Thank you. Good morning, good afternoon and good evening, everyone. Welcome to IFF's Third Quarter 2023 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. Please take a moment to review our forward-looking statements. 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 our press release. With me on the call today is our CEO, Frank Clyburn; 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 you may have at the end. With that, I would now like to turn the call over to Frank.

Thank you, Mike, and hello, everyone, and thank you for joining us. On today's call, I will begin by providing an overview of our performance in the third quarter and an update on our strong execution to position IFF for long-term success. I will then turn the call over to Glenn, who will provide a more detailed look at our third quarter financial results by business and discuss our outlook for the remainder of 2023. We will then open the call for questions. Moving to Slide 6. Our third quarter story is one of sequential improvement. As we've discussed, improving volumes has been a top priority, and we are pleased with the sequential volume improvements that we have achieved across the majority of our business. On a total company basis, while our volume in the third quarter was down mid-single digits, it was a marked improvement from our Q2 lows where we saw a double-digit decline. Similarly, our enhanced productivity initiatives as well as favorable price to inflation led to strong adjusted operating EBITDA results. Sequentially, our adjusted operating EBITDA margin finished at 17.9%, which is a 50 basis point improvement versus the second quarter of 2023. And our focus on ongoing working capital improvements drove strong free cash flow generation. In particular, the continued execution of our inventory reduction program has resulted in more than a $600 million reduction in inventory since the end of 2022. This was the largest driver of our free cash flow, which improved $320 million versus the second quarter of '23. The net result is that we delivered higher than our expectations on both the top and bottom line. At the same time, our commercial excellence initiatives in our R&D platform continue to drive improvements in our sales pipeline. In addition, in Functional Ingredients, as discussed on our second quarter call, we are implementing a targeted operational improvement plan to improve sales execution, strengthen our operating model and reshape the portfolio. As we shared previously, we expect this plan for Functional Ingredients will translate into low single-digit comparable currency-neutral sales growth in line with the market and a mid-teen adjusted operating EBITDA margin over the next 3 years with a strong improvement in 2024. And while this will take time, we are seeing improvements in our volume performance, where we finished the quarter down mid-teens versus low 20% declines in Q2 of 2023. With this momentum, we have increased confidence in our ability to deliver within our previously announced full year '23 sales guidance range and we are now targeting the mid- to high end of our full year 2023 adjusted operating EBITDA guidance range. As Glenn will highlight, we are seeing signs of green shoots in the fourth quarter, with stabilization and improvements across several parts of our business. Lastly, we've made important progress against our portfolio optimization initiatives as we are rapidly addressing our capital structure. Most notably, aligned with our best owner mindset, we announced an agreement to sell Lucas Meyer Cosmetics to specialty chemical company, Clariant, for $810 million, which is equivalent to a high teens multiple based on our projections. We expect to complete the transaction in the early part of the first quarter of 2024, and all proceeds will support our deleveraging priorities. Moving forward, we continue to pursue strategic noncore divestitures that will drive further deleverage and enable us to further prioritize our fastest-growing margin-accretive businesses and deliver long-term value for shareholders. Moving to Slide 7. In the third quarter, IFF generated $2.8 billion in sales, representing a 3% decline on the comparable currency-neutral basis. A strong performance in Scent and Health & Biosciences was more than offset by softness in Nourish and Pharma Solutions. As I mentioned, volumes improved sequentially across nearly all businesses with particularly strong performance in Scent and Health & Biosciences. Excluding Functional Ingredients, which continues to disproportionately impact our results, overall volume declined low to single digits in the third quarter. Adjusted operating EBITDA for the quarter was $506 million, down 10% year-over-year on a comparable currency-neutral basis. Our favorable net price to inflation as well as enhanced productivity gains were more than offset by lower volumes due primarily to temporary customer destocking and unfavorable manufacturing cost absorption. Adjusted EPS, excluding amortization, was $0.89, primarily impacted by lower profitability.

