Thank you. Good morning, good afternoon, and good evening, everyone. Welcome to IFF's Third Quarter 2025 Conference Call. Yesterday afternoon, we issued a press release announcing our financial results. A copy of the release can be found on our IR website at ir.iff.com. Please note that this call is being recorded live and will be available for replay. During the call, we'll be making forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to our cautionary statement and risk factors contained in our 10-K and press release, both of which can be found on our website. Today's presentation will include non-GAAP financial measures, which exclude those items that we believe affect comparability. A reconciliation of these non-GAAP financial measures to their respective GAAP measures is set forth in the press release. Also, please note that all the sales and adjusted operating EBITDA growth numbers that we will be speaking to on the call are all on a comparable currency-neutral basis unless otherwise noted. With me on the call today is our CEO, Erik Fyrwald; and our CFO, Michael DeVeau. We will begin with prepared remarks and then take questions at the end. With that, I would now like to turn the call over to Erik.

Thank you, Mike, and hello, everyone. Thanks for joining us today. IFF's third quarter results demonstrate continued execution. Our performance this quarter shows that we continue to make progress towards our goals, operate with efficiency and discipline, and further strengthen our financial position. In a more challenging environment, we are doing what we said we would do as we expect to deliver financial results in line with our full year guidance that we outlined in February. We will do this as we continue reinvesting in our business and advancing our growth strategy while driving productivity. I'll start today's call by briefly summarizing the third quarter, and then I'll talk about some of the key strategic progress we have made so far this year, and then I'll turn it over to Mike DeVeau, who will provide a detailed look at our results and segment performance in the third quarter in addition to our outlook for the remainder of 2025. We will then open the call to answer your questions. Turning to Slide 6. We are seeing encouraging results as we build a stronger IFF. Through the actions we've taken to strengthen our customer focus and enhance productivity, IFF is improving its position to compete effectively and deliver value for all our stakeholders. We're operating in a dynamic environment with ongoing macro headwinds, geopolitical challenges, and market uncertainty influencing our customers and end consumers, plus we had a strong 9% comparable from last year. We anticipated this and have been clear that the second half would likely be more challenging than the first. And even so, sales remained steady, holding flat for the quarter. Our Scent and Taste businesses both continued to deliver solid growth in the third quarter, which helped offset softness in food ingredients and short-term pressures in Health & Biosciences. As I spoke about last quarter, most of the H&B pressure was related to expected slowdowns in the health business isolated to North America. To address this, we are investing to increase innovation and expand our commercial capabilities to ensure IFF is set up to address the needs of customers now and in the future. We continue to remain focused on what we can control in the current environment. IFF delivered strong adjusted operating EBITDA growth of 7% this quarter with a margin that improved by 130 basis points. Our focus on profitability continues to bear fruit as our results demonstrated strong profitability even in this lower growth environment. I am particularly encouraged as we are also doing this while our teams are reinvesting into our core businesses to position the company for long-term success. On Slide 7, I'd like to share some of the exciting strategic progress we've made in the first 9 months of 2025. Earlier this year, we opened a Scent creative center in Dubai, a Citrus Innovation Center in Florida, and expanded our LMR Natural site in Grasse, France. All are significant initiatives that will further advance our innovation offerings and strengthen our go-to-market capabilities. Our customers are at the heart of everything we do, and these strategic investments are increasing our commercial pipeline that will start to bear fruit in mid- to late 2026 and into 2027. We also deepened our commitment to innovation through external collaborations. We recently announced an exciting strategic collaboration with BASF to drive next-generation enzyme and polymer innovation, including our Designed Enzymatic Biomaterial or DEB technology. This partnership enables us to develop more market-driven solutions that create sustainable value for both industry and the environment. Also, earlier this year, we announced a joint venture with Kemira to provide high-performance, sustainable alternatives to fossil fuel-based ingredients, also utilizing our DEB technology. Applying this technology not only provides superior purity and consistency compared to traditional biopolymers, but also enhances performance across various applications. We are already seeing commercial applications of this technology as we also announced that a major multinational CPG company has launched a new laundry detergent formulation enhanced by DEB technology, which delivers improved fabric softness and cleaning performance while replacing non-biodegradable ingredients with a readily biodegradable alternative. In addition, during the year, we reduced our leverage significantly, reaching approximately 2.5x net debt to EBITDA. After strengthening our balance sheet, we announced on our second quarter call a $500 million share repurchase authorization, making an initial move toward a more balanced and disciplined approach to capital allocation. Over the past few years, we have made significant progress streamlining our portfolio, which has allowed us to reinvest in our core business, achieve our deleveraging targets, and strengthen our financial flexibility. During 2025, we made significant progress on this as we completed the divestitures of Pharma Solutions and Nitrocellulose and announced the divestiture of our Soy Crush, Concentrates & Lecithin business to Bunge, which is aligned with our margin enhancement strategy. We continue to evaluate potential strategic alternatives for our Food Ingredients business as we look to drive our portfolio optimization strategy. While we do not have any additional information to share today, we are making very good progress, generating significant interest, and we'll keep you updated as we make further progress. On a year-to-date basis, we've delivered sales growth of 2% and achieved adjusted operating EBITDA growth of 7%. This is primarily due to the immense efforts of IFF-ers all around the globe, continuously striving to innovate, deliver results for their customers and communities, and elevate everyday products used by millions of consumers worldwide. With that, I'll pass the call over to Mike to offer a closer look at this quarter's consolidated results. Mike?

