Thank you. Good morning, good afternoon, and good evening, everyone. Welcome to IFF's fourth quarter and full year 2020 conference call. Yesterday evening, we issued a press release announcing our financial results and outlook for 2021. 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. I ask that you please take a moment to review our forward-looking statements.

Thank you, Mike, and thank you to all who have joined us today as we transition from legacy IFF to begin a new journey with N&B. We will begin by sharing a detailed look into our fourth quarter and full year 2020 results, and then Rustom and I will highlight the go-forward outlook and opportunities for the new IFF. I am really excited and proud to say that as of February 1, we have officially completed our merger with DuPont N&B. Our teams have hit the ground running, establishing our new company as an innovation leader and a global value chain for consumer goods and commercial products. With the close of the N&B transaction, we also unveiled a new brand identity and purpose intended to unite our organization and best position all divisions for success. As a purpose-driven enterprise, we share a mission to build from our strengths and transform our industry. We are now squarely focused on execution, leveraging our recent performance to capitalize on the exciting capabilities and broad customer base of our new company. I am confident that the direction we are moving and the opportunities ahead will lead to accelerated growth and improved profitability, resulting in strong value creation and total shareholder return. Beginning with Slide 6, I would like to recap what was truly a remarkable 2020. Amidst an unprecedented pandemic, the challenges to our global organization, we delivered solid financial results while embarking on a transformational journey to create a new industry leader together with DuPont N&B.

Thank you, Andreas. I’ll only cover the P&L high points on this slide and get into additional detail as we go through the following slides. In the fourth quarter, IFF generated $1.3 billion in sales, down 2% year-over-year on a currency-neutral basis. When excluding the roughly $50 million impact of 2019’s 53rd week, a comparable currency-neutral growth was plus 2%. And as I’ll explain on the next slide, that is approximately 4% when counting foreign exchange-related price changes, as is often disclosed by many CPGs.

Thank you, Rustom. Turning to Slide 17, let’s focus on 2021 and the new IFF along with the N&B business. Our teams executed well on the tremendous integration planning for the transformational combination, despite working remotely due to COVID-19. This integration planning effort, which has been over a year long, has provided us with an opportunity to create the right team and operating model needed to secure a global leadership position. It has been driven by the lessons we have learned from past integrations across both organizations, running our plans and practical experience that will enable near-term execution. We set out an aggressive timeline in 2019 to close and complete integration planning in 2020. A global pandemic only challenged us even further, but I’m very pleased to say that our teams worked extraordinarily well together to complete every aspect of our integration planning. I’m confident that the new IFF is ideally positioned to succeed. With this planning complete, we can entirely focus on execution, delivering on our commitments and realizing significant revenue and cost synergies, resulting in significant value creation for shareholders for the years to come. Let’s move to Slide 18 and take a second to focus on the value proposition of the new IFF. Our new company is poised to realize significant value for all of our stakeholders. These two highly complementary companies form a true innovation partner for all customers. The new IFF will be a force in shaping the future of our industry. Our R&D investment will be 1.5 times greater than our nearest competitor. We will hold number one or number two positions in core categories such as nutrition, cultures, enzymes, probiotics, soy proteins, flavors, and fragrances. This is coupled with the broadest and most diverse customer base in our industry, with more than 45,000 in total, and about 48% of our annual sales coming from small, medium, and private label customers. We are well positioned to drive profitable growth for our shareholders. This allows us to enhance the value we can deliver to our customers in a very powerful way. We can deliver value to customers in every interaction, from leading product offerings to significant benefits from speed to market and supply chain simplification as we deliver market-leading integrated solutions. It is important to remember that while the N&B transaction is a culminating and transformational move, it is completely consistent with how we have been evolving the portfolio over the past five years. Our strategy has focused on positioning the company for where the industry is going, not where it has been. As we acquired more natural products, developed more regional supply chains, catered more to smaller customers, and increased our technology and science-based innovations, actions like Frutarom, Lucas Meyer, Ottens Flavors, and others were important foundational steps as we executed this strategy. Looking ahead, we are pleased to have the most complete portfolio in the business, while the portfolio may change around the edges. It is complete and gives us the right base to grow and the right assets to drive the financial results you see from our long-term targets. In summary, the new IFF will be the strongest partner to customers worldwide for providing essential solutions for on-trend innovation. Now to Slide 19, I would like to emphasize the long-term value creation potential we have for IFF. Our new company has substantial synergy opportunities that will drive growth and expand margins. In our integration planning, we confirmed the run rate revenue synergy expectation at approximately $400 million by 2024, contributing at least $145 million of EBITDA by that time. Additionally, we expect to achieve meaningful cost savings, including a runway cost synergy expectation of $300 million by the end of 2023. We expect that execution on our plan will unlock about $50 million in EBITDA contribution in 2021. It is critical to underscore that with a comprehensive structure in place, we will track our progress against the identified objectives. Our hope is to continuously highlight all value creation levers to provide critical insight into our value creation story.

