At this time, I would like to welcome everyone to the International Flavors & Fragrances third quarter 2018 earnings conference all. All participants will be in a listen-only mode until the formal question-and-answer portion of the call. I would now like to introduce Michael DeVeau, Head of Investor Relations. You may begin. Michael DeVeau - International Flavors & Fragrances, Inc.: Thank you. Good morning, good afternoon, and good evening, everyone. Welcome to IFF's third quarter 2018 conference call. Yesterday evening, we distributed 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 on our website. 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, particularly with regard to our outlook for the fourth quarter and full-year 2018. 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 from forward-looking statements, please refer to our cautionary statement and risk factors contained in our 10-K filed on February 27, 2018 and our press release that we filed yesterday. Today's presentation will include non-GAAP financial measures, which excludes 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 and is on our website. With me on the call today is our Chairman and CEO, Andreas Fibig; and our Executive Vice President and CFO, Rich O'Leary. We will start with prepared remarks and then take any questions that you may have. With that, I would now like to introduce Andreas. Andreas…

Your first question comes from the line of Mark Astrachan with Stifel. Mark Stiefel Astrachan - Stifel, Nicolaus & Co., Inc.: Thanks and good morning, everybody. Andreas Fibig - International Flavors & Fragrances, Inc.: Good morning, Mark. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Hi, Mark. Mark Stiefel Astrachan - Stifel, Nicolaus & Co., Inc.: I have heard worse by the way on the last news if that's what you're talking about. So, on the business, though it's helpful commentary on Frutarom for 3Q, I guess, related to that, so what gives you confidence that it can improve in 4Q? And if I'm doing the math correctly, why give such a large implied range of sales for the business? And kind of related to that, if I remember also from Frutarom's results earlier this year, there was some volatility in their trade and marketing business in those results. So thoughts on maybe how that business fits with the new company going forward? Andreas Fibig - International Flavors & Fragrances, Inc.: Let me start the first part of the question, and then I hand it over to Rich. So, first of all, we had a solid start and an acceleration in growth with the Frutarom business for the fourth quarter, so that's a good part. And we are actually ahead of the integration. What is the big benefit for us is that we have closed the deal earlier than we sought. The teams were well-prepared. The leadership structure is in place. And most of the insecurity is gone, which we usually have when you embark in such kind of a deal. And that, let's say, fills the optimism for the fourth quarter and the year going forward. So good start, as I said, financially. Secondly, we have the organization…

Your next question comes from the line of Lauren Lieberman with Barclays.

Thanks, good morning. My first question was just around the go-to-market approach that you talked about in terms of leaving Frutarom to report independently. That was definitely different from what I had anticipated or expected to be the case. So I guess first, could you talk about, one, will you be giving us pro forma historicals that could just help us in terms of forecasting? And the second thing is, it was just interesting to me that it looks like in terms of you're going to be rolling in the Frutarom North America flavors business into Tastepoint straight away. Is the approach going to be that piece by piece, Frutarom will be integrated into Taste and Scent? And this is just to create almost a bridge platform to go slowly, such that the Frutarom piece of this is independently reported will just be going down over time? Andreas Fibig - International Flavors & Fragrances, Inc.: Okay. Rich, you get started. Richard A. O’Leary - International Flavors & Fragrances, Inc.: In terms of pro forma information, Lauren, we will on the year-end call, once all the numbers have been finalized, we'll provide a full-blown full-year pro forma for both the combined companies, so that represents the reference point going forward to the three-year guidance that we've talked about earlier. So we will provide that on the next call. Andreas Fibig - International Flavors & Fragrances, Inc.: And on the organizational setup, let's talk about the Natural Product Solutions, which is probably the most, let's say, adjacent businesses we have here at hand. That certainly is important to leave this as it is for now to make sure that we really capitalize on the growth opportunities because many of these businesses have higher growth in our core business and good profitability as…

Okay, great. And then my second question was just around the pricing and raw material environment commentary that Rich offered. So just where do you stand in terms of your sense of the incremental pricing you're going to want to be taking? Where do you stand in terms of those customer conversations? Do you have visibility for how that starts to flow through, or should we be thinking about it more as it will be gradual throughout 2019, so that you'll probably still see some gross margin pressure as you play catch-up throughout the year? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Lauren, a couple things. I think there is – unfortunately there's always a time lag as we go through this process.