Thank you, Frank, and good morning, good afternoon and good evening, everyone. Taking a closer look at our profitability performance on Slide 8. As Frank mentioned, we delivered higher-than-expected EBITDA of $506 million in the third quarter. While we continue to benefit from favorable price to inflation and productivity gains, as you can see from the slide, ongoing volume pressures impacted our profitability in the quarter. While we are encouraged by the sequential volume improvement, we have seen across most of our portfolio, it remained the primary pressure in Q3. If we look at our profitability performance, absent the unfavorable manufacturing absorption related to our inventory improvement program, adjusted operating EBITDA would have declined 6% year-over-year on a comparable currency-neutral basis. Note that our negative absorption in the quarter was less than expected as our inventory reduction program for the year has run its course and volumes have improved. We have done a good job at driving working capital improvement through our inventory reduction program, driving more than $600 million reduction in inventory since the end of '22. As a result, at this time, we are now expecting approximately a $165 million impact from negative absorption to profitability for the full year, down from $180 million. This could also flex further as the fourth quarter unfolds. To reiterate, this is a one-time transitory impact to the P&L in order to maximize cash flow moving forward. Turning to Slide 9. I'll provide a closer look at our Q3 performance by business segment. In Nourish, sales declined 7% on a comparable currency-neutral basis, driven mainly by the continued weakness in Functional Ingredients. While Functional Ingredients remained a main driver of weakness in Nourish in the third quarter, we did see sequential improvement and expect this to continue as we move into the fourth quarter. Good growth in our Flavors business and the positive impact of IFF's ongoing pricing actions and productivity initiatives were more than offset by lower volumes and unfavorable manufacturing absorption. Together, this led to a 26% year-over-year decrease in comparable currency-neutral adjusted operating EBITDA. Health & Bioscience continued to deliver strong results in Q3, led by meaningful growth in Cultures & Food Enzymes, Grain Processing, Home & Personal Care and Animal Nutrition leading to comparable currency-neutral growth of 2% year-over-year. Price increases and productivity gains led to a 12% year-over-year increase in comparable currency-neutral adjusted operating EBITDA. Scent was once again our strongest performer, delivering 7% growth in comparable currency-neutral sales driven by double-digit growth in Consumer Fragrance and high single-digit growth in Fine Fragrance. Like Health & Biosciences, Scent also saw strong 19% growth in comparable currency-neutral adjusted operating EBITDA with profitability driven by favorable net pricing and productivity gains. Pharma Solutions growth rate was pressured this quarter, in large part due to a very strong prior year comparison with a 28% 2022 sales growth comparison and a 76% '22 adjusted operating EBITDA comparison. Price increases and productivity gains for this business were more than offset by lower volumes and comparable currency-neutral sales declined 9% and comparable currency-neutral adjusted operating EBITDA declined 34% in the quarter. Now on Slide 10, I'll discuss our cash flow and leverage position. Cash flow from operations totaled $795 million, a significant increase, reflecting a strong improvement in inventory levels. CapEx year-to-date was $390 million or approximately 4.4% of sales. Our inventory reduction program and working capital improvements have also greatly contributed to IFF's improved free cash flow performance, which totaled $405 million, a significant increase of $320 million from the second quarter. Year-to-date, we also distributed $619 million in dividends to our shareholders. Our cash and cash equivalents totaled $652 million, which includes $23 million in assets held for sale. Additionally, gross debt for the quarter totaled approximately $10.3 billion, with a net debt to credit adjusted EBITDA of 4.6x. Our trailing 12-month credit adjusted EBITDA totaled approximately $2.1 billion. We are making good progress on working down our debt levels. And as Frank mentioned earlier, portfolio optimization remains a near-term priority as we work to reduce our leverage position and ensure our resources are focused on the businesses that will carry our success into the future. The sale of our Cosmetic Ingredients business, which is expected to close in the early part of the first quarter 2024 will further support our strength in capital structure as we pay down debt in line with our net debt to credit adjusted EBITDA targets. Now on Slide 11, I would like to focus on our consolidated outlook for the rest of the year. First, we are reaffirming our full year revenue guidance range of $11.3 billion to $11.6 billion, which reflects the improved momentum we are seeing across the majority of our business and accounts for the macroeconomic environment and foreign exchange impact, which we expect will persist through the end of the year. On the bottom line, we are now expecting to deliver full year 2023 adjusted operating EBITDA at the mid to high end of our previously announced guidance of $1.85 billion to $2 billion, driven primarily by favorable price to inflation and improved productivity. We also now expect full year interest expense to be slightly higher at approximately $450 million. Our projected effective tax rate for the year is expected to be approximately 21%, the same estimate we provided last quarter. Finally, as we look to the fourth quarter, we continue to expect an improving trend in the majority of our businesses as we navigate the macroeconomic challenges impacting our industry. We are seeing signs of green shoots in the fourth quarter, with stabilization improvements across several parts of our business. As we near the end of the year, I know many of you have questions on 2024. While the macroeconomic environment remains volatile with low visibility, we are optimistic heading into the new year. We have several known one-off items that we have high level of confidence will be tailwinds, including significant negative absorption related to our successful inventory reduction program and one-time Locust Bean Kernel inventory write-down. Also, we will continue to execute on our cost and productivity initiatives and have a carryover benefit from this year's restructuring program. These, of course, will be partially offset by a reset of our annual incentive compensation program where we have reduced payments in 2023 related to our performance versus target. In the end, improved volume performance will be critical to our success, and we believe that destocking will largely be done as we exit the year and we also believe we will benefit from acceleration of our strategic transformation initiatives. We will provide our 2024 guidance with our fourth quarter results, which we expect to be towards the end of February. With that, I'll turn the call back over to Frank for closing remarks.

