At this time I would like to welcome everyone to the International Flavors & Fragrances First 2014 Earnings Conference Call. All participants will be in a listen-only mode until the formal question-and-answer portion of the call. (Operator Instructions) I would now like to introduce Shelley Young, Director of Investor Relations. You may begin.

Thank you. Good morning and good afternoon, everyone. Welcome to IFF’s first quarter 2014 conference call. Earlier today, we distributed a press release announcing our first quarter results. A copy of the release can be found on our IR website at www.iff.com. This call is being recorded live and will be available for replay on our website. Please take a moment to review our forward-looking statements which I will read out loud. During the call, we will be making forward-looking statements about the company's performance, particularly with regard to the second quarter and our outlook for the full year of 2014. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that could cause actual results to differ materially from forward-looking statements, please refer to our cautionary statements and risk factors contained in our 2015 10-K filed on February 25, 2014, and our press release that we filed this morning, all of which are available 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 our press release that we issued earlier today and is on our website. With me on the call today is Doug Tough, our Chairman and Chief Executive Officer; Nicholas Mirzayantz, our President of Fragrances; Matthias Haeni, our President of Flavors; and Kevin Berryman, our Executive Vice President and Chief Financial Officer. Matthias joins us for the first time in his new role, so welcome, Matthias. I would now like to turn the call over to Doug.

Thank you, Shelley. Good morning and good afternoon to everyone. Before I start my formal comments, I would like to extend a warm welcome to Matthias Haeni. As of April 1, Matthias assumed the role of Group President, Flavors after serving as Regional General Manager of Flavors for our EAME region for the past three years. Prior to that, Matthias was the Regional General Manager for Flavors of our greater Asia region. Under his leadership, IFF expanded our manufacturing network in Asia and Europe. We opened new plants in China and Singapore for Flavors, and more recently, we have been expanding our strategically located facility in Gebze, Turkey which will serve the fast growing emerging markets in the region, region, including the Middle East and Africa. We also achieved consistently strong sales and operating profit growth in both EAME and greater Asia in Flavors. Matthias is a 23-year veteran of the flavors and fragrance industry, and we are pleased and excited to have someone with his experience and insight in this role. Turning to the agenda for today's call, I will provide an overview of the first quarter for consolidated IFF, followed by Nicolas Mirzayantz and Matthias Haeni, who will provide their perspective on the performance of our fragrances and flavors business segments, respectively. Then Kevin Berryman will provide you with a financial overview of our first quarter and turn the call back over to me for a balance of the year outlook and some concluding comments before we open the call to your questions. Turning now to the first quarter of 2014, our local currency sales growth was 7%, which reflects balanced growth between flavors and fragrances and includes a percentage point of growth from our Aromor acquisition, which we acquired on January 15. This quarter, fragrance delivered growth…

Thank you, Doug. Good morning and good afternoon, everyone. Turning to our fragrance business, we had a very strong first quarter with many highlights. Fragrance net revenue of $404 million increased 9% this quarter on a reported basis. Excluding the impact of foreign currency, fragrance delivered local currency sales growth of 8%. This includes 2 percentage points of growth from our recent Aromor acquisition. The strong overall organic growth of 6% reflects a continued high level of new wins, resulting in continued momentum and broad-based growth. The developed market had local currency growth of 9%, and the emerging markets had local currency growth of 2%, indicating the benefits of our geographic and customer diversity. Regionally, our strongest region this quarter was greater Asia, with local currency growth of 16%, and our EAME region had local currency growth of 12%. North America had growth of 8%, reflecting continued strong momentum from new wins and increased coalesced participation. With our stronger move this quarter in our developed markets, a reversal of what we’ve seen in prior quarters, due to a higher volume of fine fragrance sales, in particular to customers in North America and Western Europe, we delivered double-digit growth in fine fragrance in both our North America and EAME regions. Regarding our decline this quarter in Latin America, I would like to put our results into perspective. We are comparing to very strong growth of 15% in Latin America in the first quarter of 2013, including 37% growth in fine fragrance and 11% in consumer fragrances, both higher than the market growth. The overall fragrance business unit growth of 8%, even with the decline in Latin America, points to the strength and diversity of our portfolio. In regard to our end-use category of commercial (inaudible) with fragrance compounds, were recently realigned.…

