International Flavors & Fragrances (IFF) 10 Feb 222021 Q4 Earnings call transcript

At this time, I would like to welcome everyone to the IFF Fourth Quarter and Full Year 2021 Earnings Conference Call. All participants will be in a listen-only mode until the formal question-and-answer portion of the call. [Operator Instructions]. 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. to DeVeau, like Relations. of now would introduce Head Michael Investor I

may You begin.

be morning, good financial conference afternoon to you. and announcing good Thank Good financial quarter be and that outlook issued press XXXX. A quarter results for live full available Please our IR note this fourth website that we a is our year IFF's replay. and evening, and you year and Yesterday, copy of XXXX our moment XXXX for will found call. the ask I to full at a release on results fourth release forward-looking recorded Welcome everyone. call can being take ir.iff.com. statements. review

based on current the we'll contain of These of of call, elements the statements making business. statement. cautionary the two which on about Slide be out outlook we've the the laid uncertainty, statements state During and forward-looking Company's performance

factors and our of in today N&B Glenn months in the December February December items differ Richter. respective our our legacy IFF to comparability of year forward-looking cause those three release. allow combined me information XXXX. and can measures and Vice actual IFF Andreas to these measures non-GAAP as both include available of to that their for the will results concerning to reconciliation completion Fibig historical three is affect of the N&B XX February CEO, on note additional we XX financial and legacy months Today's and A exclude President of Executive statement comparability. on XX, months presentation and that full and the to cautionary our please periods the statements, defined also in months light results of defined website. CFO, With of risk as measures factors will using results Please our For is results, XXXX we which GAAP believe be emerge XXXX for quarter fourth January financial call stated our press that refer from Chairman and non-GAAP materially to

begin the We questions take with to turn the you now to call prepared and then will remarks end. over today's I have like Andreas. any call would at our

and you for joining Thank everyone. welcome Mike you, today. Thank us

we the full Before for results into XXXX, our that has important quarter been think for a and to dive it's IFF. year fourth this year transformational I acknowledge

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strong the strengths also the on a IFF's our and in XXXX today's XXXX. extended portfolio performance we dedication by reflect and financial XXXX. conclude our on with like of year exceptional for to speak question the and results outlook Before we'll then answer I'd full our durability of reflecting begin teams. session, for six to call our Slide

business by the today's the sales including affected delivered global most of meaningful recoveries our pandemic. Within we in divisions, challenges operating strong growth segments the across environment,

cover that to by but consisting Like the having combined many adjusted driven Glenn currency very IFF including now depths, position volume year supply actions billion chain persistent modest X% contributions. amid margin. flow actions. global a sales four challenges to pressured $X.XX cash our best are we with of in I macroeconomic cash in a delivered note want significant and these Yet, growth business the delivered strong pricing operating X% topics operate here we achieve X% strong inflation billion foundation basis For EBITDA. continues environment, generation. of to IFF greater evolving or companies growth taking or robust our approximately free profitability so and in XX% in growth financial our very on will XXXX, $XX.X representing pricing significant

towards target, having debt already to de make leveraging our reduced Given to meeting our credit adjusted we strong net to financial progress EBITDA position, continue times. significant X.X

meaningful also our with delivered in We synergies initiatives. connection integration

parts post is balance realization transactions year improvements. IFF XXXX. for our Importantly, we explore our opportunities performed through and of in drive and merger ongoing all In integration execution rapid positions in shareholder further quarter and close synergy approximately team N&B of the we cost productivity to of have synergy as focus sale of optimize to targets greater our one, $X.X to we proceeds. business Frank will made our also continue to sheet control Once our values completed progress the we these successful complete, enhancing combination to objectives, the additional divestiture de-lever more two of eLeveraging. with the will expect Growing the in announced business, strides significant of generate preparations our XXXX, the the billion optimize business, including driving microbial food of focus second the will rapidly be gross which portfolio, sale and all as portfolio our and microbial control core on well

and change solidify achievements For with that the of meaningful within forward IFF, global XXXX propel the filled chain. us continue supply our to exciting was business importance and

the customers while challenging as we environment, is delivering are to partner action leadership future. to our taking position is the an and our a operating Our indispensable business business our right team strong growth in for

as into boldly are foundational and accelerates have reinvent, delivering commitment to and on build reach it and future. that customers year the one consistent company that more on execution was around We XXXX world. ability to will a the no deliver partner our the with I transform doubt our

in single digit growth nearly digit increased double growth Asia, sales growth to that Asia strong In in pleased XXXX. growth India IFF in by would Scent well region operating key Slide all the to North segments underpinning walk for we saw our sales four health double-digit In with and results like growth and XX% turning in share Nourish, by led led our all in biosciences. all high Now I'm achieved regions. strong through and all throughout the XXXX. with achieved across X% dynamics year America, full of countries. particularly seven, by perform continued across nearly to China, we Pharma I regional of growth America Latin Solutions and momentum X%

and businesses Our high digits. Nourish with growing in digit division double Scent growth delivered health and the strong single bioscience

growth X% Nourish We Our EMEA double-digit service. was in by also sales strengths saw growth in our driven bolted EMEA with fine growth fragrance delivered significant also business. by business. food by strong sales led results the