Thank you, Glenn. Let me start by saying that I am tremendously proud of what our teams have accomplished in the last quarter to advance our focused strategic initiatives and build a stronger, more resilient IFF. Our improved performance, productivity gains and reaffirmed financial guidance reflect the hard work of our global teams that continue to support our long-term vision. We executed against our strategic priorities in Q3, and we'll continue to take action in Q4 to build a stronger IFF, better positioned to accelerate growth, expand margins and deliver value for shareholders. Finally, looking at our business more broadly, we will continue to pursue portfolio optimization initiatives to strengthen our capital structure. As we've discussed previously, we are laser-focused on investing in our highest-return businesses while positioning our less margin-accretive businesses for success, either through new ownership or through focused improvement plans, such as those we're pursuing for Functional Ingredients. Our goal, as we move through the end of 2023 and beyond is to ensure that each of our businesses has the resources and where appropriate, the ownership most conducive to accelerating our growth, expanding our margins and maximizing our long-term returns as we continue to innovate for customers worldwide. With that, I will now open up the call for questions.

Frank, my question to you. Could you please talk about the development in the Functional Ingredients part of the business? It looks like a V-shaped recovery, but any color you could give around the moving parts within that business on the top line and the ramp-up, what you mentioned around the fixed cost measures that you're taking would be great.

Gunther, it’s Frank. A couple of things. One, with regards to Functional Ingredients, the business clearly across all of ingredients is stabilizing, Gunther, and we saw good sequential improvement when I look at Q2 to Q3, in particular, in 3 of the biggest business lines, core texturants, some multipliers, sweeteners and protein solutions, good sequential improvement. So that’s a very positive sign for us. And obviously, those products are going into some of our key dairy and bakery end market categories. As far as the Functional Ingredient plan overall, we’re focused in 3 areas: one, enhance our go-to-market approach; two, drive operational efficiencies; and three, really reshaping the product portfolio. And since we’ve announced we’ve added targeted commercial professionals to pursue incremental opportunities with our customers, we’ve also reviewed our organization and we’re in the process of adjusting our operating model, Gunther, to drive greater efficiencies throughout. And at the same time, we have completed a full review of our product lines, and we’re in the process of investing behind our strongest products as well as rationalizing those that are underperforming. Team is urgently acting to drive better performance across Functional Ingredients. And the net result of this Gunther will be – we’re very confident we can grow sales in line with the market and deliver a mid-teen adjusted operating EBITDA margin over the next 3 years. Thanks for the question.

