International Flavors & Fragrances · Risk factors

Prior heading: Regulatory, consumer and economic trends may result in significant costs or adversely affect demand for our products which may have a negative impact on our operating results and future growth.

Increased regulatory scrutiny or uncertainty towards artificial or other ingredients and certain chemical substances in the U.S. or other jurisdictions, may result in significant costs due to, among other things, delays in developing, manufacturing or marketing Many of new our products are ingredients or existing products, potential required changes components in business practices, higher compliance costs, or capital expenditures. See, also “—If we consumer products which are unable sold to comply with regulatory requirements and industry standards, including those regarding product safety, quality, efficacy and environmental impact, we could incur significant costs and suffer reputational harm which could adversely affect results of operations.” At end-users throughout the same time, changes in world. Demand for such consumer trends products depends on consumer preferences that are driven by increasing awareness a variety of health and wellness, as well factors, such as the development increasing use of new weight management pharmaceutical products such as glucagon-like peptide-1 (GLP-1) receptor agonists, may affect consumer behavior. In addition, there has been growing pressure by consumers, non-governmental organizations and, in some cases, governmental agencies for more products, increasing health and wellness awareness, greater transparency in product labeling (including related to biotechnology applications, such as gene editing and mapping). Our customers have been taking steps to address these trends, including by voluntarily providing product-specific ingredients disclosure, which may impact consumer behavior. These and other consumer and regulatory trends could affect the types and volumes of our ingredients labeling, and compounds that our customers include in their consumer product offerings and, therefore, the demand for our products, which, among other things, can impact our ability to meet certain productivity levels. Many of our products are ingredients in a wide assortment of global consumer products throughout the world. Changes changes in the global, regional or local economic conditions have, and may in the near future, adversely impact demand for consumer products at a regional or global level. Such parameters include, but are not limited to, increased (such as inflation, unemployment and underemployment, unemployment, salaries and wage rates stagnation, low growth rates, and impacts of supply disruptions, climate events, or geopolitical developments. See, also “—International economic, political, legal, compliance and business factors could negatively affect our financial statements, operations and growth.” Changes in demand by our customers, including by regulatory, consumer developments). At the same time, increased regulatory requirements, statements or economic trends, questions around certain of our products, may translate result in changed changes in customer orders by our customers, including reduced quantities or order cancellations. The delays in developing, manufacturing or marketing of new or existing products. Moreover, given that the timing or volumes in our customers’ orders are generally at our customers’ discretion. Customers discretion, customers may cancel, reduce or postpone orders with us on relatively short notice. notice. These and other consumer and regulatory trends may continue to affect the demand for our products and impact our ability to meet certain productivity levels. If we are unable to anticipate or react to these trends in a timely and cost-effective manner, our productivity, results of operations and future growth may be adversely affected.

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Prior heading: Our business is highly competitive, and if we are unable to compete effectively our sales and results of operations will suffer.

The markets in which we compete are highly competitive. We face vigorous intense global competition from companies throughout the world, including multi-national multinational and specialized companies active in flavors, fragrances, enzymes, pharmaceutical excipients, nutrition and specialty ingredients, across our product offerings, as well as consumer product companies which may develop developing their own competing products. For instance, in the flavors industry, we face increasing competition from ingredient suppliers that have expanded their portfolios to include flavor offerings. Some of our competitors specialize in one or more of our product sub-segments, while others participate in many of our product sub-segments. In addition, some of our global competitors may have more resources than we do or alternatives. Competitors may have greater resources, proprietary products that could permit technologies, or benefit from recent industry consolidation, enabling them to respond to changing business and economic conditions more effectively than we can. Moreover, there has been increased consolidation among our competitors, and such consolidation to customer or partnerships among our competitors may exacerbate these risks. market demands. As we continue to enter expand into adjacent markets, such as functional foods, specialty fine ingredients foods and nutrition products, we may face greater competition-related risks in these markets than with our other businesses. For example, the specialty fine ingredients market is more ingredients, we encounter additional risks, including price sensitive than the flavors market sensitivity and is characterized by relatively lower profit margins. Some fine ingredients products are less unique and more replaceable than competitors’ products. There is no assurance that operating margins will remain at current levels, which could substantially impact our business, operating results and financial condition. Competition in our business is based, Our ability to compete depends on, among other things, on innovation, product quality, regulatory compliance, pricing, quality of logistical efficiency, digital proficiency, customer service, the support provided by marketing and application groups, and understanding of consumers. It is difficult for us intellectual property protection. Failure to predict the timing, invest in growth, scale and success of new concepts, or adapt to technological advancements could erode our competitors’ actions competitive position. Increased competition, including aggressive pricing, may lead to lost sales, margin pressure, and reduced profitability. We may not be in these areas. In particular, a position to allocate the discovery and development of new products, protection appropriate level of our intellectual property investment in research and development efforts, due to other macroeconomic pressures, and retention of key employees are critical such investments may not yield expected returns due to poor execution or delays by our ability to effectively compete customers in launching relevant products, changing consumer trends, or disruptive competitor innovations. These factors are beyond our business. Advancement in technologies have also enhanced the ability control and could negatively impact our results of operations. Additionally, a significant portion of our competitors to develop substitutable products. Increased competition sales comes from a relatively small number of large multinational customers. In 2025, our 25 largest customers, a majority of which were multinational consumer products companies, collectively accounted for approximately 32% of our sales. Multinational customers have been facing their own competitive challenges, such as pressures by existing new smaller companies and specialty players that cater to or future competitors, are more adept at adjusting to the latest consumer trends, including aggressive price competition, could result towards natural products and clean labels, changes in the loss of sales, reduced pricing retail landscape (including e-commerce and margin pressure consolidation), and increased competition from private labels, which have resulted and may continue to result in decreased demand for our products. Multinational and increasingly middle market customers also rely on “core lists” of suppliers, requiring more favorable terms for inclusion, such as rebates, which could adversely impact affect our margins. If we fail to secure or maintain such “core list” status, our sales and profitability. Failing margins could be adversely affected. Beyond large multinational customers, our customer base continues to identify be diverse. Based on fiscal-year 2025 sales, we had approximately 20,000 customers, approximately 69% of which are small and make capital expenditures to achieve growth opportunities, being unable mid-sized companies. This diversity requires ongoing adjustments to make new concepts scalable, or failing product development, manufacturing, distribution, marketing, and infrastructure to effectively support varied go-to-market models. Managing a geographically and timely reinvest in our business operations, could result in the loss of competitive position operationally diverse portfolio adds complexity, and failure to maintain relationships or gain market share with these customers could adversely affect our financial condition or results of operations.growth.

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Prior heading: If we are unable to successfully execute our strategic transformation, including our portfolio optimization, it may have a material adverse effect on our business, results of operations and financial condition.

