International Flavors & Fragrances ( NYSE: IFF ) on Wednesday announced a series of long-term initiatives , including cost cuts through workforce reduction, and outlined a plan for a new business model for higher operating efficiency and greater savings.
Shares of the company were +2% at $107.00 in midday trading.
The company said it is targeting about $100 million in annualized savings through headcount reduction and expects to realize net annualized savings of $350 to $400 million during the 2023-2025 period.
The company said it has envisioned a new operating model to transform into “One IFF," by transitioning its divisional structure to three core end markets: Food and Beverage, Home and Personal Care, and Health. IFF expects the new operating model to be fully in effect by the end of 2023.
In the meantime, IFF will maintain its existing four division structure until its new operating model is fully in effect.
The New York-based company said, as part of the long-term plan, it would announce three divestitures by the end of the first quarter of 2023 to raise about $1.2 billion in proceeds for debt reduction.
IFF board also appointed Mark Costa, Chairman and CEO of Eastman, as a director of the company, effective Jan. 1, 2023, in a bid to add outside senior executives with specific management, strategy and operations expertise.
However, the company said it is aiming to reduce the size of its board from 14 directors to about ten directors by next annual meeting in May 2023.
Through these strategic initiatives, IFF anticipates – on average – to grow sales by 4% to 6% and adjusted operating EBITDA by 8% to 10%, on a comparable currency neutral basis over the 2024, 2025 and 2026 period.
In a separate press release, the company said its Nourish division president Nicolas Mirzayantz will leave after working with the company for over three decades, effective Dec. 31, 2022. CEO Frank Clyburn will lead IFF’s current Nourish division until a replacement is named.
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IFF outlines leaner business structure, cuts jobs as part of long-term plan