] [added: (1,864)] | | | | | | [removed: 367] [added: 279] | | | | | | [removed: NMF] [added: 38] | | [added: %] | | | | [removed: (24)] [added: NMF] | | [removed: %] |

| Net income attributable to non-controlling interest | | | [removed: 7] [added: 4] | | | | | | [removed: 9] [added: 7] | | | | | | [removed: 4] [added: 9] | | | | | | [removed: (22)] [added: (43)] | | % | | | | [removed: 125] [added: (22)] | | % |

| Net (loss) income attributable to IFF shareholders | | | $ | [removed: (1,871)] [added: (2,567)] | | | | | $ | [removed: 270] [added: (1,871)] | | | | | $ | [removed: 363] [added: 270] | | | | | [removed: NMF] [added: 37] | | [added: %] | | | | [removed: (26)] [added: NMF] | | [removed: %] |

During 2023, we determined that the carrying value of the Nourish reporting unit exceeded its fair value and recorded an impairment charge of $2.623 billion in the Consolidated Statements of (Loss) Income and Comprehensive Loss for the year ended December 31, 2023.

For more detailed information about risks related to impairment of goodwill, refer to Item 1A, “Risk Factors” – *“Any impairment of our tangible or intangible long-lived assets, including goodwill, may adversely impact our profitability.”*

Impact related to the Israel-Hamas War

We maintain operations in Israel and, additionally, export products to customers in Israel from operations outside the region.

We will continue to evaluate the current events and any potential impacts related to this matter, but we do not expect there to be a material impact to our Consolidated Financial Statements.

In 2023, total sales to Israeli customers were approximately 1% of total sales.

We have a reserve of approximately $3 million related to expected credit losses on receivables from customers located in Russia and Ukraine.

During the second quarter of 2022, we also recorded a charge of $120 million related to the impairment of certain long-lived assets in Russia.

For more detailed information about risks related to the Russia-Ukraine war and the Israel-Hamas war, refer to Item 1A, “Risk Factors” - *International conflicts (such as the Russia-Ukraine war and Israel-Hamas war), geopolitical events, natural disasters, public health crises (such as the COVID-19 pandemic), trade wars, terrorist acts, labor strikes, political or economic crises (such as uncertainty related to protracted U.S. federal government funding negotiations), accidents and other events could adversely affect our business and financial results, including by disrupting development, manufacturing, distribution or sale of our products.*

For more detailed information about risks related to COVID-19 pandemic, refer to Item 1A, “Risk Factors” - *International conflicts (such as the Russia-Ukraine war and Israel-Hamas war), geopolitical events, natural disasters, public health crises (such as the COVID-19 pandemic), trade wars, terrorist acts, labor strikes, political or economic crises (such as uncertainty related to protracted U.S. federal government funding negotiations), accidents and other events could adversely affect our business and financial results, including by disrupting development, manufacturing, distribution or sale of our products.*

On a currency neutral basis, sales in 2023 decreased 6% compared to the 2022 period.

Exchange rate variations had an unfavorable impact on net sales in 2023 of 2%.

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.

2023 IN COMPARISON TO 2022

On a currency neutral basis, Nourish sales decreased 9% in 2023 compared to the 2022 period as exchange rate variations had an unfavorable impact.

On a currency neutral basis, Health & Biosciences sales decreased 10% in 2023 compared to the 2022 period as exchange rate variations had an unfavorable impact.

In addition, performance in the Health & Biosciences operating segment was driven by the net impact of the divestiture of the Microbial Control business unit and acquisition of Health Wright Products, Inc., which was approximately $228 million, and volume decreases across various business units, offset in part by price increases across all business units.

On a currency neutral basis, Scent sales increased 6% in 2023 compared to the 2022 period as exchange rate variations had an unfavorable impact.

On a currency neutral basis, Pharma Solutions sales also decreased 3% in 2023 compared to the 2022 period as the impact of exchange rate variations was flat.

The decrease in cost of goods sold was primarily driven by volume decreases in sales and the net impact of the change in business portfolio mix, which was approximately $405 million, offset in part by unfavorable manufacturing absorption primarily related to our inventory reduction program and a write-down of inventory related to Locust Bean Kernel (“LBK”) in Nourish, which was approximately $72 million.

R&D expenses increased $33 million to $636 million (5.5% of sales) in 2023 compared to $603 million (4.8% of sales) in 2022.

The increase in R&D expenses was primarily driven by higher operating expenses for R&D related activities, offset in part by the net impact of the change in business portfolio mix.

The increase in S&A expenses was primarily driven by higher operating expenses for S&A related activities and legal fees incurred for the ongoing investigations of the fragrance businesses, offset in part by lower professional fees, including consulting costs, and the net impact of the change in business portfolio mix.

The increase was driven by higher severance costs incurred as part of the 2023 Restructuring Program, net of reversals of prior severance cost accruals.

The portion of the Savory Solutions business and FSI business were classified as held for sale up until May 31, 2023 and August 1, 2023, respectively, when we completed the divestiture of the businesses (see Note 4, Note 6 and Note 21 for additional information).

The decrease in amortization expense was offset in part by the impact of acquisitions of intangible assets from Health Wright Products, Inc.

There was no impairment of long-lived assets in 2023.

Other expense (income), net, decreased $65 million to an expense of $28 million in 2023 compared to income of $37 million in 2022.

The change was primarily due to higher foreign exchange losses and losses incurred from business divestitures, such as the liquidation of a business in Russia for the sale of the portion of the Savory Solutions business and divestitures of the portion of the Savory Solutions business and FSI business (see Note 4 for additional information), compared to gains incurred from the divestiture of the Microbial Control business unit in 2022, offset in part by the gain resulting from the completion of the China facility relocation (see Note 19 for additional information) and higher pension-related benefits.

The year-over-year change was primarily driven by book to tax differences related to impairment of goodwill, lower tax charges on business divestitures and the recognition of a deferred tax benefit related to an internal restructuring.

| Acquisition, Divestiture and Integration Related Costs | | | (174) | | | | | | (201) | | |

| Regulatory Costs | | | (50) | | | | | | — | | |

| Other | | | (2) | | | | | | (11) | | |

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

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

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

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

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

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

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

On July 1, 2022, we completed the divestiture of our Microbial Control business unit (formerly a part of the Health & Biosciences segment).

Due to the Merger with N&B, for the fiscal year 2022 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 for the full twelve months of 2022 while the 2021 period does not, and thus the periods’ results are not equally comparable.

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

For the third quarter of 2022, we determined that goodwill impairment triggering events occurred for our Nourish, Health & Biosciences and Pharma Solutions reporting units, which required us to complete an interim impairment assessment.

For the year ended December 31, 2022, sales to Ukrainian customers were also less than 1% of total sales.

Various policies and initiatives have been implemented around the world to reduce the global transmission of COVID-19.

Although there continue to be minor 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 world’s population and certain countries and regions continue to suffer from outbreaks or have seen a recurrence of infections, especially with the emergence of new variants of the virus.

Accordingly, the Company continues to take the threat from COVID-19 seriously.

The impact that COVID-19 will have on our consolidated results of operations for the remainder of 2023 remains uncertain.

Due to the length and severity of the COVID-19 pandemic, there is continued volatility as a result of retail and travel, consumer shopping and consumption behavior.

Although IFF 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 impairments.

Any of these events could potentially result in a material adverse impact on IFF’s business and results of operations.

For more detailed information about risks related to COVID-19, refer to Item 1A, “Risk Factors” - *Global health crises, such as the COVID-19 pandemic, have had an impact on our supply chain and could have a material impact on global operations, our customers and our suppliers, which could adversely impact our business and results of operations.*

2023 Restructuring Program

In December 2022, we announced a restructuring program mainly related to headcount reduction to improve our organizational and operating structure, drive efficiencies and achieve cost savings (the “Program”).

Once the Program is finalized we expect to incur one-time costs of approximately $70 million and expect to achieve run-rate savings of approximately $100 million, with approximately $75 million targeted to be realized in 2023.

We expect to complete the program by the end of 2023.

The final amount and timing of this charge will be determined once the plan is finalized.

Sales included approximately $568 million of incremental sales attributable to N&B for the month of January in the 2022 period.

Approximately $179 million of gross profit was attributable to N&B for the month of January in the 2022 period.

NMF: Not meaningful

Sales

In addition, the increase in sales was primarily driven by price increases across various businesses, offset in part by the change in business portfolio mix and volume decreases across various businesses.

Nourish sales included approximately $293 million of incremental sales attributable to N&B for the month of January in the 2022 period.

Health & Biosciences sales included approximately $202 million of incremental sales attributable to N&B for the month of January in the 2022 period.

The decrease in Health & Biosciences sales, excluding the impact of N&B for the month of January in the 2022 period, was primarily driven by the change in business portfolio mix, offset in part by price increases across various business units.

Scent sales in 2022 increased $47 million, or 2% on a reported basis, to $2.301 billion compared to $2.254 billion in the 2021 period.

Scent sales in 2022 also increased 8% on a currency neutral basis.

Pharma Solutions sales included approximately $73 million of incremental sales attributable to N&B for the month of January in the 2022 period.

Cost of goods sold included approximately $389 million of incremental costs attributable to N&B for the month of January in the 2022 period.

In addition, excluding the impact of N&B for the month of January in the 2022 period and the N&B inventory step-up costs from the prior year period, the increase in cost of goods sold was primarily driven by higher material costs, due to higher commodity prices, offset in part by the change in business portfolio mix and volume decreases in sales.

R&D expenses decreased $26 million to $603 million (4.8% of sales) in 2022 compared to $629 million (5.4% of sales) in 2021.