Thank you, Erik, and thanks, everyone, for joining us today. In the third quarter, IFF delivered revenue of nearly $2.7 billion, led by mid-single-digit growth in Scent and low single-digit growth in Taste. Our sales were flat against a strong 9% comparable and were up approximately 4.5% on a 2-year average basis. We continue to focus on driving EBITDA growth through disciplined execution and margin improvement initiatives. In the third quarter, we delivered adjusted operating EBITDA of $519 million, a strong 7% increase. Our adjusted EBITDA margin also increased 130 basis points to 19.3%. Also worth noting is that our operational improvement plan continues to yield results in our Food Ingredients business. In the third quarter, Food Ingredients delivered a strong adjusted operating EBITDA margin improvement of 230 basis points compared to last year. The team has done an excellent job on improving the margin profile over the past 2 years, where they increased adjusted operating EBITDA margin by over 400 basis points and are on track to achieve their mid-teen EBITDA margin profile. On Slide 9, I will share additional details about this quarter's performance in each of our business segments. In Taste, sales increased 2% to $635 million with strong growth in Latin America and Europe, Africa, and the Middle East. On a 2-year average basis, growth remained strong at approximately 8.5%. The segment also delivered profitability gains of roughly 2%, driven by favorable net pricing and cost discipline. Our Food Ingredients segment achieved sales of $830 million, down 3% versus the year-ago period, with strong growth in inclusions that were more than offset by softness primarily in Protein Solutions. As I mentioned, Food Ingredients had an excellent quarter in terms of profitability, where the team delivered adjusted operating EBITDA of $106 million, a 24% increase year-over-year. Our Health & Biosciences segment achieved $577 million in sales, which was flat versus the prior year. On a 2-year average basis, growth remained solid at approximately 6%. Growth in Food, Biosciences, Home & Personal Care, and Animal Nutrition was offset primarily by expected softness in Health, specifically in North America. In this market, we've improved our leadership team, placing a strong emphasis on commercial and marketing capabilities. Their objective is to leverage our strong R&D pipeline and win with a broader set of customers to capture strong growth potential in that market. And while the fourth quarter will remain a challenge, we expect trends to improve in 2026. In the third quarter, H&B adjusted operating EBITDA grew 3%, driven primarily by productivity. Scent delivered a strong quarter of sales growth with net sales of $652 million, up 5% year-over-year. On a 2-year average basis, growth remained strong at approximately 7%. Third quarter performance was driven by a 20% increase in Fine Fragrance and a low single-digit performance in Consumer Fragrance. As expected, Fragrance Ingredients was under pressure and declined low single digits as growth in specialties were more than offset by declines in commodities. As a reminder, we are strategically shifting our Fragrance Ingredients portfolio towards higher growth and higher value-added specialties. We will do this by leveraging R&D and biotech for new molecule development. Our goal is to accelerate the pace of our captive releases to ensure we can differentiate ourselves and grow disproportionately in this margin-accretive business. Within Scent, volume growth drove the segment's $135 million in adjusted operating EBITDA, a 6% increase year-over-year. Turning to Slide 10. Our cash flow from operations totaled $532 million year-to-date, and CapEx was $406 million or roughly 5% of sales. Our free cash flow position in the third quarter totaled $126 million. This year, we have paid $306 million in dividends through the end of the third quarter, and our cash and cash equivalents were $621 million. As of quarter end, our gross debt was approximately $6 billion, a roughly $200 million decrease from last year and more than $3 billion decrease year-over-year. Our trailing 12-month credit adjusted EBITDA totaled roughly $2.15 billion, in line with last quarter, while our net debt to credit adjusted EBITDA remained constant at 2.5x. We will continue to be disciplined in our capital allocation priorities. Reaching our deleveraging goals was a strong achievement, and we are now focused on preserving this foundation through operational performance, specifically driving improvements in profitability and net working capital. Lastly, on Slide 11, I will walk you through our outlook for the balance of the year. We have talked today and in prior quarters about the environment in which we are currently operating. Our touch points across our global business and with our customers have allowed us to forecast this year well as our teams are delivering results in line with the guidance ranges we communicated in February. Based on our year-to-date actuals and expected fourth quarter performance, we are reiterating our full year 2025 guidance. As a reminder, we are expecting sales to be in the range of $10.6 billion to $10.9 billion and adjusted operating EBITDA to be between $2 billion and $2.15 billion. On a comparable currency-neutral basis, we expect to finish the year at the low end of our 1% to 4% sales growth guidance range as shared last quarter and near the midpoint of our 5% to 10% EBITDA growth range. We believe that this is the right call to maintain our full year guidance even with a wider range implied for the fourth quarter. It is consistent with the message we have shared all year, which is staying focused on what we said we would deliver even in a challenging environment. For the fourth quarter, we expect our typical seasonality, resulting in a step down in absolute sales and margin. And as a reminder, we again face another strong comparable versus the prior year with 12% growth in Taste, 7% growth in Scent, and 6% growth in H&B.

