IFF - Earnings call transcript Q1 2024 | International Flavors & Fragrances Inc.

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Operator

At this time, I would like to welcome everyone to the IFF first quarter earnings conference call. [Operator Instructions]

I would now like to introduce Michael DeVeau, Head of Investor Relations.

You may begin.

Michael Deveau

Thank you. and everyone. afternoon good morning, good evening, Good Welcome First Quarter Call. XXXX Conference to IFF's issued announcing press afternoon, a Yesterday we release our results. financial at of copy our the can ir.iff.com. website be A found release IR on replay. being Please that and available this is note recorded call will live be for

call, things forward-looking about During elements uncertainty. today performance and we the on based be statements These contain outlook. are will how company's making the statements and we see of

to concerning information and differ factors that cautionary actual factors cause risk to refer press XX-K the can materially, results contained please For our our and statement additional in release.

press include measures, respective that believe their these yesterday. Today's non-GAAP presentation we that reconciliation financial items non-GAAP exclude GAAP we measures will issued comparability. of release A financial the which is to those set measures affect in forth

today on Officer, Business and is CEO, President, Erik Executive Transformation me our the our Fyrwald; Vice and With CFO Glenn Richter. call

take the We and remarks you then will questions at with begin any have prepared end.

now the like With that, to to I call Erik. turn would over

Jon Erik Fyrwald

financial the year. we confidence on outlook focus end. Well, first you our the all balance upper this us business trending of see our thank discuss now far Today, our the reiterated year we'll excited for to we increased in to our performance hello, join where and so our and solid and seeing you, across today what results, are the I'm quarter in everyone. guidance, toward Mike, the

acknowledge I the X Glenn, with retire announcing to successful today after forward, the plan moving XXXX at want company. before of Now to who his end is years

has success. commitment transformation drive team. been as leadership position very on position to sheet already I've to actions his and his He come improve market experience the helpful the also to and driven balance to his During has to from tenure, IFF profitable company growth. financial IFF for benefited Glenn share me and ongoing long-term to We've multiple our

candidates external internal ensure accomplish look as The transition. and succession and smooth started all to I plan forward Board to for continued this and are IFF and announcement, a his have we helped with successor grateful a leadership succeed a to Now evaluate Glenn. has identify we Glenn

to turning Slide Now X.

We are Scent, good the quarter We digit & volumes Nourish since in grew Health for the first of time volume IFF. to achieved growth a XXXX and first strong at of with quarter the start from contributions as off Biosciences. mid-single XXXX first

We from are but only comparable the by also encouraged growth not across EBITDA double-digit from productivity growth also we volume adjusted gains businesses. as our benefited

with progress made the announced we divestiture the closing Solutions business. cosmetics business of ingredients portfolio our our time, At sale same the focusing the important of Pharma and

net transaction adjusted the Xx of first our deleveraging business. We to complete address of goal from in capital of XXXX. us divestitures high-growth will EBITDA expect The help the to pharma and refocus proceeds our further half structure, strengthen our credit on these debt areas

the to there's guidance momentum our on year announced energize previously building are we a team the higher With now performance in of the to year trend and remainder end expect the our to our still our ranges. but focused solid remainder on of work in early we and full XXXX expectations done, toward our year, cautiously XXXX the more quarter are be of profitable optimistic about and to and It's the return growth. lot results first for sustainable

X. Slide to Turning

share a I've XX what Let first during take a my IFF. here at step moment back and learned me for days

many customers. for world know Now I've of teams meeting spent time discussions. grateful with I'm getting and the our productive And over our all to the

are by full not will potential. our renewed and innovation our we has on we new yet capabilities. do to from focus priorities here. our what getting And But basics, a what about top I talent IFF realizing and on team, I'm leadership incredible optimistic back found is of a execution lots With we're perspective executive that leadership and

structure flexibility and a strengthening not First, assessment sheet create consistently us better commitments to are need due our clarity My strategic the to balance against organization we financial we largely delivered need our our enable our on for is to we and operating execute have capital more long-term to goals. to model achieve goals.

debt I to rightsized now the steps have us drive need our taken divestiture the cash realize market with clarity potential. the long-term quarter are more first our recently generation flow portfolio to quarterly moves, focus made have think we and of our cosmetics to start Pharma we Solutions, dividend getting to and in decisive help and reduction. our including some and We align and

now recently Health includes Scent. to the of also Herriott IFF, growth our the is announced Simon IFF at enables operating Paula which appointment This This advancement as Mendonça, lean has & by unit. President business career profitable business-led, dedicated model, Biosciences refocused his functions. and fragrance her We are full in the attention who of supported of our on Ana driving focus to implementing

our units put also will Nourish Functional Flavors our on We more within division. and focus Ingredients

model or have market for that above delivering several business accountability include operations, line including presidents, functions, gets into the peers. and With have directly R&D, we changed our change, better the full growth finance unit us goals execution. also than this to our with HR, end-to-end of operating of in so a they reporting responsibility business go with leading structure Their and margin will structure