R&D expenses included approximately $20 million of incremental expenses attributable to N&B for the month of January in the 2022 period, which consisted primarily of employee related expenses, including salaries, wages and bonuses and operating expenses for R&D related activities.

In addition, excluding the impact of N&B for the month of January in the 2022 period, R&D expenses decreased primarily due to lower employee related expenses, including salaries, wages and bonuses, and professional fees, including consulting costs, offset in part by higher operating expenses for R&D related activities.

S&A expenses included approximately $51 million of incremental expenses attributable to N&B for the month of January in the 2022 period, which consisted primarily of employee related expenses, including salaries, wages and bonuses, professional fees, including consulting costs, and operating expenses for S&A related activities.

In addition, excluding the impact of N&B for the month of January in the 2022 period, S&A expenses decreased primarily due to lower employee related expenses, including salaries, wages and bonuses, and professional fees, including consulting costs, offset in part by higher operating expenses for S&A related activities.

The decrease was primarily driven by lower severance costs incurred in 2022 (see Note 2 for additional information).

Amortization expense included approximately $47 million attributable to N&B for the month of January in the 2022 period related to the intangible assets acquired through the Merger with N&B.

Interest expense included approximately $13 million attributable to N&B for the month of January in the 2022 period, which included the impact of the additional debt assumed in the Merger with N&B.

For the year ended December 31, [removed: 2022,] [added: 2023,] 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.

These contracts, [added: and] the counterparties to which are major international financial institutions, generally involve the exchange of one currency for a second currency at a future date, [removed: and] have maturities not exceeding twelve [removed: months.][added: months, and are marked-to-market with changes in fair value that are recorded to Other expense (income), net within our Consolidated Statements of (Loss) Income and Comprehensive Loss.]

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 [removed: increase] [added: change] by approximately [removed: $18 million.][added: $153 million as of December 31, 2023.]

As of December 31, [removed: 2022,] [added: 2023,] these swaps were in a [removed: net] liability position with an aggregate fair value of [removed: $37] [added: $161] 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: $141] [added: $152] million.

At December 31, [removed: 2022,] [added: 2023,] the fair value of our EUR fixed rate debt was [removed: $1.293] [added: $1.384] 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: $115] [added: $143] million.

At December 31, [removed: 2022,] [added: 2023,] the fair value of our USD fixed rate debt was [removed: $6.387] [added: $6.227] 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: $639] [added: $623] million.

In general, [added: with the exception of soy and natural gas,] we do not use commodity financial instruments to hedge commodity prices.

We enter into foreign currency forward contracts with the objective of managing our exchange rate risk related to foreign currency denominated monetary assets and liabilities of our operations.

At December 31, 2023, the total amount of our outstanding debt subject to interest rate fluctuations was $895 million.

Based on a hypothetical decrease or increase of 1% in interest rates, our annual interest expense would change by approximately $6 million.

We enter into foreign currency forward contracts with the objective of reducing exposure to cash flow volatility associated with foreign currency receivables and payables, and with anticipated purchases of certain raw materials used in operations.

The gain or loss on the hedging instrument and services is recorded in earnings at the same time as the transaction being hedged is recorded in earnings.

At December 31, 2022, our foreign currency exposures pertaining to derivative contracts exist with the Euro.

| | | | | | |

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

Sales in [removed: 2022] [added: 2023] were approximately [removed: $12.440] [added: $11.479] billion.

Based on [removed: 2022] [added: 2023] sales, approximately [removed: 42%] [added: 46%] of sales were to global consumer products companies and approximately [removed: 58%] [added: 54%] of sales were to small and mid-sized companies.

During [removed: 2022,] [added: 2023,] our 25 largest customers accounted for [removed: 28%] [added: approximately 32%] of sales.

In [removed: 2022,] [added: 2023,] no customer accounted for more than 10% of sales.

Our business is geographically diverse, with sales in the U.S. representing approximately [removed: 29%] [added: 28%] of sales in [removed: 2022.][added: 2023.]

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

Our Nourish segment consists of 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 and consists of [removed: three business units:] Ingredients, Flavors and Food Designs.

During the fourth quarter of 2022, we announced our entry into an agreement to sell [added: a portion of] the Savory Solutions [removed: Group.][added: business and completed the divestiture on May 31, 2023.]

Health & Biosciences is comprised of [removed: five business units:] Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition and Grain Processing.

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

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

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

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

As of December 31, [removed: 2022,] [added: 2023,] we have [removed: 940] [added: 880] granted U.S. [removed: patents,] [added: patents] and [removed: 546] [added: 431] pending U.S. patent applications, as well as numerous other granted patents and pending patent applications around the world.

As of December 31, [removed: 2022,] [added: 2023,] we employed approximately [removed: 3,200] [added: 3,700] people globally in research and development activities.

In addition to creating new 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 [removed: yield.][added: yield, or helping to increase or improve functionality of their formulations.]

Our [removed: recently established] Center for Commercial Excellence utilizes a holistic and centralized approach towards commercial execution by, among other things:

As of December 31, [removed: 2022,] [added: 2023,] we purchased approximately [removed: 30,000] [added: 24,000] different raw materials sourced from an extensive network of domestic and international suppliers and distributors.

Natural ingredients are derived from flowers, fruits and other botanical products, as well as from [added: plant,] animal and marine products, and commodity crops like wheat, corn and soy.

- evaluating the profitability of whether to buy or make an ingredient; [removed: and]

- sourcing from local countries with our own procurement [removed: professionals.][added: professionals; and]

As of December 31, [removed: 2022,] [added: 2023,] we had approximately [removed: 220] [added: 190] manufacturing facilities, creative centers and application laboratories located in approximately [removed: 45] [added: 40] different countries.

Our major manufacturing facilities are located in the United States, The Netherlands, Spain, Germany, Indonesia, Turkey, Brazil, Mexico, Slovenia, China, India, Ireland, [added: Norway,] Finland, Denmark, Belgium and Singapore.

During the last few [removed: years,] [added: years in connection with the acquisition of Frutarom,] we undertook an initiative to optimize our global operations footprint to efficiently and cost-effectively deliver value to our global [removed: customers.][added: customers (the “Frutarom Integration Initiative”).]

[removed: Since] [added: From the] inception of the [removed: initiative,] [added: Frutarom Integration Initiative through its completion as of March 31, 2023,] we completed the closure of 22 sites.

For more detailed information about risks related to our supply chain, please refer to Item 1A, “Risk Factors” – *Supply chain disruptions, geopolitical developments, including the Russia-Ukraine [removed: conflict,] [added: war, the Israel-Hamas war and wider Middle East developments (including disruptions to the Red Sea passage] or [removed: climate change] [added: such conflicts spreading further in the relevant regions), or climate-change] events (including severe weather events) may adversely affect our suppliers or our procurement of raw materials, and thus may impact our business and financial results.*

Following the integration with Nutrition and Biosciences, Inc. (“N&B”), we launched a refreshed and comprehensive Environmental, Social, and Governance (“ESG”) roadmap, the ‘Do More Good Plan’ (“the Plan”), which aligns with IFF’s purpose of applying science and creativity for a better [removed: world.][added: world and our strategy for long term growth and value creation.]

Continuing our commitment to good governance which starts with our Board and Executive [removed: Committee] [added: Leadership Team] and is supported by a strong governance framework, including having a robust program to ensure compliance with our Codes of Conduct and adherence to the highest standards of ethics, integrity, honesty and respect in our dealings internally and with our business partners.

In [removed: 2022,] [added: 2023,] our Company continued to achieve notable recognitions in these areas.

We qualified as a constituent of the Dow Jones Sustainability [removed: Indices] [added: Index, North America] for the [removed: third] [added: fourth] consecutive year, a family of best-in-class benchmarks for investors who recognize that sustainable business practices are critical to generating long-term shareholder value.

[removed: Once again named to both the 2022 World Index and the North America Index, this] [added: This] distinction validates IFF’s leadership position in sustainability performance and underscores our commitment to executing on key ESG priorities.

IFF was also [removed: recognized by the Human Rights Campaign] [added: listed] as a [removed: 2022 Best] [added: “Best] Place to Work for [removed: LBGTQ Equality and named among the 2022 Best Places to Work for] Disability [removed: Inclusion by Disability:IN,] [added: Inclusion”] for the fourth [removed: and third] consecutive [removed: years, respectively.][added: year.]

We were also awarded the [removed: 2022] [added: 2023] EcoVadis Platinum sustainability rating for the [removed: second] [added: third] time, placing IFF among the top 1% of companies assessed.

In addition, in [removed: 2022] [added: 2023] IFF further aligned with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) by [removed: initiating] [added: completing] the first phase of a climate scenario analysis to understand and quantify the potential risks and opportunities related to climate change.

Our main competitors consist of (1) other large global companies, such as Givaudan, [removed: Firmenich] [added: DSM-Firmenich] Symrise, [removed: DSM,] Kerry, ADM, [removed: Novozymes, Chr.][added: Novonesis, (2) mid-sized companies, (3) numerous regional and local manufacturers and (4) consumer product companies who may develop their own competing products.]

At December 31, [removed: 2022,] [added: 2023,] we had approximately [removed: 24,600] [added: 21,500] employees worldwide, of whom approximately [removed: 5,500] [added: 5,200] are employed in the United States.