Thank you very much, Nicolas. Good morning and good afternoon, everyone. I'm very pleased to be here on today's conference call. I joined the team in New York. Turning to our sales performance, in the first quarter Flavors achieved local currency sales growth of 5%, led by double-digit growth in the emerging markets, which continued to be a strong and important driver for our business. We achieved solid growth within our long-term targets despite weakness in North America, thanks to the diversity and breadth of our portfolio and customer base. Notably, we achieved strong performance in many of the countries where we committed or are committing capital to add capacity or technology. In particular, the growth we are seeing in emerging markets of greater Asia, Latin America, and central and southeastern Europe clearly supports our investment strategy. In total, Flavors grew 12% in the emerging markets, led by Latin America, where we had growth of over 20%; and greater Asia, which achieved high single-digit growth. Turning to the regions, in Europe, Africa, and the Middle East, as you see on the slide, we had solid growth of 4%. This was supported by growth in all categories. In greater Asia there was widespread growth across all end-use categories, resulting in total local currency sales growth of 8%. There was double-digit growth in many countries, and we were extremely pleased to see the continuation of strong trends. In North America this quarter we saw a decline reflecting overall market weakness. It resulted in lower volumes on existing business, and new wins were not sufficient to offset these volume losses. Our customers have been impacted equally to softer market environment we are seeing in North America, and we are closely monitoring the situation. Finally, turning to our strong performance in Latin America, I…

Thank you. Good morning and good afternoon, everyone. As you can see on the slide, our performance was certainly strong in Q1. Our net sales of $770 million were up on a reported basis by 6%. Excluding the 100 basis point negative impact of foreign currency this quarter, our consolidated local currency sales growth was 7%. As noted earlier, our consolidated sales included the results from our recent acquisition of Aromor, which added a percentage point to our consolidated growth. We are pleased with the initial results from this strategic acquisition and welcome our Aromor colleagues to our global organization. This quarter, fragrance represented 52% of our sales, and flavors comprised the remaining 38%. Our growth in the quarter was well balanced between flavors and fragrances. We had a strong mix of business between the emerging markets and developed markets, up 7% and 5%, respectively. Our adjusted gross margins this quarter improved by 180 basis points to 44.7%, which reflects gross margin expansion in both business units due to very strong volume gains, certainly driven by growth from the wins, sales mix improvements, as well as some favorable impact of price to input costs and cost reduction initiatives. Strong margin growth and disciplined cost control resulted in a 14% increase in our adjusted operating profit to $159 million. Our adjusted effective tax rate in the first quarter of 25.5% was above our effective rate of 24% in the first quarter of 2013, primarily reflecting loss of tax benefits relating to the U.S R&D tax credit this year. As a result, our adjusted EPS growth of 11% brought our first quarter adjusted EPS to $1.32, resulting in an EPS growth in line with our long-term targets. Turning to our Research, Selling, and Administrative costs, RSA as a percent of sales increased…

Thank you, Kevin, Matthias, and Nicolas. As you heard from the team, we had a strong start to the year based on our operating performance. Our local currency sales growth of 7% was higher than our original forecast. Given the strong start to the year, we are reconfirming our expectation for local currency sales growth of 5% to 7%, which includes a percentage point of growth from the Aromor acquisition. Due to the volume growth and the improved mix of business, we delivered strong gross and operating margins. Our adjusted operating margins achieved growth of 14%, while our adjusted earnings per share increased 11%. We’re also reconfirming our expectation to deliver double-digit operating profit and earnings per share growth for the full year. For the second quarter we expect more moderate sales growth. However, given our emphasis on productivity savings and other margin improvements, we expect to see continued gross margin expansion, but at a lower rate of year-over-year improvement, especially as we compare the improved gross margin performance of the prior year in quarters two, three, and four. In addition, we are also closely monitoring input costs and expect to see some inflationary cost pressure in the second half of the year. Certain input costs are expected to increase. Our emphasis on our 10 key research and development platforms has resulted in a stronger pipeline for the Company, and we continue to invest in our programs and subject them to a disciplined review process to make sure they are proceeding on track. For the second quarter of 2014 we are expecting to achieve sales, operating profit, and earnings per share growth within our long-term targets. I would like to leave you with a few key takeaways from our first quarter. First, we achieved strong momentum in both business units,…

(Operator Instructions) and your first question comes from the line of Mark Astrachan with Stifel Nicolaus.

Good morning, everybody, and welcome, Matthias. I guess just couple -- few questions. One just sort of broader question on the developing markets, so a bit of a slowdown relative to 2013 growth. I guess we’ve heard from some of your larger customers that they are starting to see a slowdown. I guess maybe sort of quantify what you've seen year-to-date in 2014, and how you are thinking about that growth going forward -- and maybe even talk about specific markets, countries where you may be seeing a bit of a slowdown. And then Matthias, can you talk a bit about the North America business? I know you haven't been there that long, but maybe talk a bit about what you are thinking about expectation-wise in terms of potential improvements, since it's not just this quarter. It’s been a bit weak over the last year or so.