On Slide 20, I want to highlight the actions that will be immediately taken to begin the execution. One of the most common questions we receive from investors is not what we will deliver, but instead, how we will actually do it. As you can imagine, capturing synergies is all about the details. As we mentioned on January 11, there are 85 separate initiatives behind the $300 million cost savings in our plan, along with several initiatives on the revenue side. We tried to provide flavor on the types of actions that are part of these initiatives. In terms of revenue synergies, we’ve engaged with our top global and regional customers to introduce joint portfolios and capabilities, accelerated co-development partnerships, activated cost divisions on innovation and collaboration in R&D, and launched combined commercial excellence and integrated solution teams. At a high level, I would characterize the cost actions as follows: First, we aim to eliminate duplication, which you can imagine is prevalent across two global companies. Second, we look to align our cost structure with best-in-class practices, where applicable. Benchmarking across functions like G&A gives us tangible targets for improvement. While no two organizations are identical, we use this as a goal rather than a prescription. So whether it’s efficiency, we spread the benefits of dollar spending across a larger base. Let me give you an example; all organizations invest in R&D, but we can now leverage our investments across double the categories and customers. This shows the powerful benefits of global scale in supporting cutting-edge science investments. Finally, we have aligned our incentive compensation metrics to reflect and align with our business and integration objectives. I hope this gives you some flavor for the methods we will use to achieve our targets. We are now focused on these actions and will communicate clearly about our long-term goals.

Moving to Slide 21, the new IFF is set to deliver a best-in-class financial profile and maximize value for our shareholders. This slide summarizes our long-term outlook, which we introduced to investors at the beginning of this year. From a revenue perspective, we expect continued organic sales growth of approximately 4% to 5% over the next few years, led by our unrivaled product and solutions portfolio, which is set to benefit from our industry-leading R&D programs. We also expect to see meaningful operating margin improvements for IFF, including an estimated adjusted EBITDA margin of approximately 26% in 2023, which would be an increase of around 400 basis points from our 2020 performance. The new IFF will continue to generate strong free cash flows, and we expect a significant increase to approximately $2 billion in 2023. As we pursue further growth, capital management and deleveraging remain core priorities for us. We are targeting a net debt to EBITDA ratio of three times within 24 to 36 months post-close and we reaffirm our commitment to maintaining an investment-grade rating. Finishing on Slide 22, I would like to thank you all again for joining our call. Across the world, our teams have worked tirelessly throughout a difficult year to ensure IFF continues to serve our customers and deliver strong business results. Our full-year financial results showcase the strengths of our portfolio and, most importantly, our people. Despite the challenging environment, we made tremendous progress on our transformational journey. The formation of the new IFF, together with N&B, has made us an even stronger company, better positioned to deliver value for our stakeholders. With the pre-integration process completed, it’s now time to execute. We have the team and structures in place to ensure that our newly combined company will meet our financial and operating goals in order to shape the future of our industry and improve our world. While global volatility is expected to persist, our foundational commitment to our people, customers, communities, and planet will remain unchanged as we look to strengthen and redefine our role as the industry-leading ingredients and solutions partner. I am thrilled about IFF's exciting new chapter and hope that you will join us in our pursuit to revolutionize the industry and deliver for our customers, teams, and shareholders. Before we open the floor to questions, please note that our plan for Q&A today is to focus on our results and outlook, and not to address questions about market rumors. With that, I would now like to open the call for questions. Thank you.

And we’ll take our first question from Mark Astrachan with Stifel. Please go ahead. Your line is open.

Yes. Thanks and good morning, everyone. I guess, one question with two parts on the long-term – the new long-term targets. So on the sales growth piece, what gives you confidence that you can achieve 4% to 5% organic growth when you haven't achieved that level in recent years? Or should I say both businesses haven't achieved that kind of growth in recent years? Rustom said that you're guiding around 2% to 3% organic growth in year one. So how do you get there? Additionally, how much contribution from the change in FX accounting would add to that? And on the same long-term targets, EBITDA margins – why the same confidence to achieve those margins when EBITDA or EBITDA margin has been essentially flat over the last couple of years, despite cost synergies and legacy business productivity initiatives? I understand the challenges in 2020, but your results have been below your own expectations from an EBITDA growth standpoint too in recent years. So if you could just touch on those, I would appreciate it; I know it's a long question, but it’s hopefully important.