Thanks, Mike. Taking a look at the year so far, our global team has delivered in a difficult environment with revenue and profitability increasing year-over-year. I'm proud of what our team has accomplished, yet we continue to strive for more. We are continuing to serve our customers with excellence while investing in an exciting innovation pipeline and positioning IFF to deliver stronger profitable growth on a sustained basis. We are focusing on what we can control. Our strategy is clear. Our team is executing, and we have confidence in our ability to deliver increasing value for our shareholders and all stakeholders. I know we are building a stronger IFF that will be well positioned for 2026 and beyond. Thank you, and I'll now open the call for your questions.

The first question is from Fulvio Cazzol with Berenberg.

It's in relation to the Health & Biosciences business. I was wondering if you can provide a bit more color on what's exactly going on in the North America region for the Health business unit. I know that the decline in Q3 was well anticipated, and you highlighted this at the Q2 results presentation. But I was also wondering if you still expect to see an improvement starting in 2026 or if there is more uncertainty today on the outlook for this business compared to, say, 3 months ago?

Thanks for the question, Fulvio. This is Erik. In Health & Biosciences, the Health business in North America has been slow for us. And what we've been doing to turn that around is we've put in place new leadership with strong commercial and marketing capability. And you'll recall last year, we step changed our investment in innovation pipeline in Health, that's going well. We're connecting with our existing customers to help them grow faster, and we're finding new customers to serve in North America. So bottom line is I absolutely expect to see improvements, particularly in the second half of '26 going into '27 and then a full recovery fully back on track in 2027.