*Diversity, Equity, & Inclusion [removed: (DE&I)*][added: (“DE&I*”*)*]

| [removed: Frank Clyburn] [added: J. Erik Fyrwald(1)] | | | | | | [removed: 58] [added: 64] | | | | | | Chief Executive Officer and member of our Board of Directors | | |

| Deborah [removed: Borg] [added: Borg(1)] | | | | | | [removed: 46] [added: 47] | | | | | | Executive Vice President, Chief Human Resources, Diversity & Inclusion and Communications Officer | | |

| Michael DeVeau | | | | | | [removed: 42] [added: 43] | | | | | | Senior Vice President, Corporate Finance and Investor Relations | | |

In 2023, we introduced patented enzymatic polymers that are renewable, biodegradable alternatives to functional ingredients used in home cleaning and beauty care products.

During the fourth quarter of 2022, we announced our entry into an agreement to sell our Flavor Specialty Ingredients business and completed the divestiture on August 1, 2023.

During the fourth quarter of 2023, we entered into an agreement to sell our Cosmetic Ingredients business and expect the divestiture to be completed in the first quarter of 2024.

- periodically assessing our supply base with a view towards greater cost efficiencies and improvements.

In addition, following our submission to CDP Climate Change, Water Security and Forests, we maintained our leadership position in CDP Climate Change and achieved management level for CDP Water Security and Forests for 2023.

*“Your Uniqueness Unleashes Our Potential*” is the unifying vision for DE&I at IFF around the world because we know that the diverse backgrounds, experiences and knowledge of our global workforce is what unleashes the potential that exists at the intersection of science and creativity.

This is what enables us to *Be the Premier* *Partner* to our customers.

In 2023, we refreshed our strategic framework to continue accelerating our journey.

This new strategic framework builds on what has come before and increases focus on integrating DE&I into how we operate on a daily basis - fostering inclusive talent processes, inclusive employee experiences and external engagement.

Through this new strategic framework, among other things:

- We made progress against our ESG goals, increasing representation for women in senior leadership roles to approximately 38%;

- We expanded accountability beyond the executive team by tying senior leader bonus awards to progress towards our 2030 gender diversity goals;

- Our colleague communities or employee resource groups (open to all IFF employees, with a focus on Women, Black, LGBTQIA+, Latino/a/e, Asian, People with Disabilities, Early in Career, Veterans & First Responders) increased visibility and impact with well-attended events around the world; and

- We committed to the Living Wage Pledge.

IFF is proud to continue to be globally EDGE certified for gender equality at the “Move” level by the Edge Certified Foundation and we continue to leverage and be recognized by other external benchmarking organizations including Bloomberg Gender Equality Index; DisabilityIN’s Disability Equality Index, Workplace Pride, as well as others.

In 2023, we participated in the Black Equality Index for the first time.

These indices allow us to understand what it takes to raise the bar and refine or adjust our DE&I initiatives accordingly.

Below is a list of the executive officers of the Company and other significant employees who are members of our Executive Leadership Team as of February 28, 2024.

| Yuvraj Arora | | | | | | 52 | | | | | | President, Nourish | | |

_____________________

(1)These individuals are executive officers and file reports under Section 16 of the Securities Exchange Act of 1934.

*J.

Mr. Fyrwald joined us from Syngenta, where he served as Chief Executive Officer since 2016.

Prior to his role at Syngenta, Mr. Fyrwald served as Chief Executive Officer of Univar Solutions from May 2012 until May 2016, as Chairman and Chief Executive Officer of Nalco from 2008 until 2011, when Nalco merged with Ecolab Inc., and following the merger, he served as President of Ecolab.

Mr. Fyrwald began his career at DuPont starting in 1981.

During his 27 years at DuPont, Mr. Fyrwald held a number of positions, including Group Vice President of the Agriculture and Nutrition Division at DuPont and Vice President and General Manager of DuPont’s Nutrition and Health Business.

*Yuvraj Arora* has served as our Executive Vice President and President, Nourish since June 19, 2023.

Mr. Arora joined IFF from Kellogg North America, where he served as the President of the company’s six U.S. categories since April 2021.

He was with Kellogg for more than 20 years, beginning in India in 2002 where he held roles in marketing and category management.

He later assumed roles of increasing responsibility in marketing, brand management and general management upon his relocation to the United States in 2005 and in Singapore from 2012-2015.

Dr. Johnson

Dr. Vroemen has been with the N&B Business since 2004.

Over the past two decades, he has assumed roles of increasing responsibility in research and development in Europe and the U.S.

Recent Developments

On January 11, 2024, we announced the departure of Frank K.

Clyburn Jr. as our Chief Executive Officer, effective February 6, 2024.

The Board of Directors appointed J.

Erik Fyrwald as our Chief Executive Officer, effective February 6, 2024.

As part of our ongoing transformation and business initiatives, we intend to reorganize our segments around end markets: Food & Beverage, Household & Personal Care and Health.

We expect that the transaction will close in the second quarter of 2023, subject to customary closing conditions.

On July 1, 2022, we completed the divestiture of our Microbial Control business unit (formerly a part of the Health & Biosciences segment).

By the completion of this initiative, targeted to occur by the end of 2023, we expect to close approximately 30 manufacturing sites.

In 2022, we were named to the CDP “A List” for corporate transparency and action on climate change for the eighth consecutive year, and we also maintained a leadership position on CDP’s lists for water security and forests.

Hansen, (2) mid-sized companies, (3) numerous regional and local manufacturers and (4) consumer product companies who may develop their own competing products.

Our DE&I vision: *“Your Uniqueness Unleashes Our Potential.*” sets the tone for our colleagues to be empowered to bring their whole authentic selves to work.

To this end, we are dedicated to nurturing a truly inclusive and equitable culture through the three pillars of our DE&I mission:

- Our People embody the mosaic of the markets we serve and are empowered to transform the future;

- Our Spirit nurtures an inclusive and fair culture where every voice is valued and heard; and

- Our World embraces diversity of thought and strives to do more good, creating a better future for all.

In 2022, the IFF DE&I program continued to grow in reach and impact.

We continued our commitment of gender equality using the Economic Dividends for Gender Equity Methodological Framework, a leading global gender equity benchmark and certification.

IFF was the first company ever to retain a global “Move” rating from the Edge Certified Foundation, this time across the harmonized company and 27 countries up from 22 countries.

IFF also achieved an Edge Plus rating for intersectionality inclusion.

IFF was also named for the first time to the 2022 Bloomberg Gender Equality Index recognizing, among other things, our commitment to transparency.

IFF was also listed as a “Best Place to Work for Disability Inclusion” for the second consecutive year with a 100% score.

The AccessAbilities colleague community continued to push forward awareness and inclusive behaviors for persons with disabilities.

Moreover, IFF maintained our “Best Place to Work for LGBTIQ+ Equality” with 100% scores in Human Rights Campaign Corporate Equality Index and the HRC Equidad Mexico and also achieved a Bronze Level recognition form the India Workplace Equality Index.

Throughout 2022, our employee resource groups known as “colleague communities” continued to thrive and mature.

Our communities; Women@IFF, Prisma, Black Excellence, IFF Unidos, ACE, AccessAbilities, NextGen@IFF and SERVE (which supports veteran and first responder issues), hosted several events throughout the year and continued to expand their footprint around the globe through chapter development & new members.

In 2022, our second annual Global Inclusion Week delivered over 5,000 hours of training further advancing our journey towards inclusion.

In response to the novel coronavirus (“COVID-19”) pandemic, and while following the requirements of local authorities, we have developed protocols and mandatory site guidelines to continue to protect the health and safety of employees at each location.

The current executive officers of the Company, as of February 27, 2023, are listed below.

| Ana Paula Mendonça | | | | | | 54 | | | | | | Senior Vice President, Commercial Excellence | | |

| Christophe Fauchon de Villeplee | | | | | | 58 | | | | | | President, Scent | | |

Mr. Clyburn joined us from Merck, where he served as Executive Vice President and President of Human Health.

While at Merck since 2008, Mr. Clyburn held a number of positions, including Chief Commercial Officer, inaugural president of the company’s Global Oncology business, and President of the Primary Care and Women’s Health businesses.

Before joining Merck, Mr. Clyburn was Vice President of the Oncology and Internal Medicine business units at Sanofi Aventis and held a wide range of leadership roles with that company.

*Ana Paula Mendonça* has served as our Senior Vice President, Commercial Excellence since December 2022.

Prior to that, she served as Vice President, President Global Ingredients & Regional General Manager, North America, Consumer Fragrances since February 2022, and, before that, as Vice President, Regional General Manager, North America, Consumer Fragrances since January 2016.

Ms. Mendonça joined IFF more than 30 years ago, and her broad experience expands across Category Management (Fine Fragrance, Home, Fabric, and Beauty), Global Marketing, and Product Innovation.

*Christophe Fauchon de Villeplee* has served as our President, Scent since September 2021.

Mr. de Villeplee previously served as President, Global Consumer Fragrances.

He originally joined our Company in 1999 and has previously held positions of increasing responsibility, including sales, group country management, regional general management of fragrances, North America, and vice-president of Global Fine Fragrances and Beauty Care.

From June 2016 to February 2021, he served as our Executive Vice President, Chief Research & Development and Sustainability Officer.

From January 2015 to June 2016, Dr. Yep was Senior Vice President of Research, Development & Applications with The Kerry Group, a taste and nutrition company.

Prior to The Kerry Group, Dr. Yep was Senior Vice President of R&D at PepsiCo, a multinational food, snack and beverage corporation, and was Global Vice President, Application Technologies at Givaudan Flavors and Fragrances, a multinational manufacturer of flavors, fragrances and active cosmetic ingredients.

