International Flavors & Fragrances | North America Risk Reward Update

Research evidence excerpt

International Flavors & Fragrances | North America Risk Reward Update

UpdateM

Risk Reward – International Flavors & Fragrances (IFF.N)

KEY EARNINGS INPUTS

Drivers Dec 2025 Dec 2026e Dec 2027e Dec 2028e

Sales Growth (%) (5.2) (0.6) 4.4 4.8

Adjusted EBITDA Margin (%) 19.2 19.7 20.4 21.2

INVESTMENT DRIVERS RISKS TO PT/RATING MS ESTIMATES VS. CONSENSUS

Innovation rates and volume growth at RISKS TO UPSIDE FY Dec 2026e

customers underpin sales growth Faster Renovation Theme roll-out

Execution on cost and top-line synergies Faster LFL growth on L&R penetration Sales / 10,820

Faster profit margin expansion from Revenue 10,570 10,869

GLOBAL REVENUE EXPOSURE gearing/innovation/H&B (US$, mn) 10,735

Food Ingredients portfolio optimisation

APAC, ex Japan, Mainland 0-10% Improved FCF generation China and India

0-10% India RISKS TO DOWNSIDE EPS 4.25 4.76

0-10% Japan Weak volume growth vs peers/market (US$) 4.46

0-10% Mainland China Failure to recover profit margins

10-20% Latin America Below peer FCF generation

10-20% MEA Low incremental ROCE DPS

20-30% Europe ex UK Major M&A without clear synergy plans (US$) 1.60 1.90

20-30% North America 1.64

Source: Morgan Stanley Research Estimate OWNERSHIP POSITIONING

View explanation of regional hierarchies here Mean Morgan Stanley Estimates

Inst. Owners, % Active 64.2% Source: Refinitiv, Morgan Stanley Research

MS ALPHA MODELS HF Sector Long/Short Ratio 2x

HF Sector Net Exposure 5.2%

2/5 24 Month 1/5 3 Month

BEST Horizon MOST Horizon Refinitiv; MSPB Content. Includes certain hedge fund

exposures held with MSPB. Information may be

Source: Refinitiv, FactSet, Morgan Stanley Research; 1 is inconsistent with or may not reflect broader market

the highest favored Quintile and 5 is the least favored trends. Long/Short Ratio = Long Exposure / Short