The next question is from the line of Nicola Tang with BNP Paribas.

I wanted to ask about the top line guidance. The bottom end, so the 1% currency-neutral growth implies a negative low single digit for Q4 versus the flat year-on-year that you did in Q3 despite slightly easier comps. What are the main headwinds to top line in Q4? And how much of your cautious outlook relates to the weak end market macro geopolitical trends that you referred to versus IFF-specific exposures? And to what extent do we need to see end market recovery to see a top line acceleration in 2026?

Thank you for your question, Nicola. You are right. The comparable growth is 6% in the fourth quarter, which has dropped from 9% in the third quarter, and we are being more cautious with our top-line projections this quarter. The primary reason for this is the macro environment. When examining end market demand, particularly volumes, we have noticed softness in the Food Ingredients category within HPC. We are continuing this trend for the remainder of the year to ensure our forecasting is accurate. Regarding our core portfolio, Erik mentioned it, and I also highlighted it in our prepared remarks. We are making good progress on Fragrance Ingredients and Health in North America, though we still have some work to do to fully recover, as Erik indicated. It's important to note that combined, these areas represent about 5% of our total company sales, making it small in scale but deserving of significant focus moving forward. As we look ahead to 2026, we are cautiously optimistic that growth acceleration will occur as the market normalizes and the initiatives we've been implementing over the past 18 months begin to show results.

The next question is from the line of David Begleiter with Deutsche Bank.

This is Emily Fusco on for David Begleiter. On Food Ingredients, are we still on track for an update on this business with the Q4 earnings call in February? And also just a follow-up, have you begun to engage with private equity and strategics on this business?

Thanks, Emily. Absolutely, you'll get an update, and I'll give you a quick update now. We are seeing strong interest by both private equity and strategics. And fortunately, the business transformation that Andy Mueller is leading with his team is on a strong track, which obviously is very helpful to this process. This is a very good business that keeps getting better and has a bright future, and we'll update where we are in February.

The next question is from the line of Lisa De Neve with Morgan Stanley.

I have one question. Can you please reiterate your free cash flow outlook for this year and the components of how we should expect the different free cash flow components to move into the fourth quarter and if you expect to see an improvement? That's my first question. And I have a small follow-up on Fulvio's question. You talked about investments in H&B. Could you please remind us of where specifically you're making the investments, most notably if you're opening any new plants in certain regions?

Sure. I'll start with the cash flow question. Thanks, Lisa. For our free cash flow expectation for 2025, we anticipate being slightly below our earlier target of around $500 million. There are several factors to consider. On the positive side, we expect our capital expenditures to decrease as we've tightened our policies due to our cash flow generation, which is encouraging. However, there are two offsetting factors to keep in mind. First, our inventories are higher in certain areas of the business, which is partly due to building strategic stock in key areas to leverage current costs and the availability of materials. Second, some one-time costs are elevated due to the portfolio work we are undertaking. When considering these factors, it leads us to be a bit below that $500 million mark. That being said, I want to point out that we expect to see an improvement in overall net working capital in the fourth quarter, which remains a major focus for us as we move into 2026. There is a chance for us to enhance our free cash flow generation, and our team is dedicated to achieving significant improvements moving forward. Erik, I'll hand it over to you.

Sure. On Health & Biosciences investment, as we said last year, we've significantly increased our spend in R&D and commercial capabilities, both for our Health business, next-generation probiotics and other products as well as our enzyme business and our DEB technology. We've announced and we're making great progress that we're building a DEB plant together with Kemira with our joint venture and called AlphaBio. And it's on track, and we expect to start that up in 2027 and look forward to that. But significant investment into Health & Biosciences, and we see that starting to pay off, as we said, significantly in the second half of 2026 and very strong into '27.

The next question is from the line of Kristen Owen with Oppenheimer.

So I wanted to ask about the new wins that you cited in both Taste and Scent. We continue to hear about how challenging the volume backdrop has been. So I'm hoping you can elaborate on maybe what contributed to those wins in this backdrop?