standardized visibility managers for the system track strengthen framework drive to is and deliver that this greater We make also established creates to believe work, execution create improvement. drive provides have define the an current processes, results makes help performance, metrics processes continuous to ways will management of how collectively in years. we in we the simple that so responsibilities this coming and which to defines set period IFF decisions and operating a tools us a for Now value,

customers sustainable cost two, other people, innovations to focus four, share number profitable value new number faster; number operational people lead customer introducing improvement are an engaged one, safety, our market create on who and based main drive three, are also growth; relentless do organization. four and We on excellence products to structures; to powerhouse focus this operating across philosophy pillars: and the quality, continuous and competitive innovation

that profitably collaboration And and the of still it's our I commitment pleased win with and business-empowered expect all by am deliver enhance teams encouraged We while time. will doing to around financial world. customers, system over model energy so, by the our operating and strong performance early, and

now dive I'll into that, Glenn to pass the results for over deeper With Glenn? our first quarter. it to

Glenn Richter

thanks us joining to for you, and Thank today. everyone Erik,

start our excited to are mentioned to and we business we're early As we by build the encouraged earlier, year, XXXX momentum Erik the these throughout positive continue beyond. on and across as signals

basis, comparable a first the generated In $X.X quarter, billion sales in year-over-year. sales. X% increased roughly IFF On currency-neutral

revenue Biosciences Scent, strong businesses, Our and was Nourish. led Health quarterly sequential across by volume mid-single-digit including growth performance & with of our most improvements

inclusive line of have pricing to largely modestly rates markets, in positive, the changes. particular where was quarter, the that have peso, been euro Pricing drive our indexed benefit, FX-related U.S. in emerging pricing exchange pricing the with plan. negative Argentine like and/or Absent in would pricing in this industry, we, of

represents quarter with a million. and led contribution growth adjusted productivity operating delivered $XXX from the strong the EBITDA by basis, profitability We This year-over-year a XX% volume comparable initiatives. in increase on of

quarter. points XX% As approximately a adjusted result, the margins margin to in basis nearly improved operating XXX by

saw business across by volume strong to segments. basis sales Nourish, growth into very Slide X% X. comparable deeper now double-digit I'll we currency-neutral with on Turning performance our improvements price. In And strong markets. business the Flavors across and both all in dive our Flavors with a increased nearly in growth in

low up declined due since comparable planned digits, was volume single quarter of our actions. pricing first time XXXX. year-over-year the fourth Ingredients Functional currency-neutral the Overall, sales to

drove XX% EBITDA gains with and increase in of volume gross and Ingredients. profitability, In solid improvements operating comparable in a Functional both growth terms productivity margin Flavors adjusted

with another both & Health line and top growth. Biosciences segment Our bottom had quarter strong

portfolio, by Improved led in Food performance a Personal drove comparable mid-single-digit adjusted Processing in sales Home operating sales. Nutrition X% Enzymes, in Animal increase a double-digit to & currency-neutral in H&B growth Care, volume increase Grain growth comparable and gains Cultures productivity and & Solid XX% in and EBITDA. year-over-year led our

in Ingredients basis. primarily Scent outstanding Fragrance sales, delivered The which terms of Fragrance in delivered Fragrances. in Fine growth Consumer EBITDA double-digit including in productivity volume growth XX% an growth excel adjusted led growth quarter, comparable by profitability, growth of mid-single-digit and another also comparable currency-neutral by improvements, a and segment operating excellent on driven and XX%

into expected Lastly, a distributors the is in excipients from volumes noting to due distribution these destocking It's Pharma first destocking more reduce model. that of some other trends, business continued core productivity last of improvements to were market-related Solutions, due was and the in Pharma by year. while initiatives, which initiative Solutions' to late offset its as on began quarter driven worth part and we convert trend reliance direct lower saw the

with and more relationships, portfolio also are margins. be enhance as efforts Pharma direct will We thrive resources in our partnership complexity of Solutions succeed access chain Also, believe while the positioned approach to shift optimization mentioned, divest customer technical business the reduce Roquette. will as provide agreed confident improving to and to greater to we part supply our a the and business

cash quarter, of Now the while roughly on results. flow million operations impacted XX, from and normal position. CapEx $XX quarter our I'd $XXX leverage discuss Slide was million X.X% flow like our free this cash flow seasonality In to totaled Cash first or sales.