Earlier in his career, Dr. Yep was at McCormick & Company, a flavor, seasonings and spices company, where he held executive roles of increasing responsibility in food science.

| | | | | | |

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.” [added: For more detailed information about risks related to legal proceedings, refer to Item 1A, “Risk Factors” – *“Our results of operations may be negatively impacted by the outcome of uncertainties related to legal claims, disputes, investigations and litigation, including the ongoing antitrust and competition investigations and related class actions lawsuits.”*]

| | | | | | |

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

For the fiscal year ended December 31, [removed: 2022][added: 2023]

The aggregate market value of the voting stock held by non-affiliates of the Registrant was [removed: $30,369,016,357] [added: $20,313,097,570] as of June 30, [removed: 2022.][added: 2023.]

As of February 21, [removed: 2023,] [added: 2024,] there were [removed: 255,061,711] [added: 255,314,909] 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: 2023] [added: 2024] Annual Meeting of Shareholders (the “IFF [removed: 2023] [added: 2024] Proxy Statement”) are incorporated by reference in Part III of this Form 10-K.

| ITEM 1. | | | [removed: [Business](#i03de90bde21b4b93bcea41cbf259f7f5_13)] [added: [Business](#i2f76b3bf6f194379a886ecfc128c8f1b_13)] | | | [removed: [3](#i03de90bde21b4b93bcea41cbf259f7f5_13)] [added: [3](#i2f76b3bf6f194379a886ecfc128c8f1b_13)] | | |

| ITEM 1A. | | | [Risk [removed: Factors](#i03de90bde21b4b93bcea41cbf259f7f5_16)] [added: Factors](#i2f76b3bf6f194379a886ecfc128c8f1b_16)] | | | [removed: [12](#i03de90bde21b4b93bcea41cbf259f7f5_16)] [added: [12](#i2f76b3bf6f194379a886ecfc128c8f1b_16)] | | |

| ITEM 1B. | | | [Unresolved Staff [removed: Comments](#i03de90bde21b4b93bcea41cbf259f7f5_19)] [added: Comments](#i2f76b3bf6f194379a886ecfc128c8f1b_19)] | | | [removed: [31](#i03de90bde21b4b93bcea41cbf259f7f5_19)] [added: [30](#i2f76b3bf6f194379a886ecfc128c8f1b_19)] | | |

| ITEM 2. | | | [removed: [Properties](#i03de90bde21b4b93bcea41cbf259f7f5_22)] [added: [Properties](#i2f76b3bf6f194379a886ecfc128c8f1b_22)] | | | [removed: [31](#i03de90bde21b4b93bcea41cbf259f7f5_22)] [added: [32](#i2f76b3bf6f194379a886ecfc128c8f1b_22)] | | |

| ITEM 3. | | | [Legal [removed: Proceedings](#i03de90bde21b4b93bcea41cbf259f7f5_25)] [added: Proceedings](#i2f76b3bf6f194379a886ecfc128c8f1b_25)] | | | [removed: [31](#i03de90bde21b4b93bcea41cbf259f7f5_25)] [added: [32](#i2f76b3bf6f194379a886ecfc128c8f1b_25)] | | |

| ITEM 4. | | | [Mine Safety [removed: Disclosures](#i03de90bde21b4b93bcea41cbf259f7f5_28)] [added: Disclosures](#i2f76b3bf6f194379a886ecfc128c8f1b_28)] | | | [removed: [31](#i03de90bde21b4b93bcea41cbf259f7f5_28)] [added: [32](#i2f76b3bf6f194379a886ecfc128c8f1b_28)] | | |

| ITEM 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i03de90bde21b4b93bcea41cbf259f7f5_34)] [added: Securities](#i2f76b3bf6f194379a886ecfc128c8f1b_34)] | | | [removed: [31](#i03de90bde21b4b93bcea41cbf259f7f5_34)] [added: [32](#i2f76b3bf6f194379a886ecfc128c8f1b_34)] | | |

| ITEM 6. | | | [removed: [\[Reserved\]](#i03de90bde21b4b93bcea41cbf259f7f5_37)] [added: [\[Reserved\]](#i2f76b3bf6f194379a886ecfc128c8f1b_37)] | | | [removed: [32](#i03de90bde21b4b93bcea41cbf259f7f5_37)] [added: [33](#i2f76b3bf6f194379a886ecfc128c8f1b_37)] | | |

| ITEM 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i03de90bde21b4b93bcea41cbf259f7f5_40)] [added: Operations](#i2f76b3bf6f194379a886ecfc128c8f1b_40)] | | | [removed: [32](#i03de90bde21b4b93bcea41cbf259f7f5_40)] [added: [33](#i2f76b3bf6f194379a886ecfc128c8f1b_40)] | | |

| ITEM 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i03de90bde21b4b93bcea41cbf259f7f5_58)] [added: Risk](#i2f76b3bf6f194379a886ecfc128c8f1b_58)] | | | [removed: [48](#i03de90bde21b4b93bcea41cbf259f7f5_58)] [added: [48](#i2f76b3bf6f194379a886ecfc128c8f1b_58)] | | |

| ITEM 8. | | | [Financial Statements and Supplementary [removed: Data](#i03de90bde21b4b93bcea41cbf259f7f5_61)] [added: Data](#i2f76b3bf6f194379a886ecfc128c8f1b_61)] | | | [removed: [49](#i03de90bde21b4b93bcea41cbf259f7f5_61)] [added: [48](#i2f76b3bf6f194379a886ecfc128c8f1b_61)] | | |

| ITEM 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i03de90bde21b4b93bcea41cbf259f7f5_64)] [added: Disclosure](#i2f76b3bf6f194379a886ecfc128c8f1b_64)] | | | [removed: [49](#i03de90bde21b4b93bcea41cbf259f7f5_64)] [added: [48](#i2f76b3bf6f194379a886ecfc128c8f1b_64)] | | |

| ITEM 9A. | | | [Controls and [removed: Procedures](#i03de90bde21b4b93bcea41cbf259f7f5_67)] [added: Procedures](#i2f76b3bf6f194379a886ecfc128c8f1b_67)] | | | [removed: [49](#i03de90bde21b4b93bcea41cbf259f7f5_67)] [added: [49](#i2f76b3bf6f194379a886ecfc128c8f1b_67)] | | |

| ITEM 9B. | | | [Other [removed: Information](#i03de90bde21b4b93bcea41cbf259f7f5_70)] [added: Information](#i2f76b3bf6f194379a886ecfc128c8f1b_70)] | | | [removed: [49](#i03de90bde21b4b93bcea41cbf259f7f5_70)] [added: [49](#i2f76b3bf6f194379a886ecfc128c8f1b_70)] | | |

| ITEM 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i03de90bde21b4b93bcea41cbf259f7f5_73)] [added: Inspections](#i2f76b3bf6f194379a886ecfc128c8f1b_73)] | | | [removed: [49](#i03de90bde21b4b93bcea41cbf259f7f5_73)] [added: [49](#i2f76b3bf6f194379a886ecfc128c8f1b_73)] | | |

| ITEM 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i03de90bde21b4b93bcea41cbf259f7f5_79)] [added: Governance](#i2f76b3bf6f194379a886ecfc128c8f1b_79)] | | | [removed: [49](#i03de90bde21b4b93bcea41cbf259f7f5_79)] [added: [49](#i2f76b3bf6f194379a886ecfc128c8f1b_79)] | | |

| ITEM 11. | | | [Executive [removed: Compensation](#i03de90bde21b4b93bcea41cbf259f7f5_82)] [added: Compensation](#i2f76b3bf6f194379a886ecfc128c8f1b_82)] | | | [removed: [50](#i03de90bde21b4b93bcea41cbf259f7f5_82)] [added: [50](#i2f76b3bf6f194379a886ecfc128c8f1b_82)] | | |

| ITEM 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i03de90bde21b4b93bcea41cbf259f7f5_85)] [added: Matters](#i2f76b3bf6f194379a886ecfc128c8f1b_85)] | | | [removed: [50](#i03de90bde21b4b93bcea41cbf259f7f5_85)] [added: [50](#i2f76b3bf6f194379a886ecfc128c8f1b_85)] | | |

| ITEM 13. | | | [Certain Relationships and Related Transactions and Director [removed: Independence](#i03de90bde21b4b93bcea41cbf259f7f5_88)] [added: Independence](#i2f76b3bf6f194379a886ecfc128c8f1b_88)] | | | [removed: [50](#i03de90bde21b4b93bcea41cbf259f7f5_88)] [added: [50](#i2f76b3bf6f194379a886ecfc128c8f1b_88)] | | |

| ITEM 14. | | | [Principal Accountant Fees and [removed: Services](#i03de90bde21b4b93bcea41cbf259f7f5_91)] [added: Services](#i2f76b3bf6f194379a886ecfc128c8f1b_91)] | | | [removed: [50](#i03de90bde21b4b93bcea41cbf259f7f5_91)] [added: [50](#i2f76b3bf6f194379a886ecfc128c8f1b_91)] | | |

| ITEM 15. | | | [Exhibits and Financial Statement [removed: Schedules](#i03de90bde21b4b93bcea41cbf259f7f5_97)] [added: Schedules](#i2f76b3bf6f194379a886ecfc128c8f1b_97)] | | | [removed: [50](#i03de90bde21b4b93bcea41cbf259f7f5_97)] [added: [50](#i2f76b3bf6f194379a886ecfc128c8f1b_97)] | | |

| ITEM 16. | | | [Form 10-K [removed: Summary](#i03de90bde21b4b93bcea41cbf259f7f5_205)] [added: Summary](#i2f76b3bf6f194379a886ecfc128c8f1b_202)] | | | [removed: [115](#i03de90bde21b4b93bcea41cbf259f7f5_205)] [added: [116](#i2f76b3bf6f194379a886ecfc128c8f1b_202)] | | |

| ITEM 1C. | | | [Cybersecurity](#i2f76b3bf6f194379a886ecfc128c8f1b_1718) | | | [30](#i2f76b3bf6f194379a886ecfc128c8f1b_1718) | | |

| | | | | | | | | |

| [SIGNATURES](#i2f76b3bf6f194379a886ecfc128c8f1b_205) | | | | | | [117](#i2f76b3bf6f194379a886ecfc128c8f1b_205) | | |

| | | | | | |

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

| [SIGNATURES](#i03de90bde21b4b93bcea41cbf259f7f5_208) | | | | | | [116](#i03de90bde21b4b93bcea41cbf259f7f5_208) | | |

| | | | | | |

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

Risk Management and Strategy

Our comprehensive Incident Response Plan outlines processes to identify, detect, assess, respond to and recover from threats, including cybersecurity threats.

