Flavors Sales Up 15%; 8% in Local Currency

Fragrances Sales Up 8%; 1% in Local Currency

Double-Digit Increase in Adjusted EPS

International Flavors & Fragrances Inc.

Investors:

Yvette Rudich, 212-708-7164

Director of Corporate Communications

or

Media:

Melissa Sachs, 212-708-7278

Manager, Corporate Communications

Logo: http://www.iff.com/internet.nsf/HomePage!OpenForm

International Flavors & Fragrances Inc. (NYSE: IFF), a leading global creator of flavors and fragrances for consumer products, today announced results for the second quarter 2008. On a GAAP basis, earnings per share (EPS) were $0.83 in the 2008 second quarter, versus $0.87 in the prior year quarter. Second quarter 2008 adjusted earnings per share after special items were $0.81, a 13 percent increase versus the $0.72 earned in the prior year quarter on a comparable basis.

The 2008 second quarter results included employee separation costs of $3.4 million or $0.03 per share, and a $3.9 million or $0.05 per share benefit from favorable tax rulings with respect to prior periods. The 2007 second quarter results included a pre-tax gain on a land sale of $5.3 million or $0.04 per share, as well as a $10 million or $0.11 per share benefit from favorable tax rulings with respect to prior periods.

Operating profit for the quarter was 16.0 percent of sales, including employee separation costs, compared to 17.9 percent in the prior year period.

"The four percent local currency sales growth during the second quarter keeps us on track to deliver on our long-term revenue and EPS goals," said Robert M. Amen, IFF's Chairman and CEO. "While North America continues to be a challenge, total Company revenue benefited from growth in the Greater Asia and Latin America regions where sales grew 20 percent or more. Our non-U.S. sales in the second quarter amounted to 75 percent of total revenue, with more than one-third coming from the world's emerging markets."

Mr. Amen continued, "Our teams remain focused on creating innovative and consumer-preferred flavors and fragrances that help our customers grow their brands, especially in the emerging markets where demand for consumer goods is outpacing GDP growth."

Second quarter 2008 sales were $636 million, up 11 percent from the prior year period. Reported sales benefited from the generally weaker U.S. dollar, mainly against the Euro; at comparable exchange rates, sales would have increased 4 percent over the 2007 quarter.

Flavors Business Unit

The 15 percent growth in Flavors sales resulted from both market share gains and volume increases of existing business. Growth in Latin America was particularly strong with Flavors sales up 36 percent in the quarter. Greater Asia posted sales growth of 22 percent. Excluding the impact of currencies, Flavors sales were up 8 percent.

Fragrances Business Unit

Fragrances sales increased 8 percent on a reported basis and 1 percent excluding the impact of currencies - a significant improvement over first quarter 2008 results. Looking at total second quarter reported revenue by geographic region, Fragrances sales grew 18 percent in Greater Asia, 15 percent in Europe and 14 percent in Latin America. These gains offset an 11 percent decline in North America.

Second Quarter 2008 Overview

-- Gross profit, as a percentage of sales, was 41.5 percent compared with 42.9 percent in the prior year quarter. This decrease was mainly the result of the decline in North America sales, which impacted absorption of manufacturing expenses, most notably in fragrance compounds. In addition, product mix and some impact of higher material costs also affected margins.

-- Research and development spending, as a percentage of sales, was 8.8 percent versus 8.5 percent in second quarter 2007, which reflects increasing investments in customer applications.

-- Selling and administrative expenses, as a percentage of sales, increased to 16.5 percent as compared to 15.9 percent in second quarter 2007. The 2008 expenses included $3.4 million of employee separation costs.

-- Interest expense totaled $19 million as compared to $8 million in second quarter 2007, due to higher borrowings incurred in connection with the 2007 accelerated share repurchase program, which was completed in June 2008. Average cost of debt was 6.0 percent for the quarter as compared to 4.2 percent in the 2007 second quarter.

-- Effective tax rate for second quarter 2008 was 23.2 percent compared to 19.2 percent in the prior year quarter. Both periods benefited from favorable tax rulings with respect to prior periods; excluding the benefit of these favorable rulings, the effective tax rate for second quarter 2008 and 2007 would have been 27.6 percent and 29.4 percent, respectively.