reminder, March. QX bonus usually in quarter is of we year payments the a make As flow cash annual lowest the cash as

in $XX the totaled Our flow free negative position cash period. negative quarter year-ago million versus $XX in the million

the paid also of We first million the $XXX through end quarter. dividends in

equivalents sale. $XX and including cash $XXX in Our held cash assets totaled million, for million

our debt deleveraging adjusted versus continues year at credit our billion of to for efforts almost in ago X.Xx make ratio a quarter progress debt end. gross net $X reduced by EBITDA and to IFF

credit Our $X.X approximately EBITDA adjusted trailing XX-month billion. totaled

quarterly proceeds $XXX the reflected note were of Please not and in million received that of in the the April sale results. LMC consequently from

achieve Pharma we close, the will announced net EBITDA in our are we target will transaction to Solutions the following XXXX. we confident be Xx adjusted debt credit the of half transaction, completed which of expect first With that

now ranges. On Slide XX, Based the year, our performance improved will our turn first the This mentioned, that and our improving high to for majority the now outlook balance previously operational our of remain with Erik guidance our quarter XXXX. year the reflects across to optimistic be and, expectations belief announced cautiously I'd our volumes end we X% previously financial expect like the as also towards about and ahead announced to our end towards of trend in of on trends to the portfolio. for the X% results of higher

approximately decline markets to guidance versus approximately previously pricing We quarter, X% also therefore, and expectation pricing announced that the pricing previous due FX-related would our year the in first emerging for pricing X.X%. XXXX to increases in saw full raised

now of foreign we these have FX X% an which X% versus is expected previously to our growth, exchange offsetting X% With adverse the rate pricing as changes, contribution. impact currency expect essentially sales on X% will to

XXXX, for announced line, productivity. This billion. bottom $X.X end we as are assumes billion the adjusted range strong improvements volumes towards now previously $X.X On guidance operating well EBITDA continued our in as the trending to of of high

is ability in our and it our While the still volume guidance. have year are consequently, year, encouraging, trends confidence full in to we achieve early increased

For the driven $XXX EBITDA billion with expect million operating billion, $XXX volumes approximately by to sales to we second to $X.XX of an quarter, approximately $X.XX million. adjusted be improved

turn for closing it now to back remarks. Erik I'll

Jon Erik Fyrwald

Thank you, Glenn.

I IFF the shared have Team call, at so I top the much see my of potential. as as on XX first been energizing Now days

top and And bottom it's positive time, an results year show We transformative talent have quarter our this from building we first our our honor and during are solid I outlook. by global and great to to the across positive teams, and am the encouraged line capabilities and IFF our momentum. start lead that

lot work still we do. Yet have to of a

to to competitive, us And committed start need can what growth. a forward. see very helps win peers drive the market differentiate I'm innovation that they year, products solid profitable them and and bringing the from be going to what give and, and sustainable accomplish customers to us to excited As continues our we we with turn, are in

now I'd up like it to open questions. And with that, for

Operator

Our of Kevin Instructions] question the Vertical [Operator McCarthy Research comes Partners. with first from line

Matthew Hettwer

to how detail context see react operating seen start This to could philosophy is Matthew to additional regarding businesses your first nice strong Hettwer XX the year. give some Kevin. on through It's you a the you've the and us individual new Erik, days? for

Jon Erik Fyrwald

Matthew. question, Yes. Thanks the for

hear the tour probably around the different we've that a tour you And As right from employees listening our customers discussion world multiple world. models, to companies our XX know, together been on it's is around different all and And been announcement since after operating coming change philosophies. a my from I've that the great joining with January all of IFF. really of what the or I've discerned had

proud the we team organization the and come done and very I'm there do And we've uncertainty that nicely, clarify operational was of what drive together to performance. how we're team, the to structure to And the about pillars and structure been significant our forward we model has were have executive things. together we've able is four that and on going leadership the going focused and very

around had feel town around And our world. think time by forward. employees. on it clear and special We've spent growing. we've the feel of moving energy with our both engagement gotten company the people I what all leadership. really the our halls love I is world, their the And how We've all live about We've touched I video. I we're

then enthusiasm we're that bringing for the our drive us unit need we and is to innovation customers I that, make our leading on win customers, that teams empowered our all innovation share great innovation profitably to job that think acceptance core, we're there's also customers we an that help to of model, and market us business grow at to have with focus and company, innovation our the the for the sure of support it's customers value. and and

reducing technology, that helps finally, in driving productivity, shared like where and productivity and things using then company also sense, And strengthen service with technology. makes we have and reducing smart functional more information consultants, it healthy layers, the in innovation that productivity, centers, that doing growth invest us

to feeling our around executive you. great Thank can world. all this that of and great capabilities, there's all together try And full we my people leadership So company. do that to is people potential in is unleash the team the coming

Operator

line Nicola Paribas. Our Tang next comes from question of the with BNP

Ming Tang

the operating that about it Pharma of there you divest And intend the about talked do any Solutions, you change divestments? sort announcement Can bit is Erik, further portfolio? talk Firstly, following now? little in you Or model. for a pursue to to

could And of you explain confident is another on the flow, in are of And for upside, the quarter? trade in million given was $XXX guidance? Glenn or EBITDA then high flow in your there in free upward the on target drove if adjusted in I end, squeeze an still for cash one million the what see cash could year the it revision, basis? terms increase potentially And that you you the receivables $XXX