Yes. Thank you, Mark. That’s a very important question. I’ll take the first piece and then I’ll hand it over to Rustom for the FX details. We are very confident that we are on track for the long-term targets. Let me explain why. For example, the Scent division, which is very important to us, has turned around quite significantly in a tough year like 2020. We see good signs early this year that this journey will continue. We are on track. The second piece is Taste, which has shown some performance issues in 2019 and into 2020, but we’ve seen sequential improvement and a good start to 2021. We have taken all necessary actions to bring this division back on track. We have reorganized the European region into Western Europe, Africa, and the Middle East to place more focus on emerging and more mature markets. We have focused integration efforts on the Frutarom organization, particularly in Europe last year. We have fully integrated that, and we have restructured our go-to-market strategy, and it looks like we are starting to perform well. The legacy IFF side is showing positive signs. On N&B, there are many portfolio pieces with good growth profiles. We mustn't underestimate that parts of the portfolio were pressured by COVID last year, and that would help from the second half of this year.

Thank you, Andreas. Hi, Mark. The guidance we provided was in dollars, in relation to our S-4, and when we talked about synergies and additional revenue synergies we expect. FX can be difficult to predict. We have been looking at FX rates as of the time we provided all those forward estimates. The new methodology we talked about gives us a better growth rate in terms of what we reveal. It doesn't change the overall actual dollars, right? The underlying essence is that while 2020 had its fluctuations, we are in line for targeted growth moving forward.

And we’ll take our next question from Gunther Zechmann with Bernstein. Please go ahead. Your line is open.

Hi, good morning, Andreas. Good morning, Rustom. Hi, Mike. That’s almost emotional for me that you changed the reporting to the way that the European TS disclose organic sales growth. So that’s a bit of a long-awaited wish. Can I clarify on your 2021 guidance? What is the organic component, and how much do you account for FX pricing? I hear your point, Rustom, about FX being unpredictable, but could we break it down to volume expectations and underlying pricing considering any cost inflation that you include in your 2021 guidance?

On the pricing side, we expect higher raw material costs during the period. So our recovery is factored into our pricing as well. To explain the FX part: considering our weighted average basket of key currencies, the biggest is the U.S. dollar, followed by the Euro and Danish Krona, which is tied to the Euro at about 27%. When we look at this weighted basket, our basic budget for 2021 versus 2020 indicates about a 1% difference. Currently, spot rates are running better than that, from our perspective, indicating that our expected 2021 growth rate remains about 3.5%. This assessment includes small contributions from synergies, and we anticipate that our preliminary sales growth around 3% so far aligns with these expectations.

Next, we have Faiza Alwy with Deutsche Bank. Please go ahead. Your line is open.

Yes. Hi. Thank you. Good morning. So Andreas, I know there are some activists out there, but I know you can’t comment.

Hello? Yes, we can hear you.

We’ll move next with Matthew Deyoe with Bank of America. Please go ahead. Your line is open.

Good morning. You mentioned food service was down double digits on the quarter and on the year. Can you be more specific? Additionally, we’ve seen a lot of European lockdown headlines. Has that decelerated in Q1? Why didn’t Taste, excluding food service, grow mid-single digits or better? What is keeping it, excluding food service, in the 1% to 2% range versus closer to mid-single digits?

Yes, let's discuss food service first. Food service globally is expected to return to levels seen in 2019, which should be achieved next year. However, we have observed a better start into January, down only in the high single digits, which is an improvement compared to last year, driven by many regions. Impacts on Taste have also included customer structure, as we serve a larger number of smaller to mid-sized customers compared to competitors. However, we see a positive recovery with an increased pipeline of new projects. As for the Scent business in 2021, Fine Fragrance is seeing easier comparisons throughout the year, but the consumer scent business may experience other dynamics. We have made significant traction in the back half of 2020 and have targeted our market share accordingly.

We’ll take our next question from Faiza Alwy with Deutsche Bank. Please go ahead. Your line is open.

Yes. Hi, thank you. Sorry about the earlier confusion. I wanted to reflect on your tenure as CEO. In recent years, IFF has underperformed its peers. What do you believe has driven that operating underperformance? Have you focused on the right customers and categories? Have you invested appropriately in R&D? Or have you been too focused on M&A? Is there anything you would have done differently over the last few years?