-- Average number of diluted shares (in millions) was 80.6 compared to 90.1 in second quarter 2007.

About International Flavors & Fragrances Inc.

IFF is a leading global creator of flavors and fragrances used in a wide variety of consumer products and packaged goods. Consumers experience these unique scents and tastes in fine fragrances and beauty care, detergents and household goods, as well as beverages, confectionary and food products. The Company leverages its competitive advantages of brand understanding and consumer insight combined with its focus on R&D and innovation, to provide customers with differentiated product offerings. A member of the S&P 500 Index, IFF has sales, manufacturing and creative facilities in 31 countries worldwide. For more information, please visit our Web site at www.iff.com.

Individuals interested in receiving future updates on IFF via e- mail can register at http://ir.iff.biz.

Audio Web Cast

An audio Web cast, to discuss the Company's second quarter 2008 financial results and outlook, will be held Thursday, July 31 at 9:00 a.m. ET. Interested parties can access the Web cast, accompanying slide presentation, press release, Generally Accepted Accounting Principles (GAAP) reconciliation and Form 10-Q on the Company's Web site at www.iff.com, under the "Investor Relations" section. For those unable to listen to the live broadcast, a replay will be available on the Company's Web site approximately one hour after the event and will remain available on the IFF Web site until August 14, 2008.

Cautionary Statement Under The Private Securities Litigation Reform Act of 1995

Statements in this quarterly release, which are not historical facts or information, are "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on management's current assumptions, estimates and expectations. Certain of such forward- looking information may be identified by such terms as "expect," "believe," "outlook," "guidance," "may," and similar terms or variations thereof. All information concerning future revenues, tax rates or benefits, interest savings, earnings and other future financial results or financial position, constitutes forward- looking information. Such forward-looking statements involve significant risks, uncertainties and other factors. Actual results of the Company may differ materially from any future results expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions in the Company's markets, including economic, inflationary and recessionary pressures, high energy and commodity prices, decline of the U.S. dollar, population health and political uncertainties; interest rates; the price, quality and availability of raw materials; the Company's ability to implement its business strategy, including the achievement of anticipated cost savings, profitability and growth targets; the impact on cash and the impact of increased borrowings related to the July 2007 share repurchase program; the impact of currency fluctuation or devaluation in the Company's principal foreign markets and the success of the Company's hedging and risk management strategies; the outcome of uncertainties related to litigation; the impact of possible pension funding obligations and increased pension expense on the Company's cash flow and results of operations; and the effect of legal and regulatory proceedings, as well as restrictions imposed on the Company, its operations or its representatives by U.S. and foreign governments. The Company intends its forward-looking statements to speak only as of the time of such statements and does not undertake or plan to update or revise them as more information becomes available or to reflect changes in expectations, assumptions or results.

Any public statements or disclosures by IFF following this report that modify or impact any of the forward-looking statements contained in or accompanying this report will be deemed to modify or supersede such outlook or other forward-looking statements in or accompanying this report.

TABLE

International Flavors & Fragrances Inc. Consolidated Income Statement (Amounts in thousands except per share data) (Unaudited)

Three Months Ended__ Six Months Ended

June 30,__ June 30,

%__ %

2008__ 2007__ Change__ 2008__ 2007__ Change

Net sales__ $636,126__ $573,726__ 11__ $1,232,731__ $1,139,827__ 8

Cost of goods sold__ 372,345__ 327,668__ 14__ 723,474__ 657,050__ 10

Gross margin__ 263,781__ 246,058__ 7__ 509,257__ 482,777__ 5

Research and development__ 56,166__ 48,760__ 15__ 108,222__ 95,392__ 13

Selling and administrative__ 104,662__ 91,198__ 15__ 194,811__ 182,469__ 7

Amortization of intangibles__ 1,539__ 3,555__ (57__ )__ 3,078__ 7,111__ (57__ )

Restructuring and other charges__ (255__ )__ -__ 5,967__ -

Interest expense__ 18,545__ 8,396__ 36,764__ 16,710

Other (income) expense, net__ (4,117__ )__ (2,819__ )__ (1,812__ )__ (2,986__ )