Jon Erik Fyrwald

the Okay. I'll start Nicola and questions. then hand it over to Glenn. -- And thanks question, for or

first be of then and strengthen So the to over Pharma opportunity Solutions portfolio, of Pharma And beyond business the for performance on the Solutions we see Roquette. of a lot the us all, with that will year. further year next with another

the course, four going other on But we're Flavors then the units the that both focus we have and forward, to driving of business really Functional Nourish, with Ingredients.

bringing is to drive perform our productivity, on to to Biosciences focus healthy to in now it leading drive Scent best profitable growth, have 'XX make have quarter, We those performance the ways strengthen All can supporting well, the the that and but we're the sure deliver year and & and innovation for full share in Health us market that business do second beyond. we XXXX, business. we businesses

the takes it right each of at We're take win we has years each strategy businesses have also making coming portfolio that of we'll businesses do review the and businesses. those of to process what to going what And through a each in for the sure to look a the investment-wise going and forward. win in

Glenn? we've our businesses quarters got But each the in more are now, all right capabilities hear is with right bringing making in across the right right the that by culture strategy, on innovation. years. customers business, So focus collaboration, coming and you'll the sure about winning and leading

Glenn Richter

Thanks, Erik. well. adjusted We're actually free our terms trending more full outlook in as Thanks for year question, and the for favorable of flow cash Nicola.

be to earnings performing versus We're momentum of than some we and planned, and a is then actually, some million mentioned, capital going just $XXX taxes. working improvement timing to $XXX actually million. As closer the combination probably expect -- on better actually

costs includes would Reg that, G note pharma. that to related I also higher

$XXX pharma entities, that as include did systems, So $XXX year we a Erik not The the for this mentioned, gave et million cetera. is heavy legal you obvious of balance in lifting, Feb separating reasons. That's about roughly number million.

question. on directionally, So adjusted $XXX a flow basis, million an cash Thanks for free the on basis, million. $XXX reported

Operator

Josh with question of comes line UBS. next Our Spector from the

Joshua Spector

on on ask I actually bit of a think easier. expectations basis comps on get cadence. volume very congrats some strong so to I wanted But year-over-year quarter, I of first mean, that. your a the clearly,

So is we say call your is Or consider? you'd that you just would as view conservatism? a characterize out should you something there headwind would

Jon Erik Fyrwald

more into soft Thanks, fairly Josh. But then CPG me see still And as U.S. the the it, EU. the still and company I clearly, in give you start Glenn can let coming are and volumes details. new company,

do whole most destocking tailwind so alluded Solutions the the Pharma of we Glenn Pharma of is marketplace, And of can think expect we've some market a Solutions. volume of outside expect lot strategy. But seeing that emerging from of market and very line growth. are in destocking that can't a to although after we're lot both seen markets bottom there destocking, growth. I change end And a the going the our are growth channel attractive we

we're even and also and customers. leading be has about increase innovation customers didn't heard profitably successful that focus market to projects through take with commercial And growing win. we projects does But focus that to and and overall, more a we're bringing and that be our the we customers didn't with lot innovation What leading their the growing we're winning. projects going I've so understanding already even growth to more them? share our Glenn? winning business us that are win Why win them? bring it for with But

Glenn Richter

think, underneath of until more Erik few we strengthening environment, a which sort we hard see mentioned, sort incredibly a Josh, have second Thanks, as has months and on Erik. Again, to half. the until the of us consumer it's I belts, yet to our in optimistic for appear, be

volumes the X% half, to of As second point, half to a X% first X% and basically reference circa X%. the

down As second of a X%. year, because X% and reminder, aggressive half of destocking, last half, was the down first the the

the guidance. think it So a as strength before half. end said, I see about bit confident of more But is greater volume providing need the there market, we little Erik think higher of sort as the as lapping second in of growth in well we're we sort to

Operator

Sison next Mike comes from Wells Our question Fargo. of line with the

Michael Sison

Really margins, rate of to improvement really would first that XX%. EBITDA run about of When I year. nice sort sequentially. imply the levels the Guidance and the start think EBITDA quarter good fall

curious just So any the Glenn. reoccur? first for XX% quarter and volume wouldn't year? the sort of of positives And demand wouldn't of congrats remain levels if And EBITDA stay on margin rest range one-time here, that why this sort retirement, during the in

Glenn Richter

Mike. Thank you,

So good question.

implied So the of volume of That mix, XX.X%. year XXX LMC. of related of to that XX% of and around is balance change, sort is the inclusive for QX, half points basis

million revenue. $XX out and So LMC, million quarter you about take about per $XX of

margin. high So it's relatively

to everything So a XX% that down you basically quarter. the XX% in normalized, gets from

if just XX%, expenses. for of The QX your then somewhere XX%-plus the to versus bit XX direct range, more we basis maintain, should balance points then year. a price-to-cost were volumes to and in some really the net forecast But the residual the timing of realization question, probably in be is little answer