We follow those processes to manage material risks from cybersecurity threats, including risks relating to disruption of business operations or financial reporting systems, intellectual property theft; fraud; extortion; harm to employees or customers; violation of privacy laws and other litigation/legal risk; and reputational risk, as part of our overall risk management system and processes.

In addition, our Enterprise Risk Management (“ERM”) program considers cybersecurity risks alongside other company risks.

Our enterprise risk professionals consult with cross-organizational leaders to gather information necessary to identify cybersecurity risks, evaluate their likelihood and severity, identify necessary mitigations and assess the potential impact of those mitigations on residual risk.

Our ERM Committee, chaired by the Chief Financial Officer (“CFO”) and General Counsel (“GC”), and comprised of senior leaders representing each risk domain, integrates global risks, including cybersecurity and compliance, to ensure appropriate prioritization of resources and alignment across the Company.

The ERM Committee meets with our Executive Leadership Team and presents at least annually to our Board of Directors on the ERM process and on our risk mitigation actions, including providing reporting focused on compliance and cybersecurity risks.

Our Chief Information Officer (“CIO”) is responsible for delivering on the Company’s global Information Technology (“IT”) strategy, including infrastructure, data and analytics, application delivery, end user services, cybersecurity risk management and the digital technology transformation program.

The IT leadership team leads the implementation of the IT strategy and the day-to-day operations.

Under the guidance of the CIO, our Chief Information Security Officer (“CISO”) leads Information Security (“InfoSec”), which includes the Cyber Fusion Center, Infrastructure Security, including network segmentation, firewalls and intrusion detection and prevention systems, Identity and Access Management, Application Security, Data Security and InfoSec Governance, Risk and Compliance.

InfoSec is overseen by the InfoSec Steering Committee, comprised of senior leaders representing all corporate functions and business units, and the InfoSec Governance Review Board, comprised of the IT leadership team and the InfoSec leadership team.

InfoSec is governed in coordination with IFF’s ERM Committee and is aligned to the U.S. National Institute of Standards and Technology (“NIST”) Cybersecurity Framework.

In addition to our dedicated leadership team overseeing InfoSec, we view InfoSec as a shared responsibility, and to best protect our network, computers and data from threats, we empower our employees to be our first line of defense.

To that end, all employees globally complete annual mandatory InfoSec training on email security, password security and our Acceptable Use Policy.

We use email security, endpoint security, logging and monitoring, remote access, application security and other tools to deter threat actors, block malicious/phishing emails and avoid IT system interruptions.

Our comprehensive InfoSec Incident Response Plan is updated at least annually, and provides guidance for detecting, containing, eradicating and recovering from potential incidents.

It outlines escalation procedures, reporting requirements, incident severity levels, a materiality assessment and roles and responsibilities for key partners, including IT, Legal/Employee Relations, Corporate Communications, Human Resources and other senior leaders.

Our escalation procedures include escalation to our Executive Leadership Team, Audit Committee, Disclosure Committee, and Board of Directors, and reporting to

regulators, customers, investors, and others.

We also maintain cybersecurity insurance, regularly evaluate the effectiveness of our systems, and test our contingency plans by conducting vulnerability analysis and tabletop exercises with both technical incident responders and senior leaders.

Based on industry baselines and discussions throughout our membership in various global InfoSec communities, we believe that these preventative actions provide adequate measures of protection against information security breaches/incidents and reduce our cybersecurity risks.

Given the evolving nature of InfoSec incidents, we regularly engage with our peers on threat intelligence and collaborate with organizations both in our industry and across industries to share best practices.

In connection with our InfoSec risk management processes, we engage third-party assessors and outside counsel.

Our program includes review and assessment by external, independent third parties, who assess and report on our overall InfoSec program and identify areas for continued focus and improvement.

Our CIO, CISO and GC oversee our technology risk management and privacy teams, which work in partnership with our Internal Audit team to review IT-related controls as part of the overall internal controls process and regulatory requirements.

We consult with outside counsel to advise our team and our Board of Directors on best practices for InfoSec oversight, and the evolution of that oversight over time.

InfoSec employees regularly speak at and attend industry events to ensure awareness of evolving threats and innovative prevention and remediation techniques.

Further, our InfoSec risk management processes extend to the oversight and identification of threats associated with our use of third-party service providers through relationship due diligence, InfoSec assessments and contractual provisions.

Our business strategy, results of operations and financial condition have not been materially affected by risks from cybersecurity threats, including as a result of previous cybersecurity incidents, but we cannot provide assurance that they will not be materially affected in the future by such risks and any future material incidents.

For more detailed information about risks related to our cybersecurity, refer to Item 1A, “Risk Factors” – *“A significant data breach or other disruption to our information technology systems could disrupt our operations, result in the loss of confidential information or personal data, and adversely impact our reputation, business or results of operations.”*

Governance

The Board of Directors is responsible for overseeing and reviewing with management the Company’s InfoSec risks and the policies and practices established to manage such risks.

In that effort, the Board of Directors delegates certain responsibilities to our Audit Committee.

This committee-level focus on InfoSec allows the Board to further enhance its understanding of these issues as it continues to have overall oversight responsibility for risk.

The Audit Committee assists the Board of Directors in its oversight by staying apprised of our InfoSec programs, strategy, policies, standards, architecture, processes and material risks, and by overseeing response to InfoSec incidents.

Our Audit Committee receives from management updates, at least quarterly, on material security risks, including any material incidents, relevant industry developments, threat vectors and material risks identified in periodic penetration tests or vulnerability scans.

These updates also include material legal and legislative developments concerning InfoSec, our approach to complying with applicable law and material engagement with regulators concerning IT and InfoSec.

The Board of Directors receives regular reports from the Audit Committee which detail (a) InfoSec initiatives, (b) reviews of the policies and practices established to manage these processes, and (c) reviews of the Company’s procedures for monitoring compliance with applicable laws.

Additionally, the Board of Directors also receives updates on the Company’s risks through ERM program reports, which include management’s approach to mitigating and managing InfoSec risks.

Members of the Board of Directors stay apprised of the rapidly evolving cyber threat landscape and provide guidance to management, as appropriate, to address the effectiveness of our overall data privacy and cybersecurity program.

Our principal owned and leased [removed: properties] [added: properties,] as of December 31, [removed: 2022,] [added: 2023,] are as follows:

| Plant | | | [removed: 48] [added: 40] | | | | | | [removed: 20] [added: 16] | | | | | | [removed: 24] [added: 18] | | | | | | 13 | | | | | | 22 | | | | | | [removed: 12] [added: 7] | | | | | | [removed: 18] [added: 16] | | | | | | [removed: 5] [added: 4] | | |

| Office | | | [removed: 3] [added: 2] | | | | | | [removed: 77] [added: 57] | | | | | | — | | | | | | [removed: 7] [added: 6] | | | | | | [removed: 4] [added: 3] | | | | | | [removed: 37] [added: 20] | | | | | | — | | | | | | [removed: 8] [added: 3] | | |

| Laboratory | | | 7 | | | | | | [removed: 16] [added: 13] | | | | | | [removed: 1] [added: 2] | | | | | | 15 | | | | | | — | | | | | | [removed: 16] [added: 14] | | | | | | [removed: 2] [added: —] | | | | | | [removed: 2] [added: 3] | | |

| Warehouse | | | 1 | | | | | | [removed: 12] [added: 11] | | | | | | — | | | | | | [removed: 11] [added: 10] | | | | | | — | | | | | | [removed: 3] [added: 2] | | | | | | [removed: 3] [added: 2] | | | | | | [removed: 11] [added: 8] | | |

| Other | | | [removed: 5] [added: 4] | | | | | | [removed: 5] [added: 4] | | | | | | — | | | | | | [removed: 8] [added: 7] | | | | | | [removed: 11] [added: 7] | | | | | | [removed: 4] [added: 3] | | | | | | 3 | | | | | | 4 | | |

| | | | 54 | | | | | | 101 | | | | | | 20 | | | | | | 51 | | | | | | 32 | | | | | | 46 | | | | | | 21 | | | | | | 22 | | |

| | | | 64 | | | | | | 130 | | | | | | 25 | | | | | | 54 | | | | | | 37 | | | | | | 72 | | | | | | 26 | | | | | | 30 | | |

| | | | | | |

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

Our common stock is principally traded on the New York Stock Exchange under the ticker symbol [removed: “IFF”.][added: “IFF.”]

| Title of Class | | | | | | Number of shareholders of record as of February 21, [removed: 2023] [added: 2024] | | |

| Common stock, par value 12 1/2¢ per share | | | | | | [removed: 3,431] [added: 3,249] | | |

The total return assumes that dividends were reinvested daily and is based on a $100 investment on December 31, [removed: 2017.][added: 2018.]