As a part of our ongoing strategic transformation and our portfolio optimization strategy, optimization, we have completed several divestitures in recent years and continue to evaluate and work towards divestitures or additional transactions, including strategic transactions. For instance, during the second and third quarter of 2024, we completed divestitures of our Cosmetic Ingredients business and our Flavors and Essences UK business, respectively. Additionally, during March 2024 and October 2024, we entered into agreements alternatives for the sale of our Pharma Solutions business disposal group and our nitrocellulose business, respectively, which are each expected to close in the second quarter of 2025. Strategic Food Ingredients segment. Successfully completing such transactions are generally dependent depends on many factors which we cannot fully beyond our control, including, among other things, relevant such as industry dynamics or and macroeconomic conditions, the third party interest of potential buyers and their ability to finance such transactions (which is also impacted by general economic and financial conditions and market dynamics), the performance of the financing, underlying assets or business, requisite asset performance, regulatory approvals, and related separation activities. Implementing entanglements with the rest of our businesses. Moreover, such transactions can be are complex, costly and time-consuming and may also result in additional expenses costly, and unanticipated issues, such as competitive responses, employee turnover or impact on our commercial relationships. For instance, divestitures involve separation costs time-consuming, and efforts that may divert management’s and employees’ attention and also result in attention, lead to significant stranded costs and dis-synergies separation costs, and dis-synergies, risk of assuming liabilities, failure to meet business case objectives for the Company. Moreover, divestitures often entail post-closing third-party agreements, such transactions, as supply arrangements (including with “take or pay” provisions), product well as employee turnover, and negative impacts on customer and supplier relationships. Strategic transactions often involve post-closing obligations under supply, manufacturing, cross-licensing, transitional, licensing, or site services transitional service agreements (“ancillary agreements”), that may bind the Company us for certain periods after closing, extended periods, during which market or Company conditions may change. Any failure change. At the same time, we also continue to enter into, complete or potential delays in closing any pursue collaborations, joint ventures, partnerships, acquisitions to enhance innovation, expand our product portfolio, and support growth, but these transactions also involve significant risks. Negotiating and implementing such transaction, any failure arrangements is similarly complex and time-consuming, and we may fail to close deals, agree on favorable terms, or avoid potential post-closing disputes, any disputes. Revenue from collaborations depends on our partners’ performance, and these arrangements may not lead to timely or successful product development or commercialization. Acquisitions present additional risks, including integration challenges, failure to mitigate achieve anticipated synergies, cost savings, or manage the associated costs of revenue growth, and exposure to incremental liabilities or contractual obligations to minority investors. We may also incur impairment charges if acquired businesses underperform. Failure to enter into such transactions, transactions or obtain appropriate complete them on time, manage costs, or negotiate favorable terms for ancillary agreements, could result in significant costs, adversely affect the successful implementation of increase expenses, hinder our portfolio optimization strategy as well as strategy, and negatively affect our financial condition, including our leverage ratio. condition. Even if such initiatives are implemented successfully, the full when successful, expected benefits may not be realized or may not be realized within the desired timeframe. The take longer than anticipated, and failure to meet the these challenges involved in implementing our strategic transformation could result in a material adverse materially impact on our business, business and results of operations and financial condition.operations.

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Prior heading: Our performance may be adversely impacted if we are not successful in managing our inventory and/or working capital balances.

We evaluate our manage inventory balances of materials based on shelf life, expected sourcing levels, known uses and anticipated demand based on forecasted customer order activity and changes in our product/sales mix. Efficient demand. Effective inventory management control is a key component of our business success, financial returns and profitability. To be successful, we must maintain sufficient inventory levels and an appropriate product/sales mix critical to meet our customers’ demands, meeting customer needs without allowing those levels to increase to such an extent that the costs associated with storing and holding other inventory adversely impact our financial results. incurring excess storage costs. If our buying decisions do not we fail to accurately predict sourcing levels, customer trends or our expectations about forecast customer needs are inaccurate, we demand, it may have to take unanticipated markdowns or charges lead to dispose of the excess or obsolete inventory, which can adversely requiring markdowns or disposal charges that negatively impact our financial results. Current supply-chain related issues Supply chain disruptions and other global risks could also lead to cause raw material shortages and inventory depletion, which may adversely affect our operations. See “—Supply chain disruptions, geopolitical developments, climate-change events, natural disasters, public health crises, trade wars, and other events may adversely affect our productivity, business, our procurement of raw materials, and our development, manufacturing, distribution or sale of our products, and thus may impact our business and financial results.” Additionally, we believe while excess inventory levels of raw materials with a short shelf life in our manufacturing facilities subjects us to the risk of increased inventory shrinkage. lives may increase shrinkage risk. If we are not successful in managing our inventory balances and shrinkage, balances, our results of operations and cash flows from operations may be negatively affected. We affected. Relatedly, we also sell certain accounts receivable on a non-recourse basis to unrelated financial institutions under “factoring” agreements, some of which are sponsored by certain customers. Should we choose not to participate, or if these programs were no longer available, it could reduce our cash flows from operations in the period in which the arrangement ends.ends. Similarly, our failure to maintain proper control over collection of receivables and payment of payables could similarly impact our cash flows and results of operations.

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Prior heading: 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 action lawsuits.

From We are or may be, from time to time we are time, involved in a number of legal claims, regulatory investigations, shareholder litigation and other litigation, including claims matters related to competition and antitrust, environmental issues, intellectual property, product liability, competition and antitrust, personal injury, environmental matters commercial disputes, employment and labor matters, false or deceptive advertising, and indirect taxes. For instance, product liability claims may arise due to the fact that we supply products from supplying ingredients to the food and beverage, functional food, pharma/nutraceutical beverage, and personal care industries. Our manufacturing and other industries, while the operation of our facilities may expose us to environmental claims, claims of and personal injury (including from alleged exposure to facilities’ emissions), claims, regulatory investigations and potential fines. In addition, actions, and fines. 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 also increase litigation risk. As further described in our consolidated financial statements, we are currently subject to antitrust and competition investigations in the United States a number of countries and Europe, as well as class action lawsuits against us and certain of our competitors in the United States U.S. and Canada, Canada alleging violations of antitrust laws violations by us 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 certain of these investigations our competitors. Additional suits and lawsuits. Antitrust investigations may follow, and competition enforcement outcomes are uncertain. Enforcement actions by the U.S. Department of Justice and the U.S. Federal Trade Commission and other regulators may could result in regulators imposing significant fines, penalties, or restrictions on a company’s business practices in a manner that may significantly impact its results of operations. Our results of operations, liquidity or financial condition could be restrictions, adversely impacted by unfavorable outcomes in these or other pending or future claims, disputes, investigations or litigation. Poor affecting results of operations, liquidity 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. In addition, in light of our product offerings into functional food, nutraceuticals, natural antioxidants or pharmaceutical products, we may also be subject to claims of false or deceptive advertising claims relating to the efficacy, health benefits or other performance attributes of such offerings in the U.S., Europe and other foreign jurisdictions in which we offer these types of products. These claims can arise as a result of function claims, health claims, nutrient content claims and other claims that impermissibly suggest such benefits or attributes for certain foods or food components. The cost of defending these claims or our obligations for direct damages condition, and indemnification if we were found liable could adversely affect our results of operations. overall business. Our insurance coverage may not be adequate insufficient to protect us from potential material expenses related to pending and future claims and our current levels of insurance may not be available in the future unavailable at commercially reasonable prices. Any of cost in the future. Unfavorable outcomes in these factors or future matters could adversely materially affect our profitability and results of operations.financial condition.