Operator

Citi. question Cunningham of from with next Patrick comes the Our line

Unknown Analyst

just expectations for if where your price/cost small price you're for positive Are to to seems Zhang FX. structural This any net pricing? -- is Or for a net be [ The giveback bit Eric than full on a guide out What you be seems this the are is ] you expected? there getting year? Patrick. areas less

Glenn Richter

net full the balance QX as I mentioned, than Eric, year. expecting year, positive, a we're small I the biased of little Yes, right. more you're mean, the towards

Functional which year, pricing space. highly focused Ingredients in Our the largely were actions, givebacks were this

time. pricing for are performance the that don't the improved the year. these And business well at We the part tracking actions. actions is other believe any the we to of top against expectations see additional related do year on sort We for the set this kind of of we in point balance that in pricing in

environment And inflationary at if we in the the year, of pretty balance general, it's look stable. of sort the then for

Europe. you, commodities we think a than positive as flattish what's mentioned, slightly I trending balance And are in a stability year. Thank of tad freight, net But given the ocean happening Red more up. quarter energy trending the Generally, the generally, is is little the in up, Sea. particularly and, to maybe down, logistics first in price particularly Eric.

Operator

question Our Begleiter the David from next Deutsche comes of line with Bank.

David Begleiter

Or Ingredients improvement the looking entirety market due Asian low-cost some the level competition? forward, return that business Functional turn and business portion in in there Erik, will to of this this sales not And can is to of does business? earnings? prior of

Jon Erik Fyrwald

at the that 'XX are refresh Ingredients XXXX families the right looking we're we marks second strong the systems year the some Ingredients question, and business. beyond. you and and now improvement this Absolutely, Thanks Functional focused to the quarter, years. year, what but hard the but improvement but in team full the 'XX, pleased after to strategy right Functional beginning addition the long, are make all tough again very make would it I the are be of we better much with doing is delivering with a are approach for third Functional of -- also the putting sure which to what a And takes see doing pleased sure for turnaround. And working very happening, strengthen XXXX, to that, say quarter execution, And it our continues business business. the David, improvement what I'm into in a that starting that that and to things very spell. product start really in a to back focus and glad on we Ingredients see of more after across on to the then doing sustained making And is

start hear can and in you'll they're how with we that on making, is of in good 'XX more we'll progress. quarters. progress the taking both that on pleased we'll turnaround. do very the about XX, and actions a but I'm it And the is with But the the then see productivity. coming focus And team customers making

Glenn Richter

the Yes. to that, would of back they to we've we're effective, innovation in A past, on the we we implemented our of just in sort didn't as equation structure the get of operations. And question. we've be. are full going in we're to service early the year. procurement more XXX% pipeline. The late going recovery And extensive year this by I of have where the next David, add last the lot manufacturing of through for to where of start margin mentioned to probably to as into think need to and Pricing piece terms the That review stated until piece 'XX. pleased side. a been final the We're the get be very be. will cost actions Thanks elements is should year this

Operator

Our with Sachs. Goldman line next from Samuelson Adam comes of the question

Adam Samuelson

anything outsized perspective notable out volume you versus trends if in love would the there's of the as that by given kind And performance the or quarter first whole from discussion. on digits. would of areas to a again, mid-single year? as there materially quarter differ probably Would regional the exclude region that is over weakness call portfolio think the and your I balance And get first where could of strength up anything pharma performance, we

Glenn Richter

a year, America look others H&B the in had than the EMEA. seeing the phenomenal of in what That's greater Adam, business, we of and combination softer emerging by the are across in more little board, and volumes, X%-plus so marketplace. If a in a the sort in from volume and good seen of probably question. start Regionally, the standpoint range. Scent we LatAm, generally and X% strength have markets Nourish dissimilar not Asia North to

continue so bit then the As H&B a Scent we then pharma we're year, softer not from for down emerging and think were to to planning high of about X% the balance we we're the second and seeing very QX market, getting flattish improving the these into some QX where quarter. about and the at balance in actually Nourish of year. little we're these as continuing very, least through move and levels, at softening expecting the more and But regional because actually they generally, on balance, that

Operator

comes Our line with the John next Roberts of question from Mizuho.

John Roberts

Best for the CFO Erik, all to anything think wishes, companies Glenn, than within CEO Do from thanks your help. opportunities IFF has more positions. most promote and had you for there's that on change smoother? positions? outside is to culture Board the just bench, in there a the the organization so to deeper to are a develop needs C-suite transitions Or look for C-suite

Jon Erik Fyrwald

most we them leaders have think important sure and promotion give their Well, careers. thanks it's one. as do talent we is thing that important right the talent through right in me, the the And advance we the to we for really the To that develop I question, John. the continue opportunities to a company, make

sometimes talent needs external I company some in of And point. retire across always do inside. But successor significant when talent if come was the and you But the background promotions. Ana like have the Paula don't And the and Syngenta, there you President at I can fill made great to to as tell run we also, Mendonça just you gaps and have inside come was look customers, promotion, or that, Scent. one like much prefer promoted change at enthusiasm leadership so if division far I from my And the out that when her internal point to want being Scent right to her I I so that people at for we've very that. executive talk to I'll

work Board the from the inside make to make the sure can. within we team to that sure wherever right to continue executive we will we're with developing and promote with I So that leadership talent the company