Thank you for the question, Kristen. There are obviously economic challenges across the businesses right now, particularly in North America. However, in all four of our business units, including Taste and Scent, we are focusing heavily on strengthening our commercial pipeline, enhancing customer relationships, and improving our win rate as well as our innovation pipeline. We're seeing significant progress across various segments and geographies. For instance, our new ENVIROCAP Scent encapsulation technology was recently launched in laundry with a major consumer packaged goods company, and the results have been impressive. They are very enthusiastic about it, and the sustainability benefits are substantial. We expect this technology to contribute to our growth moving forward. Another example I’m particularly excited about is our recent win with Miu Miu by L'Oreal Fine Fragrance, developed by our master perfumer, Dominique Ropion, which is set to become a solid line for us in the future. It's an excellent product, and I believe it will perform well in any economic environment we face. We are making good strides in our commercial and innovation pipelines, and by delivering exceptional technological advancements to our customers, we will continue to grow these businesses.

The next question is from the line of Salvator Tiano with Bank of America.

You spoke a little bit about 2026, hopefully, growth accelerating a bit. But can you also mention any other major or discrete items that you see affecting your income statement or your cash flow next year versus 2025?

Yes, thanks, Sal. Great question. We are currently in the planning process for 2026, so we can't provide much detail at this time. However, we will give a full guidance update during our year-end or Q4 call in February for 2026. That being said, I want to highlight one moving part that should be clear. We closed the Pharma transaction on May 1, and for the first 4 to 5 months of 2026, it contributed about $369 million in sales and $76 million of EBITDA. This will diminish as we cycle through the first half of the year, so I wanted to point that out. As for the rest of our operations, everything is pretty routine, and there are no significant discretionary items to mention at this point.

The next question is from the line of Ghansham Panjabi with Baird.

Erik, can you just give us an update on the internal initiatives you have going on and as it relates to both cost optimization and growth? You called out capacity being tight in certain areas in the past. And I know you asked the question on Health & Biosciences, but what about across the rest of the portfolio? And just on the cost savings side, as it relates to productivity, etc., can you give us a sense as to the savings that is likely to flow into 2026 in context of just the operating environment not being very helpful?

Yes. Thanks for the question. I'll have Mike go through the details here.

Yes. Appreciate it, Ghansham. Over the last 18 months, we've done a lot of work to improve our competitiveness as an organization. And so specifically, Erik has highlighted specifically around the H&B, Health business that we put a lot of money in terms of R&D and commercial capabilities starting really in the second half of '24 and over the course of 2025. And that's really to build and bolster some of the innovation pipeline and really strengthen again the commercial capabilities. In addition, we've also increased and will continue to increase our CapEx in the areas to improve capacity, specifically in H&B, where we think we have good growth potential and really good incremental margins associated with that. And so that's something we've done and will continue to do as we go forward from here in that business to really generate the value there. As we go into 2026, we believe we're positioned well, and we are cautiously optimistic that we will lead to improved growth trajectories going forward. At the same time, we're also working on just generating better incremental productivity that comes with improving margins going forward as a focus. And so I don't want to go into too much of the details here. Again, we'll come back in February when we give our overall guidance. But I think the team has made a tremendous amount of progress both in reinvesting, really trying to get the growth aspect of it and targeting incremental productivity opportunities to continue to expand margin and reinvest in the business as needed through a self-funding mechanism. So feel good about the progress being made.

The next question is from the line of Patrick Cunningham with Citigroup.

This is Alex filling in for Patrick. It seems we are noticing a significant shift in the economy, particularly with lower income households reducing their spending. I am curious if this trend is evident across your business segments and what it might mean for volumes in 2026.