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Prior heading: Supply chain disruptions, geopolitical developments, climate-change events, natural disasters, public health crises, tariffs and trade wars, and other events may adversely affect our business, our procurement of raw materials, and our development, manufacturing, distribution or sale of our products, and thus may impact our productivity, business and financial results.

We, We operate in a complex global environment and we are exposed, directly or indirectly through our suppliers, are subject to risks, inherent in agriculture, global development, manufacturing, distribution or sale on a global scale, of goods, including natural disasters, global or local health crises, international conflicts, terrorist acts, agricultural products. These include trade wars (including tariffs and duties), sanctions, geopolitical developments, trade wars, industrial accidents, supply chain disruptions, environmental events, climate change events (including severe weather events), strikes natural disasters and other public health crises, terrorism, industrial accidents, labor disputes, disruptions in supply chain or information systems, political or economic crises (such as uncertainty related to protracted U.S. federal government funding negotiations or inflation), disruption or loss of key research or manufacturing sites, product quality control, safety and environmental compliance issues, regulatory requirements, crises, as well as other external factors over which neither our suppliers nor we have control. We use many different Our products depend on a wide range of raw materials for our business, sourced globally, such as essential or vegetable oils, extracts and concentrates derived from fruits, vegetables, flowers, woods and other botanicals, botanical extracts, animal products, raw fruits, organic chemicals and petroleum-based chemicals, as well as, gelatin, glycols, cellulose products and cellulose processed grains, guar, locust bean gum, organic vegetable oils, peels, saccharides, seaweed, soybeans, and sugars and yeasts. In connection with our manufacturing of our products, we often rely on third-party suppliers for such raw materials. If our suppliers are unable to supply us with sufficient quantities of ingredients and raw materials to meet our needs, we would need to seek alternative sources of such materials (which may result in higher procurement costs) or pursue our own production of such ingredients or direct acquisition of such raw materials. However, for chemicals. For certain of our ingredients and raw materials, we rely on a limited number of suppliers where there are not readily available alternatives. If we are unable to obtain or manufacture alternative sources of such ingredients or raw materials at a similar cost, we may seek to (i) reformulate our products and/or (ii) increase pricing to reflect the higher supply cost. To mitigate our sourcing risk, we maintain strategic stock levels for critical items. However, if we do not accurately estimate the amount of raw materials that will be used for the geographic region in which we will need these materials or competitively price our products, our margins could be adversely affected. Environmental events may affect our facilities, customers or suppliers and the availability, quality and pricing of raw materials. There is growing evidence that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather and precipitation patterns, growing and harvesting conditions (both on land and in the sea), and the frequency and severity of extreme weather and natural disasters, such as floods, wildfires, droughts and water scarcity. Environmental or climate change events may disrupt our facilities and have a negative impact on, among other things, crop size and quality, supply chain, energy or transportation costs, affecting as a result our manufacturing processes and the availability, quality, and pricing of affected raw materials. Climate related policies and energy production restrictions and pricing, or the lack or failure of such policies and restrictions, may exacerbate such negative impacts. As we source many of our raw materials globally, we are subject to additional risks. Supply chain disruptions, as demonstrated by the disruptions related to the COVID-19 pandemic, may result in increased costs, delays or limited availability related regions, making us vulnerable to raw materials, strain on shipping and transportation resources, and higher energy prices, which can negatively impact our margins shortages, delays, and operating results. Energy prices (including the price of fuel and alternative energy sources) are in and of themselves subject to significant volatility caused by, among other things, market fluctuations, supply and demand changes, currency fluctuations, production and transportation disruptions, and other world events, as well as geopolitical developments volatility. Tariffs and climate change related conditions discussed above. In addition, the imposition of or changes in customs, tariffs, other trade protection measures (including with respect to China, Canada, Mexico, European Union or other jurisdictions by the U.S.), import or export licensing requirements, restrictions, sanctions, and sanctions on trade with certain countries, imposed by the U.S. or other countries as well as related retaliatory actions or ensuing uncertainty related to such trade measures, could adversely affect demand for our products, our cost or ability to import raw materials or export our products to other markets. Similarly, geopolitical developments, such as the US-China relations, escalating tensions between China and Taiwan, the (e.g., U.S.-China relations, Russia-Ukraine 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 also impact, among other things, certain raw material, energy and transportation costs, certain of our suppliers, distributors, customers and local markets, global and local macroeconomic conditions, and cause further conflicts), as well as supply chain disruptions (including by delaying the delivery times of raw materials needed for our business or our products to customers). We maintain disruptions, along with energy price fluctuations, may further strain operations in both Russia and Ukraine margins. Environmental and export products to customers in Russia climate-related events, including severe weather, droughts, floods, and Ukraine from operations outside the region. As the Russia-Ukraine war has prolonged, it continues to water scarcity, can also impact our sourcing of certain raw materials for future years, crop yields, transportation, and we continue to look for alternative suppliers energy costs, increasing sourcing challenges or adjust the types of raw materials used in our products. In response to the events in Ukraine, the Company has limited the production and supply of ingredients in and to Russia and Belarus to only those that meet the essential needs prices of people, including food, hygiene and medicine, and as a result, our operating performance in Russia remains lower compared to previous years and may not reverse in the near future. The Israel-Hamas war and wider Middle East developments have impacted and may continue to impact our operations in Israel and certain input costs. Many of our customers, local markets and suppliers. While we operate research and development, manufacturing and distribution facilities throughout the world, many of these facilities are extremely specialized and certain of our research and development or creative laboratories facilities sites are uniquely situated to support our research highly specialized, and development efforts while certain of our manufacturing facilities some are the sole location where a specific ingredient for producing certain products or product is produced. If uniquely situated to support our research and development, manufacturing and distribution facilities were disrupted, innovation efforts, respectively. Disruptions affecting these sites, including due to the risks outlined above, the cost of relocating or replacing these activities or reformulating these ingredients or products may be substantial, which could result in production or development delays lead to costly delays, reformulations, or otherwise have an adverse effect on our margins, operating results relocation expenses. While we maintain strategic stock levels of certain raw materials and future growth. seek alternative sources when needed, these measures may not fully mitigate risks. If we are not able to successfully mitigate such risks, we could experience disruptions in production or increased costs, production, which may result in decrease in our gross margin or reduced sales, and have a material adverse effect on our productivity, business, results of operations and financial condition. Increases in input costs, including raw materials, transportation, and energy, have been exacerbated by recent inflationary and tariff pressures. If we are unable to increase the prices of our products to our customers to offset increased input cost trends, or if we are unable to achieve cost savings to offset such cost increases, our profits and operating results could be adversely affected. Our ability to price our products competitively is critical to maintain and grow our sales. However, possible increases in prices of our products to customers or the impact of the broader macroeconomic environment on our customers may continue to lead to declines in demand and sales volumes. We may also be unable to accurately predict or hedge cost fluctuations or anticipate the impact of price increases, while competitors may adapt more effectively. Persistent cost volatility could lead customers to seek alternative suppliers or reformulate products, resulting in long-term sales declines or loss of market share. Additionally, inflationary or deflationary trends may affect the financial health of customers and suppliers, further impacting demand and supply. These factors are beyond our control and may materially affect our business and financial condition.