Nice quarter. Frank, deleveraging is an important part of your thesis going forward. And can you maybe provide an update on your divestiture process? I think there's press out there that Pharma potentially is up for sale and how that fits in your strategy?

Mike, it's Glenn. I'll start and then Frank can add to it. We've been very open for many quarters about enhancing our portfolio, which is crucial for achieving our future leverage goals. We're pleased to announce the recent sale of Lucas Meyers Cosmetics for $810 million in gross proceeds, which should result in about $730 million net. All of that will be directed towards divestitures. The company sold for an approximate 18 times multiple based on this year's projected earnings, which we find encouraging. We have several other portfolio actions in progress. Although we haven't publicly mentioned Pharma, it's being discussed in the press. We're confident these actions will lead us to our target of a leverage ratio of 3x or lower. Regarding your question about Pharma, it is a solid, sticky business operating in a healthy sector. However, there is relatively little overlap with end customers in the rest of IFF. Thus, the synergy across our portfolio with Pharma is limited. To address how Pharma fits into our overall framework, remember that Pharma is positioned in the middle range in terms of return on invested capital. It benefits from a higher-return segment, which is the excipients, constituting about 75%, alongside a lower-return, more industrial business. Frank, do you want to add anything?

No, I think we can go. Yes.

Actually, Frank and Glenn, you both commented that volume performance improved sequentially through Q3, and you pointed to signs of green shoots. So I was wondering if you could give more color either by division or by specific end markets in terms of where you're seeing that improvement? And what's your latest assessment of customer inventory levels overall, do you think that destocking is now behind us?

Thanks for the question. It was interesting to see literally essentially every single sub-business within Nourish, H&B and Scent had a sequential improvement in volumes from Q2 to Q3. So it was very broad-based in terms of the performance improvements we saw. I’d say, in general, the HPC categories were stronger from an absolute volume standpoint than the food and beverage, which is not surprising given what’s happening from a consumer demand standpoint. Pharma was the one exception. Pharma actually had volumes down. I would note, though, they had an incredibly strong third quarter of last year. They had a plus 12% in terms of volumes. So there’s a bit of an overlap. We had converted a system in Q2 of last year. So there was a bit of a backlog of orders, which were cleared up in Q3. So a little bit of a normalization from the standpoint. Relative to your question on destocking, it’s very difficult to say per se. However, our feedback from our business is, we would say that the majority of the customers at this point are either done or expected to be winding down by the end of the fourth quarter. I think the one segment that’s a little bit of a lagger is Pharma. The Pharma business in terms of the customers started destocking a little bit later. It has a meaningful distributor component of the business as well and also the industrial side. And I think that’s also been reflected very clearly in the competitive side for the Pharma business as well. So knock on wood, things are sort of moving very broadly across the entire business.

Scent benefited from favorable price versus raws. Was that both sequential and year-over-year? Are you getting more price sequentially? And how are you thinking about 2024?

John, this is Glenn again. By the way, welcome to your new home. So relative to Scents, sequentially, it’s relatively neutral, Q2 to Q3 in terms of the net price versus cost, although it is less moving, less price and more cost. So we’re now seeing the effects of the deflation basically moving through more so. And year-over-year, slightly higher in the third quarter versus the second quarter. As a reminder, in our core markets being the consumer and Fine Fragrance, our final pricing actions were implemented at the beginning of this year. So really what we’re now beginning to do – and there was some implementation in the second quarter of last year, so we’re now sort of fully overlapped last year from a neutrality standpoint, and what we’ll be seeing more is the cost reduction. One important asterisk, we have a percent of our business, as you know, that’s basically sells ingredients. About 50% of the production is used for our own products and 50% sold. There’s a commodity component such as turpentine as an example, Galaxolide, which is somewhat commoditized. So the pricing dynamic is a little bit more on a downward cycle given those categories. But in general, the net price cost is generally very stable in the Scent business. So thanks for the question.