Thanks, Patrick. Yes, we are seeing some of this, and we've talked to the weakness overall in volumes in North America. But the good news is we've got a diverse customer base, both in size of customers, geography base, and categories. And we're adapting our focus around the world. And just to give you some examples, on the lower end and private label area, we're seeing growth, and we've put more emphasis on that. On the high end, the Fine Fragrance business continues to do well. So we've put a lot of emphasis on making sure that we're a partner of choice in Fine Fragrances, and we talked about the Miu Miu win with L'Oreal, very important for us. We're seeing geographies even in Fine Fragrance, like the Middle East growing very rapidly. We're putting more emphasis there. We opened a creative center there. And we continue to obviously stay focused on ensuring that we do well with global key accounts but also increasing our emphasis on regional and smaller customers in geographies that are fast growing. So yes, there's a K-shaped economy more today than there was before, but we're adapting our model to make sure that we grow at or ahead of the market going forward.

The next question is from the line of Joshua Spector with UBS.

I wanted to try again a little bit on '26 and just thinking about really the range of scenarios and your ability to respond and specifically that if we stay in this kind of, call it, 1% growth environment, maybe from a consumer perspective, do you have actions and levers that you think would deliver earnings growth higher than that, be it self-help or other things in flight that we should be considering?

Yes. Great question, Joshua. I'll take this one, if that's okay. Growth is an important part of the algorithm. And so the more growth we get, the incremental margins associated with that growth in terms of fixed cost leverage, it's nice. So the more you can grow, the better you are. So that's ultimately what we're striving to, which is why some of those reinvestments were so important to make sure we accelerate the growth. At the same time, you do need to prepare that if the event that the market is still in that 1% to 2% range, how do you work on your cost structure to ensure you generate profitability improvement. We are fully focused on that. The team has done a very good job over the last couple of years to drive productivity, but it's something that is paramount now as we go forward to continue to do that. And so areas like streamlining corporate functions, leveraging automation, redesigning processes that will allow us to be more effective and more efficient. And so I do believe we still have some opportunities there. There is contingency planning associated with that. So as we think about the context going forward, we will include that as areas to accelerate to make sure we maximize profitability as we go forward even in a lower growth environment.

The next question is from the line of John Roberts with Mizuho.

Have we been seeing any acceleration in the reformulation of food products? And is that maybe part of the reason for the continued strength in the Flavors business?

We haven't seen a big shift yet. What I would call it is a continued move towards cleaner labels and reformulation for that, which we like. And if that accelerates, that's good for us. But what we've been doing is following what our customers and consumers want, which are cleaner labels, and we've got a very strong capability, both in Scent and in Taste and Naturals. And that's played well for us, and that's why you're seeing growth because of our focus on the innovation, but also on our commercial capabilities to help customers delight consumers.

Yes. Maybe just to add on that. When you look at it, John, the pipeline has actually improved and continues to improve. And so what that's a good barometer is that the customers are looking for more innovation, which is very good for our business overall. So I think that's the buoyancy that you've seen over the last couple of quarters within Scent and Taste overall, which has provided a bit of tailwind there.

Yes. As the customers see lower volume growth in the market, they're pushing for more innovation to be able to profitably grow themselves, and we're there to help.

The next question is from the line of Kevin McCarthy with Vertical Research Partners.

This is Matt Hetwer on for Kevin McCarthy. Would you comment on two items: a, the potential pace of execution against the $500 million share repurchase authorization that you announced last quarter; and then b, the expected cash proceeds from the pending divestiture of the deal with Bunge.

Thank you, Matt, for the question. Regarding the share buyback program, we began it on October 1 as outlined in our trading plan. The program aims to address dilution, targeting around $80 million annually to offset it. We do have some flexibility to adjust our purchases based on intrinsic value and free cash flow generation. For modeling the fourth quarter, since we started on October 1, I would expect that we're offsetting dilution, which translates to about $20 million for this quarter. We will provide further updates during the guidance call in February. As for your second question about the expected proceeds from the Bunge deal, I anticipate gross proceeds of approximately $110 million, with around $90 million expected in net cash proceeds after accounting for taxes and associated deal fees.

The next question is from the line of Lauren Lieberman with Barclays.

I have two questions. First, regarding Taste, I noticed in the slides that you mentioned favorable net pricing. I'm curious how that compares to what your peers are experiencing. I was a bit surprised to see positive pricing in the current environment. My second question is about your observations on the growth of multinationals compared to local and regional players. Additionally, I’d like to know about the pipeline activity from those two groups.