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Prior heading: 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, productivity, business or results of operations.

We rely on information technology systems, including some managed by third-party providers, to conduct business and to support our critical business processes, including those relating to product formulas, processes such as product development, manufacturing, sales, order and invoice processing, production, distribution, internal communications and communications with third parties throughout the world, processing transactions, summarizing and reporting results of operations, complying with financial reporting, regulatory (including SEC), tax or legal requirements, and collecting and storing customer, supplier, employee compliance, and other stakeholder information. data storage. To address the risks to our information technology systems and the associated costs, mitigate risks, we maintain an information security program that includes updating technology and information security policies and with updated technology, policies, controls, cybersecurity insurance, cybersecurity governance and compliance, employee/consultant awareness governance, training, table-top exercises, logging and monitoring monitoring, and routine testing of our information technology systems. We believe that testing. While these preventative actions provide adequate measures of protection against information security breaches/incidents and generally reduce our mitigate cybersecurity risks, however, cybersecurity incidents, data breaches and operational disruptions potential threats are constantly evolving, evolving and becoming more sophisticated, including through the increasing use of AI, and conducted by groups and individuals with a wide range diverse group of expertise and motives, including actors, such as foreign governments, cyber terrorists, cyber criminals, malicious employees and other insiders and outsiders. Additionally, continued geopolitical turmoil, including the ongoing conflicts in the Middle East and between Russia and Ukraine, heightened the risk of cyber incidents. We and our third-party providers are subject to the The risks posed by such incidents, which and potential threats can take many forms, including such as code anomalies, “Acts of God,” data leakage, hardware or software failures, human errors, cyber extortion, password theft or introduction of viruses, malware and ransomware, including through phishing emails. emails. Geopolitical conflicts, such as those in the Middle East and Russia-Ukraine, further heighten cyber risk. A significant IT disruption to or breach of our information technology systems or those of our third party providers could result in the loss of confidential business, customer, supplier or employee information, litigation or fines, data, operational downtime, litigation, regulatory penalties, damages, reputational harm, and may require substantial investigations, repairs or replacements or impact our ability to summarize and report financial results in a timely manner, affecting our productivity or resulting in significant financial, legal and relational costs and potentially harming our reputation and adversely impacting our operations, customer service remediation costs. Increased reliance on cloud computing, AI, and results of operations. Additionally, the increasing use hybrid work arrangements adds complexity and evolution of technology, risk, including cloud-based computing and AI, may lead to potential loss or through unauthorized disclosure access or use disclosure of personal data and proprietary information that was collected, used, stored, or transferred with respect to our business, and to dissemination or destruction of confidential information, unintentionally or otherwise, stored in our or in our third-party providers’ systems or through use of AI, which may significantly increase our business and information security costs, and expose us to reputational harm, penalties, or legal liability. As we complete integration of systems information. Integration of prior acquired companies with IFF’s systems and prepare for the announced divestitures, we reduce our risk profile. Additionally, an information security or data breach could require us to devote significant management and financial resources to address the problems created, and, as a result of the private rights of action provided for under the European Union’s General Data Protection Regulation (the “GDPR”), the California Consumer divestitures also create transitional vulnerabilities. Privacy Act (the “CCPA”) and other laws relating to data protection and privacy in other jurisdictions, in the event of such breaches, additional as GDPR and CCPA that allow private actions increase our litigation against us may result. These types of adverse impacts could also occur in the event the confidentiality, integrity or availability of company, customer, supplier or employee information are compromised due exposure related to a data loss by us or a trusted third party. We or the third parties with which we share information may not discover any such incidents and/or loss of information for a significant period of time after the incident occurs. In addition, our hybrid and remote work arrangements could introduce operational risk, including cybersecurity and IT systems management risks. potential cyber incidents. We have experienced threats to our data and our systems and although we have not experienced a material incident to date, there can be no assurance that these measures will prevent or limit the impact of a future incident. Additionally, while we have insurance coverage designed to address certain aspects of cyber risks in place, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

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Prior heading: We are subject to risks associated with the potential use of AI in our own operations and by third-party partners that we may engage with.

IFF has We have been increasingly using or considering using AI tools in its our operations, research and development and other areas. Many of our third-party partners also utilize or are considering utilizing certain AI tools. IFF We may be exposed to AI-related risks in cases where IFF utilizes AI in connection with certain business activities now or in the future, in cases where, whether known or unknown to IFF, IFF personnel, use AI for we, our business or at IFF locations, employees, or in cases where our third-party third party partners, in each case whether or not known to IFF, us, use AI tools, as well as in their business activities (which cases where we may not be in a position fail to control). adopt AI tools at a pace or breath as our competitors. The use of AI by us, our employees or any of our third-party partners may result in create risks, such as unauthorized disclosure of personal data, proprietary information and privacy risks, trade secrets, commercially sensitive or confidential information of IFF, our employees or our partners. Similarly, we may become, through the use of AI information, and unbeknownst to us, recipients potential receipt or users use of such information provided by other parties, third-party proprietary data, which may enable, among other things, third parties could lead to claim that we infringed on their intellectual property rights. Such unauthorized disclosures or uses of information can result, among other things, in reputational harm, loss of confidence by our customers or employees, penalties, litigation costs, or legal liability. Additionally, the use of disputes. AI may lead to the weakening or loss of intellectual property also weaken IP rights, where AI-generated inventions or creations may not be properly attributed to the rightful inventors, potentially resulting in additional disputes over intellectual property ownership and inventorship rights. Further, the The use of AI to draft patent applications may lead to inaccuracies or omissions in the applications, potentially resulting in weakened patent protection or possible outright rejection based on intellectual property ownership and inventorship. Analyses, inventorship. Separately, analyses, results or business processes relying on AI may also be deficient, inaccurate, or biased and we may fail to identify in a timely fashion or at all, if or to the extent that is the case. Furthermore, as discussed above, AI can exacerbate our amplify cybersecurity or and IT risks. See “—A significant data breach or other disruption to our information technology systems could disrupt our operations, risks and introduce compliance challenges as regulations evolve. Such risks may result in the loss of confidential information or personal data, and adversely impact our reputation, productivity, business or results of operations.” With new and evolving AI comes a continually changing AI information, litigation, regulatory environment, which may create additional compliance costs and risks. penalties, damages, reputational harm. At the same time, AI is already changing and has the potential to further significantly change the way we or and our competitors do business by, among other things, accelerating research and development, creating efficiencies, improving supply chain, productivity and other processes, customer experience, talent management and decision-making. Any failure to capitalize on the AI benefits to the same degree or with the same speed as our competitors may put us in a disadvantageous position and render our intellectual property portfolio less valuable. If we are unable to successfully manage these risks, it may have a material adverse effect on our business, results of operations and financial condition.position.