Very good. Thank you, Faiza. First, back in 2015, when we began mapping our strategy, we had a clear plan due to the changing environment and customer demands. As we adapt to integrated solutions and address demands for naturals, we see a shift toward smaller customers taking a larger share. I believe our strategy was well-defined and worked effectively, considering we evolved from a $3 billion organization in 2014 to an $11 billion company now with a broad offering. Importantly, we are leaders in many defined categories. While there were challenges with some parts of our portfolio, like Food, I believe our strategic moves and actions have been appropriate. Looking forward, we are well positioned for the coming years.

We’ll move next with Jeff Zekauskas with JPMorgan. Please go ahead. Your line is open.

Thanks very much. In terms of the effects of COVID on the DuPont business, you mentioned that roughly 15% of your revenues were down 15%. Is the penalty for the DuPont business bigger or smaller? Secondly, were you a customer of DuPont prior to the merger? If so, was it a substantial relationship? Were other flavor and fragrance companies clients of DuPont as well?

I can answer the customer relationship aspect first, and then I’ll hand it over to Rustom for the COVID impact. We had minimal customer relationships with legacy DuPont. Other flavor and fragrance companies had a small amount of business with DuPont, but it was limited overall. Rustom, if you could address the COVID impact on the DuPont business.

Sure. The DuPont N&B business was impacted by COVID approximately 20%, and there were regional differences within its various segments, such as biorefineries and food service.

Our next question comes from Ghansham Panjabi with Baird. Please go ahead.

Hey guys, good morning.

Good morning.

Thanks for taking my question. I wanted to touch on Slide 14, where you listed many of your 2021 assumptions. Can you help us with tax rate guidance for 2021, CapEx on a pro forma basis, and also the EPS weighting between the first half and second half, considering your comments about the first half being challenging relative to the current COVID environment?

Rustom?

Yes. Regarding the tax rates, we've got a sense of previous tax rates, noting that DuPont N&B operates at a higher effective tax rate. We'll detail this once we finalize our numbers. As for EPS, we've focused on EBITDA as a better, more transparent representation of business, hence haven't provided first-quarter EBITDA guidance specifically.

Thank you, Rustom. And what about your CapEx expectations for the full year?

No changes from what we communicated regarding CapEx, which was around the high 400s, approximately $465 million. Specifically, we expect around $235 million from the N&B side and around $230 million from legacy IFF.

We’ll move next with Lauren Lieberman with Barclays. Please go ahead.

Great, thanks. Good morning.

Good morning, Lauren.

Hi, I have two questions. One is just to clarify; does the long-term target of 4% to 5% FX neutral need to change with the new revenue disclosure methodology? It seems you are including some pricing effects. Secondly, in terms of long-term growth, while I appreciate the conservative view in leaving room for delivery, I wonder what that implies about your outlook for market growth. With this transaction and the objective of creating a different business model for the industry, your long-term targets appear unchanged, so I’d like to understand how that relates to your view on market growth.

For your second point, we are approaching 2021 carefully. Given the COVID effects, we've adopted a slower start, anticipating impacts in the first half. However, we eagerly project future growth and the ability to achieve a target of 4% to 5% growth in subsequent years, above the industry's standard. This is supported by our diverse opportunities and a strong commitment to execution. Rustom, can you expand upon the first piece of Lauren’s question?

Yes, Lauren. Our long-term targets were based on dollars and reflected FX considerations. There is no change in the methodology. The numbers we provided remain valid, and our revenue expectations will adhere to our established target. The synergy contributions will support attaining those growth rates over the anticipated periods.

Thank you, Rustom.

Operator, we’ll take one more question if that’s okay.

Yes, good morning.

Good morning, PJ.

Thanks for taking my question. I have two questions related to margins. There seems to be a lack of operating leverage in the business, as seen in the latest reports: in the Scent… your sales were up 3%, but profit was flat; in Taste, sales were down 5%, and profit was down 10%. Why isn't the bottom line growing faster than the top line?

Rustom?

The bottom line is actually growing faster. If you look at our full-year numbers for Scent, ballpark, revenue growth was around 3%. We have seen significant boosts coming from incentive payout adjustments after a poor 2019. Those won’t repeat in 2021, which is favorable for the future. Additionally, the costs associated with COVID, such as air freight and PPE, totaled approximately $26 million. These effects will normalize in the coming year.

Thank you, Rustom.

We have reached our allotted time. I would like to turn the floor back to Mr. Andreas for any closing remarks.

Yes, thank you for the good questions. We know we have a long line of inquiries. We will continue with our one-on-ones and look forward to reconnecting with all of you in the coming weeks and months. Thank you. Goodbye.

Goodbye, everyone.

And this concludes today's conference. You may disconnect your line at any time and enjoy the rest of your day.