I storm business our year. Slide to overall contributed now performance would discuss to segments eight, that like Moving sales IFF our across the growth to for

growth and and neutral Pharma of in by industrial the Scent primarily constraints. driven animal broad X% also fragrance, by demand achieve led to culture ingredients. based currency Biosciences businesses. and Health our XXXX, achieved in consumer enzymes. home our neutral year, while sales growth limited For was ongoing neutral X% and and to food by driven strong ingredients fine X% currency currency headwinds and strengths we continue growth solution design currency full see strong logistical food related care, attrition in fragrance flavors, Nourish availability material X% neutral growth delivered and delivered and performance personal business,

the segment would like driving underlying focus Slide nine, to to on Now on dynamics perform. I

home X% volume were pricing on For included while costs in of our materials, raw and and cost and segment. XX.X% strong en a Health processing In a and food continued for strong Higher management. aim focus double growth drivers. which ingredients and actions adjusted margins our EBITDA key in logistic personal remain were Nourish, costs growth materials operating EBITDA the by Bioscience, raw impacted from and enzymes digit increased is and performance consistent of challenge care strong cultures margin growth,

Scent Our in rebound from fine by benefited year fragrances. strongly division last particular,

Bps higher productivity mix and margin to performance double-digital solar however, for XX saw fragrances overhang led business. operating supply XX% consumer issues Adjusted grew by we segment's EBITDA growth, double-digit performance. actives. remained in as expanded margin demand and significant and and Global volume growth across in finally, addition XXXX the favorable industrial and solutions, cosmetic continued In chain customer an pharma growth

sales pre-COVID ahead. year the levels, Moving very share year I'm result now to that encouraging which pleased to for our particularly XX, Slide exceeded full is

position IFF's as merger doing across outlined, and essential around recognize customers the strengths previously was value industries our as N&B resilience Simply sales to innovation today a It a partner work with the the that customers put, goals for of bring an integrate reflecting critical world. to and our continues enhanced and As the strategically customers stronger execution. segments, to our focus is and we partner. a extended deliver our of our in clear consistent on IFF are business businesses our are value as and trusted business we unique we result portfolio

Revenue With synergies quarter. savings like team exceeded discipline move projected of to savings. Execution Slide includes deliver XXXX, in to deliver one approximately remain that also see that, line million combination. in strong to cost and approximately a $XX over for call fourth target top the reiterate pipeline to the to $XX million to I operating to Let's connection I'm priority a commitment. million $XX performance would modest to to with our results leadership and the were continuing and This the we pleased I'd develop. reflect synergies this XX. like N&B progress contribution top in our turn our with In Glenn. year

Thank Thank and being you everyone. us again welcome with you, Andreas today. for

growth, was As for strong a including Andreas highlighted, XXXX finish. strong year a sales quarter fourth

basis, mutual billion quarter IFF growth across year quarter Nourish, $X in as digit our increase driven representing third more a of year Health closely well consolidated at fourth growth greater double-digit results, Pharma a than division, by generated Looking Scent our and XX% our on sales primarily consecutive divisions. double-digit and as high growth, Biosciences in over currency our single

as synergies offset our pressures, and which growth, face quarter actions protect the productivity excellence a discuss a businesses and our pressures to the with fourth and like in XXXX I of mobilized inflationary continued we to overall in entire as pricing year significant these escalation increases, much outlook. across all implement actions results, to industry, performance solid as and As to our margin prepare we result, our quarter, volume accelerate price well Early inflationary recognized fourth quickly discuss I'll positive when profitability. full operational productivity. efforts benefits to significant our

fourth several will next of slides, our deeper briefly dive the I quarter business of On segments. core into financials each the

Turning quarter the In and our a volume I'll and price growth neutral begin overall Nourish strong fourth quarter, with to Nourish segment, currency Slide growth solid increases. basis, in year-over-year both XX, achieved X% experienced XXXX. a by which on driven performance sales

due particular our increases Our increasing the Flavors in the food realized customer and and design Adjusted slightly year-over-year sales grew by basis inflationary to processing. fourth food growth all and pressures. sales strong strategic double on productivity digits business grain double XX, for profitability segment. both service currency in division growth quarter Biosciences quarter. despite growth health, drove Pressure regions. on fourth increased also microbial strong operating with in neutral Nourish control, Ingredients delivered demand declined to occured a led Slide increased across volume of animal and Health digit growth EBITDA and strong price nutrition On growth, in by XX%

