International Flavors & Fragrances, Inc.

At this time, I would like to welcome everyone to the IFF third quarter 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 one on your telephone keypad. If you would like to remove your name from the queue, please press star two. 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 third quarter 2024 conference call. Yesterday afternoon, we issued a press release announcing our financial results. A copy of the release 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. During the call, we'll be making forward-looking statements about the company's performance and business outlook. These statements are based on how we see 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. 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 the press release. With me on the call today is our CEO, Eric Fehrwald, and our Executive Vice President, CFO, and Business Transformation Officer, Glenn Richter. We will begin with prepared remarks and then take questions that you have at the end. With that, I would now like to turn the call over to Eric.

Well, thank you, Mike, and hello, everyone. I'm glad to be here with you all today to discuss our solid third quarter results. On today's call, I'll begin by providing an overview of our performance and the solid results across each of IFF's businesses, which gives us confidence to increase our full year 2024 guidance. I will also provide commentary on our efforts to continue to strengthen IFF for now and the future. I will then turn the call over to Glenn, who will provide a more detailed look at our third quarter financial results and discuss our outlook for the remainder of 2024, and we will then open up the call for questions. If you go to slide six, IFF delivered another quarter of solid results and significant bottom line improvement compared to a year ago. IFF achieved growth across all our business units with notable volume improvement across the entire portfolio. The combination of improved market conditions and our global team's passion and drive to serve our customers and address evolving needs across end markets was a major contributor to our performance. The actions we have taken this year to strengthen our business and capital structure, as well as our push to drive productivity in today's dynamic marketplace, are producing encouraging results. Importantly, we delivered high single-digit volume growth with broad-based contributions across each of our businesses. Equally encouraging, comparable adjusted operating EBITDA grew by double digits in the third quarter, primarily driven by volume performance and productivity gains. Considering our solid performance in the third quarter, specifically flowing through our over-delivery in the quarter, as well as our continued cautiously optimistic outlook for the fourth quarter, we are modifying our full-year 2024 financial guidance. We are making solid progress against our targets and are confident we will achieve net sales between $11.3 and $11.4 billion, which is almost $100 million higher than our previous guidance range. We are tightening the range and are now targeting the high end of our previously communicated range of $2.1 to $2.17 billion. Lastly, I am pleased to share that we remain on track to complete the previously announced divestiture of our pharma solutions business in the first half of 2025, marking another significant milestone in our portfolio optimization and deleveraging journey. Now moving to slide seven, I want to highlight a few key achievements so far this year. While we continue to operate in a challenging end market environment, our performance over the last nine months has bolstered our position as a preferred innovation partner and growth enabler for our customers. Over the last nine months, currency neutral sales grew 7%, primarily driven by double digit growth in cent and high single-digit growth in health and biosciences. Comparable adjusted operating EBITDA has increased 19% year to date, fueled by our strong recovery in sales volume growth versus prior year lows and our productivity initiatives. Since announcing our new business-led operating model, operating philosophy, and strategy refresh earlier this year, our focus on getting back to the basics is translating into stronger financial performance with greater end-to-end responsibility and accountability. With a reinvigorated mindset and a simplified structure, IFF is better positioned to navigate today's complex and fast-moving operating environment. Now, these steps also include sharpening our focus on key end markets and increasing our investments in high-growth areas for the benefit of our teams and our customers. In the third quarter, we also opened a creative center in Shanghai and have started to invest in additional creative centers in Mexico City and India. Together, these innovation hubs in important markets expand our global footprint and ensure we have the regional expertise required to serve customers on a more intimate level and address their unique needs. With our people at the heart of IFF's revised strategy, I'm equally excited to announce that our employee engagement has improved significantly over the last 10 months. As I've said before, empowering and enabling our global team to do what they do best is essential to our shared success as a global organization. And earlier this month, much of our global team had the opportunity to come together and celebrate IFF's 135-year legacy and 60th anniversary of being listed on the New York Stock Exchange, a true honor and reminder of the incredible legacy of this great company. I have no doubt that that legacy of IFF will continue for the next 135 years, but for now, I'll pass it on to Glenn for a closer look at our quarterly results.