So I guess I'm curious about how you think about your volume performance relative to peers as it appears that they're still outgrowing you all. I suppose somewhat related maybe to the last question, but bigger picture, it looks like pricing was a much smaller contributor sequentially. Does that factor into how you think about volumes? And then just lastly, tied together, when do you think your sales can go back to the long-term algorithm?

Mark, it’s Frank. Let me take that one. And a couple of things that I really wanted to highlight on this question. So first, we spent a lot of time, obviously, with our teams throughout the quarter and at the end of the quarter, looking at our competitive dynamics and how we are positioned. And to highlight, maybe if you could give me a minute just to walk through some of our key business lines. So Flavors, for instance, Mark, we actually grew the business this quarter. And feel very good about our performance, in particular, in North America and Greater Asia and a very well positioned against our competitive set. Health & Biosciences, you actually saw growth versus prior year, Mark, which was very encouraging. And in fact, you saw growth in Cultures & Food Enzymes, Animal Nutrition. Home & Personal Care was a good growth quarter for us. Grain Processing, good growth from a sales perspective as well. And then if I look at our Scent business, our Scent business actually grew above market, Mark. Consumer Fragrance above market. So clearly growing market share there. And then also our Fine Fragrance business had good performance. So I feel really good about this Scent performance versus prior year. And then also as we’ve already highlighted across just about all of our business lines, good sequential improvement. So when I look at our overall business, I feel really good about the sequential improvement. The one area that we do have disproportionate volume declines versus our competitors as we’ve highlighted is Functional Ingredients. If you were to exclude Functional Ingredients, Mark, our volume would be down low single digits. So we feel as though we’re well within our peer set there. And like I said, we feel very good about the majority of our business and how we’re performing. And then the other one that we have highlighted, Mark, was with regards to Pharma. But Pharma, as we’ve mentioned, had a very strong competitive quarter last year. So that’s more of a competitive issue for us in this quarter compared to last quarter of last year. But all in all, Mark, we feel as though the overall business is sequentially improving and is in a really good position as we head into 2024.

Frank, on Pharma Solutions, can you comment on the sequential margin decline? Was it more mix or more costs? And what does this mean for you, do you think for margins in Q4 and next year for Pharma?

Yes, David. So Pharma, as we mentioned, the comparison versus prior year, as we highlighted, was a 28% growth. Last year with a lot of shipment catch-up as we implemented in some SAP shipments that went into Q3 of ‘22. And then EBITDA growth last year was 76%. So that was the comparator versus last year. And obviously, you can see that we’re down 9% on the top line this year because of that comparator. If you look sequentially, Mark, you do see some choppiness, as Glenn highlighted earlier. There are some distributors that are starting to rightsize inventory in this business. That is something that we see more of a destocking as we ended kind of Q3. And as we go into Q4, we anticipate that the inventory destocking will continue. With that said, we think it’s temporary in nature. I have no concerns about the overall outlook for the Pharma business, very sticky business. Our core Pharma position is – what should I say, our core Pharma business is well positioned with our customers. So destocking by our distributors, rightsizing inventory, temporary in nature, and we feel good about the growth potential performance as we go into ‘24 and beyond.

Glenn, could you elaborate on the major factors affecting 2024 EBITDA compared to 2023? Specifically, there are no inventory absorption charges and no inventory write-off from the second quarter. Additionally, there are headwinds from incentive compensation. Can you provide some quantification on that? Should we expect significant price-cost tailwinds? There's also the impact from the divestiture to consider. Can you help us understand the productivity savings we should anticipate looking ahead to 2024 on a year-over-year basis? Finally, is the main variation mainly due to volume and associated operating leverage, or is there something else worth noting?