food grew and and cultures digits against year-over-year strong enzymes high at single personal a comparisons. care Additionally, and each home

growth operating and inflation pressure while faced to logistics adjusted to higher increased EBITDA cost. volume Our X% due higher and productivity, due margins

basis. and Scent Slide which year-over-year fine on to supported fourth currency strong XX, division growth rebound driven or double our to growth X% was a in performance fragrances, quarter, and growth by delivering now wins increased perform new well digit by continued a growth saw Turning the in continued achieved X% volume. This neutral

mitigate. we to Our in Despite ago against growth strong the core a higher of Solutions Performance volume delivered success price high in with Both Slide to and of growth Performance from operating and was segment sales mix strength to increases. and digit growth materials, single cost impacted ingredients. higher also growth XXXX operating raw EBITDA continues the year-over-year and our performance currency-neutral scent growth by categories we volume to take contribute to market digit margin raw macro contribute double that of was the challenges On favorable environment EBITDA Consumer constraints by fragrance segment comparison. adjusted Fragrances continue global single result industrial the category the pharma overall is as and delivered XX, a recovers, in our potential energy chain of digit and strong Solutions. costs. will to the We ingredients experiencing full the our which business, recognize optimistic due adjusted the affected as recognize segment in current supply year Pharma the The are situation quarter. action solid X% business of material Solutions

in Now flow on like to XX, Slide cash review I progress our and position de would leveraging.

were of year For approximately strategic meet investments X.X% as over sales track and full strong or the due implementation CapEx our segments COVID delivered was delays continued due vendor of than to portfolio. made expenditures the attractive of to $XXX of XXXX, in on our originally cash of capital lower a our to we slower leveraging projects environment. $X XXXX, goals. most some de part planned million billion in the Overall, our we and

adjusted target, out $X.X, finishing billion a our reduced by substantial deleveraging $XX.X debt progress perspective, versus our shareholders dividends We From XXXX continued credit and leverage we also toward to EBITDA $XXX achieving $XXX to IFF in net million paid million to gross QX year three will debt a make in post to debt divestitures XXXX. that with additional $XXX adjusted million. cash and with XXXX times remain on supported achieve further to cash to in target competent credit three, IFF on net our by EBITDA close, is that equivalence of touch We track I finished by we moment. deleveraging ratio. of

on XX, to Turning XXXX. commentary our outlook slide I'd for provide like business to

billion. For billion to fiscal operating between with billion $X.X EBITDA expect $XX.X and revenue year of billion range XXXX, $X.X we $XX.X the in adjusted

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we a large will tensions continue remain these planned we issues market into pandemic, have all aware, environment expect and challenges are political from IFF, to our operate challenges, industry you have impacted for been global ongoing with supply uncertainties at well and these by in chain As and XXXX. and that complex

materials, As quarter see to I shared energy on XXXX, third our expect pressures call, significant in increases inflationary logistics. in raw we we be cost large as and

actions strong pricing we shareholders. profit for generate fully term, pre-inflation we to confident growth, result, ability remain Longer returns margin. focused a levels significant exposure, margin creation in as but we are improving to offset result taking our are and we will in our which will dollar expect recover our sales As to strong depress value to cost on

reductions our remain on intently increased We productivity business. synergies also driving and through focused throughout cost efforts

In approximately addition, also key result will to carryover while CapEx which passive of as to help and in XXXX investments lowering 'XX in technologies, support the we are increasing expansion sales X% a costs. increased CapEx of logistics growth

also Finally, levels to million serve $XXX increasing more we be to appropriate inventory customers. we can our ensure continue approximately by will to

to raw digits, we certain double cost to would specifically expect costs, materials, Now expect more to we Slide much 'XX. energy continue see I XX%. as logistics did rise including XX, and in it be increases moving 'XX like trends cost on 'XX. and forecasts we call in they will Heading approximately XXXX, in now into to the to Overall, saw inflation that 'XX focus

related savory differently ingredients, between pressures to with With we online energy and N&B. increases due petrochemicals, inflationary raw manifest legacy The pulp, in aroma specialty N&B in 'XX and legacy mitigate increases capacity demand. the sweeteners. the to been facing themselves and materials turpentine, cost of grains cellulose, are the supply oils, chemicals, [indiscernible] hope of fragrance agriculture, chemicals, Most year, most of we related added imbalance We and to inflation are double to higher in an headwinds digit seeing logistics some to this later chemicals, businesses. IFF have specialty logistics coming start these in