So maybe, Erik, I'll start on the Taste piece of it. The team has really done a good job. And so when I think about the net pricing comment, Lauren, when there's areas of inflation and one area, there is some tariff inflation that we get, the team has done a really good job of offsetting that as part of their pricing areas. At the same time, it's a net pricing number. So in terms of the inflationary environment that we've seen throughout 2025, which was about low single-digit inflation, the team did a really good job of productivity to drive some of those costs down. And so when you combine productivity with the raw material cost exposure and the pricing strategy, that's how you got to your net pricing benefits there. And so I think I can't speak to the competition, but I can speak that the team has done a very good job at executing on that piece of it. In terms of the global versus local regional, Erik?

Yes, we're seeing the regional and locals growing faster, and we put more emphasis on growing with them and accelerating our pipelines with them. But the global key accounts are still critically important to us, and they're increasing their focus on innovation. So our pipelines with them are very strong and robust. So we're not decreasing our emphasis on global key accounts, but we're increasing our focus on the regional and locals.

The next question is from the line of Laurence Alexander with Jefferies.

Can you give us some color on what your customers are telling you about inventory levels and their patience on reformulations? And what I mean is, are they seeing the evidence that reformulations are driving significant organic growth acceleration? And if not, how long will they keep reformulating before they switch to other ways to protect earnings and cash flow in a slow growth environment?

I'll begin by addressing the inventory question, which is a pertinent one. In a slower growth environment, particularly with some global accounts, it's crucial to manage inventory effectively to minimize its impact on the business. From our team's feedback, it's evident that some markets, especially North America, have higher inventory levels. Consequently, our forecast includes a slight deceleration in that specific market due to these inventory levels. Overall, inventories appear well-managed on a global scale, although North America may need some inventory adjustments. Regarding reformulation, it presents an opportunity. In recent years, pricing has heavily influenced customer strategies. As Erik mentioned, innovation becomes increasingly vital in a market where pricing pressures exist. I don’t foresee them disregarding the importance of innovation; they will continue to prioritize it in their strategies. This is favorable for us at IFF, as we value our portfolio and R&D efforts. Those are the key points I wanted to address, and I’ll pass it to Erik for any additional insights.

And the only thing I would add then is on the inventory side, there's a lot of uncertainty with our customers, and they're trying to operate with lower inventory levels. So we absolutely can and will do a better job of managing our inventory levels, but we're also trying to make sure that we're not missing order opportunities. So we're really trying to stay close to our customers and understand what their needs are so that we're able to operate with lower inventories, but not miss any delivery reliability goals.

The next question is from the line of Silke Kueck, with JPMorgan.

When you look at 2026, what do you think will be the major product launches? The collaboration with BASF suggests there may be product opportunities in the detergent category. Will this impact consumer fragrances and Scent, or is it likely to be seen in the enzyme category under H&B? That's my first question. Secondly, beverage can companies have mentioned growth in protein-enriched beverages, with protein being added to almost everything. Is this an opportunity for IFF? Specifically, when it comes to beverages, do you view this as a taste opportunity, or will protein elevate the H&B sector? Lastly, you mentioned that regional and local companies are growing faster than multinationals. Does that imply that private label is also expanding more rapidly, and how do you plan to pursue the private label market?

Thank you for your questions, Silke. I'll address them one at a time, and Mike can join in too. Let's start with the BASF collaboration, which is quite significant. BASF has a strong foothold in chemistry and works with many home and personal care companies. We have strong capabilities in enzymes and a solid customer base, but we haven't fully penetrated the market as desired. By combining our strengths with BASF's commercial expertise, we believe there is a great opportunity to better serve our customers. We expect to see enzyme growth beginning towards the end of 2026, with more acceleration in 2027. This will enhance our relationships and connections with customers for Scent. Regarding the protein sector, we are experiencing strong demand, particularly in plant-based proteins, which are currently popular. While the growth in alternative meats is slower and starting from a smaller base, there are considerable opportunities in beverages and bars. We are committed to ensuring that our protein products provide excellent mouthfeel and taste, avoiding any settling, and enhancing flavor. This allows us to deliver more comprehensive solutions by leveraging our protein and food ingredients capabilities. The protein trend is robust and is being further boosted by GLP-1 therapies, which we expect to continue driving growth. Lastly, concerning regional and local markets, private label is indeed becoming more important, reflecting the K-economy. We are focusing on collaboration with private label retailers and co-manufacturers to ensure our capabilities align with their needs.

