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Segment Information | 3 Months Ended
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Mar. 31, 2021
Segment Reporting [Abstract] |
Segment Information | SEGMENT INFORMATION During the first quarter of 2021, the Company completed its Merger with N&B. Following the Merger, the Company reorganized its reportable segments and is now organized into four reportable operating segments: Nourish, Health & Biosciences (“H&B”), Scent and Pharma Solutions. These segments align with the internal structure to manage these businesses. The Company’s Chief Operating Decision Maker regularly reviews financial information to allocate resources and assess performance utilizing these reorganized segments. Therefore, beginning in the three months ended March 31, 2021, the Company reported its financial performance based on its new segments. The Company recast certain prior period amounts to conform to the way the Company is internally managed and how the Company monitors segment performance during the current fiscal year. Prior to the realignment, the Company operated and managed its business as two operating and reportable segments: Taste and Scent. Nourish combines IFF’s Taste segment and N&B’s Food & Beverage segment. It is comprised of three platforms, Ingredients, Flavors and Food Designs, with a diversified portfolio across natural and plant-based specialty food ingredients, flavor compounds, and savory solutions and inclusions, respectively. Ingredients provide texturizing solutions to the food industry, food protection solutions used in food and beverage products, specialty soy and pea protein with value-added formulations, emulsifiers and sweeteners. Flavors provide a range of flavor compounds and natural taste solutions that are ultimately used by IFF's customers in savory products, beverages, sweets, and dairy products. Flavors also provide value-added spices and seasoning ingredients for meat, food service, convenience, alternative protein and culinary products. Food Designs provide savory solution products such as spices, sauces, marinades and mixtures. Additionally, Food Designs provide inclusion products that help with taste and texture by, among other things, combining flavorings with fruit, vegetables, and other natural ingredients for a wide range of food products, such as health snacks, baked goods, cereals, pastries, ice cream and other dairy products. Health & Biosciences is comprised of six platforms, Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition, Grain Processing and Microbial Control, with a biotechnology-driven portfolio of products that serve the health and wellness, food, consumer and industrial markets. Products within this portfolio range from enzymes, food cultures, probiotics and specialty ingredients for non-food applications. Health provides ingredients for dietary supplements, food and beverage, specialized nutrition and pharma. Cultures & Food Enzymes provide products that aim to serve the global demand for healthy, natural, clean label and fermented food for fresh dairy, cheese, bakery and brewing products. This is accomplished by providing IFF's customers with products that allow for extended shelf life and stability, which help to improve customers' products and performance. The platform's enzyme solution also allows IFF's customers to provide low sugar, high fiber and lactose-free dairy products. Home & Personal Care produces enzymes for detergents, cleaning and textile processing products in the laundry, dishwashing, textiles and industrials and personal care markets that help to enhance product and process performances. Animal Nutrition produces enzymes that help to improve the product and process performance of animal feed products, which aim to lessen environmental impact by reducing farm waste. Grain Processing produces enzymes for biofuel production and carbohydrate processing. Microbial Control produces biocides for controlling microbial populations for oil and gas production, home and personal care and industrial preservation markets. Scent is comprised of (1) Fragrance Compounds, which are ultimately used by our customers in two broad categories: Fine Fragrances, including perfumes and colognes, and Consumer Fragrances, including fragrance compounds for personal care (e.g., soaps), household products (e.g., detergents and cleaning agents) and beauty care, including toiletries; (2) Fragrance Ingredients, consisting of synthetic and natural ingredients that can be combined with other materials to create unique fine fragrance and consumer compounds; and (3) Cosmetic Active Ingredients, consisting of active and functional ingredients, botanicals and delivery systems to support our customers’ cosmetic and personal care product lines. Major fragrance customers include the cosmetics industry, including perfume and toiletries