Yeah. Richard A. O’Leary - International Flavors & Fragrances, Inc.: I think we've talked about that in the past about certain contracts and arrangements have windows for that. But we are already having conversations, the businesses certainly are starting to have the conversations around what is going to be necessary. We're going to expect to see – on an overall basis, I would expect to see mid-single-digit increases next year, again, skewed heavily towards the Fragrance business, given the continued supply chain interruptions that we're dealing with there. The teams are already having those conversations with and teeing those things up with the customers, but I would expect to see some continued pressure during the course, but I also fully expect to see progress quarter by quarter going forward also.

Okay, that's great. Thank you so much. Andreas Fibig - International Flavors & Fragrances, Inc.: You're welcome.

Your next question comes from Faiza Alwy with Deutsche Bank.

Yes. Hi, good morning. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Good morning. Andreas Fibig - International Flavors & Fragrances, Inc.: Good morning, Faiza.

So two questions for me too. One is just to follow up on the raw material and pricing commentary. Could you give us more color in terms of where you're seeing the most raw material inflation? I know you said Fragrances. But just more specifically, is it the naturals? Is that synthetics, petrochemicals? Where are you seeing more of that? And then do you think that you're going to be able to recover the entire raw material inflation, because it looks like you talked about two points of pricing this quarter, but you said that you still haven't offset the entire inflation. So do you anticipate being able to offset that as you go through 2019? Richard A. O’Leary - International Flavors & Fragrances, Inc.: So, Faiza, remember, a portion of that is related to the BASF, so that's something that still is being worked through. We're doing everything we can to mitigate the effects of the citral stuff. Some of it doesn't show up in pricing because we'll go through and work with customers on reformulations to adapt the cost base, so not everything is going to show up exactly. But I do expect over time that we will be able to recover this. We've got to protect our customers' business, but we also have to protect our bottom line. It's not easy. I'm never going to say it's easy. So I do expect, as I said to Lauren's question, I do expect us to see further pressure and continued focus on price realization in 2019. In terms of where is it coming from, it's very much in the core feedstock type of ingredients for the Fragrance business. Again, in my comments, I mentioned that we've had supply chain interruptions. We started the year and we were at mid-single digits including citral. We've had issues in suppliers in India. We've had fires in India. We've had shutdowns in China on some of the core ingredient suppliers – chemical ingredient suppliers. More recently, more environmental-related supply chain restrictions, and we're also starting to see situations where demand is coming from non-F&F markets for the same raw materials, which is creating a supply and demand pressure point, and we don't expect new capacity come on in the short term. So I think we're going to have to deal with it. Our customers understand what's driving it. We spend a lot of time walking them through the details, and then working with them in terms of how do we mitigate the impacts on both sides. So, it's going to continue. Unfortunately, we're in a period where it seems every six months something else is popping up and we're having to deal with it with our customers. We're probably going to have the third round of conversation with customers in a very short period around price increases that are necessary for us to protect our bottom line in the long run.

Okay. Okay. Thanks for that. And then just my second question is around Frutarom again. I guess, I'm still not convinced that this is – like, I guess, I'm looking for more comfort from you in terms of how much of the Frutarom sales issue this quarter were timing related? And perhaps if you could update us on what your outlook is for like the Frutarom sales and EBITDA for fiscal 2018? So how much of a snapback are you expecting in the fourth quarter? So, were the timing issues more just the first half was better or are they going to come back in the fourth quarter? And then related to that, now that you've owned the business for maybe a month, are there any surprises outside of the revenue shortfall in the third quarter? What are some of the key – biggest integration risks that you see around Frutarom? Just more color around that would be really helpful. Thanks. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Sure, Faiza. Obviously, it's hard to pinpoint it exactly. What I can tell you is we've been able to, as I said in my comments, so if we look at some specific issues, the colors business has a pricing issue related to changes in the underlying raw materials. But that's had a big impact in that business. I talked about the timing of orders and order patterns, both in the citrus business as well as part of the savory business. So I think that's part of the reason why we believe it's a unique circumstance. Undoubtedly, there is – one of the biggest challenges any company that's going through this type of combination has to deal with is distraction. We always do our best to try to keep everybody focused…

Okay. Thank you very much.