If you productivity peers. portfolio, have similar based and synergy inflation aggressively pricing we and Recognizing broad to pursuing actions at look challenges, high these raw our legacy digit single been seeing flavor accelerating we fragrance IFF and efforts. are material

guidance Turning to for a our sales more XX, I bit Slide XXXX. will into provide insight

billion sales top to until $XX.X comparable $XXX momentum XXXX. not February of a basis, XXXX back $XX.X of Our N&B represents to part IFF approximately To must of million get more results. revenue our in billion strong XXXX expectation of on to continued sales of you results January as XX were N&B related add

of sales sales to removal well Our year. divestiture last for months following the the microbial we 'XX prep our guidance their accounts as closed of December the gets results as revenue fruit to for business, revenue control comparable also completed October June base our of anticipated 'XX as first $XX.XX sale slide. That of in of 'XX which billion on the you indicated nine

As a grow X% on a plus approximately impact expect top prices our to increasing more mind, to in larger the over will basis. volume anticipate comparable the offset 'XX. order dollar growth 'XX This our be year overall for X% sales that strong of to in where line XXXX. performance currency significantly central to we in we fully neutral to to I our are pricing year With said contributor pricing 'XX, earlier, we significantly inflation exposure cost in months be following

for in make operating comparability. front, also guidance the Now, we had of to adjustments terms adjusted on our

divetiture prep control well EBITDA related subtract that add to to of the as you results first of for our billion. comparable EBITDA nine microbial a as of get seven approximately of to you EBITDA as to fruit of result business, EBITDA the the general N&B business and $X.X months the months a 'XX, If base anticipated related the 'XX related

plan. is actions critical mentioned base to inflationary to As offset our 'XX broad pressures implementing pricing

essentially each actions three month, across Over customer our entire the our plus last executed business has of base. pricing

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continue By supply environment in also we 'XX leverage comparable strong, up global chain volume price to and to reinvestments closely and adding X%. the should be be approximately net of prepared Importantly, to It and living anticipated in additional plus combination be noted expect of growth and synergies execute is productivity, synergy of appropriate. monitor we will X% as business. cost a EBITDA it a that of contribution to benefits synergy the is where increases productivity the net number the here and actions productivity,

will XXX modestly Our 'XX, versus guidance approximately which our adjusted margin down that recovery, implies net our equates operating to be EBITDA due cost basis dollar points. to principally

XXX of basis approximately total to inflation Over increases, on or the approximately $X of more and adjusted year the our higher margins XX.X%. rapidly To 'XX give billion points be has course perspective price full than basis will will 'XX, we are while working a you magnitude, margin impacted we and an the of cover for inflation significantly. see it 'XX

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most XXXX to the to of reported that margin are the in be margin of inflation, concluding. total turn we third first quarter. to the first expect price where positive challenged quarter sales will over Much after quarter down starting strong by operating with driven be this will each While XXX performance the versus basis EBITDA our be adjusted expected year points quarter, year-over-year

our each. color detailed into As further execution of and key focus highlight areas to want I 'XX for plans I our for four conclude, provide

on we are momentum. 'XX our sales building committed to strong First,

continue to targeted targeted growth. exceptional global teams maintain scaled 'XX rates. that will X% us 'XX investments volume including R&D to Our X% overall pipeline We industry neutral support our and growth we will growth commercial superior with to sales allow solutions continue believe that and customer strong to currency deliver growth consistent anticipates

across I In to substantial constrained previously, addition, chain efficiencies. and of portfolio capacity investments portions our mentioned as increase enhancing we supply making are

we'll we chain our pace, on over focused as focus that our on last synergies as and the be of original meaningful to near time. of are addressing That Lastly, our sharpening opportunities supply issues. said, we will revenue was term planned are our behind allow much platform synergy depth year confident revenue us build breadth

to previously outlined, on comprehensive we of established needed. Second, tools to several quickly quickly to macro the prepared based are broad intently And additional our and focused actions a as we pricing as as importantly, have pricing year are for enhance the of execute actions review processes, involves, one our pricing to to inflation. new the react offset core we months, environment our throughout pricing To dynamic procurement ability businesses. undertaken end over teams more implemented last end each the environment

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pricing enhancing focused Going procurement processes on we are and forward, our further programs.

accelerate Third, XXXX. broadly productivity we efforts realization and are to synergy in our more determined our

are $XXX improvements. Net we included of cost reductions targeting efficiencies for operational to reference, investments the our million other logistic growth. net 'XX approximately pressures we inflationary efficiencies are year. yield from and million targeted your targeting synergies, $XXX in and help a enhancements of drive top approximately of wage and guidance, reformulations, line For cost

service global efficiencies, developing customer service. roadmap and are solutions and of we with scope manufacturing to good the is our Consequently, detailed feel our a of in recognize driving ensuring there provide integrated all global this plan logistics undertaking do. actively we While a divestitures. review of platform, the work to technology also progress, accelerate a working is review to capabilities superior our procurement, comprehensive and constructing accelerate digital end to addition Fourth, non-core scale of that while also and and to we end we we shared more goal the meaningful are