manufacturers, and the household products industry, including manufacturers of soaps, detergents, fabric care, household cleaners and air fresheners. Pharma Solutions is comprised of N&B’s historical Pharma Solutions business. Pharma Solutions is a producer of cellulosics and alginates-based pharma excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharma solutions. The primary market for Pharma Solutions is the oral dosage pharmaceuticals excipients market. Effective in the first quarter of 2021, management elected to change the profit or loss measure of the Company’s reportable segments from Segment Operating Profit to Segment Adjusted Operating EBITDA for internal reporting and performance measurement purposes. This change was made to enhance the transparency and visibility of the underlying operating performance of each segment. The Company's Chief Operating Decision Maker evaluates the performance of these reportable operating segments based on Segment Adjusted Operating EBITDA, which is defined as Income (Loss) Before Taxes before depreciation and amortization expense, interest expense, restructuring and other charges, net and certain non-recurring items. Prior period amounts have been recast to reflect these changes in segment profitability measures. Reportable segment information was as follows:
| Three Months Ended |  |
| March 31, |  |
(DOLLARS IN MILLIONS) | 2021 |  | 2020 |  |  |  |
Net sales: |  |  |  |  |  |  |
Nourish | $ | 1,308 |  |  | $ | 772 |  |  |  |  |
Health & Biosciences | 426 |  |  | 34 |  |  |  |  |
Scent | 569 |  |  | 541 |  |  |  |  |
Pharma Solutions | 162 |  |  | — |  |  |  |  |
Consolidated | $ | 2,465 |  |  | $ | 1,347 |  |  |  |  |
Segment Adjusted Operating EBITDA |  |  |  |  |  |  |
Nourish | $ | 270 |  |  | $ | 176 |  |  |  |  |
Health & Biosciences | 128 |  |  | 9 |  |  |  |  |
Scent | 128 |  |  | 118 |  |  |  |  |
Pharma Solutions | 43 |  |  | — |  |  |  |  |
Total | 569 |  |  | 303 |  |  |  |  |
Depreciation & Amortization | (242) |  |  | (81) |  |  |  |  |
Interest Expense | (65) |  |  | (32) |  |  |  |  |
Other Income (Expense), net | 7 |  |  | (11) |  |  |  |  |
Frutarom Integration Related Costs (a) | (1) |  |  | (4) |  |  |  |  |
Restructuring and Other Charges, net (b) | (4) |  |  | (5) |  |  |  |  |
Losses on sale of assets | — |  |  | (1) |  |  |  |  |
Shareholder Activism Related Costs (c) | (7) |  |  | — |  |  |  |  |
Employee Separation Costs (d) | (3) |  |  | — |  |  |  |  |
Compliance Review & Legal Defense Costs (e) | — |  |  | (1) |  |  |  |  |
N&B Inventory Step-Up Costs | (182) |  |  | — |  |  |  |  |
N&B Transaction Related Costs (f) | (89) |  |  | (5) |  |  |  |  |
N&B Integration Related Costs (g) | (37) |  |  | (10) |  |  |  |  |
(Loss) Income Before Taxes | $ | (54) |  |  | $ | 153 |  |  |  |  |
_______________________
(a) | Represents costs related to the integration of the Frutarom acquisition. For 2021, costs primarily related to performance stock awards. For 2020, costs primarily related to advisory services, retention bonuses and performance stock awards.
(b) | For 2021, represents costs primarily related to severance as part of the Company's restructuring efforts. For 2020, represents costs primarily related to the Frutarom Integration Initiative.
(c) | Represents shareholder activist related costs, primarily professional fees.
(d) | Represents costs related to severance liabilities, including accelerated stock compensation expense, for employees who have separated from the Company.
(e) | Costs related to reviewing the nature of inappropriate payments and review of compliance in certain other countries. In addition, includes legal costs for related shareholder lawsuits.
(f) | Represents transaction costs and expenses related to the transaction with N&B, primarily includes legal and professional fees.
(g) | Represents costs primarily related to advisory services for the integration of the transaction with N&B, primarily consulting fees.
Net sales, which are attributed to individual regions based upon the destination of product delivery, were as follows:
| Three Months Ended March 31, |  |
(DOLLARS IN MILLIONS) | 2021 |  | 2020 |  |  |  |
Europe, Africa and Middle East | $ | 873 |  |  | $ | 543 |  |  |  |  |
Greater Asia | 587 |  |  | 310 |  |  |  |  |
North America | 722 |  |  | 303 |  |  |  |  |
Latin America | 283 |  |  | 191 |  |  |  |  |
Consolidated | $ | 2,465 |  |  | $ | 1,347 |  |  |  |  |
| Three Months Ended March 31, |  |
(DOLLARS IN MILLIONS) | 2021 |  | 2020 |  |  |  |
Net sales related to the U.S. | $ | 654 |  |  | $ | 271 |  |  |  |  |
Net sales attributed to all foreign countries | 1,811 |  |  | 1,076 |  |  |  |  |
No non-U.S. country had net sales greater than 6% of total consolidated net sales for the three months ended March 31, 2021.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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