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Segment Information | 9 Months Ended
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Sep. 30, 2023
Segment Reporting [Abstract] |
Segment Information | SEGMENT INFORMATION The Company is organized into four reportable operating segments: Nourish, Health & Biosciences, 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 segments. Nourish is comprised of three business units, Ingredients, Flavors and Food Designs, with a diversified portfolio across natural and plant-based specialty food ingredients, flavor compounds, and systems 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 blends and systems that combine key ingredients tailored to IFF customers’ specific needs. 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 five business units, Health, Cultures & Food Enzymes, Home & Personal Care, Animal Nutrition and Grain Processing, 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 business unit’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. Scent is comprised of (1) Fragrance Compounds, which are ultimately used by IFF’s 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 fragrance compounds; and (3) Cosmetic 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 a vast portfolio, including cellulosics and seaweed-based pharmaceutical excipients, used to improve the functionality and delivery of active pharmaceutical ingredients, including controlled or modified drug release formulations, and enabling the development of more effective pharmaceutical finished dosage formats. Pharma Solutions excipients are used in prescription and over-the-counter pharmaceuticals and dietary supplements. Pharma Solutions products also serve a variety of other specialty and industrial end-uses including coatings, inks, electronics, agriculture and consumer products. Reportable segment information was as follows:
| Three Months Ended |  | Nine Months Ended
| September 30, |  | September 30,
(DOLLARS IN MILLIONS) | 2023 |  | 2022 |  | 2023 |  | 2022
Net sales: |  |  |  |  |  |  |
Nourish | $ | 1,449 |  |  | $ | 1,703 |  |  | $ | 4,666 |  |  | $ | 5,252 |
Health & Biosciences | 518 |  |  | 512 |  |  | 1,553 |  |  | 1,838 |
Scent | 615 |  |  | 591 |  |  | 1,815 |  |  | 1,756 |
Pharma Solutions | 238 |  |  | 257 |  |  | 742 |  |  | 750 |
Consolidated | $ | 2,820 |  |  | $ | 3,063 |  |  | $ | 8,776 |  |  | $ | 9,596 |
Segment Adjusted Operating EBITDA: |  |  |  |  |  |  |
Nourish | $ | 178 |  |  | $ | 287 |  |  | $ | 567 |  |  | $ | 981 |
Health & Biosciences | 150 |  |  | 137 |  |  | 426 |  |  | 513 |
Scent | 131 |  |  | 119 |  |  | 353 |  |  | 328 |
Pharma Solutions | 47 |  |  | 69 |  |  | 173 |  |  | 192 |
Total | 506 |  |  | 612 |  |  | 1,519 |  |  | 2,014 |
Depreciation & Amortization | (292) |  |  | (293) |  |  | (855) |  |  | (897) |
Interest Expense | (110) |  |  | (83) |  |  | (337) |  |  | (232) |
Other Income, net | 19 |  |  | 33 |  |  | 34 |  |  | 43 |
Restructuring and Other Charges (a) | (2) |  |  | 4 |  |  | (61) |  |  | (5) |
Impairment of Goodwill (b) | — |  |  | (2,250) |  |  | — |  |  | (2,250) |
Impairment of Long-Lived Assets (c) | — |  |  | — |  |  | — |  |  | (120) |
Acquisition, Divestiture and Integration Related Costs (d) | (42) |  |  | (57) |  |  | (118) |  |  | (167) |
Strategic Initiatives Costs (e) | (6) |  |  | (1) |  |  | (28) |  |  | (1) |
Regulatory Costs (f) | (13) |  |  | — |  |  | (32) |  |  | — |
Other (g) | (1) |  |  | — |  |  | 1 |  |  | (5) |
Income (Loss) Before Taxes | $ | 59 |  |  | $ | (2,035) |  |  | $ | 123 |  |  | $ | (1,620) |
_______________________
(a) | For 2023 and 2022, represents costs primarily related to severance as part of the Company's restructuring efforts. |
(b) | Represents costs related to the impairment of goodwill in the Health & Biosciences reporting unit. |
(c) | Represents costs related to the impairment of intangible and fixed assets of an asset group that operated primarily in Russia. |
(d) | For 2023 and 2022, primarily represents costs related to the Company's actual and planned acquisitions and divestitures and integration related activities primarily for N&B. These costs primarily consisted of external consulting fees, professional and legal fees and salaries of individuals who are fully dedicated to such efforts. For 2023, acquisition costs primarily relate to earn-out adjustments. For the three months ended September 30, 2023, business divestiture, integration and acquisition related costs were approximately $29 million, $12 million and $1 million, respectively. For the three months ended September 30, 2022, business divestiture, integration and acquisition related costs were approximately $31 million, $25 million and $1 million, respectively. For the nine months ended September 30, 2023, business divestiture, integration and acquisition related costs were approximately $70 million, $42 million and $6 million, respectively. For the nine months ended September 30, 2022, business divestiture, integration and acquisition related costs were approximately $91 million, $73 million and $3 million, respectively. |
(e) | Represents costs related to the Company's strategic assessment and business portfolio optimization efforts and reorganizing the Global Shared Services Centers, primarily consulting fees. |
(f) | Represents costs primarily related to legal fees incurred for the ongoing investigations of the fragrance businesses. |
(g) | For 2023, represents (losses) gains from sale of assets. For 2022, represents shareholder activist related costs, primarily professional fees, severance costs, including accelerated stock compensation expense, for certain executives who have been separated from the Company, and gains from sale of assets. |
Net sales, which are attributed to individual regions based upon the destination of product delivery, were as follows:
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(DOLLARS IN MILLIONS) | 2023 |  | 2022 |  | 2023 |  | 2022
Europe, Africa and Middle East | $ | 918 |  |  | $ | 1,030 |  |  | $ | 2,958 |  |  | $ | 3,258 |
Greater Asia | 670 |  |  | 701 |  |  | 2,031 |  |  | 2,200 |
North America | 853 |  |  | 939 |  |  | 2,668 |  |  | 3,006 |
Latin America | 379 |  |  | 393 |  |  | 1,119 |  |  | 1,132 |
Consolidated | $ | 2,820 |  |  | $ | 3,063 |  |  | $ | 8,776 |  |  | $ | 9,596 |
| Three Months Ended September 30, |  | Nine Months Ended September 30,
(DOLLARS IN MILLIONS) | 2023 |  | 2022 |  | 2023 |  | 2022
Net sales related to the U.S. | $ | 782 |  |  | $ | 920 |  |  | $ | 2,430 |  |  | $ | 2,799 |
Net sales attributed to all foreign countries | 2,038 |  |  | 2,143 |  |  | 6,346 |  |  | 6,797 |
No non-U.S. country had net sales greater than 7% of total consolidated net sales for the three and nine months ended September 30, 2023. No non-U.S. country had net sales greater than 6% of total consolidated net sales for the three and nine months ended September 30, 2022.

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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://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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