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Prior heading: Our success depends on attracting and retaining talented people within our business and our management team. Changes to management, including turnover of our top executives, and significant shortfalls in recruitment, retention or transition of employees or our management team could adversely affect our ability to compete and achieve our strategic goals.

Attracting, developing, and retaining talented employees employees, including our management team and senior employees, is essential to the successful delivery of our products and has become more difficult and costly in the current labor market. Furthermore, as we continue to focus on innovation, meeting our need for scientists productivity goals. Our ongoing strategic transformation initiatives, 2025 reportable segment reorganization and other professionals will increase corporate cost reallocations have impacted and may result in increased labor costs. The ability continue to attract and retain talented employees is critical in, among other things, meeting productivity goals as well as the development of new products impact employees’ roles and technologies, which is an integral component of our growth strategy. responsibilities. Competition for employees can be intense skilled labor particularly in scientific, tech and if specialized fields may pose a risk to continued business operations, or increased labor costs. If we are unable to successfully transition, integrate, motivate and reward our employees, we may not be able to retain them. If we are unable to retain our employees them or attract new employees in the future, employees. Thus, our ability to effectively compete with our competitors and to grow our business could be adversely affected. Changing worker and talent market expectations around flexible work models and relocation has also impacted our ability to retain talent. affected. 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 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. We can make no assurances that we would be able to properly manage any shift in focus or that any changes to our business would ultimately prove successful.

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Prior heading: Any impairment of our tangible or intangible long-lived assets, including goodwill, may adversely impact our profitability.

A significant portion of our assets consists of long-lived assets, including tangible assets such as our manufacturing facilities, and intangible assets, including goodwill and customer relationships. As a result of our acquisitions, including the acquisition of Frutarom and the N&B Transaction, as of December 31, 2024, 2025, we recorded approximately $15.525 had $14.3 billion of intangible assets and goodwill, including $4.289 billion of goodwill associated with primarily arising from the acquisition acquisitions of Frutarom and $11.817 billion of goodwill associated with the merger with the N&B Business, prior to the impact of impairment charges and business divestitures. N&B. Our results of operations and financial position in future periods could be negatively impacted should future impairments of our long-lived assets, including intangible assets or goodwill occur. At least annually, we assess goodwill for impairment. We test for impairment by comparing the estimated fair value of a reporting unit with its carrying amount. If the carrying amount of a reporting unit exceeds its estimated fair value, we record an impairment charge based on the difference between the two. Intangible assets with finite lives are also tested for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. Such events and changes in circumstances could include a sustained decrease in our market capitalization, increased competition or unexpected loss of market share, increased input costs beyond projections (for example due to regulatory or industry changes), our inability to recognize the anticipated benefits of acquisitions, unexpected business disruptions (for example due to a natural disaster, public health crises, crisis, such as pandemics or epidemics or loss of a customer, supplier, or other significant business relationship), acts by governments and courts, operating results falling short of projections, or significant adverse changes in the markets in which we operate. During operate. Effective January 1, 2025, our Nourish segment was restructured into two newly designated operating segments and reporting units: Taste and Food Ingredients. This change in management reporting necessitated the year ended December 31, 2024, we recorded reallocation of goodwill between the two reporting units and the performance of a goodwill impairment test both prior to and subsequent to the change. We recorded an impairment charge of $64 million $1.153 billion within the Food Ingredients operating segment as a result of the change in the Company’s segments, which is reflected in the Consolidated Statements of Income (Loss) and Comprehensive Loss. Income (Loss) during the year ended December 31, 2025. Any future restructuring or other changes in reporting may result in additional impairment charges. Refer to Part II, Item 7 and Note 1 and Note 12 to the Consolidated Financial Statements for additional information. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of reporting units requires us to make assumptions and estimates regarding our business performance, future plans, future annual net cash flows, income tax considerations, discount rates and growth rates based on industry, economic, regulatory conditions and other market factors. Moreover, management will make significant accounting judgments and estimates for the application of acquisition accounting under GAAP, and the underlying valuation models. IFF’s business, operating results and financial condition could be materially and adversely impacted in future periods if IFF’s accounting judgments and estimates related to these models prove to be inaccurate. To the extent any of our acquisitions, including the acquisitions of Frutarom and the N&B Business, businesses do not perform as anticipated and our underlying assumptions and estimates related to their fair value determination are not met, whether due to internal or external factors, the value of goodwill and other long-lived assets may be negatively affected and we may be required to record impairment charges. Effective January 1, 2025, our Nourish segment has been restructured into two newly designated operating segments: Taste and Food Ingredients. This change in management reporting necessitates the reallocation of goodwill between the two reporting units and the performance of a goodwill impairment test both prior to and subsequent to the change. While we have not yet completed our goodwill and long-lived assets impairment assessments required by this internal reporting structure, we anticipate incurring a material impairment charge in the first quarter of fiscal 2025, estimated to be in the range of $1.0 billion to $1.5 billion.charges.