Thank you, Adam. So let me kind of break that down into 2 components. One, just normalizing, I’ll say, the onetime items from this year into next year and then talk a little bit about 2024. In terms of normalizing this year, first thing you do is you have to take out $75 million of EBITDA related to divestitures. So that’s roughly 6 months of Savory Solutions and then FSI, or Fragrance Specialty Ingredients business. And then basically a full year directionally for LMC, that’s about $75 million in earnings. In addition, you have to add back the impact of absorption which goes away. That absorption is related to the inventory reduction. So as we’ve mentioned, we’ve taken out nearly $600 million of volume-related inventory this year. That’s about $165 million benefit. On top of that, the LBK write-off in the second quarter was $44 million. And then lastly, in terms of sort of add normal items, I would add about $25 million of additional benefit associated with the annualization of our headcount reduction program this year. Offsetting that, as you mentioned, is roughly $70 million-ish of basically truing up our incentive plans back to 100% given this is a challenging year, they’ll pay out at a lower percentage. So those are the normalized items I would take the sort of baseline the 2023 results. Candidly, relative to ‘24, we are – we’ll be prepared to have a very fulsome discussion at the February call. We’re in mid-planning process right now. We’re working with all the businesses in terms of their plans from volume, net price, procurement on deflation, productivity programs, et cetera. So it’s a little early to talk about those components at this point, but we promise you, we’ll have a very detailed discussion in February.

Just a follow-up on positive absorption or just absorption coming off next year. What percentage of the portfolio is build-to-order versus build-to-stock? And are there any specific businesses where that split is skewed towards one or the other?

Yes. I wouldn't say that built-to-order products don't have an impact on absorption because they do. To answer your question, we are approximately 55% build-to-stock and 45% build-to-order in our overall portfolio. The build-to-stock is more associated with the legacy DuPont or N&B portfolio, whereas the build-to-order corresponds with the legacy FNF. Therefore, Nourish is probably slightly more build-to-stock than build-to-order, but it includes a mix of the Ingredients business, food systems, and then notably, the Flavors, H&B, and Pharma businesses, which are primarily build-to-stock, while the Scent business is mainly build-to-order.

I was curious if you guys could talk a little bit about pricing. Pricing in the quarter came through a bit stronger, I think, than we had anticipated. And so just curious about that because I didn't think that there was any incremental pricing going through. So maybe it was just sort of stickiness, but would love some detail on that.

Yes. It’s more related to deflation than price per se. Pricing – actually, all of our pricing was implemented earlier this year. We really have not been implementing any more pricing actions this year. So it’s really been the favorability associated with deflation that enhanced our earnings versus expectations.

So I was just wondering if you could give an update on free cash flow. What your expectations are for this year now? And just given you scaled back your inventory, I guess your manufacturing headwind from inventory adjustments, does that mean you're done? Or is there more opportunistic inventory reduction to do to shore up free cash flow further?

So the second part – Josh, this is Glenn. So the second part of your question, we are largely done with the inventory reductions. We’re basically going to be largely flatlined for the balance of the year. Relative to our free cash flow estimates for the year, they are unchanged versus our previous quarter. We will be, call it, circa $450 million on reported free cash flow for the year. I will note, once again, that includes about $440 million-ish of Reg G items. So we’re right around $900 million of adjusted free cash flow for the year. Just as a reminder of those Reg G items, they’re broken down into about a little over half of them, call it, about $240 million are literally associated with our divestitures. A big portion of those are taxes, not surprisingly. We also have another roughly $80 million of the final integration costs. Those are associated with systems conversion and legal entity changes from DuPont. Those will be completed this year. And then there’s about $75 million-ish related to restructure. That’s from the implementation of this year, and then, call it, $50 million-ish sort of all other related expenses. So that’s sort of a breakdown of the Reg G items.

Can you update how much of your business ex Pharma is in the fix or shift category? And how much it needs to improve in aggregate or on average for you to be happy with it? I mean like not just like a minimum threshold, but what your like 3- to 5-year target might be?

When you reference fix or shift, I'm assuming you're talking about the Ingredients business, so is that correct?

Most of it, but I guess I'm fishing for if you have anything else that you're now putting in that category?

