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International Flavors & Fragrances Inc. | Annual Report 2018 International Flavors & Fragrances Inc. | ANNUAL REPORT 2018 What if we brought the world’s best together? Global Headquarters 521 West 57th Street | New York, NY 10019 | 212.765.5500 www.iff.com This report is printed on paper containing post consumer fiber. The paper used in this report is also certified under the Forest Stewardship Council™ guidelines. BOARD OF DIRECTORS LEADERSHIP TEAM Marcello V. Bottoli 1 Andreas Fibig Partner Chairman of the Board Es Vedra Capital Advisors LLP and Chief Executive Officer Dr. Linda B. Buck 3 Richard O’Leary Full Member Executive Vice President Fred Hutchinson Cancer Research Center and Chief Financial Officer Michael L. Ducker 2 Amos Anatot Former President and President, Frutarom Chief Executive Officer FedEx Freight Anne Chwat Executive Vice President, David R. Epstein 3 General Counsel and Executive Partner Corporate Secretary Flagship Pioneering Francisco Fortanet Roger W. Ferguson, Jr. 2,* Executive Vice President, Operations President and Chief Executive Officer TIAA Yoni Glickman President, Natural Product Solutions John F. Ferraro 1,* Former Global Chief Operating Officer Matthias Haeni Ernst & Young Divisional Chief Executive Officer, Taste Andreas Fibig Nicolas Mirzayantz Chairman of the Board Divisional Chief Executive Officer, Scent and Chief Executive Officer International Flavors & Fragrances Inc. Susana Suarez-Gonzalez Executive Vice President, Christina Gold 2, 3,* Chief Human Resources Officer Former President and Chief Executive Officer Vic Verma The Western Union Company SVP, Chief Information Officer Katherine M. Hudson 2 Gregory Yep Former President and Executive Vice President, Chief Executive Officer Chief Global Scientific Brady Corporation and Sustainability Officer Dale F. Morrison 1, 2, 3, + Founding Partner Twin Ridge Capital Management Stephen Williamson 1 Senior Vice President and Chief Financial Officer Thermo Fisher Scientific 1 Audit Committee 2 Compensation Committee 3 Nominating and Governance Committee * Indicates Chairperson + Lead Director FPO Design by Fusion Media, Inc. www.fusionhome.com © 2019 International Flavors & Fragrances Inc. All rights reserved. Andreas Fibig Chairman and Chief Executive Officer Dear Fellow Shareholders, Customers & Employees For everyone who’s celebrated a birthday or The combination of IFF and Frutarom is recognized an anniversary, the sense of wonder truly unique and compelling as it enriches another year brings is a familiar one. That awe our portfolio with a stronger product in hard-earned accomplishments. The pride in offering with an increased focus on naturals learning valuable lessons and continuing on to and health and wellness, as well as more even greater successes. And most importantly, comprehensive solutions. the vision of what the future holds. For a company to reach its 130th anniversary, it is nothing less than a tribute to the countless employees who’ve invested their talents and “2018 was expertise in us throughout the years. It’s a testament to our customers and shareholders a year of who believe in our products, our values, and our drive to be the best in our industry. great change Our 130th anniversary is a momentous occasion, inside IFF.” a focal point when the dynamics that have brought us to this place connects our legacy with our future vision. 2018 was a year of great change inside IFF. We underwent a monumental joining with Frutarom, which established us as a global leader in taste, scent, and nutrition. It also enhances our exposure to the fast- 1959 saw the merger of these two powerhouse growing small- and mid-sized customers, companies and International Flavors & including private label, and provides Fragrances Inc. was established. Since then, opportunities to expand into attractive and this company has engaged in a calculated, fast-growing categories, such as savory solutions, fruitful growth strategy that has increased natural colors, natural food protection, and our financial viability, strengthened our R&D, health ingredients. Throughout the year, we also deepened our value to our customers, and transformed our commitment to diversity and provided our employees with growth – both inclusion into an employee-powered mission. professionally and personally. From Bush And our pledge to treat the world gently was Boake Allen to Laboratoire Monique Remy recognized by international organizations and (LMR) to Lucas Meyer Cosmetics to our recent escalated with the launch of new environmental acquisitions of David Michael and Ottens Flavors – goals and ambitious science-based targets. now joined as Tastepoint by IFF – and so many others, each acquisition has been a historic moment for IFF and one which has transformed us into who we are today. Even as our combination with Frutarom was “We stand on our historical event of 2018, the year held many other significant moments to be celebrated. In the shoulders R&D, we continued down our path of innovating firsts by launching three natural taste