As additional balance we the to also are successfully We're sheet enhance business, and portfolio of optimization track Microbial growth have on portfolio. complete focus efficiency our our opportunities. discussed, sale we and deliver will targeting our to of which the profitability further on core Control

quarters, it billion or our Over of can to and generate the to that IFF marketing the months, results coming Control transactions will business, growth where turn confident would With that, portfolio, $X.X are businesses, the profile. billion. next prep our $X.X plan handful believe four, XX proceed our am I fruit nonstrategic a over three Similar expected the proceeds and of be will that with non-strategic we approximately Microbial call we these we and deliver current accretive action Andreas. margin call XXXX. strength, this our go-forward like and with back to rate momentum together sales leading to strong in will With to I

is steady deeply N&B. I has our year solid ever know as integration with it than profit of and personal growth, year significant had we over that progress towards stronger today Thank IFF's sales am been. and to company as this XXXX been proud has with transformation you, I me, the Glenn. year in well

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first we with instructions] And will Gunther Bernstein. question Zechmann from take [Operator our

is Your line open. now

two? please? and that in with on is get key of already Hi, thanks the everyone. one already Gleen, Andrea. first range your Can respectively my your you're start you question. year. just what's the in morning of customers higher to taking quite increases you I ahead lot hear And the some volume end F&F. second seen the please? us from guidance on required you lower the The of the elasticity the to increases pushing Good price expect the that line top outline or or for Hi. Hi one a through is for have regard peers of What's Can to what price

Yeah. the question. good morning, Gunther. Thanks for

To those good are to know up Your yourself two because of elasticity. recently, than [ph] companies that market is on in in a the that's amp range point anything, frankly, we've relative price. line, highly be volumes. have had more probably If additional We drive sticking about coming bigger consumer have related market. there's we've question, the historically product the terms have what top second inflationary as extent, actually not of generally the the pressures, and releasing lower may additional probably seen a sort from If the you your bigger very been line. i.e. of be much what's us. say That's than we'd in from a I think price will volumes been X% X% difference assumption some we the to for to fact relative is standpoint the to through. going the indicator the volume pricing, questions to likely we're volume push implemented variable top feel we price question mark but to

are the sort have in month month their We results, generally January [ph] by the holding one of volumes QX. way, of

we given it pricing plan got what drop degree of expect, accordingly basically be together, year, when put the prudent we sort implementing range we've plan our is is abnormal everybody an going market. pricing, to being this So and we're said, the seeing is to of yet. not we actually That competitors lot in sheer and same a of the the seen very recognizing a awful from of

will we from Astrachan question And our take with Mark Stifel. next

now line Your open. is

both top pricing. line so adjusted on guidance, everyone. in 'XX morning, follow and up expectations this the of related Thanks to is last Yeah. sort and the predicated strongly guess Wanted really to EBITDA I question,

term in yeah do about you this strokes. how broader, So kind of think longer

you and took price. of back the they quickly much ability and took or ago, If and ebbed years terms take price how to competitors in how go they flowed price

competitors you about So through your just those calls, about nobody's talking earnings how think you back really you react? go how If but out specifics. do laid specifics,

how yeah about given think point, a quickly this just versus much you're how how what don't in of 'XX adapt beyond how you year? pricing follow we embedded what's your directly and do you're do competitors can think you are in or related pricing if is much about going it a So to from taking at standpoint taking back terms how point and your competitors what do this

on Sure. well react in actions. horizon, we're quarter heavy we Great is pricing into on reality as Mark. We very signal call with quickly. The midstream question, a our third the inflation

of year the every quarter actually So executing That day we working the based quite been base. entire broad the spent sort of across latter of this has then effective. customer part pricing and fourth

that already, based i.e., implemented be of It second pricing of the kick and the over will quarter. that which most largely sticking. So in to read first we've appears on

similar passing same they're from through. of our as inflationary also thing competitors, the pressures, and We all under they're also seeing observing sort pricing we're know are

neck of doing in the of So we in terms what market. feel neck we're like to we're sort

where and surgical. are of also We pricing we if elastic, will less price are that are are being category is There are price you there through. or they more passing that typically are slightly of other thoughtful sort competitive, are being areas certain and elastic about

neck-to-neck like doing of feel we in we're we're So what market. of in terms the sort

more small, months. has do sort customers or we've sort will I not seen, the lot There elastic been a fact less thoughtful certain And relatively directly a over of volumes than being that we is terms are it. actions. competitive, amount And, more and of, if elastic pricing are to making other seen sure typically where segments. slightly sort and significant categories being of in that actually are mentioned, price. those are price you as in implemented host pricing of we've -- that about of change have believe, A now big we are are appropriate coming in surgical. of our that related lost that the and of for believe being we We areas there of and our we But price

about we're the in we year. last the dollars, implemented longer million on so all, We’re had billion to relative the a and We mentioned two we on years. matching $XXX million $XXX term, last year. in planning script, We as of between inflation $XXX million anticipated this $XXX the million, about

to do $XXX move still we that continues as very We $XXX the to importantly, capture million and we're And So million market fully XXXX. additional into short. anticipate ebb flow.