That's mostly 90% of it. As we mentioned, that business makes up about 20% to 25% of our total portfolio. Frank previously outlined the major initiatives during the call. It will take some time to fully implement those initiatives. We are seeing some improvement in the business, but we are still a ways from returning to the full historical level of both earnings profile and growth. Our goal is to increase the EBITDA margin from largely a high single-digit level to the mid-teens and to grow the business in line with the industry, which historically has been around 1% to 2% growth per year in terms of volume.

And this is Frank. What I would add is on that 20% Glenn mentions and a number of those have – assets have been disposed and we continue down the path of optimizing our portfolio as we’ve highlighted. And then within Functional Ingredients, as we’ve mentioned, we are making good progress, as I highlighted earlier, and that’s really where the majority of the improvement area needs to be. But I don’t want to lose also sight of the 80% or so of the businesses we’ve been highlighting today that has seen good sequential improvement in a number of businesses that actually grew versus prior year.

Is there a $70 million SG&A benefit this year from the compensation changes? And did most of that occur in the third quarter? And secondly, if there's a $160 million headwind from unfavorable manufacturing absorption, which is a 150 basis points headwind to gross margin. Do you expect as a base case, your gross margin to be up by 150 basis points next year? And do you need volume growth in order to achieve that?

I think to the second question, you should definitely normalize the absorption as a starting point. The ultimate margin dynamics for next year, which we’ll discuss in more detail in February, will be a combination of mix, volume growth and ultimately, any additional sort of price inflationary pressures. So it’s a complex. I don’t think you can just straight line the improvement. I think you can reset the baseline, but then you have to sort of think through all the variables of what’s driving the gross margin rate for next year. So we’ll park that, come back to that in February. The $70 million that we've referenced really are the savings from headcount reductions we've implemented this year. So as a reminder, there was a program that where we’ve targeted $100 million of annualized cost reduction, so roughly $70 million, $75 million of that this year and then about $25 million will be the annualized impact. It’s all been implemented. So it’s all done. So it’s really just a timing element of that. And then lastly, there’s always some choppiness quarter-to-quarter because of accruals around variable incentives. So depending on up or down, things can get trued up and can be a little bit choppy. So that does affect the quarter-to-quarter RSA as well.

I wanted to ask if you could remind us about your exposure to soybean prices and key oil seeds, particularly vegetable oils. Also, can the recent decline in some of these edible oils significantly impact the 2024 EBITDA?

I would say 2 things. We have a very, very large basket of raws. So there’s lots of things moving in either direction. In general, the cost trends or deflation trends are working in our favor. So that’s a general statement. Relative to soy, we do actually lock in over time. We typically hedge out for a period. So we don’t necessarily always capture either the immediate upside or downside, but over the longer arc, obviously, as those prices decline, we capture it.

Congrats on the quarter. Just to confirm, in the past, you've mentioned the 3.0x net debt-to-EBITDA as a level you plan to hit in 2024. So I guess just based on where you are in the asset sale discussions, do you still have confidence and visibility into achieving that level next year? Or is there some risk that, that gets extended? I know the covenant horizon was pushed out about a year to early '26. So any help on the time line would be great.

We appreciate your question, Andrew. We're very confident that our current M&A activity will enable us to achieve our goal of 3x or less. We expect to accomplish this by the end of next year. There is always a timing element involved in closing transactions due to separation and legal entity changes. However, barring any typical delays, we should be in good shape by the end of next year.

So first, I want to start by thanking all of our IFF FERC colleagues around the world and all of the tremendous work that they are focused on to really help our customers and to continue to innovate. Our vision as a company is truly to be the innovative leader in essential solutions, and we’re very proud of the progress that we’re making through this quarter. And I also want to thank everyone for joining our call. We look forward to our fourth quarter update and full year guidance for ‘24 update in February, and I wish everyone well, and thanks for joining our call.

That concludes today's conference call. Thank you for your participation. I hope you have a wonderful rest of your day.