International Flavors & Fragrances, Inc.

At this time, I would like to welcome everyone to the IFF fourth quarter and full year 2023 earnings conference call. All participants will be in a listen-only mode until the formal question and answer portion of the call. To ask a question at that time, please press star 1 on your telephone keypad. If you would like to remove your name from the queue, please press star 2. Participants will be announced by their name and company. In order to give all participants an opportunity to ask their questions, we request a limit of one question per person. I would now like to introduce Michael DeVoe, Head of Investor Relations. You may begin.

Thank you. Good morning, good afternoon, and good evening, everyone. Welcome to IFF's fourth quarter and full year 2023 conference call. Yesterday afternoon, we issued a press release announcing our financial results. A copy of the results can be found on our IR website at ir.iff.com. Please note that this call is being recorded live and will be available for replay. Please take a moment to review our forward-looking statements. During the call, we were making forward-looking statements about the company's performance and business outlook. These statements are based on how we think things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to our cautionary statement and risk factors contained in our 10-K and press release, both of which can be found on our website. Today's presentation will include non-GAAP financial measures which exclude those items that we believe affect comparability. A reconciliation of these non-GAAP financial measures to their respective GAAP measures is set forth in our press release that we issued yesterday. With me on the call today is our CEO, Eric Fearwald, and our Executive Vice President and Chief Financial and Business Transformation Officer, Glenn Richter. We will begin with prepared remarks and then take any questions that you have at the end. With that, I would now like to turn the call over to Eric.

Thank you, Mike, and hello, everyone. I'm excited to join you all today. I would like to begin by sharing some initial perspectives since joining IFF. I will then turn the call over to Glenn, who will provide a look at the fourth quarter and full year 2023 financial results before providing commentary on our current outlook for the full year 2024. After that, we'll open the call for Q&A. Now, I officially joined IFF on February 6th, and I have been impressed by the world-class teams globally and the strong innovation across our company. I spent the last few weeks visiting our operations and teams and some of our US and overseas businesses. I spent that time listening to our teams meeting many of our customers, and assessing the current status of our businesses. IFF has a proud history as a global leader in high-value ingredients and solutions and a great platform from which to build and expand our partnerships with customers across the value chain to help them create leading consumer products. I believe in our purpose to help create a better world through science and creativity applied to sustainably meet customer and consumer needs. The opportunity we have ahead of us is very big, and that is why I joined IFF. We have solid businesses and will take the actions needed to unleash our full potential to start to deliver profitable market share gains by bringing great innovation to win with our customers. A perfect example of this is in our scent business, where we have been outperforming competition, something we must do also across our other businesses. IFF also has other high-quality businesses, such as flavors and health and biosciences, where we will leverage our innovation to deliver higher growth rates with very attractive profitability. And in some of our challenge businesses, such as functional ingredients, with focus and attention, we can significantly improve performance. In both instances, we will do so by putting the business first, eliminating unnecessary processes and overhead, driving empowerment and strong leadership. And by doing so, IFF will be a more innovative and customer-centric organization that will be effective and efficient. We also must be better executors focus the IFF team away from distractions to continuously grow market share across all our businesses, put more of our investments into our high-return businesses and transformative R&D initiatives and our IT infrastructure, and achieve our capital structure targets by reducing outstanding debt. And when we do this, over time, I see strong upside and value creation for all IFF's stakeholders. Moving to the next slide, I'll walk through the achievements and factors that marked IFF's progress through the fourth quarter and full year 2023. Now, throughout the past year, IFFers have continued to take important steps to strengthen our financial and operational foundation and position this company to deliver value for the near, mid, and long term. Our performance in the fourth quarter demonstrates progress. While reported sales were down, comparable currency neutral sales increased 1% and comparable currency neutral EBITDA grew 17% with an adjusted margin expansion of 260 basis points. We've also seen notable improvements in volume trends across the majority of our business segments in the second half of the year. enabling us to perform within previously stated guidance ranges for full year 2023 sales and adjusted operating EBITDA. Now, with this progress and the improving performance through the second half of 2023, we exited the year on solid footing, and we are optimistic about our ability to build on this momentum and are targeting getting back to year-on-year growth for the full year 2024 while strengthening for 2025 and beyond. Now, as I said earlier, we are committed to reducing our level of debt. We have therefore announced an update to our dividend policy to reduce the quarterly dividend by approximately 50% to 40 cents per share. This is not a decision the board and management have taken lightly as we know the dividend is important to shareholders. However, It will enable us to reduce debt faster, strengthening our capital structure, which will create additional long-term value. This will also give the company greater financial flexibility, which will, when required, give us the ability to make more high-return growth investments. I'll now turn it over to Glenn. Glenn.