react. seen there's haven't and if pressures, the materials are on positioned we to a additional prepared recently, market been lot ups of downs, And inflationary raw some rapidly. they're to go very we're but to we're, Although movement

our with question DeStefano take from next we'll Fargo. Mike Wells And

is line Your open. now

guess your is is of the the goals end to Andreas track great your XXXX. together when Good growth put morning. you. And working through good think you year. question about has my on hit -- been I deal Hey, when be top-line seem with you to you,

to 'XX. If sort & a get year, to billion seem over to of order $X you're does going like do by 'XX it tall 'XX this

that doable million absolute just maybe lot. you a you $XXX So 'XX the or still in do the year? next pricing curious, EBITDA know it's goal I think delayed And helps a if in year; is get

for through walk of relative sort the to Thank us the can you in curious goals happens original just So deal? what 'XX you.

That -- week being Frank it’s the targets. a two next 'XX, call us is be to term our it some term joins XX, say is do a and longer things it over going goals? would we think sense, said, our XX; 'XX the months very aggressively certainly it, it I question coming working will about number Obviously think I from year. to in we review next longer for big how

$XXX of have think least we I incremental clear standpoint. synergy left but a hundred another pricing XXXX out, at gets hundred from XX directionally we quite have a for million to would a hope of sight million pointed the line to you us of side range on to more, As extent the synergy that million productivity. frankly, actually I

gap, to that figure gap a still there's And there. but work getting the we to close we're have out. So

environment revenue optimistic we I the of the he terms overall And addition, opportunities but operating think platform growth. are there's and feel year performance to challenging. more of again, the supply of operating been there And and meaningful on enhance global in we lot margin. a terms strength productivity for the would, am has because qualitative more the basis would've I had top I'm do that I with what the chain of of in that, opportunities combination spend in of on I very a of anticipated deal issues, time the here, level convinced our inflation to

top arrives that. can't to through So go a have I, until there's XXXX we think Frank And on number. of line on clear we additional productivity. of and and process, next sort call we I that very based has provide it opportunities a detailed But year, pricing

with John our take UBS. question next Roberts we'll And from

line Your is open. now

Thank best you Andreas. and wishes

X% This FX XXXX from there with our through the first than sales. a headwind and portfolio. X% going seat on that's impact is more the to guiding new You're time an headwind in EBITDA current

your currencies in And currency, how So revenues overall new be continues and changed much the but are the maybe us basket has costs portfolio? the side of currencies. to with Euro relative foreign of help important your dollars the key with to the

XX% slightly changed are, XX% Then based. a about combination The basket NMB. Roughly are a, earnings. U.S the range a cash the a higher XX% flow a with then because It's an actually around have that and it European cost of standpoint, U.S of revenues based. while our residual dollar is of revenues. denominated, base denominated. XX% Euro's our more about actually Euro, in It's for From are currencies perspective non-US has in earnings from we the terms of

is that's It's standpoint. on what we risk it significant portion. focused a from So, the one, a

As think average, planning so We the circle sort it's the that's the from XXX, XXX of you year, Euro a year. about we in last XXX, on were know, sort dropped how XXX been range.

Thank you.

And Adam with from Goldman we'll take question our next Samuelson Sachs.

line Your now is open.

open a to capture morning, I you. 'XX the was little and Good that Hi. maybe embedded bit in -- the dig the guidance. everyone. cost the in Thank in energy are 'XX just more Yes. on assumption

potential corollary address where we're little guess some what's kind post exiting of and be what relative the plan, the 'XX? about with bit to original that, XXXX the this left the, in other a carryover the of to EBITDA we think of to are and and capture 'XX in Just, of and -- margin but of kind pricing kind just as some the conversations, merger we

for the synergies the million. we Yeah, to question. Thanks as we thanks. identified sure. Adam, $XX.XX did reminder, Relative

to was total posting be $XXX commitment ramp year to this to that $XXX $XXX actually We're that. million. our note another of basket Our get this productivity million. I is to million would actually year. to We're up million and short going $XX

just figure combination just focus more the thinking out we're deal. opposed as areas. just past to a synergies, on So that than narrow frankly, costs the year we important It's enterprise, how the broadly to across cut

if global on all chain. count will, given to synergy sort procurement just in of the shortfall, impact. arena, it's this supply on that what's of you Wasn't Now realistic year, going the

residual the -- other I I'm confident plus as above So us basically plus XXX, and to we'll XX and the XX focus and going to areas to that. fully synergies we're continue productivity to XXX the on gets mentioned, get

over about get 'XX. of into the the think pricing you to carryover of another if So the and million of that's sort next standpoint XX between how to $XXX from a then year XXX carry XX you

next Zekauskas Jeff our with JPMorgan, now question take your from line we'll open. And

much. very Thanks

can be or less this X.X do $X.X operating be billion should the cash-flow in the of make EBITDA in for little of XXXX, what improvements cash XX%. you billion will that base you normal $X.X an ratio ratio that expect your on flow or generated What think cash than flow ratio? to EBITDA? about You, Is that operating you a -- is

great a question. it's Yeah.