[removed: ][added: ]

| Year-end Data | | | [removed: 2017 | | |] 2018 | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | [added: 2023 | | |]

While we have historically paid dividends on a quarterly basis to shareholders of our common stock, the declaration and payment of future dividends will depend on many factors, including, but not limited to, our earnings, financial condition, business development needs and regulatory considerations.

Our Board of Directors may reduce, suspend or discontinue the payment of dividends at any time.

See Part II, Item 8 of this Form 10-K in the “Consolidated Statements of Shareholders’ Equity” and in the Notes to Consolidated Financial Statements in Note 12 for additional information.

| International Flavors & Fragrances | | | $ | 100.00 | | $ | 98.30 | | $ | 85.19 | | $ | 120.59 | | $ | 86.40 | | $ | 69.58 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 131.49 | | $ | 155.68 | | $ | 200.37 | | $ | 164.08 | | $ | 207.21 | |

| S&P 500 Consumer Staples Index | | | $ | 100.00 | | $ | 127.61 | | $ | 141.32 | | $ | 167.65 | | $ | 166.61 | | $ | 167.47 | |

| S&P 500 Specialty Chemicals Index | | | $ | 100.00 | | $ | 118.26 | | $ | 138.57 | | $ | 178.80 | | $ | 129.71 | | $ | 150.65 | |

| International Flavors & Fragrances | | | $ | 100.00 | | $ | 89.90 | | $ | 88.38 | | $ | 76.59 | | $ | 108.41 | | $ | 77.68 | |

| S&P 500 Index | | | $ | 100.00 | | $ | 95.62 | | $ | 125.72 | | $ | 148.85 | | $ | 191.58 | | $ | 156.88 | |

| S&P 500 Consumer Staples Index | | | $ | 100.00 | | $ | 91.62 | | $ | 116.92 | | $ | 129.48 | | $ | 153.60 | | $ | 152.65 | |

| S&P 500 Specialty Chemicals Index | | | $ | 100.00 | | $ | 94.27 | | $ | 111.49 | | $ | 130.63 | | $ | 168.56 | | $ | 122.29 | |

| | | | | | |

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

| | | | | | |

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

See index to Consolidated Financial Statements on page [removed: [50](#i03de90bde21b4b93bcea41cbf259f7f5_94).][added: [50](#i2f76b3bf6f194379a886ecfc128c8f1b_94).]

| | | | | | |

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

| | | | | | |

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

Management assessed the effectiveness of our internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

Based on this assessment, management determined that, as of December 31, [removed: 2022,] [added: 2023,] 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 December 31, [removed: 2022] [added: 2023] as stated in their report which is included herein.

| | | | | | |

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

Rule 10b5-1 Trading Plans

During the quarter ended December 31, 2023, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) (a “10b5-1 trading arrangement”) or any “non-Rule 10b5-1 trading arrangement” as defined in Item 408(c) of Regulation S-K.

None.

| | | | | | |

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

The information relating to directors and nominees of the Company is set forth in the IFF [removed: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] 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: 2023] [added: 2024] Proxy Statement to be filed on or before April [removed: 28, 2023,] [added: 29, 2024,] except as to information required pursuant to Item 402(v) of Regulation S-K relating to pay versus performance.

| | | | | | |

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

The items required by Part III, Item 12 are incorporated herein by reference from the IFF [removed: 2023] [added: 2024] Proxy Statement to be filed on or before April [removed: 28, 2023.][added: 29, 2024.]

| | | | | | |

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

The items required by Part III, Item 13 are incorporated herein by reference from the IFF [removed: 2023] [added: 2024] Proxy Statement to be filed on or before April [removed: 28, 2023.][added: 29, 2024.]

| | | | | | |

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

The items required by Part III, Item 14 are incorporated herein by reference from the IFF [removed: 2023] [added: 2024] Proxy Statement to be filed on or before April [removed: 28, 2023.][added: 29, 2024.]

| [Report of Independent Registered Public Accounting [removed: Firm](#i03de90bde21b4b93bcea41cbf259f7f5_100)] [added: Firm](#i2f76b3bf6f194379a886ecfc128c8f1b_100)] (PCAOB ID: 238) | | | [removed: [51](#i03de90bde21b4b93bcea41cbf259f7f5_100)] [added: [51](#i2f76b3bf6f194379a886ecfc128c8f1b_100)] | | |

| [Consolidated Statements [removed: of](#i03de90bde21b4b93bcea41cbf259f7f5_103) [(Loss)](#i03de90bde21b4b93bcea41cbf259f7f5_103) [Income] [added: of (Loss) Income] and [removed: Comprehensive](#i03de90bde21b4b93bcea41cbf259f7f5_103) [(Loss)](#i03de90bde21b4b93bcea41cbf259f7f5_103) [](#i03de90bde21b4b93bcea41cbf259f7f5_103)[Income for] [added: Comprehensive](#i2f76b3bf6f194379a886ecfc128c8f1b_103) [Loss](#i2f76b3bf6f194379a886ecfc128c8f1b_103) [](#i2f76b3bf6f194379a886ecfc128c8f1b_103)[for] the years ended December 31, [removed: 202](#i03de90bde21b4b93bcea41cbf259f7f5_103)[2](#i03de90bde21b4b93bcea41cbf259f7f5_103)[, 202](#i03de90bde21b4b93bcea41cbf259f7f5_103)[1](#i03de90bde21b4b93bcea41cbf259f7f5_103) [and](#i03de90bde21b4b93bcea41cbf259f7f5_103) [20](#i03de90bde21b4b93bcea41cbf259f7f5_103)[20](#i03de90bde21b4b93bcea41cbf259f7f5_103)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_103)[3](#i2f76b3bf6f194379a886ecfc128c8f1b_103)[, 20](#i2f76b3bf6f194379a886ecfc128c8f1b_103)[22](#i2f76b3bf6f194379a886ecfc128c8f1b_103) [and 202](#i2f76b3bf6f194379a886ecfc128c8f1b_103)[1](#i2f76b3bf6f194379a886ecfc128c8f1b_103)] | | | [removed: [53](#i03de90bde21b4b93bcea41cbf259f7f5_103)] [added: [53](#i2f76b3bf6f194379a886ecfc128c8f1b_103)] | | |

| [Consolidated Balance Sheets as of December 31, [removed: 202](#i03de90bde21b4b93bcea41cbf259f7f5_106)[2](#i03de90bde21b4b93bcea41cbf259f7f5_106)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_106)[3](#i2f76b3bf6f194379a886ecfc128c8f1b_106)] [and [removed: 20](#i03de90bde21b4b93bcea41cbf259f7f5_106)[21](#i03de90bde21b4b93bcea41cbf259f7f5_106)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_106)[2](#i2f76b3bf6f194379a886ecfc128c8f1b_106)] | | | [removed: [54](#i03de90bde21b4b93bcea41cbf259f7f5_106)] [added: [54](#i2f76b3bf6f194379a886ecfc128c8f1b_106)] | | |

| [Consolidated Statements of Cash Flows for the years ended December 31, [removed: 20](#i03de90bde21b4b93bcea41cbf259f7f5_112)[2](#i03de90bde21b4b93bcea41cbf259f7f5_112)[2](#i03de90bde21b4b93bcea41cbf259f7f5_112)[, 20](#i03de90bde21b4b93bcea41cbf259f7f5_112)[21](#i03de90bde21b4b93bcea41cbf259f7f5_112)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_109)[3](#i2f76b3bf6f194379a886ecfc128c8f1b_109)[, 202](#i2f76b3bf6f194379a886ecfc128c8f1b_109)[2](#i2f76b3bf6f194379a886ecfc128c8f1b_109)] [and [removed: 20](#i03de90bde21b4b93bcea41cbf259f7f5_112)[20](#i03de90bde21b4b93bcea41cbf259f7f5_112)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_109)[1](#i2f76b3bf6f194379a886ecfc128c8f1b_109)] | | | [removed: [55](#i03de90bde21b4b93bcea41cbf259f7f5_112)] [added: [55](#i2f76b3bf6f194379a886ecfc128c8f1b_109)] | | |

| [Consolidated Statements of Shareholders’ Equity for the years ended December 31, [removed: 202](#i03de90bde21b4b93bcea41cbf259f7f5_115)[2](#i03de90bde21b4b93bcea41cbf259f7f5_115)[, 202](#i03de90bde21b4b93bcea41cbf259f7f5_115)[1](#i03de90bde21b4b93bcea41cbf259f7f5_115)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_112)[3](#i2f76b3bf6f194379a886ecfc128c8f1b_112)[, 202](#i2f76b3bf6f194379a886ecfc128c8f1b_112)[2](#i2f76b3bf6f194379a886ecfc128c8f1b_112)] [and [removed: 20](#i03de90bde21b4b93bcea41cbf259f7f5_115)[20](#i03de90bde21b4b93bcea41cbf259f7f5_115)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_112)[1](#i2f76b3bf6f194379a886ecfc128c8f1b_112)] | | | [removed: [56](#i03de90bde21b4b93bcea41cbf259f7f5_115)] [added: [56](#i2f76b3bf6f194379a886ecfc128c8f1b_112)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i03de90bde21b4b93bcea41cbf259f7f5_121)] [added: Statements](#i2f76b3bf6f194379a886ecfc128c8f1b_118)] | | | [removed: [57](#i03de90bde21b4b93bcea41cbf259f7f5_121)] [added: [57](#i2f76b3bf6f194379a886ecfc128c8f1b_118)] | | |

| [Schedule II — Valuation and Qualifying Accounts and Reserves for the years ended December 31, [removed: 202](#i03de90bde21b4b93bcea41cbf259f7f5_211)[2](#i03de90bde21b4b93bcea41cbf259f7f5_211)[, 202](#i03de90bde21b4b93bcea41cbf259f7f5_211)[1](#i03de90bde21b4b93bcea41cbf259f7f5_211)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_208)[3](#i2f76b3bf6f194379a886ecfc128c8f1b_208)[, 202](#i2f76b3bf6f194379a886ecfc128c8f1b_208)[2](#i2f76b3bf6f194379a886ecfc128c8f1b_208)] [and [removed: 20](#i03de90bde21b4b93bcea41cbf259f7f5_211)[20](#i03de90bde21b4b93bcea41cbf259f7f5_211)] [added: 202](#i2f76b3bf6f194379a886ecfc128c8f1b_208)[1](#i2f76b3bf6f194379a886ecfc128c8f1b_208)] | | | [removed: [S-1](#i03de90bde21b4b93bcea41cbf259f7f5_211)] [added: [S-1](#i2f76b3bf6f194379a886ecfc128c8f1b_208)] | | |

We have audited the accompanying consolidated balance sheets of International Flavors & Fragrances Inc. and its subsidiaries (the “Company”) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the related consolidated statements of (loss) income and comprehensive [removed: (loss) income,] [added: loss,] of [removed: shareholders'] [added: shareholders’] equity and of cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] 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 [removed: Company's] [added: Company’s] internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - 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 December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022] [added: 2023] 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 December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control - Integrated Framework* (2013) issued by the COSO.

