Using an unlevered Free Cash Flow to Firm (FCFF) model, we project International Flavors & Fragrances Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from -1.6% to -1.7% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 66, DPO 65, DIO 122). At a 7.6% WACC with mid-year discounting, the terminal value (89% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 29.7x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $148.67 per share, suggesting IFF is undervalued by 110.3% at the current price of $70.70.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 976 | 1,006 | 1,052 | 1,074 | 1,056 | 1,083 |
| (−) Net Interest | 284 | 293 | 306 | 313 | 307 | 315 |
| (+) D&A | 494 | 506 | 499 | 497 | 505 | 517 |
| EBITDA | 1,753 | 1,804 | 1,857 | 1,884 | 1,868 | 1,915 |
| (−) Tax | 158 | 163 | 170 | 174 | 171 | — |
| (−) CapEx | 458 | 472 | 494 | 504 | 496 | — |
| (−) ΔWC | -17 | 94 | 144 | 71 | -57 | — |
| Free Cash Flow (FCF) | 1,155 | 1,075 | 1,049 | 1,135 | 1,258 | — |
| Peers' EBITDA Multiple | 29.7x | |||||
| Terminal Value | 56,792 | |||||
| WACC / Discount Rate | 7.59% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 1,113 | 963 | 874 | 878 | 905 | 39,389 |
| Enterprise Value | 44,122 | |||||
| Projection Period | 4,734 | 10.7% | ||||
| Terminal Value | 39,389 | 89.3% | ||||
| (−) Current Net Debt | 6,061 | |||||
| Equity Value | 38,061 | |||||
| (÷) Outstanding Shares | 256M | |||||
| Fair Price | $149 | +110.3% | ||||
| WACC \ EV/EBITDA Exit Multiple | 25.7x | 27.7x | 29.7x | 31.7x | 33.7x |
|---|---|---|---|---|---|
| 5.6% | $142 | $153 | $165 | $176 | $187 |
| 6.6% | $135 | $146 | $156 | $167 | $178 |
| 7.6% | $128 | $138 | $149 | $159 | $169 |
| 8.6% | $121 | $131 | $141 | $151 | $161 |
| 9.6% | $115 | $125 | $134 | $144 | $153 |
Current price: $70.70. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.