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

Our indebtedness and related covenants could adversely affect our liquidity, flexibility, and cost of capital. As of December 31, 2024, 2025, our total debt was $8.977 approximately $5.994 billion. There may be circumstances in which required payments of Required principal and/or interest on our debt could adversely affect our cash flows, our operating results or our ability to return capital to our shareholders. In addition, our existing Revolving Credit Facility and Term Loan are also at variable interest rates, exposing us payments, pricing grids tied to potentially material interest rate risk at our current level of indebtedness. Furthermore, our degree of leverage could adversely affect our future credit ratings. If we are unable to maintain or improve our current investment grade rating or improve our leverage, it could adversely affect our future cost of funding, liquidity ratings, and access to capital markets. The Company does not have any rating downgrade triggers that would accelerate the maturity dates of its senior unsecured debt. However, any downgrade in financial covenants under our revolving credit rating may, depending on the extent of such downgrade, negatively impact facility could limit our ability to raise obtain additional debt capital, financing, invest in our liquidity and business, or return capital position, and may increase our cost to shareholders. A downgrade of borrowing for new capital raises. In addition, our existing Revolving Credit Facility and Term Loan have pricing grids that are based on credit rating, such that our cost of borrowing may ratings could increase if our public debt rating decreases. 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 Loan contain various covenants, limitations borrowing costs 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 reduce market access. A deterioration of the previous four fiscal quarters. On September 19, 2023, we entered into further amendments to our Revolving Credit Facility and Term Loan 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 the September 2023 amendments superseded the ratios and step downs set forth in prior amendments condition may lead to these credit facilities entered into additional restrictions, including limitations 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 share repurchases 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 Loan is subject to a mandatory prepayment provision whereby prepayments from certain asset sale proceeds must be used to pay down amounts outstanding thereunder. See Note 14 for additional information on the amendments to the debt agreements. Our current level of leverage could increase our vulnerability to sustained, adverse macroeconomic weakness, limit our ability to obtain further financing, 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 proceeds. If we operate and our ability are unable to pursue certain operational and strategic projects maintain compliance with covenants, manage maturities, or opportunities, including necessary investments into preserve investment grade ratings, our business or large acquisitions. Our level liquidity, financial condition, and cost of indebtedness, as well as a failure to comply with covenants under our debt instruments, capital could be adversely affect our business, results of operations and financial condition or our ability to return capital to our shareholders and any additional debt modifications, instruments or covenant reliefs may subject us to additional covenants and restrictions.affected.

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Prior heading: If we are unable to comply with regulatory requirements and industry standards, including those regarding product safety, quality, efficacy and environmental impact, we could incur significant costs and suffer reputational harm which could adversely affect results of operations.

The development, manufacture and sale of our Our products are subject to various regulatory requirements in each of the countries in which our products are developed, manufactured extensive and sold. In addition, we are subject to product safety evolving regulatory, safety, and compliance requirements (including potential site inspections) established by governments, non-governmental organizations, including industry or similar oversight bodies, or contractually by our customers, including across multiple jurisdictions. These requirements concerning govern product safety, quality development, manufacturing, labeling, marketing, and sale, and include standards related to product safety, quality, efficacy, environmental impacts (including packaging, energy and water use impact, sustainability, and waste management), animal welfare and other sustainability welfare. Compliance obligations may arise from government authorities, industry bodies, non-governmental organizations, or similar issues. Changes contractual commitments to regulations or the implementation of additional regulations, especially customers. Regulatory frameworks continue to expand and become more complex, particularly in certain highly regulated markets we are active in, such as regulatory markets, and may involve modernization of food safety laws, increased regulatory heightened scrutiny or uncertainty regarding of certain ingredients (including synthetic ingredients), and evolving standards and regulations affecting pharmaceutical excipients or in reaction to new or next-generation biotechnology-derived components). Emerging technologies, including advances in such as protein engineering, biotechnology (e.g., gene editing editing, and gene mapping), novel uses of existing technologies biotechnology, are also prompting new or stricter rules on ingredients produced by biotechnology techniques have required and regulatory approaches. These developments may in the future require us to reduce or reformulate products, remove or replace certain ingredients, substances substances, or processing aids from the product portfolio and may result modify manufacturing processes, potentially resulting in significant costs or costs, capital expenditures expenditures, or require operational changes in business practice that could result in reduced adversely affect margins or profitability. As concerns regarding safety, quality and environmental impact become more pressing, we may see new, more restrictive regulations adopted that impact our products in the U.S. and abroad. profitability. Recent regulatory actions illustrate these trends. For example, the EC recently adopted a European Commission’s ban on microplastics, including those found microplastics in personal care items, detergents products, detergents, and cosmetics, to reduce plastics pollution. We are now required cosmetics requires us to modify our products and/or innovate new solutions to replace microplastics in our and reformulate affected products. The Similarly, the European Green Deal includes a Deal’s Chemicals Strategy for Sustainability (CSS), which will trigger (“CSS”) has driven updates of the main to key regulations governing chemical substances used in household such as the EU Classification, Labeling and cosmetic products or in industrial applications (REACH, CLP, Cosmetic Regulation Packaging regulation (“CLP”) and Detergent Regulation). This strategy aims for an expansion of the generic EU Detergent Regulation, introducing hazard-based risk management approach based on hazard rather than risk and will introduce other concepts like grouping of similar substances to accelerate regulatory decision making. The practical implementation decisions. Revisions of this strategy the EU Cosmetic and Chemicals regulations have been deferred to the new EU Commission, but are still possible. These changes may negatively impact some of the certain products we place on the market, offer, including some enzymes or and fragrance ingredients. If we are unable In the US, under the Toxic Substances Control Act (“TSCA”) chemicals regulation, companies experience significant challenges to bring new substances to the market, with major delays experienced with US EPA assessments and very restrictive release conditions being established for substances that make it through these reviews. Failure to adapt promptly and cost-effectively to these new regulations or standards changes could result in a cost effective increased costs to reformulate affected products and timely manner, we may lose in loss of business to competitors who are able to provide with compliant products, expose ourselves to losses due to paused or ceased operations, operational disruptions, customer claims, regulatory fines, litigation litigation, or reputational damage. Gaps in our operational processes or those of our suppliers or distributors can result in products that do not meet our quality control or industry standards or fail to comply with the relevant regulatory requirements, which in turn can result in finished consumer goods that do not comply with applicable standards and requirements. Further, gaps in our operational processes may impact our productivity and also create challenges in recovering damages from our vendors, even when our vendors’ products fail to meet applicable standards and requirements. Products that are mislabeled, contaminated or damaged could result in a regulatory non-compliance event, including fines, penalties or even a product recall by the FDA or a similar foreign agency. We may also be exposed to serious adverse health claims related to undetected poor quality of raw materials, internal system failures to adequately reduce or eliminate certain hazards (such as pathogens, allergens, contaminants, pesticides, physical hazards, etc.) or products that are not in line with required or agreed specifications. Compliance risks are further compounded by operational complexities. Gaps in our processes, or those of suppliers and distributors, could lead to non-compliant or unsafe products, mislabeled or contaminated goods, or failures to meet agreed specifications. Supply chain complexities, challenges, aging equipment and infrastructure, human errors, error, and inadequate hazard controls (e.g., for pathogens, allergens, contaminants, pesticides, or other failures physical hazards) may exacerbate such risks. these risks. Such events could potentially harm consumer health and safety and may trigger recalls, regulatory enforcement actions, penalties, lost profits, reputational harm, productivity losses, property damage, personal injury, other liability or litigation. Our contracts often require us to indemnify our customers for the costs associated with a product non-compliance event, events, including penalties, costs and settlements arising from remediation, litigation, remediation costs or loss of and lost sales. As our offerings are used in many products intended for human use Insurance or consumption, these consequences would supplier indemnification may be exacerbated if we unavailable or our customer did not identify the defect before the product reaches the consumer and there was a resulting impact at the consumer level. Such a result could lead insufficient to potentially large-scale adverse publicity, cover these liabilities. Additionally, negative effects publicity, whether based on consumer’s health, recalls and potential litigation, fines, penalties, sanctions or other regulatory actions. In addition, if we do not have adequate insurance or contractual indemnification from suppliers or other third parties, actual or if insurance perceived safety or indemnification is not available, the liability relating quality concerns, could immediately impact sales and customer relationships and require substantial resources to product or possible third-party claims arising from mislabeled, contaminated or damaged restore confidence in our products and brand. Any of these factors could adversely affect our business, financial condition or results of operations. Furthermore, adverse publicity about our products, or our customers’ products that contain our ingredients, including concerns about product safety or similar issues, whether real or perceived, could harm our reputation and result in an immediate adverse effect on our sales and customer relationships, as well as require us to utilize significant resources to rebuild our reputation.results of operations.