Operator

Panjabi the line comes of question next Ghansham Our Baird. with from

Ghansham Panjabi

sort objectively the to IFF then terms of in of of to residual you high related you that Erik, go Fragrances? of on And meet the of was -- cetera, going quarter that guess, how by? sort driven part sort Was terms would gains? Consumer first et as that, of of be I with that just what listening And share moats in off, your especially tour, are did drive performance, going assess on and customers forward? Scent, the if it the was, what businesses first

Jon Erik Fyrwald

with way quite It's ways. lot dates a got remaining, The have really you. we've businesses terrific insight Laurence understand it innovation of great of I consumer also back people the We a in some that to and be capability. are customers, that good that that a would back lot is ]. capability Thanks, [ say had history

bring having a it collaborate wherever drive but that decision-making makes be in clear, we can to having to So customers potential. time, -- the innovation their things, and to would by very potential making our end-to-end, people businesses full including about. clarity solutions we what customers, that's say then so culture able we be unleash in the our working enhance have and the the to the to collaborative is also but And to their our ability successful. And productivity. our I talking and capabilities, the across strategy be businesses, capabilities, sense, at it's drive team by leadership same people execution, healthy full haven't to realized even or to It's what clarity

forward. And so you'll more think people IFF that, well enthusiasm more a across of is we've if that can and find going And you I what do lot to believe got unleash. to what we potential talk I think lot the company, doing a doing I with but about we're

Specifically Scent has with time of companies lot so stayed customers. world-class the great time they're of perfumers company of customers lot a has I've to I to perfumers. because CPG our just proud been that brought on so company. innovation value. our am by perfumers that CEOs with that name have part success. such this spent I important this their focused be Scent, on leading named of customers, unit perfumers a that a largely in got to spent And We've I've think has with

is is, consumer great great that scent, team the great to they're the the teams fine or what's the driven success or formulations really the not but consumer floor develop scent detergents And fragrances our or co-create whether leading the detergents growth. perfumers or to shampoos making our body wash, the them, bringing bringing of learned, consumer been whole dishwash such and products, the around laundry new cleaners customers critical has so new of technology product. And great fragrances sure I've we're whatever great part a detergents, it help and and perfumers or help perfumers around products, only

the So I super under Ana's that leadership strong expect with expect that to performance team continue. and I she's got, continued

Operator

Bank Tiano Our of from of Salvator with America. next the comes question line

Salvator Tiano

correctly, you I If the for year. about remember had gains talked million productivity $XXX

upsized number quarter, the a quantify little you in benefit the can rest And what can of the this bit do talk given gains of is So you What for -- strong year? the the in QX? obviously you for was year? first the expect rest the

Glenn Richter

Good question, Salvator.

around guiding of our higher EBITDA trending are the million of about towards hence, in at quarter. $XX some million full We of range guide. And productivity year our about that's terms and, commentary $XXX per

fairly and additional very driving as from that in of that of everything would best it's taking the note, I terms progress literally really we out, leadership rationalization to previous of way, achievement. terms disciplined made ratable there's cost calls, opportunities. by of we've tremendous with is have our plant-by-plant practices. the So plenty kind procurement And in in and SKU looking behind -- said in approach teams a operations

I As platform, ingredients to approach provide which opportunities. ] our taking additional a will [ we're zero-based mentioned,

within behind global been leveraging as And technology so on spend, focusing focused really automate need eliminate shared that indirect opportunities continuing basically we've on our have way getting and our been at then to advance services, out looking a RSA really to dollar that, work. every we

speed of piece picking that actually it is So up well. as

we're very suggest, going to Thanks So out question. numbers. the deliver future, continue $XXX as the million. good we pretty for we feel I about to And productivity strong into would look

Operator

of from Lisa De question comes with Stanley. next Morgan line Our the Neve

Lisa Hortense De Neve

first you first some any Congratulations you can not reduced second for just which be strong maybe sneak to year, see where a see optimizing require or going on half question, the the scope share you complete announcement in the of pharma then to question. with is up first your expected I'm next sheet quarter. redemption of potential My division, so where position that debt and refinancing? And for in may balance could that be the or

of So some their are KPIs what on they compensation this? during feeding and light shed departments, and the may on structure HR they the into variable may receive your amongst to now you have presentation, pay you divisions. deliver directly mentioned or key finance that not others, Can your

Glenn Richter

this is Sure. Lisa, Glenn.