The next question is from Apkio Evers with Wells Fargo.

I know this was mentioned earlier, but I wanted to explore Fine Fragrance a bit more. You reported 20% growth this year in this quarter and double-digit growth last quarter, indicating strong growth. You've talked about some wins, but I’m curious if there are other underlying trends fueling this growth. Looking ahead, can we expect this level of growth to continue? I understand you mentioned potential from your Scent center in Dubai and Florida yielding results by mid to late 2026. How should we anticipate the next quarter and the first half of 2026?

The Fine Fragrance business has experienced significant growth rates. While I don't anticipate that level of growth continuing, I do foresee steady growth for Fine Fragrances. This is largely due to our strong capabilities, including talented perfumers and innovative molecules, along with increased investment in innovation planned for 2026 and 2027. We've also made investments in key locations like Dubai and creative centers in other areas such as Shanghai. We are fully dedicated to this market and aim to support our customers in creating exceptional products. Additionally, the rise of social media influences is expanding the market reach, attracting not only women but also younger men and diverse demographics, which I believe will continue to drive growth.

The last question is from the line of Christopher Parkinson with Wolfe Research.

This is Harris Fein on for Chris. I mean there's been some solid year-on-year margin comps in Food Ingredients. Just wondering if you could maybe talk about the line of sight to bridge that margin to the mid-teens next year. And we're also all looking forward to the strategic update early next year. But in the interim, maybe if you could talk about any opportunities you have to prune maybe more along the lines of what you did with the Soy Crush business in the interim, that would also be helpful.

Harris, thanks for the question. I believe the Food Ingredients team has done an outstanding job focusing on improving margins. To recap, at the lowest point, we were at about 9% EBITDA, but now we are on a trajectory moving from 9% to 12%, and aiming for 14%, which could reach 15% with adjustments for the portfolio. The path to recovery looks strong, and the team has performed excellently. As we move forward, it's important to note that while we have divested certain businesses, we are also strategically refining our overall portfolio. We are selective and have stepped away from some lower-margin businesses, which has affected our top-line performance this year and into 2025. However, as we approach 2026, any additional growth in that sector will greatly enhance our P&L leverage. The top priority is to steer the business back toward growth. Additionally, we embarked on a significant productivity initiative two years ago, focusing on plant and raw material optimization. The team has made good progress in this area, which is a major factor in our performance in 2025, and this will carry into 2026 as well. With these two strategies, we have a clear opportunity to continue improving the business both in terms of revenue and margins. I am confident we will return to the mid-teens, and the team remains fully committed to achieving this goal as we move forward.

And I'd just add one other thing, is we are investing where we see high profit margin growth opportunities. For example, the TAURA fruit inclusions business segment is we're expanding the capacity significantly there. The current capacity is sold out, high margins, high growth. So Andy and his team are really driving also growth in the higher-margin areas.

There are currently no questions registered at this time. So I'd like to pass the call back over to Erik for any further remarks.

Well, thank you all for joining today's call. Let me close by saying that I'm very proud of the progress the IFF team has made over the last 18 months. We are a much stronger company with a bright future. We have a solid balance sheet, a clear strategy, a strong and strengthening innovation pipeline, a strong focus on serving customers and consumers, and we're executing better and better and doing what we say we are going to do. So I look forward to the road ahead, and thank you very much.

Thank you all. At this time, this will now conclude today's conference call. We appreciate your participation. We hope you all have an amazing rest of your day, and you may now disconnect your lines.