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Prior heading: We could be adversely affected by violations, by us or our counterparties, of U.S. or foreign anti-bribery and anti-corruption laws and regulations, applicable sanctions or competition laws and regulations in the jurisdictions in which we operate or ethical business practices and related laws and regulations.

The global nature of our business, our size and employee count, workforce, the significance of our international revenue, our focus on emerging markets markets, and our presence in regulated industries create various expose us to complex domestic and local international regulatory challenges and subject us to risks associated with our international global operations. The We are subject to the U.S. Foreign Corrupt Practices Act (the “FCPA”) (“FCPA”) and similar anti-bribery and anti-corruption laws and regulations in other countries jurisdictions, which generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining to obtain or keeping retain business or for secure other commercial advantage. In addition, advantages. U.S. public companies are required to must also maintain records that accurately accurate books and fairly represent their transactions records and have an implement adequate system of internal accounting controls. Under the FCPA, U.S. companies may be held liable for the corrupt actions taken by directors, officers, employees, agents, or other strategic or local partners or representatives. As such, if we or our intermediaries fail partners. Failure to comply with the requirements of the FCPA or similar legislation, governmental authorities in the U.S. and elsewhere laws could seek to impose result in substantial civil and/or or criminal fines and penalties which could have a material adverse effect on penalties, materially adversely affecting our business, reputation, operating results results, and financial condition. We operate or and may pursue opportunities in some jurisdictions, jurisdictions such as China, India, Brazil, Russia Russia, and Africa, that pose potentially certain African countries, which present elevated risks of fraud or corruption or increased risk of fraud, corruption, and internal control issues. challenges. In certain jurisdictions, regions, compliance with anti-bribery laws may conflict with local customs and practices. From time to time, we have conducted and will We periodically conduct internal investigations of the relevant facts and circumstances, control testing and investigations, compliance reviews, and take control testing, and implement remedial actions, when appropriate, actions as appropriate to help ensure that we are in compliance with applicable corruption and similar laws and regulations. compliance. Detecting, investigating investigating, and resolving actual or alleged violations of the FCPA or other anti-bribery and anti-corruption laws and regulations is expensive, could consume significant time costly, time-consuming, and attention of our may divert senior management and could subject us to investigations and inquiries by governmental and other regulatory bodies. Any allegations attention. Allegations of non-compliance could disrupt operations, damage relationships with such laws third parties, and regulations could have a disruptive effect on our operations in such jurisdiction, including interruptions of business or loss of third-party relationships, which may negatively impact our financial condition and results of operations or financial condition. Any operations. A determination that our operations or activities are not in compliance with we violated such laws and regulations could expose us to result in severe criminal or civil penalties or other sanctions, criminal penalties, significant fines, termination loss of necessary licenses and permits and penalties or other sanctions that may harm our business permits, and reputation. reputational harm. Given the international scope of our business, global footprint, we also sell certain of our products to countries that are subject to U.S. and other jurisdictions’ sanctions under general licenses and authorizations related to such products, technologies and transactions. authorizations. For example, the U.S., the European Union Union, and other countries jurisdictions have imposed sanctions and export controls on Russia, Belarus Belarus, and occupied regions of Ukraine. As a result, we have limited our export of ingredients restricted exports to customers in Russia, Belarus and occupied these regions of Ukraine to only those that are permitted and products that meet the essential needs of people. needs. Compliance with sanctions laws is highly technical and requires careful oversight, and it is possible that actions taken rigorous oversight. Any inadvertent breach by us, our subsidiaries subsidiaries, or our suppliers may cause us to be in breach with these laws, which could have a material adverse effect to on our business. In addition, antitrust and competition laws and regulations continue to be actively enforced by competition authorities in the U.S., the European Union and other jurisdictions where IFF is we are active. Our failure to comply with competition laws and regulations can expose the Company us to, among other things, high fines, damage actions, actions (including private causes of action), reputation harm, and disruptions to our business, and expose our employees to civil or criminal penalties. See, also “—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 action lawsuits.” Lastly, our reputation Similarly, the enforcement of international trade laws, including duties, tariffs, licensing requirements, anti-boycott, dumping and others is relevant to our customers’ willingness broad and worldwide business. Our compliance failures related to purchase any international trade laws or regulations could result in fines, damages, reputational harm and other negative impacts on the financial results of the Company. Finally, our products reputation and customer relationships depend in part on our compliance by our suppliers, distributors, customers or and other counterparties with ethical employment practices, such as with respect practices and legal requirements, including those related to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, as well as with all legal workplace safety, and regulatory requirements relating to the conduct of their businesses (including the ones mentioned in the preceding paragraphs). human rights. While we generally require that third parties we work with agree expect adherence to our vendor code of conduct, we do not exercise control over our suppliers, distributors, vendors and customers third parties and due to the global nature of our business cannot guarantee their compliance with such ethical and lawful business practices or such legal requirements. If our compliance. Failure by counterparties fail to comply with meet applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, standards could harm our reputation and brand image could be harmed, and we could be exposed brand, expose us to litigation, investigations, enforcement actions, monetary liability, and additional costs that would harm costs, and adversely affect our reputation, business, financial condition, results of operations operations, and prospects.

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Prior heading: Changes in our tax rates, the adoption of new U.S. or international tax legislation, or changes in existing tax laws could expose us to additional tax liabilities that may affect our future results.