Okay, Mark, I will start off, and then I'll ask both Matthias and Nicolas to weigh in with their perspectives. I think the overarching comment is we still have great confidence in overall emerging market opportunities, the celebrated next billion consumers. We believe that trend is inexorable, and we remain committed to it. I'd also say that -- and you will get more specifics in a minute, but to the degree that some of our customers are sensing or mentioning some of the slowdown, it's been marginal for us. And the buoyancy continues pretty good across almost all of the major emerging markets. So we haven't seen the trend to the degree they have, and we remain bullish. But you’ve asked specific questions and I’ll ask Matthias to start, and then Nicolas can weigh in with thoughts from fragrances.

Thank you. Let me tell you that we are really pleased to see development which we see with the emerging markets. We have seen very strong momentum in Latin America, but also in most of the strategic key markets in Asia Pacific as well as in central southeastern Europe, and strong, focused markets for our folks in Africa. As such, we don't see a slowdown. I believe we have continued to put solid momentum going forward in these markets. Coming back to your question on North America, indeed we are disappointed with our performance in the first quarter this year. We have experienced lower volumes on existing business; and new wins, which we had particularly in key categories like beverages could not offset the weakness we have experienced with our sales in many key accounts. I tried to outline that we will be up against very strong comparables. Also, in the second quarter in North America we will expect a different order pattern and a change in our performance in the second half of this year.

Mark, good morning. This is Nicolas. Sentiments overall regarding our confidence in the emerging markets, they have been a growth engine for many quarters in the past. You see we have continued momentum in greater Asia following last year's momentum, and coming from a very, very good -- increased new wins and increased penetration of the market, and also leveraging our encapsulation technology. So maybe the additional comments will be about Latin America. The decline that we saw is coming after nine consecutive quarters of double-digit growth. I think that -- let me chart it through drivers. First of all, we are comparing to very strong growth of 15% in the first quarter last year, and as I indicated 37% including fine fragrance and 11% in consumer fragrances. It would be sure to say that we are seeing in major countries, such as in Brazil, with the market slowing down a bit, and also some inventory correction from some of our customers. Two important factors moving forward; first of all, the level of new wins is comparable to our historical average. So our momentum and our coalesced participation and success is continued. And also, we are early in the quarter. And we are seeing a reversing of the trend in Q2. So it's really one quarter which will be impacted by the factors I just shared with you.

Your next question comes from Mike Sison with KeyBanc Capital Markets. Mike Sison – KeyBanc Capital Markets: Good morning, guys. Great start to the year. Nicolas, you talked about three to four areas that drove the improvement in operating margin this quarter, pretty impressive there in the low 20s. Can you maybe give us a feel of which of those 3 to 4 areas were most pertinent and sustainable for the rest of the year? Is this sort of a new level of profitability we should expect going forward? And then one for Matthias. Congratulations on the new spot there. Anything different that you are going to drive going forward? I think Hernan had a great run. Anything new that you expect to do to drive growth and keep that business on track? Thank you.

Okay, Mike. This is Kevin. Thanks for the call, and let me make a couple of comments as it relates to some of the drivers on margin, and then I can turn it over to Nicolas to provide further clarity. Look, I think at the end of the day we have continued to be driving the maximization of the portfolio, which is about a lot of initiatives throughout the organization to help drive incremental profitability into the portfolio. That really was the primary driver to our improvements in margin on a total basis for the Company. If you think about growth leverage, you think about the benefits of mix, you think about the cost reduction initiatives that are in place, those were the majority of the driver for the gross margin improvement. Of course, that was really the big driver to our operating profit improvement as it relates to the combination of the two, the volume, the growth at the top line as well as the gross margin improvement. So, the road from -- slight benefit as it relates to the net benefit of input costs and pricing options that had been taken, are really the big drivers. And the material part of the improvement was relative to the growth leverage, the mix, and the cost reduction initiatives.

Mike, this is Nicolas. Just to add to Kevin's comment, you have already talked about the extreme focus on the productivity initiatives, and we've really reduced our footprint. We've been focusing on some of the most effective parts of our portfolio. We invested. It's the result of innovation and really driving the innovations of our portfolio faster. And now you are on the level of execution. So all these productivity initiatives, along with the focus on really maximizing our portfolio and driving innovation have been some of the key drivers of the improvement.

Thank you very much, Mike. We have made significant investments over the last few years in key strategic markets and added infrastructure to increase capacity, but also in our creative skillset. We have a very strong innovation pipeline in our health and wellness portfolio, where we are addressing the demands to reduce sugar, fat, and salt. I am very confident we will capitalize on the many investments which we have made in the past in our fold. I’m very proud that I have a very strong management team which I can take over from Hernan.

And, Mike, it might be fair for me to weigh in, having worked with Hernan and now Matthias for a short while. Matthias is focused on technology, and technology being a driver of growth and innovation is probably something I have really noticed. And it fits and aligns really well with what we are trying to do. Matthias's knowledge of the industry and technology is going to be a real plus for us.