modulators of giants.” and two fragrance molecules. And with new partner Amkiri, we delved further into pioneering sensorial experiences with Visual Fragrance™, a multisensory body art. Aligned with top customers, we were especially excited to be recognized as Best Innovation There’s a saying at IFF: “We stand on the Contributor Laundry & Home Care by one; and shoulders of giants.” It means everything through the execution of our business strategy, we’ve achieved is a direct result of those we were truly the partner of choice as we earned who’ve come before us. Nothing can be truer core list status with several customers over for a company that started in a small Dutch the course of 2018. As a global manufacturing town in 1889 when two gentlemen went into organization, we continued to embrace the fruit juices business. Joseph Polak and governmental compliance, safety, and quality. Leopold Schwarz had a passion for naturals, In 2018, our GRA team culminated a ten-year flavors and sensorial experiences that has led effort to achieve REACH compliance, a mandate IFF for generations. The same can be said for in sync with our essential belief in championing A.L. van Ameringen, who in 1918, shortly after safe ingredients and customer confidence. his dismissal from Polak & Schwarz, established Over and beyond the diligence needed for what would become van Ameringen-Haebler, REACH compliance, we systematically drove a company that withstood The Great Depression compliance training throughout IFF to ensure and a world war to bring aromatic expressions our products are safe and adhere to the to a growing customer base. regulations of the land. 2 In our 130-year history, we have only designated of the new sites or of the employees who five notables with the highly esteemed mantle of worked so hard to make it happen. Master Perfumer. Carlos Benaim was our first – which I spoke about last year – and in 2018, Part of their drive stems from the dedicated we added Dominique Ropion, Steve Nicoll and architecture of growth and development we work Francisco Marano to the ranks. Each unique in to instill at IFF. Our push to build our talent and their expertise in the wide breadth of Fine and organization comes from the knowledge that Consumer Fragrances, and each with a diverse our employees are our future, just as they are and innovative olfactory expression to offer the reasons for our successful past. We have our customers and consumers. broadened the employment training available to IFFers through our IFF University and nurtured Sustainability also continued to be a prevalent an environment where the uniqueness of part of our everyday as we surpassed three our employees is unleashed through vibrant of our four 2020 environmental targets and employee communities, such as our Women@IFF, launched our new environmental goals with an employee resource group that has empowered ambitious science-based targets. Our efforts women for years at the company. continued to be recognized as we joined Barron’s 100 most sustainable U.S. companies list, qualified for FTSE4Good Developed Market Index for the first time, and we were named to Euronext Vigeo’s World 120 Index – an index that ranks us amongst the top companies “Our employees within the Euronext universe. In addition, IFF- LMR Naturals continues to lead the industry with are the real 90 certified vegan natural extracts and IFF-Lucas Meyer Cosmetics successfully strengthened our leaders pushing product profile with the acquisition of sustainable ingredients and associated intellectual property us towards an from the pioneering Kemin Industries. Our unique position of intertwining the legacy expanded future.” beauty industry with the demands of today’s consumers is being fully realized. This is all being done as we work to lead the market in the evolution of health, wellness, and sustainability. I’m pleased to say that our standing externally in the market is just as strong as our building Our employees are the real leaders pushing blocks within. We finished the year with us towards an expanded future. They challenge approximately $4 billion in annual sales, $677 and enhance our every effort. In Greater Asia, we million in adjusted operating profit,* $5.58 of opened a new flavors plant in Zhangjiagang and adjusted EPS,* and $6.28 of adjusted EPS ex not too far away in Nanjing we opened the first amortization.* Top line was driven by a mid- IFF naturals lab outside of the U.S. The ownership single-digit performance in Taste propelled our employees exuded over the intricate process by growth in all regions and categories; and of establishing these new sites was a clear sign a mid-single-digit increase in Scent with high- that their commitment to the success of the single-digit growth in Fragrance Ingredients, company runs deep. We couldn’t be prouder led by double-digit growth in Cosmetic Active * Adjusted Operating Profit, Adjusted EPS & Adjusted EPS Ex Amortization are Non-GAAP metrics. Please see our GAAP to Non-GAAP metrics in Exhibit A at the end of this report.

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