Your next question comes from Silke Kueck with JPMorgan.

Good morning. How are you? Andreas Fibig - International Flavors & Fragrances, Inc.: Good morning. Very well. Thank you, Silke.

So there were a couple of acquisitions pending under Frutarom. And so I was wondering whether you can quantify what the – that maybe in like dollar terms, like, what the acquisitions of Frutarom added to Frutarom sales in the third quarter. What you expect for the fourth quarter and what you expect to – they may add in 2019? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Look, Silke, I think given that those – that the third quarter results are their numbers and we don't – I'm not comfortable disclosing that. I think in terms of M&A for – I mean we just continue to work together as you've heard Andreas and I talk about that we keep continue to work together on the pipeline. We've now reprioritized the comp – the two team's standalone pipelines into to a refined list based on our priorities and our needs going forward. We look to continue to execute against that pipeline. But I'm not – I really don't feel comfortable given the standalone nature of their results in Q3 coming in on the individual components of it? Andreas Fibig - International Flavors & Fragrances, Inc.: What you have seen so...

Well, but...

Sorry. If I could add on this, Silke, what we have seen is that there were no acquisitions made this year during the process of the, let's say, the deal, let's say, the pre-deal months. But we have – as Rich said, actually we have a good pipeline of very value and technology-added opportunities. And I would not wonder if we could hopefully close two of these deals until the end of the year. They are smaller ones, but they would fit exactly into our wheelhouse. So, you see we're at a bit of a pause during that period. But now we are basically taking the combined pipeline with the new priorities and then going after it. And I think it will be a big success going forward.

I was just, like, interested in knowing what sort of, like, the acquisitions added that were already announced, not even like the things that may have happened between when the transaction was announced and at closing, just sort of like what was announced prior to acquiring Frutarom, of things that may have closed? I was just wondering what those acquisition benefits were for the quarter and what they may add for next year? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Look, again, they're going to disclose their results in the next two or three weeks. And then, we'll be in a better position to answer any questions at that point in time. I don't feel comfortable covering it right now.

Okay. In terms of the DNA, and I apologize because I'm not as familiar with Frutarom as I could be. I thought that for the past two quarters that the D&A at Frutarom was something that was close to, like, $17 million a quarter, and what you said is you thought maybe it's something like $9 million a quarter? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Because we're just doing the amortization, not the D&A. So it's just adding back amortization.

Okay, so amortization is $9 million of that, okay? That's helpful. Richard A. O’Leary - International Flavors & Fragrances, Inc.: That's correct.

Okay. And then D is like another $8 million, okay. The last thing is more of a comment rather than a question, but I thought rather than having an aggressive accounting treatment on earnings, maybe it's helpful to just provide the EBITDA aspect of it because I get a separate EPS estimate rather than including all amortization, which just seems like an aggressive treatment. Richard A. O’Leary - International Flavors & Fragrances, Inc.: I would disagree that it's an aggressive treatment. It's looking at the underlying profitability. But then, again, bridging – it's a simple way to bridge it back to cash flow generation. We've seen this done on several of the acquisitions of similar sizes. So I don't consider it aggressive. I'm trying to keep it, – the number of metrics that we have to communicate and monitor going forward to keep it simple.

Your next question comes from the line of John Roberts with UBS. Andreas Fibig - International Flavors & Fragrances, Inc.: Hi, John. Michael DeVeau - International Flavors & Fragrances, Inc.: John. Richard A. O’Leary - International Flavors & Fragrances, Inc.: John?

Hi. Can you hear me? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Yeah, now we can. Andreas Fibig - International Flavors & Fragrances, Inc.: Yes. We can now.

Yeah. On slide 18, are we going to get operating earnings for four segments or three segments? Michael DeVeau - International Flavors & Fragrances, Inc.: Only three. Andreas Fibig - International Flavors & Fragrances, Inc.: Three.