strategy. we're innings our management deciding of liability of early So the in sort

basically Coincidentally, 'XX $X.X you As risk. look, some as we're actually cheaper are more net have cumulatively how we pharma. so and debt the bring we're in think But $X.X of actually be know, holistic notional balancing trade-off as maturities for will savings, that bringing and a proceeds to taking well interest billion. billion circa the going from cost we in of between about refinancing repayment, we 'XX debt,

about think we'll of some So bringing that. down part as towers

So going more the the but about to as But optimize just the to close are finalizing forward. thinking get we there'll not closer the to of come deal. maturities immediate we how structure be sort of

that, with I'm question? want take take the question. to you to happy next next So Do the Erik,

Jon Erik Fyrwald

Yes.

there plan and performance. about set clearly the that on And business changes. units feeding units, to clear their the be can changes no into so reporting XXXX So business into business everybody because making drive and functions done being units, the we're the the not it it's is will

corporately units business reporting functions we're that the XXXX, be in be will into business those incentivized reporting effective unit on will the But performance. that

the they their corporate unit performance more is also, units. to total what to a there enhance the functional company that the business functional we're corporate business doing component. But unit's collaboration As people part corporate and overall to great clearly, also business I of alignment performance. career the each will people best have opportunities collaborating across incentives, be and the their the would on functional want company. team driving course, also are, we have but that units more business encourage continue their everybody that that performance a continue that business level drive to of element large And senior the their corporate business and across leadership ensure practices of unit's to say performance across and

unit other that So it performance and the their to business of to of collaboration incented each clearly, business drive be that business a business will combination. with is performance highly enhances businesses. the be the going performance But

Operator

comes question line Stifel. of next with Mark from Our Astrachan the

Mark Astrachan

Two clarifications and a question.

on and So it Scent there the big quarter. benefit number a in rate partly was I sounds that lot like basis. year-on-year the a EBITDA of guess, growth volumes in explains

is think normalize us the with the much would reversal it the how year? And had and that from you really business. channel helpful. you, from refill picture, to same that, will how volume you if growth is ordering customers do your destocking broader are Scent of to I could that, the XQ through much thing what head And specifically we be So growth, guess, as say the fair total maybe EBITDA tell on

Glenn Richter

Yes.

hard in Mark, terms on chain. to definitively of the question, of second going your what's understand kind So downstream supply

were from a that QX was X.X there bit certain but We probably than into reducing volume as general, little know, in segments. of prices, in went point. less directionally QX, think I However, you

the that marketplace. there's generally, to at terms restocking I of in not the some any this fairly QX. the point decided no it's time. of think into minimis. destocking. There's restocking de think, customers there's But is are push in So absence But orders customers view, feeling an In general, I in

In terms that stronger very of consumer versus a your first had in Note volumes, fine. Scent Scent was quarter. it question on strong

mentioned, not will the those balance of volume So single-digit that high as the that the that gains continue sort year. of standpoint. the we're we makes anticipating And mix-neutral through versus from enterprise just --

a is guide our from lower that the year So standpoint. balance that's a reflected volume being in basically piece of

Operator

comes with of Barclays. the Our next line question from Lauren Lieberman

Lauren Lieberman

had two questions. I

just was Food volumes quarter First the and on quite volumes still Nourish up. being the in are industry weak. performance

path it's of were but square curious not org forward, then to up, kind helpful in we're second was question, was So of outside notion if process that plan. though, kind of of update there bit just of us of the a I and that's in understand was, market structure thing hear direction the to you're very was being little you you obviously for the inventory the been that that I -- that, seeing it's structure I your surely right part curious the were versus what not a set Glenn, end the and moving on demand. And backwards org rebuilding Erik, merits deemed performance kind in. could the

intention. there going an were or positive were there something was that There elements to bring

the are can anything, not or So to I'm if org you could sense, of in give you that ways bring I structure make pursuing to just to curious kind if try up? that clarify. that going didn't that you're If think what, model setting up forgo and into there be

Jon Erik Fyrwald

start can add Glenn I'll no, it. and No, to then

First organization all, to the in structure. structure, the have market-based of was idea organization

been have split would Biosciences into & Health example, for So up units. four different

the so that your belief team you business As is your have -- stay can within and creation -- innovation, about stays executive sure a expertise that R&D you customers that talked to the needs manufacturing the we've they that commercial having it, the end-to-end. call by design and innovation, is leadership the gain most capabilities and and the be all way come we end-to-end together bring, going and with as and that an we to that you're making to that really the IC&D, back R&D business that connect there what within engine and

the Now businesses same hit have that different markets. we

with business lot Care, a and common Personal Scent in & have Home both our biosciences So business customers. our

us into global what IFF accounts is to But that enable that end-to-end accounts a overall these by we'll company, but then which working They will So business they what the that will coming include that will that have And the include the to that bring. want to and details of but represent the presidents and that's them. account innovation businesses, that to continue account others, relationship, leader that we'll from the know key experts units want. way, me for which business have will units the account, the large experts really want coordinated. innovation both the can see with bring

Glenn Richter

Yes.