As described in Notes 1 and 6 to the consolidated financial statements, the Company’s goodwill balance was [removed: $13.355] [added: $10.635] billion as of December 31, [removed: 2022,] [added: 2023,] and the goodwill related to the [added: Nourish,] Health & [removed: Biosciences] [added: Biosciences, and Pharma Solutions] reportable [removed: segment] [added: segments] was [removed: $4.321 billion.][added: $3.489 billion, $4.391 billion, and $1.265 billion, respectively.]

[removed: The Company] [added: Management] has determined that the [added: Nourish,] Health & [removed: Biosciences segment is] [added: Biosciences, and Pharma Solutions reportable segments are each] also a reporting unit.

[removed: For the third quarter of] [added: During] 2022, [removed: management] [added: the Company] determined that [removed: a] goodwill impairment triggering [removed: event] [added: events] occurred for [removed: the] [added: its Nourish,] Health & Biosciences [added: and Pharma Solutions] reporting [removed: unit.][added: units.]

Key estimates and assumptions used in these valuations include revenue growth rates, gross margins, [added: adjusted operating] EBITDA margins, terminal growth rates and discount rates.

[removed: For the third quarter of] [added: During] 2022, [removed: management] [added: the Company] determined that the carrying value of the Health & Biosciences reporting unit exceeded its fair value and recorded a goodwill impairment charge of $2.250 [removed: billion.][added: billion in the Consolidated Statements of (Loss) Income and Comprehensive Loss for the year ended December 31, 2022.]

The principal considerations for our determination that performing procedures relating to the [removed: interim] goodwill impairment [removed: assessment] [added: assessments] of the [added: Nourish,] Health & [removed: Biosciences] [added: Biosciences, and Pharma Solutions] reporting [removed: unit] [added: units] is a critical audit matter are (i) the significant judgment by management when developing the fair value estimate of the [added: Nourish,] Health & [removed: Biosciences] [added: Biosciences, and Pharma Solutions] reporting [removed: unit;] [added: units;] (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, EBITDA margins, terminal growth [removed: rate,] [added: rates,] and discount [removed: rate;] [added: 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 management’s [removed: interim] goodwill impairment [removed: assessment,] [added: assessments,] including controls over the valuation of the [added: Nourish,] Health & [removed: Biosciences] [added: Biosciences, and Pharma Solutions] reporting [removed: unit.][added: units.]

These procedures also included, among others (i) testing management’s process for developing the fair value estimate of the [added: Nourish,] Health & [removed: Biosciences] [added: Biosciences, and Pharma Solutions] reporting [removed: unit;] [added: units;] (ii) evaluating the appropriateness of the discounted cash flow [removed: method;] [added: method used by management;] (iii) testing the completeness and accuracy of [removed: the] underlying data used in the discounted cash flow method; and (iv) evaluating the reasonableness of the significant assumptions used by management related to revenue growth rates, gross margins, EBITDA margins, terminal growth [removed: rate,] [added: rates,] and discount [removed: rate.][added: rates.]

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

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the discounted cash flow method and (ii) the reasonableness of the [removed: significant assumptions related to the] terminal growth rate and discount [removed: rate.][added: rate assumptions.]

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

| *(DOLLARS IN MILLIONS EXCEPT PER SHARE AMOUNTS)* | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Net sales | | | $ | [removed: 12,440] [added: 11,479] | | | | | $ | [removed: 11,656] [added: 12,440] | | | | | $ | [removed: 5,084] [added: 11,656] | |

| Cost of goods sold | | | [removed: 8,289] [added: 7,798] | | | | | | [removed: 7,921] [added: 8,289] | | | | | | [removed: 2,998] [added: 7,921] | | |

| Gross profit | | | [removed: 4,151] [added: 3,681] | | | | | | [removed: 3,735] [added: 4,151] | | | | | | [removed: 2,086] [added: 3,735] | | |

| Research and development expenses | | | [removed: 603] [added: 636] | | | | | | [removed: 629] [added: 603] | | | | | | [removed: 357] [added: 629] | | |

| Selling and administrative expenses | | | [removed: 1,768] [added: 1,787] | | | | | | [removed: 1,749] [added: 1,768] | | | | | | [removed: 949] [added: 1,749] | | |

| Restructuring and other charges | | | [removed: 12] [added: 68] | | | | | | [removed: 41] [added: 12] | | | | | | [removed: 17] [added: 41] | | |

| Amortization of acquisition-related intangibles | | | [removed: 727] [added: 680] | | | | | | [removed: 732] [added: 727] | | | | | | [removed: 193] [added: 732] | | |

| Impairment of goodwill | | | [removed: 2,250] [added: 2,623] | | | | | | [removed: —] [added: 2,250] | | | | | | — | | |

| Impairment of long-lived assets | | | [removed: 120] [added: —] | | | | | | [removed: —] [added: 120] | | | | | | — | | |

| [removed: (Gains) losses] [added: Gains] on sale of [removed: fixed] assets | | | (3) | | | | | | [removed: (1)] [added: (3)] | | | | | | [removed: 4] [added: (1)] | | |

| Operating (loss) profit | | | [removed: (1,326)] [added: (2,110)] | | | | | | [removed: 585] [added: (1,326)] | | | | | | [removed: 566] [added: 585] | | |

| Interest expense | | | [removed: 336] [added: 380] | | | | | | [removed: 289] [added: 336] | | | | | | [removed: 132] [added: 289] | | |

| Other [removed: income,] [added: expense (income),] net | | | [removed: (37)] [added: 28] | | | | | | [removed: (58)] [added: (37)] | | | | | | [removed: (7)] [added: (58)] | | |

| (Loss) income before taxes | | | [removed: (1,625)] [added: (2,518)] | | | | | | [removed: 354] [added: (1,625)] | | | | | | [removed: 441] [added: 354] | | |

| Provision for income taxes | | | [removed: 239] [added: 45] | | | | | | [removed: 75] [added: 239] | | | | | | [removed: 74] [added: 75] | | |

| Net (loss) income | | | [removed: (1,864)] [added: (2,563)] | | | | | | [removed: 279] [added: (1,864)] | | | | | | [removed: 367] [added: 279] | | |

| Net income attributable to non-controlling interest | | | [removed: 7] [added: 4] | | | | | | [removed: 9] [added: 7] | | | | | | [removed: 4] [added: 9] | | |

| [(a)(3) EXHIBITS](#i2f76b3bf6f194379a886ecfc128c8f1b_199) | | | [112](#i2f76b3bf6f194379a886ecfc128c8f1b_199) | | |

*Goodwill Impairment Assessments - Nourish, Health & Biosciences and Pharma Solutions Reporting Units*

Key estimates and assumptions include revenue growth rates, gross margins, EBITDA margins, terminal growth rates, and discount rates.

Management determined that the carrying value of the Nourish reporting unit exceeded its fair value and recorded an impairment charge of $2.623 billion for the year ended December 31, 2023.

February 28, 2024

| Comprehensive loss | | | (2,261) | | | | | | (2,639) | | | | | | (446) | | |

| Trade receivables (net of allowances of $52 and $53, respectively) | | | 1,726 | | | | | | 1,818 | | |

| Goodwill | | | 10,635 | | | | | | 13,373 | | |

| Total Assets | | | $ | 30,978 | | | | | $ | 35,522 | |

| Net (loss) income | | | $ | (2,563) | | | | | $ | (1,864) | | | | | $ | 279 | |

| Net (loss) income | | | | | | | | | | | | | | | | | | | | | (2,567) | | | | | | | | | | | | | | | | | | | | | | | | 4 | | | | | | (2,563) | | |

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

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

| Balance at December 31, 2023 | | | 275,726,629 | | | | | | $ | 35 | | | | | $ | 19,874 | | | | | $ | (2,439) | | | | | $ | (1,896) | | | | | (20,438,094) | | | | | | $ | (963) | | | | | $ | 31 | | | | | $ | 14,642 | |

Correction of Prior Year Consolidated Financial Statements

The Company revised its Operating lease right-of-use assets from $636 million to $743 million and Operating lease liabilities from $565 million to $672 million on its Consolidated Balance Sheets as of December 31, 2022.

This reflects the correction of an error of $107 million related to a lease renewal that was not correctly reflected in the prior year period.

