International Flavors & Fragrances Inc. Barclays 19th Annual Global Consumer Conference

We are a lot different, Lauren.

Different. Thank you for having me.

It's great to be back here. We had this discussion two and a half years ago, and a lot has changed. First of all, when I got to IFF, we had a very weak balance sheet. We were 4.5x levered. We are now 2.5. We had missed consensus. We had missed guidance even a number of times. We now have a number of many quarters in a row of achieving guidance and doing what we say we are going to do. I think the most important change is that at the time, the attempt with the Frutarom acquisition, the Nutrition & Biosciences acquisitions, was to be a one-stop shop.

We have been very clear for the last almost two and a half years that our goal is to be an innovation leader, and an innovation leader with three great innovation-driven businesses: Scent, Taste, and Health & Biosciences. We have set those businesses up as standalone end-to-end businesses that have everything within them to succeed. They have the R&D, the production, and the commercial capabilities. Now they coordinate, collaborate across, and I think they do it much more effectively because they know what they need to do to win in their businesses and then can help each other to win with customers. We also have, I think, now a very strong leadership team in each of the businesses and corporately, and we have got the team and the capabilities to go out and drive profitable growth.

Well, I think if you look at where we were, and it was interesting because in my first weeks, I got calls and emails from a number of CEOs of very big CPG companies, asking me to come and say hello, and basically the message was, "IFF is a very important supplier, but you have kind of lost your way. You are not really delivering the innovation that we need and expect from IFF." I think if you ask our customers today, you will hear a very different story that IFF is back. Now, of course, we are not where we want to be. We want to keep getting better. But we have made a lot of progress to where we have significantly enhanced the engagement scores of our people. We were losing some really good talent.

I think not only are we retaining our good talent, we are attracting really good talent, and we have hired some outstanding perfumers, for example, in our Scent business. Across the company, we have really brought in some great talent to augment the great talent that we have. We have strengthened our commercial capabilities. We have focused on making sure that we do well in the developed markets and with global key accounts, but we have also put more emphasis on regional and local accounts and in emerging markets, and that is starting to pay off. We have also significantly enhanced our R&D spend, but also our R&D process around making sure that it is connected to what customers really value and will pay for, and stop stuff that was not important. Then in manufacturing, we fell behind in investing in CapEx.

We've upped our CapEx spend and are strengthening our ability to supply high reliability, high quality, and cost competitive. However, we're still getting the Food Ingredients business separated, and as we do that, there's still efforts that go into that.

Yeah. That separating the ERP systems, separating the contracts with third parties.

We've got facilities, we've got products that we have to re-register because they had the same names, all kinds of things like that. So we still have effort to do that, but once that's finished first half of next year, it's all about how do we drive greatness in Scent, Taste, and Health & Biosciences.