businesses. a I cross-sell. or Ingredients. as predates if optimize which is do combining the significant Flavors "revenue premise, was with these actually focus and the how was synergies way, axis through much, synergy would to Flavors can opposed And individual the Lauren, where shifted the a single much reality either original opportunity" That run better will other Ingredients add, on is that you on So put represent me, being businesses the

we've particularly our As key as in firsthand other long-term et global of Ingredients develop deliver But Erik said, does we just only it the plans, it of a there the cetera. terms focused that mechanisms get team with results. way accounts, more seen cross-sell, to help are to sort on Ingredients,

together. And that's I So your when by from put years question, early was although view shift optimistic. innings, big X-plus very the to the the first cautiously think ago, way,

caution, is the in early. business, it's it on of in business. remediation can we're we starting the we're of on terms Ingredients Flavors on business particularly in or Ingredients share our But There's X-plus gaining terms feel encouraging that place. parity our X.X%. quarterly off percent that house, the of sides to our at a of the would results. lot relative were that and a based good in I trends volumes competitive From were Our set we business what peers both measure

Jon Erik Fyrwald

strengthening but increases. some recovered lost to that that to share of And givebacks. a Flavors, due what a Ingredients, some commercial it actions I land. some is, I would with the was it overpricing pipeline regain team good in of to think now a that pipeline that really also able led to just add that was was And pricing combination was we've And price

Operator

from of comes Jefferies. the with Alexander line question next Our Laurence

Laurence Alexander

inventory on up follow sort comments the dynamics about to downstream. want Just the of

shifting from either having more they're you or them you capital to in net then out, and working for be or days from look bit that a levels? what levels of tailwind pull metrics? product And for If strategies term, current you terms therefore would a customers needing innovation inventory demand little longer are or their further headwind hearing reset other about your

Jon Erik Fyrwald

that consistently, we're So I've back met grow increases XX in than customers. to now ever. the to than maybe more more customers, last with pivoting important -- being since And I've with very needing they're price what able hearing and innovation being from think I joined, is innovation XX

innovation. of business good so to that's it's That's have And customers need what what can what that can because that that's a innovation end-to-end part important that's to our what we're us for They units business. to going more their have why they bring have want that quickly so and that's they're to they aggressively grow and profitably looking continue deliver. for,

So going that's how they're grow. we're going to grow to and that's how

Operator

line comes from next Zekauskas with of the question Our Jeff JPMorgan.

Jeffrey Zekauskas

midpoint your second for quarter, million at performance you you your... of the revenue Or was what can your your look quarter sequentially? basis, quarter that behind allowed is that, are And down Can April Given what's were a maybe I which which the sold $XXX know, dynamic up first up, when about you and cost discuss is goods then versus the forecast about your revenues don't is? your $XX talk X%, on down at second, sequential X%, about your happened volumes fourth million. performance,

Glenn Richter

QX? second Jeff, to of And your was it QX part your that was question, point? What reference

Jeffrey Zekauskas

goods were Yes, change Yes, revenues right. up much exactly there's couple because sold of a in and not cost hundred million. of

Glenn Richter

of productivity we and and then with in were. fourth from sequentially have vis-à-vis is the so LMC Generally, sort the elements the I QX. Yes, Well, items the to related referenced, of think, think really a QX. the you I'd mix. that as dynamics yes. QX about of business $XXX mix QX. of about some the timing QX there is basically the are dynamics in you one-time net are mix decline. yes, to of and associated million some to the X/X fundamentals price Yes, About But number fourth Decline absence that in the very quarter say similar, quarter

year, time we little of the outlook of in bit The savory year, sort well. Versus the of remind to business FSI. other just seasonality last part solutions, in prior business, terms had had a we as the is you, this

in LMC had also We the mix.

at So the we're question a the second about reduction of seeing comparison. Volumetrically, on quarter, there's year, the of your good substantial an lousy was versus this in for sort quarter a X% to into But obviously last extremely we're well pretty middle extremely all-in point. month. year-over-year month. in revenue the anticipating an a growth was X% volume April it QX. We're what X%

the in least book bit the a of point May Jeff. call June trending X%-plus and of Thanks, performance standpoint. overlap basically is there's sort But the at towards it, that quarter. of, terms from an for that So this at

Operator

no time. questions There at registered are this

to will I for concluding over remarks. pass the So call back Erik

Jon Erik Fyrwald

for all joining you Thank today.

two me Let comments. just close with

to did announce just But of pending There's make First do. yet. And of sure, get leaving part to unleashing he's as we're all, enjoying ELT, retirement. the to us lots leadership want work I him team, executive Glenn potential. more his our not full

we're really you to Team full try delight our is great very capabilities. Second being people, to it's do of unleash our much. our IFF. and point part Thank customers, shareholders. all can to we going our We've innovation got employees terrific great potential And and

Operator

today's concludes you call. your Thank participation. for That

your disconnect may lines. You now

International Flavors & Fragrances (IFF) 7 May 242024 Q1 Earnings call transcript