going actually to work do two in going figure have to to of We investments cash out some more year. longer areas this be relative be to to making where higher slightly we're generation. term sort We're

flow inventories a will is be of $XXX we're investments say, I about inventories these sort about equal of of net think million. One basis. be I adding building, on to going cash should

about reminder, be. of historically back days. the XXX year deal end at We built range. were the This that of at closed to we're artificially need levels, ago, inventory the entity were, XX sort some where the still of year. short of We As was combined low when we in we a the a was X but

Those is million. increases spending last our thing well, We second twofold. increase are The as year $XXX this will year. less to CapEx relative year the than ended

of operate in by-product basically being and steel the last products. in implement a in suppliers, supplying of And that we to terms were just other COVID delayed was of addition, we CapEx unable Some year environment.

speed at So able the implement we're which as the to load well.

help up we're simply which higher address ramping some as side. achieve, capacity well levels costs lower actually also as ramping constraints, to up. achieve will We're demand chain, So logistics on the supply

cash-flow be longer inventories to previously, the and higher is neutral, CapEx a have there work about cash term about relative net, I mentioned really some apart sort would to do, term, think our done. goals that's the we, to felt Longer the business overall enterprise. So $XXX million the of generation relatively year-over-year, of of between increase as from but after combination

And we'll our take Lauren question Barclays. next for Lieberman with

Your now line is open.

Great, thanks.

of XXXX, think in XX being inflation worth on about commented that it So we I it that months when be get residual million the was to there but just with I pricing. fact some referencing on, $XXX pricing on into XX covered benefit your for talk know taking you did competitors to

shorter that timeframe So I'm you. a just would curious be such why for

that's be of true have in would your at thoughts and any like the kind My for and you little into year? data certainly informing that that's more and If where this all. N&B there's Thanks. very think of the as just was that's But more them. nature value businesses, for for on of elasticity I your degree just, and I add, It's those on. portions is one understanding versus some commodity are history or So not are costs switching there's there customers how, what well, portfolio? bit at, on point there piece components you elasticity know, the low know so plenty. visibility don't business two visibility thoughts point of N&B

Thanks In general, pricing off action. haven't the of I we question. drop volume much our to relative seen Sure. as Thanks. for mentioned,

pricing. there are to that in demand where So categories able environment the slightly are competitive, relatively push but certain through is still high, more we've been

is there's there, in to year next open relationships into it's in pockets That's point to environment, there that renegotiate put sort an and nowhere too It one. year that of actually great businesses? place. up million seen this that, from the reason overlap will standpoint. and despite contractual of there's in for time been easier to roll we why of a takes inflation. And late the So have of sort it renegotiations across there this Point any two, there, kick and the softness lag, that's $XXX level

are So just indexes that the or then as certain more certified tied based indices a well. to contracts timing element some and of

$XXX recall to $XXX last basically another so have all we're, implementing we we year, So that. we're then had And catch million up. million

of And will that for we 'XX, of sort the into window into So literally up catch million which sort of then right at kick five. $XXX we billion, residual implementation. sort that XX same it within thinking months, will is that in

our Deutsche with And we'll take bank. next question David from Butler

line You is open. now

morning. Thank you. Good

a little low X%, or X% year, this you gaining given bit guidance volume the to back Going it share. are seems

beginnings growth point synergies. of out? line assumption there Thank anything that have initial that limiting might this revenue for Is some you you. year You can

prudent the appropriately sheer sort that to the planning a we in given if you standpoint. of will, the from in have pricing have level of envelope want push volume didn't We our of we plan. process, think I, been sort

a of mentioned As very the are issues and legacy it's we making standpoint the have to about of very, up. very of some to just the going certainly better had the as depend as function it the a inventory, meaningful very, lot But capacity consumer holding as CapEx, past, to I us, will issues businesses as allow of well. mentioned investments, if the a sort upon we've Those to capacity be ahead it's having from a continues. combination From seems days year the previously, principally and in very last us in largely feel were early That prudent year. of we a But legacy to this that standpoint. of unprecedented of market year. planning address we meet N&B in well being