Pretax income__ 87,241__ 96,968__ (10__ )__ 162,227__ 184,081__ (12__ )

Taxes on income__ 20,209__ 18,596__ 9__ 39,252__ 43,020__ (9__ )

Net income__ $67,032__ $78,372__ (14__ )__ $122,975__ $141,061__ (13__ )

Earnings per share

Basic__ $0.84__ $0.88__ $1.54__ $1.58

Diluted__ $0.83__ $0.87__ $1.52__ $1.56

Average shares outstanding

Basic__ 79,627__ 89,174__ (11__ )__ 79,962__ 89,276__ (10__ )

Diluted__ 80,578__ 90,124__ (11__ )__ 80,916__ 90,391__ (10__ )

TABLE

International Flavors & Fragrances Inc. Condensed Consolidated Balance Sheet (Amounts in thousands) (Unaudited)

June 30,__ December 31,

2008__ 2007

Cash and cash equivalents__ $119,490__ $151,471

Short-term investments__ 55__ 604

Receivables__ 521,120__ 450,579

Inventories__ 525,651__ 484,222

Other current assets__ 112,705__ 103,602

Total current assets__ 1,279,021__ 1,190,478

Property, plant and equipment, net__ 514,920__ 508,820

Goodwill and other intangibles, net__ 729,759__ 732,836

Other assets__ 295,078__ 294,654

Total assets__ $2,818,778__ $2,726,788

Bank borrowings and overdrafts__ $147,562__ $152,473

Other current liabilities__ 395,269__ 386,423

Total current liabilities__ 542,831__ 538,896

Long-term debt__ 1,068,884__ 1,060,168

Non-current liabilities__ 564,078__ 510,527

Shareholders' equity__ 642,985__ 617,197

Total liabilities and shareholders' equity__ $2,818,778__ $2,726,788

TABLE

International Flavors & Fragrances Inc.

Consolidated Statement of Cash Flows

(Amounts in thousands)

(Unaudited)

Six Months Ended

June 30,

2008__ 2007

Cash flows from operating activities:

Net income__ $122,975__ $141,061

Adjustments to reconcile to net cash provided by operations:

Depreciation and amortization__ 42,529__ 42,287

Deferred income taxes__ 851__ 4,629

Gain on disposal of assets__ (684__ )__ (6,737__ )

Equity based compensation__ 8,898__ 8,248

Changes in assets and liabilities

Current receivables__ (57,879__ )__ (54,058__ )

Inventories__ (25,151__ )__ (1,258__ )

Current payables__ (16,060__ )__ (38,535__ )

Changes in other assets__ (23,855__ )__ (1,831__ )

Changes in other liabilities__ 27,226__ 1,836

Net cash provided by operations__ 78,850__ 95,642

Cash flows from investing activities:

Additions to property, plant and equipment__ (28,808__ )__ (21,331__ )

Purchase of investments__ (3,983__ )__ (4,786__ )

Proceeds from investments__ -__ 8,978

Proceeds from disposal of assets__ 934__ 8,751

Net cash used in investing activities__ (31,857__ )__ (8,388__ )

Cash flows from financing activities:

Cash dividends paid to shareholders__ (37,143__ )__ (37,230__ )

Net change in bank borrowings and overdrafts__ (12,333__ )__ (496__ )

Proceeds from issuance of stock under stock plans__ 2,840__ 36,461

Excess tax benefits on stock options exercised__ 38__ 3,914

Purchase of treasury stock__ (29,995__ )__ (80,711__ )

Net cash used in financing activities__ (76,593__ )__ (78,062__ )

Effect of exchange rates changes on cash and cash equivalents__ (2,381__ )__ 471

Net change in cash and cash equivalents__ (31,981__ )__ 9,663

Cash and cash equivalents at beginning of year__ 151,471__ 114,508

Cash and cash equivalents at end of period__ $119,490__ $124,171

Interest paid__ $41,282__ $19,553

Income Taxes paid__ $18,441__ $21,866

TABLE

International Flavors & Fragrances Inc. Segment Profit (Amounts in thousands) (Unaudited)