Okay. Michael DeVeau - International Flavors & Fragrances, Inc.: You're going to have Scent, Taste and then Frutarom.

And then in terms of sales granularity reporting going forward, will we get the same granularity on Fragrances that we currently get, the regional plus Fine and Ingredients? And will we get any additional granularity on sales underneath the various Frutarom and Taste segments? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Look, John, we're going through that right now. But I would tell you that where I expect this to end up is we're going to report it the way we manage the business. So, on the Taste side of the business, we'll report along the regions, that's the way that business is run. On the Scent side, we'll report around the categories. And on the Frutarom side, I think we're getting around the regional numbers. Directionally, that's where we're headed.

Okay. Thank you.

Your next question comes from the line of Adam Samuelson with Goldman Sachs. Adam Samuelson - Goldman Sachs & Co. LLC: Thank you. Good morning, everyone. Andreas Fibig - International Flavors & Fragrances, Inc.: Good morning, Adam. Adam Samuelson - Goldman Sachs & Co. LLC: Maybe just, I want to make sure on the guidance, that you can just clarify, the underlying IFF business, as we think about the fourth quarter and/or where the previous constant currency or currency neutral sales growth was, has that expectation changed in anyway? I know there was an embedded deceleration in growth in the prior guidance based on the tougher comps and you slowed a little bit this quarter. But I just wanted make sure I am understanding kind of what the assumption is on both the top line and then constant currency operating profit for the legacy business for 4Q? Richard A. O’Leary - International Flavors & Fragrances, Inc.: No, no, nothing significant in terms of change, in terms of the legacy business, both in terms of top line and overall profitability. We're on target. Adam Samuelson - Goldman Sachs & Co. LLC: Okay. That's helpful. And then just as we think about 2019, on the Frutarom side, again, going back to some of the questions on the decel implied in 3Q, I mean it's a pretty – the constant currency growth looks like they were up in the high-single digits, kind of the 8%, 9% range in the first half of the year. And I don't know – we don't know exactly where it was for 3Q, but it looks to be kind of flat to up slightly organically. I mean, the confidence of that is this is really just a timing of order patterns and are not something kind of more…

Your next question comes from the line of Gunther Zechmann with Bernstein.

Hi. Good morning, everyone. Andreas Fibig - International Flavors & Fragrances, Inc.: Hey. Good morning, Gunther. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Good morning, Gunther.

Hey. Just a clarification on the amortization, the $220 million that you mentioned, just to make sure this includes also the non-Frutarom part of amortization that you're now including there. Thinking of David Michael, I think it was $7 million or so, and Fragrance Resources a few, so you're taking all of them together. And also on the amortization schedule, is there anything you can share at this point or when would you be able to give the phasing and the details around how to model that over the coming years? That's the first one. And the second one on free cash, more a longer-term question, you've been run-rating with the IFF legacy business for a number of years now very consistently around the 12% free cash flow to sales level per year. I appreciate that you have cash outflows as you integrate the business. But as a run rate, is there any reason to believe why the cash profile should be different from that? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Let me start with the first question, Gunther. In terms of the $220 million, it's really roughly $36 million for the historical Frutarom, $37 million roughly for legacy IFF amortization, and then the incremental – the difference to that to $220 million, which is call it $147 million, is our current estimates of what the step up is going to be. I don't think Bob has finished the calcs yet, so it's going to take us a while. I would certainly expect that to be the basis for 2019, but we'll have more clarity, I'd say midpoint of 2019 at the earliest, but we'll update everybody if anything changes materially. In terms of free cash flow generation, given the incremental step up, I would expect that…

And that's all on the organic side. How do you think about providing capital to the Frutarom business to pursue acquisitions, and also what about the IFF legacy business looking for acquisitions longer term? Andreas Fibig - International Flavors & Fragrances, Inc.: It's in the business plan. Richard A. O’Leary - International Flavors & Fragrances, Inc.: I think as I said earlier, we don't look at it anymore as Frutarom's historical M&A and our historical legacy M&A. It's now one combined pipeline that's based on this strategy and the prioritized segments that we see going forward for the combined businesses. We're not done with all that work yet, but there are things that are in the pipeline that we are confident with, and we continue to work to pursue those. Andreas Fibig - International Flavors & Fragrances, Inc.: Yeah. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Andreas's comment about CapEx, on a combined basis, I do see that coming down to probably somewhere between 3% and 3.5% on a combined basis after we get through 2019 and 2020 with all the integration work.