We are subject to taxes in the U.S. and numerous foreign jurisdictions. Our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, changes in liabilities for uncertain tax positions, cost of repatriations or changes in tax laws laws, regulations, or their interpretation. Any of these changes could have a material adverse effect on our profitability. operating results. We have and will continue to implement transfer pricing policies among our various operations located in different countries. These transfer pricing policies are a significant component of the management and compliance of our operations across international boundaries and overall financial results. Many countries routinely examine transfer pricing policies of taxpayers subject to their jurisdiction, challenge transfer pricing policies aggressively where there is potential non-compliance and impose significant interest charges and penalties where non-compliance is determined. However, governmental authorities could challenge these policies more aggressively in the future and, if challenged, we may not prevail. We could suffer significant costs related to one or more challenges to our transfer pricing policies. We are subject to the continual examination of our income tax returns by the Internal Revenue Service, state tax authorities and foreign tax authorities in those countries in which we operate, and may be subject to assessments or audits in the future in any of the countries in which we operate. The final determination of tax audits and any related litigation could be materially different from our historical income tax provisions and accruals, and while we do not believe the results that follow would have a material adverse effect on our financial condition, such results could have a material effect on our income tax provision, net income or cash flows in the period or periods in which that determination is made. In addition, a number of international legislative and regulatory bodies have proposed legislation and conducted investigations of the tax practices of multi-national companies and, in the European Union, the tax policies of certain European Union member states. In December 2021, the Organisation for Economic Co-operation and Development (“OECD”) released the Pillar Two model rules to reform international corporate taxation that aim to ensure that applicable multinationals (global revenue exceeding €750 million) pay a minimum effective corporate tax rate of 15%. The rules are being passed into national legislation based on each country’s approach, and some countries have already enacted or substantively enacted the rules. A framework on Safe Harbours and Penalty Relief was released in 2022 providing details on the transitional reliefs available to businesses over the initial years of Pillar Two implementation. The OECD released administrative guidance in February 2023 aiming to provide clarity over contentious areas of the model rules and aiming to provide greater certainty for businesses impacted by Pillar Two. We continuously evaluate these developments and the potential impact of the Pillar Two framework, subject to legislative adoption by individual countries. This legislation may have a material effect on our effective tax rate, income tax expense, net income or cash flows. The European Commission (“EC”) is continuously investigating tax rulings in a number of European Union member states, including with respect to specific multi-national corporations to determine whether such rulings comply with European Union rules on state aid. Under European Union law, selective tax advantages for particular taxpayers that are capable of distorting competition and affecting trade between member states may constitute impermissible state aid. If the EC determines that a tax ruling or an implemented tax regime violates the state aid restrictions, the tax authorities of the affected European Union member state may be required to collect back taxes for the period of time covered by the ruling. If the EC, tax authorities or other interested parties in other jurisdictions were to successfully challenge tax rulings applicable to us in any of the member states in which we are subject to taxation or our internal intercompany arrangements, we could be exposed to increased tax liabilities or less favorable tax regimes. In addition, a new European Union regulation – the Foreign Subsidy Regulation – has been recently introduced to address distortions in the European Union market caused by foreign subsidies (including favorable tax regimes) granted by non-EU States to companies active in the European Union. The European Union regulation imposes notification requirements, and also empowers the EC to investigate such potential distortions. Should the EC determine that foreign subsidies have been granted to us capable of distorting competition within the EU, the Company may be exposed to penalties and other costs. countries. In August 2022, the U.S. government enacted legislation commonly referred to as the “Inflation Reduction Act”, which, among other things, imposed a minimum “book” tax on certain corporations effective for taxable years beginning after December 31, 2022 and created a new excise tax on stock repurchases made by certain publicly traded corporations after December 31, 2022. 2022. In July 2025, the United States enacted the One Big Beautiful Bill Act (“OBBBA”) which, among other things, extended key provisions of the Tax Cuts and Jobs Act of 2017 and allowed for immediate expensing of certain business expense. Provisions are applicable beginning in 2025 with many provisions applicable beginning in 2026. We continue to evaluate its the impact as of the OBBBA on our future cash taxes and effective tax rate. Changes in tax laws or regulations, including further guidance becomes available.developments in connection with the IRA and OBBBA; changes enacted in response to the action items provided by the OECD under Pillar Two, and continued scrutiny on the taxation of large multinational companies all increase tax uncertainty and could impact the Company’s effective tax rate and provision for income taxes. These changes are unpredictable and as such, it is difficult to predict the cumulative effect of such tax laws and regulations on our operating results.

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Prior heading: The N&B Transaction could result in significant tax liability, and we may be obligated to indemnify DuPont for any such tax liability imposed on DuPont.

The completion of the 2021 N&B Transaction in 2021 was conditioned upon the receipt a Reverse Morris Trust (“RMT”), treated as tax-free for U.S. federal income tax purposes by DuPont of Dupont. Dupont received an opinion of counsel that the transaction generally will qualify qualified as a tax-free reorganization. The tax opinion was based upon various factual representations and assumptions, as well as certain undertakings made by DuPont, IFF and N&B. If any of those factual representations or assumptions were untrue or incomplete in any material respect, any undertaking was or is not complied with, or the facts upon which the opinion was based are materially different from the facts at the closing of reorganization. In connection with the N&B Transaction, the transaction may not qualify (in whole or part) for tax-free treatment. The N&B spin-off IFF, N&B, and certain aspects of the pre-spin-off internal reorganizations to form N&B could be taxable to DuPont if N&B or we were to engage in Dupont entered into a “Spinco Tainting Act” (as defined in the Tax Matters Agreement, by and among DuPont, N&B and IFF, a form of which is attached to IFF’s registration statement on Form S-4 (Registration Number 333-238072)). 333-238072) (“TMA”). Under the TMA, IFF and N&B are required to indemnify Dupont for any taxes resulting from a “Spinco Tainting Act.” A Spinco Tainting Act is generally any action (or inaction) within our control or under the control of N&B or their affiliates, any event involving our common stock or the common stock of N&B or any assets of N&B or its subsidiaries, or any breach by N&B or any of its subsidiaries of any factual representations, assumptions, or undertakings made by it, in each case, that would affect the non-recognition treatment of the spin-off and RMT (or other internal reorganizations for U.S. federal income tax purposes, as described above. Under prior to the Tax Matters Agreement, we and N&B will be required Transaction) to indemnify DuPont for any taxes resulting from a Spinco Tainting Act. Dupont. If we were required to indemnify DuPont pursuant to under the Tax Matters Agreement as described above, TMA, this indemnification obligation may be substantial and could have a material adverse effect on us, including with respect to our financial condition and results of operations. Moreover, we are not indemnified by Dupont for most tax liabilities related to pre-spin-off periods. periods prior to the N&B Transaction. Tax liabilities could increase as an outcome of final determination of tax examinations and could adversely impact our financial results.

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