Your next question comes from the line of Faiza Alwy with Deutsche Bank. Faiza Alwy – Deutsche Bank: So I have a couple of questions. First of all, I wanted to get an update on the input costs. I know that you talked about a benefit this quarter, but then the back half is expected to be -- it's supposed to be more expensive on the input costs side. But then it looks like you took some pricing this quarter. So was that pricing related to the expected increase in input costs in the back half? Or -- and then more specifically, where exactly are you able to take the pricing this quarter? And then my second question was on for selling and admin costs. It looks like those increased -- and I know you highlighted the incentive comp increase. Was that really the only thing that drove that increase? Or were there any costs associated with, for example, the Aromor acquisition that you may have considered as part of adjusted operating profit, but may really be extraordinary? If you could just comment on that. Thanks.

Thanks for the question, Faiza. I think, first thing, on pricing, we really didn't take any pricing in the quarter. So if you look at our top-line performance, it's really related to volume and mix, which is driving the top line. So, no real fundamental change in pricing levels for the quarter. The second point as it relates to input costs, we feel pretty comfortable as we sit here today that our current inventory levels plus contractual arrangements won't result in there being a material change and any pressures on gross margins this year, per se. But we do know that current pockets of areas of input and material are in fact at elevated levels versus what we would be enjoying at this particular point in time in terms of our costs. So once we get back into the market and are purchasing those new inventory levels, they will be at higher prices. And we expect that to be occurring over the back half of this year. I would call out a couple of areas. I would call out citrus. I would call out onion. I would call out patchouli as some areas where we know that there are some increases in costs coming. So as we realize those costs, we will be having targeted discussions with certain customers to understand those pressures that will be developing. And certainly, as we enter into 2015 we’ll start to see some of that flowing through the P&L.

(Operator Instructions) Your next question comes from the line of Edward Yang with Oppenheimer. Edward Yang – Oppenheimer & Co.: Good morning and congratulations a nice quarter. Just following up on the question about pricing. How often do you go back and talk to customers now on pricing? Back in the day in the industry, I think generally you kept prices pretty stable and tried to get higher prices on new products. But I think that changed during some of the raw material inflation we saw in the last five years or so. So how often do you have these conversations at this point in terms of pricing?

Let me take a stab. This is Kevin -- at the question. I think it really is depending upon the specificity of the issues that are involved and the magnitude of the increases. And we could have targeted discussions with one group of customers because of the mix of the materials that they use, and no discussions with other customers, because they are not faced with the same dynamic. Look, if in fact there is a general minor cost increase, I think generally speaking, we don't look for pricing relative to that, because we look to drive efficiencies into our portfolio on an ongoing basis. So we try and limit our asks for price increases for our customers. But when we look at the increases that we are expecting in the areas I called out, they are high enough where we are going to need to have a discussion with certain customers, and that will be occurring probably over the back half of the year, as we see those costs developing. Edward Yang – Oppenheimer & Co.: And do the customers, Kevin, come back and initiate pricing discussions on their own? For example, if you are getting raw materials relief, do they ask for -- have they been asking for concessions?

I think as in any buy/sell relationships, our customers always ask for lower prices. I think that's a continuous kind of process. But certainly, it becomes a little bit more elevated if, in fact, they believe there are input cost reductions that we are able to realize. But I would remind you, though, at the end of the day, the input costs where we are today are still at very extraordinary levels versus historical. And so at the end of the day, we are still underwater in terms of gross margins, just from the input cost increases we saw over the course of 2011 and 2012. We’ve recovered the gross profit, but not the gross margin impact of that. So as we look at these input costs going forward, we’ll be having those targeted discussions with customers. Edward Yang – Oppenheimer & Co.: Okay. And just some final cash flow questions. Buyback activity -- you said that would be up year over year. Could you give a sense of the range there? Is it still going to be targeted towards primarily offsetting options creep? And the CapEx was up 13% year over year. What's your expected spending for 2014?

Sure. Our expected spend is consistent with the message that we have been delivering over the last actual few years. We will be in the neighborhood of 4.5%, so between 4% and 5% of sales. And I would say probably closer to 4.5%, kind of in the middle of that range in terms of CapEx. In terms of the share buyback, certainly at current share price levels, I would say it will be slightly above the amount of the share buyback that we had last year. But certainly, that's dependent upon what's happened on the share price going forward. If we see significant increases, we’ll probably be buying a little bit less. And if we see significant decreases, we’ll be buying more.

And there are no further questions at this time.

Thank you very much for everyone's participation on today's call, and we look forward to talking to you again in early August, when we have our Q2 results. Thank you.

Thank you for joining today's International Flavors & Fragrances conference call. You may now disconnect.