In addition, the Company revised its Goodwill from $13.355 billion to $13.373 billion and Deferred income tax liabilities from $2.265 billion to $2.283 billion on its Consolidated Balance Sheets as of December 31, 2022.

This reflects the correction of an error of $18 million related to deferred income tax liabilities as part of purchase accounting for the Merger with N&B.

The Company also corrected an error related to the fair value of derivative assets and liabilities of cross currency swaps.

As a result of this correction, the Company revised its Other assets from $699 million to $689 million, which included a $9 million impact to deferred income taxes, Other liabilities from $472 million to $491 million and Accumulated other comprehensive loss from $2.169 billion to $2.198 billion on its Consolidated Balance Sheets as of December 31, 2022.

The Company also revised its Cumulative translation adjustment from $(904) million to $(933) million on its Consolidated Statements of Shareholders’ Equity for the year ended December 31, 2022.

The Company also adjusted the disclosure of its total receivables factored for the years ended December 31, 2022 and 2021 from $1.030 billion to $1.451 billion and $668 million to $1.167 billion, respectively, and the outstanding principal amounts of receivables from $212 million to $157 million as of December 31, 2022.

The impacts of these corrections are also presented in the related footnotes.

unrelated financial institutions and accounts for the transactions as sales of receivables.

The Company sold approximately $1.752 billion, $1.451 billion and $1.167 billion of receivables in 2023, 2022 and 2021, respectively, under the Company’s own factoring agreements and customer sponsored factoring agreements.

Under the Company’s own factoring agreements for which the Company has continued responsibility to collect receivables and provide to its sponsor, it sold approximately $843 million, $547 million and $197 million of receivables in 2023, 2022 and 2021, respectively.

The Company also considers current and anticipated future conditions of the general economy in the determination of allowances, including significant aspects of a geographic location and the industries in which the Company operates.

The Company’s general allowance for credit losses is calculated using a loss rate model that is primarily based on historical write-off experiences and applied to trade receivables.

As necessary, additional reserves are established based on other factors, such as aging of receivables, customer credit quality and account collectability and country risk.

These allowances are reviewed and approved by the Regional and Global Credit committees.

(2)Bad debt expense included approximately $13 million related to expected credit losses on receivables from certain customers in Egypt, offset by approximately $8 million of reversals of allowances on receivables from customers located in Russia and Ukraine.

The Company will continue to evaluate its credit exposure related to Egypt, Russia and Ukraine.

| *(DOLLARS IN MILLIONS)* | | | 2023 | | | | | | 2022 | | |

Interest incurred during the construction period of certain property, plant and equipment is capitalized until the underlying assets are placed in service, at which time straight-line amortization of the capitalized interest begins over the estimated useful lives of the related assets.

Capitalized interest was approximately $17 million, $13 million and $9 million for the years ended December 31, 2023, 2022 and 2021, respectively.

The Israel-Hamas War

The Company maintains operations in Israel and, additionally, exports products to customers in Israel from operations outside the region.

The Company will continue to evaluate the current events and any potential impacts related to this matter, but does not expect there to be a material impact to its Consolidated Financial Statements.

The Russia-Ukraine War

| [(a)(3) EXHIBITS](#i03de90bde21b4b93bcea41cbf259f7f5_202) | | | [111](#i03de90bde21b4b93bcea41cbf259f7f5_202) | | |

*Interim Goodwill Impairment Assessment - Health & Biosciences Reporting Unit*

February 27, 2023

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

| Comprehensive (loss) income | | | (2,610) | | | | | | (446) | | | | | | 386 | | |

| Receivables: | | | | | | | | | | | |

| Trade | | | 1,871 | | | | | | 1,952 | | |

| Allowance for doubtful accounts | | | (53) | | | | | | (46) | | |

| Goodwill | | | 13,355 | | | | | | 16,414 | | |

| Maturity of net investment hedges | | | — | | | | | | — | | | | | | (14) | | |

| Proceeds from life insurance contracts | | | — | | | | | | — | | | | | | 2 | | |

| Proceeds from issuance of stock in connection with stock options | | | — | | | | | | 9 | | | | | | — | | |

| Balance at December 31, 2019 | | | 128,526,137 | | | | | | $ | 16 | | | | | $ | 3,823 | | | | | $ | 4,118 | | | | | $ | (717) | | | | | (21,738,838) | | | | | | $ | (1,023) | | | | | $ | 12 | | | | | $ | 6,229 | |

| Net income | | | | | | | | | | | | | | | | | | | | | 363 | | | | | | | | | | | | | | | | | | | | | | | | 1 | | | | | | 364 | | |

Certain reclassifications have been made to the prior periods’ financial information in order to conform to the current period’s presentation.

The Company elected to change its fiscal year end in connection with the Merger with N&B to align the Company’s fiscal year with N&B’s.

The 2022, 2021 and 2020 fiscal years were 52 week periods.

For ease of presentation, December 31 is used consistently throughout the financial statements and notes to represent the period-end date.

For the 2022 and 2021 fiscal years, the actual closing dates were December 31 and for the 2020 fiscal year, the actual closing date was January 1.

The Company sold approximately $1.030 billion, $668 million and $351 million of receivables in 2022, 2021 and 2020, respectively.

Regional and Global Credit committees review and approve specific customer allowance reserves.

The allowance for expected credit losses is primarily based on two primary factors: i) the aging of the different categories of trade receivables, and ii) a specific reserve for accounts identified as uncollectible.

The Company also considers current and future economic conditions in the determination of the allowance.

(1)The adjustment to allowances for bad debts was a result of purchase price allocation related to the Merger with N&B.

In November 2021, the FASB issued ASU 2021-10, “Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.” The ASU requires annual disclosures about transactions with a government that are accounted for by applying a grant or contribution accounting model by analogy.

This guidance is effective for all entities for annual periods beginning after December 15, 2021 and early adoption is permitted.

This guidance was adopted by the Company as of January 1, 2022 using the prospective method of adoption.

In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers.” The ASU is intended to provide specific guidance on how to recognize and measure acquired contract assets and liabilities from revenue contracts in a business combination.

An acquirer needs to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers.

At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.

To achieve this, an acquirer may assess how the acquiree applied Topic 606 to determine what to record for the acquired revenue contracts.

The Company early adopted ASU 2021-08 during the second quarter of 2022.

As part of the Frutarom Integration Initiative, the Company expects to close approximately 30 manufacturing sites with all closures targeted to occur by the end of 2023.

Total costs for the program are expected to be approximately $42 million including cash and non-cash items.

2017 Productivity Program

In connection with 2017 Productivity Program, the Company recorded $24 million of charges related to personnel costs and lease termination costs since the program's inception.

As of December 31, 2020, the program was completed.

For 2022, 2021 and 2020, the Company incurred total charges of approximately $4 million primarily related to the severance costs in connection with the closure of a facility in Germany.

Movements in severance-related accruals during 2020, 2021 and 2022 are as follows:

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

| | | | Title: | | | *Executive Vice [removed: President and] [added: President,] Chief Financial & Business Transformation Officer* | | |

Dated: February [removed: 27, 2023][added: 28, 2024]

| /s/ [removed: Frank Clyburn] [added: J. Erik Fyrwald] | | | | | | Chief Executive Officer and Director (Principal Executive Officer) | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Glenn Richter | | | | | | Executive Vice [removed: President and] [added: President,] Chief Financial & Business Transformation Officer (Principal Financial Officer) | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Beril Yildiz | | | | | | Senior Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer) | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ [removed: Dale F. Morrison] [added: Roger W. Ferguson, Jr.] | | | | | | Chairman of the Board, Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Kathryn J. Boor | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Barry A. Bruno | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Mark [added: J.] Costa | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| Mark [added: J.] Costa | | | | | | | | | | | | | | |

| /s/ Carol Anthony (John) Davidson | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ John F. Ferraro | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Christina Gold | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Gary Hu | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| /s/ Dawn C. Willoughby | | | | | | Director | | | | | | February [removed: 27, 2023] [added: 28, 2024] | | |

| | | | For the Year Ended December 31, [removed: 2020] [added: 2023] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Allowance for doubtful accounts | | | $ | [removed: 16] [added: 53] | | | | | $ | [removed: 6] [added: 9] | | | | | $ | — | | | | | $ | [removed: (1)] [added: (11)] | | | | | $ | [removed: —] [added: 1] | | | | | $ | — | | | | | $ | [removed: 21] [added: 52] | |

| Valuation allowance on credit and operating loss carryforwards and other net deferred tax assets | | | [removed: 204] [added: 262] | | | | | | [removed: 35] [added: 76] | | | | | | — | | | | | | — | | | | | | [removed: 18] [added: (23)] | | | | | | [removed: —] [added: 9] | | | | | | [removed: 257] [added: 324] | | |

| J. Erik Fyrwald | | | | | | | | | | | | | | |

| /s/ Kevin O’Byrne | | | | | | Director | | | | | | February 28, 2024 | | |

| Kevin O’Byrne | | | | | | | | | | | | | | |

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

| Frank Clyburn | | | | | | | | | | | | | | |

| Dale F. Morrison | | | | | | | | | | | | | | |

| /s/ Edward D. Breen | | | | | | Director | | | | | | February 27, 2023 | | |

| Edward D. Breen | | | | | | | | | | | | | | |

| /s/ Roger W. Ferguson, Jr. | | | | | | Director | | | | | | February 27, 2023 | | |

| /s/ Matthias Heinzel | | | | | | Director | | | | | | February 27, 2023 | | |

| Matthias Heinzel | | | | | | | | | | | | | | |

| /s/ Stephen Williamson | | | | | | Director | | | | | | February 27, 2023 | | |

| Stephen Williamson | | | | | | | | | | | | | | |