International Flavors & Fragrances, Inc.

This time, I would like to welcome everyone to the IFF Second Quarter 2025 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'd 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 will request a limit of one question per person. I would now like to introduce Michael Bender, Head of Investor Relations. Michael, you may begin.

Thank you. Good morning, good afternoon, and good evening, everyone. Welcome to IFF's Second Quarter 2025 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 .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, 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 the press release. Also, please note that all the sales and adjusted operating EBITDA growth numbers that we will be speaking to on the call are all on a comparable currency neutral basis, unless otherwise noted. With me on the call today is our CEO, Eric Fierwald, and our CFO, Michael DeVoe. We will begin with prepared remarks and then take questions at the end. With that, I would now like to turn the call over to Eric. Thanks, Mike,

and good morning, everyone. Thanks for joining us today. Our second quarter results reflect continued progress with growth, improved profitability, and our vestiges that have strengthened our financial position and our net debt to EBITDA is now down to 2.5 times. This progress shows that the steps we are taking, including creating and bringing leading innovation to customers and driving operational excellence, is paying off. I will start with an executive summary of some accomplishments so far this year, and then I'll turn the call over to Mike DeVoe, who will provide a more detailed look at our financial results for the second quarter and our current outlook for the rest of 2025. Then we'll open it up for your questions. On this next slide, I'd like to summarize our recent results and the progress we are making towards building a more competitive, growth-oriented IFF. We achieved solid growth and profitability in the first half of 2025 with 3% sales growth and 7% operating EBITDA growth. I'm also very pleased that during the quarter, we completed the divestitures of our Pharma Solutions and Nitrocellulose businesses and successfully completed our debt tender offering. These actions enabled us to reduce our leverage to 2.5 times ahead of our target of less than three times, further solidifying our financial position. This is the first time IFF has been below 3.0 times net debt to credit adjusted EBITDA since 2018. And yesterday, we also announced the divestiture of our Soy Crush, Concentrates, and Lessothin business to Bungie. These products better fit with Bungie, and it's another step in our focus on products with differentiated innovation that enhances margins. And this will get us closer to our team's EBITDA margin goal for our food ingredients business. And as we streamline our food ingredients portfolio, it also strengthens our ability to continue evaluating strategic alternatives for this business. We also announced a new $500 million share repurchase authorization to return capital to our shareholders. This board authorization shows the confidence we have in the future of IFF and marks an important step toward a balanced and disciplined capital allocation strategy, which prioritizes both business and reinvestment to drive sustained growth and return of capital to shareholders. Looking ahead, we remain on track to deliver our full year 2025 guidance that we outlined earlier this year, despite an increasingly challenging operating environment and the time it is taking for the increased investments in R&D and in health and biosciences capacity that we started to action through last year to show up in increased sales. We continue to focus on the factors within our control, and as we said on the first quarter earnings call, have prepared for a more difficult second half, particularly given the strong prior comparison in the third quarter of last year. And while we expect to be at the lower end of our one to four percent currency neutral sales growth in 2025, we are confident in our ability to navigate evolving conditions, respond swiftly to emerging challenges and opportunities, and maintain discipline execution throughout the remainder of the year. We have strengthening commercial and R&D pipelines that I am confident will begin to show more impact in 2026 and build for full benefit in 2027. Before I pass it over to Mike, I want to take a moment to thank our IFFers all around the world for driving our progress so far this year. They've started to build positive momentum, including developing leading innovations that will show increasing value in the coming years. And they are doing this while strengthening our productivity muscle to enable us to continue to invest in growth despite increasing market challenges. With that, I'll pass the call over to Mike to take a closer look at our consolidated results for the quarter. Mike?