Yeah. Richard A. O’Leary - International Flavors & Fragrances, Inc.: So we have built into our cash flow projections, we have built into our leverage ratios incremental M&A over the next three years.

Your next question comes from the line of Jonathan Feeney with Consumer Edge.

Good morning, thanks very much, a few quick ones. First, can you characterize the margin differential between Fine Fragrance and Fragrance ingredients? Is one materially higher than the other, and any comment about that? Second, what can you – there was just a lot of great discussion about CapEx relative to depreciation. Can you give us a full-year run rate depreciation number, and then roughly what a full-year CapEx number looks like pro forma right now, depreciation versus CapEx for 2018 for the combined businesses on a full-year basis? And third and finally, how did you get a $9.8 million settlement from a supplier related to a prior recall? I haven't quite seen that before. Thank you. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Okay. Let me start with the Fine Fragrance versus Fragrance ingredients, and I'm going to put – I'm going to take the cosmetic actives out of that comparison. I think on a gross margin basis, there's a significant difference. On a return on sales basis, it's much closer to – they're much closer to each other, given the relative overheads of those two businesses. So they're both attractive on an accretive basis, but gross margin wise, if you think about mix, Fine Fragrance is significantly higher than the Fragrance Ingredients business. CapEx as a percent of sales, I have to come back to you on that one. I think for – let me come back to you on that one. I don't want to guess and do my math in my head over the call. In terms of the insurance recovery, again, this is related to the product recall issue we settled with our customer last year. We wrote the check in early part of 2018. And then, we've gone back to the vendor's insurance company and worked on getting reimbursement from them, because they had their own product liability insurance and that's where the money came from.

Got you, thanks very much.

Your next question comes from the line of Patrick Lambert with Raymond James.

Good morning. Thanks for taking a few questions, very simple. Could you quantify a bit the parts of Frutarom that are getting into Taste and Scent? I think IBR is pretty small, but I don't know to model the flavors North America. If you could help us in that? And the second is regarding again the modeling of integration, in particular, the cost that you will incur in restructuring. I think you commented on the overall amount, but if you're a bit more clear on when the timing of the spending in Q4 and I guess 2019? Thank you. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Patrick, could you just repeat the second part of that question, because I'm not sure I got it?

Yeah. I was – can you hear me? Andreas Fibig - International Flavors & Fragrances, Inc.: Yeah. Richard A. O’Leary - International Flavors & Fragrances, Inc.: Yeah. Yeah. Go ahead, sorry.

Yeah. Just I guess like everybody were trying to fully integrate now Frutarom in our model. And I was trying to forecast the integration costs that you've mentioned at the time of the acquisition. And if you had a bit more precise picture on the timing of the spending already in Q4 and 2019? Richard A. O’Leary - International Flavors & Fragrances, Inc.: Sure. No problem. So on the internal transfers of IBR and the North American flavors, it's really, it's small. So it's insignificant, again. So, it's not a big number. It's not going to impact the regional numbers much at all. In terms of the integration costs spend, I think it's what Andreas said earlier, I think the bulk of that, the CapEx as well as I would expect that the bulk of those things to be both in 2019 and 2020... Andreas Fibig - International Flavors & Fragrances, Inc.: Yes. Richard A. O’Leary - International Flavors & Fragrances, Inc.: ...with a slight lag, I would say in terms of the severance costs by a quarter or two. But I think the bulk of it's going to be in 2019 and 2020. Andreas Fibig - International Flavors & Fragrances, Inc.: Yeah.

And I would now like to turn the call back over to Andreas for closing remarks. Andreas Fibig - International Flavors & Fragrances, Inc.: Thank you very much for all these great questions. We'll follow up in the one-on-one calls as usually and have a great day, and it's Election Day. [07BDC1-E Rich O'Leary]: Thank you.

Thank you for participating in today's conference. You may now disconnect.