Three Months Ended__ Six Months Ended

June 30,__ June 30,

2008__ 2007__ 2008__ 2007

Net Sales

Flavors__ $289,794__ $252,541__ $563,601__ $495,983

Fragrances__ $346,332__ $321,185__ $669,130__ $643,844

Consolidated__ $636,126__ $573,726__ $1,232,731__ $1,139,827

Operating Profit

Flavors__ $56,861__ $52,580__ $113,789__ $97,394

Fragrances__ $56,339__ $58,273__ $103,235__ $117,141

Global Expenses__ $(11,531__ )__ $(8,308__ )__ $(19,845__ )__ $(16,730__ )

Consolidated__ $101,669__ $102,545__ $197,179__ $197,805

Interest Expense__ $(18,545__ )__ $(8,396__ )__ $(36,764__ )__ $(16,710__ )

Other income (expense), net__ $4,117__ $2,819__ $1,812__ $2,986

Income before taxes__ $87,241__ $96,968__ $162,227__ $184,081

TABLE

International Flavors & Fragrances Inc. Regulation G Reconciliation Schedule

Earnings Per Share

2008

Q1__ Q2__ YTD*

EPS Reported__ $0.69__ $0.83__ $1.52

Employee Separation Costs__ 0.03__ 0.03

Restructuring Charges__ 0.06__ 0.06

Insurance Recovery__ (0.02__ )__ (0.02__ )

Tax Adjustment (1)__ (0.03__ )__ (0.05__ )__ (0.07__ )

EPS as Adjusted__ $0.70__ $0.81__ $1.51

2007

Q1__ Q2__ YTD*

EPS Reported__ $0.69__ $0.87__ $1.56

Gain on Asset Sale__ (0.04__ )__ (0.04__ )

Tax Adjustment (1)__ (0.11__ )__ (0.11__ )

EPS as Adjusted__ $0.69__ $0.72__ $1.41

(1) Favorable tax ruling benefit related to prior years

Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)

9/30/2007__ 12/31/2007__ 3/31/2008__ 6/30/2008__ Total

Net Income__ $58.8__ $47.2__ $55.9__ $67.0__ $228.9

Interest expense__ 8.6__ 16.2__ 18.2__ 18.6__ 61.6

Income Taxes__ 21.8__ 16.8__ 19.0__ 20.2__ 77.8

Depreciation__ 16.9__ 17.8__ 18.0__ 21.4__ 74.1

Amortization__ 3.6__ 2.2__ 1.5__ 1.6__ 8.9

Restructuring charges__ 5.9__ -__ 6.2__ (0.2__ )__ 11.9

EBITDA__ $115.6__ $100.2__ $118.8__ $128.6__ $463.2

9/30/2006__ 12/31/2006__ 3/31/2007__ 6/30/2007__ Total

Net Income__ $63.7__ $47.9__ $62.7__ $78.4__ $252.7

Interest expense__ 6.5__ 7.4__ 8.3__ 8.4__ 30.6

Income Taxes__ 27.1__ 14.4__ 24.4__ 18.6__ 84.5

Depreciation__ 18.6__ 19.1__ 17.3__ 17.9__ 72.9

Amortization__ 3.7__ 3.7__ 3.6__ 3.5__ 14.5

Restructuring charges__ 0.3__ 2.0__ -__ -__ 2.3

EBITDA__ $119.9__ $94.5__ $116.3__ $126.8__ $457.5

This supplemental schedule provides adjusted non-GAAP financial information and a quantitative reconciliation of the difference between the non-GAAP financial measure and the financial measure calculated and reported in accordance with GAAP

These non-GAAP financial measures should not be considered in isolation, or as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The Company believes that it is meaningful for investors to be made aware of and to be assisted in a better understanding of, on a period to period comparative basis, the relative impact of restructuring and employee separation charges, an insurance recovery related to a product contamination issue, a gain from the sale of land and the benefit of tax rulings relating to prior years. The adjusted information is intended to be more indicative of the Company's core operating results.

* The sum of the individual quarter's net income per share does not equal the earnings per share for the year-to-date due to changes in average shares outstanding during the year.

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