question Baird. from Ghansham our And we with will next take Panjabi

open. now is line Your

if terms year. unfolds has the again. Andreas, Thanks. and two at I I'm you on up your you very, morning, ingredients characterization you in slide of subcategories sort had everybody. mean X question Okay. follow Good looking Congrats to some can channel inventories, assuming a guess a what break-up you Are pretty demand comments of very I'm know, And big assuming fine maybe go a of year made inventory obviously last healthy fragrance the year on comp one if just from the missed terms I as from sorry comps the XXXX. you I inflation And this, a also, as did channel as sequencing queue. standpoint version then trajectory unfolds? against, but inflation know in of you're

just year. the you I'll Yeah, to progression year through sort the let really, year on some second the over question margin, give of margin perspective change me answer

businesses look the because on years a it's range two when reflects to very come we've it currency up that to that combination And better bit. COVID any two normalized of of a relative year of and inflation So of sort the quite interestingly, and basis. it's pricing, quarter actually the close enough been actually the they the neutral the on our a look action, in difficult given together. businesses of you, tightened to or the results And at

have standpoint, in year business So relates There more different have part our much distribution this big general. addressed. also the in environment, we tighter and effectively we planned to more volume part, of to think we as units. differences opinion our per two in don't volume from a se, across planning X% capacity because some we're it being because And normalized are in issues

to wide the a and expect pro volumes businesses on relates So principally challenged. the how that that we're differences between of most inflation do wide half first we from a A range the range be and as the will have first to offsetting actions pricing a, the of the quarter we don't impact. expect

little points. that the a quarter XXX likely down over basis margin first expect to of is have We year, year

into will basis up soft we'll a down to expect quarter. the half year. of in directionally full back The XX points full We in to the year around that that the second the And then year be get combination. year, sort XXXish basically is over guidance of year from

pricing So in kicking that, basically the, pricings, relative see a is of sort inflation. how the reflection the of we the, to the

our question with Parkinson from Securities. And we'll take Mizuho next Chris

now is open. line Your

you Thank much. Great. so

right look portfolio Thank much. know, printing? cetera. feel I just comment Nourish, when can kind so positive and pretty take here Scent, a portfolio you any So your on two et at things the you look results just portfolio, in Do solid now, for of across back synergies the you color on revenue step smaller you potential just where then also on port more incrementally first, you of the right further

Good Yeah. question.

behind, our spend more from plan We to of the R&D of pipeline how not view synergies. are maybe timing little issues. is longer our simply and last the byproduct relative admit basically inflation ended add the this a up do commercial to right? synergies. resources function going our revenue pace forward. actually term on last to because very So a in original the year that The more a issues We of strong supply It's chain dedicating we're we year. a that. the spent revenue there's teams, for We here to basically teams on the the the bit working of good the about synergy, together we and allowed That opportunities the nature more Andres prospects standpoint. we, for on very revenue now of of like and going feel also We time feel

the very the within customer, very of goes it see I just because the our by and you together. So nicely division of nature products basically no will majority -- the opportunities the

the solution our basically solution can, a based you protein cases, If plant to take can many, customers, a offer many all where total one so products even that's just total on in example. that almost

for The enzyme on, hand. had where and Institute, business of you other on meetings the just business this going household the this American and we the see products in the month's one hand are customer example Congress, big care is, cleaning that fragrance

our and you as now programs a with that with They're area, come Glenn, by now as So then one on And we have for running more themselves capsule. bit the and three, not well. the very underestimate comment R&D we which for put good well these are which the synergy enhanced up portfolio. on give produce detergent example. a solutions. already a that capsules more the opportunities And is capabilities, opportunities little forward something for and you R&D takes we have then concrete really And certainly fragrance the many on biggest you probably us looking side just two in these should time. generation to as, I into should the green Everybody going and is is to

a job I sort have Non-Core strategically simply don't and are I basically my fit. Yeah, for mentioned of thoughtful bottom our diluted good line a businesses. about comments, very, and great being just non-core as question in great we've very that top on think a line, portfolio, of and done those

through prep. As you sold know, have we

microbial billion second $X.X on closing be That's quarter the basically We will gross. controls.

three or We up. that four teed have being businesses other are

going have We our to very the $X.X cash is get think be entities or to executed. within months to We and billion to four to laborer use us need billion those the three issues. lower transactions proceeds months. relative coming them range times will X.X that to importantly, to close goal to in in quarters. XX is in the three fully anticipate We the market I

do of get So in that of very that in have that dedicated in, but relative interest good nothing, had set a sort properties. well; working actually on to teams markets done to certain we been focus to been

very that. So encouraged by we're

closing this the will back time. line And on turn no for or to further we any have program over remarks. at I Fibig questions Andreas the additional

good taking the the good IFF my questions you. and, participation work and the Yeah. constructive Thank and you you much meeting all day. here. last That's preparation. have a and good for Thank Thank for and very

Thank participation. today's does for This conclude program. your you

-- time You a may disconnect time at wonderful wonderful and have any day.