At this time, I would like to welcome everyone to the International Flavors & Fragrances Fourth Quarter and Full Year 2018 Earnings Conference Call. [Operator Instructions]. I would now like to introduce Michael DeVeau, Head of Investor Relations. You may begin.

Thank you. Good morning, good afternoon and good evening, everyone. Welcome to IFF's Fourth Quarter and Full Year 2018 Conference Call. Yesterday evening, we distributed press release announcing our financial results. A copy of the release can be found on our website at ir.iff.com. Please note that this call is being recorded live and will be available for replay. Please take a moment to review our forward-looking statements. During the call, we'll be making forward-looking statements about the company's performance, particularly with regard to the outlook for the first quarter and full year 2019. 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 the cautionary statement and risk factors contained in our 10-K filed on February 27, 2018, and in 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. For the purpose of this presentation, please note that we've calculated combined numbers by combining our results with the results of Frutarom prior to the acquisition on October 4, 2018, and adjusting for divestitures of Frutarom businesses since October 4, 2018. With me on the call today is our Chairman and CEO, Andreas Fibig; and our Executive Vice President and CFO, Rich O'Leary. We'll start with prepared remarks, and then take any questions that you may have. With that, I'd now like to introduce Andreas.

Thank you, Mike. On the call today, I will give an executive overview of our operational performance for 2018. Once finished, I will ask Rich to give a more in-depth financial review of the business before leading into our integration priorities for 2019 on the Frutarom acquisition. We will then provide an update on our financial expectation for 2019, and then as usual, take any questions that you may have. I'm very pleased to say that 2018 proved to be a historic year in the long and successful history of IFF. As we recently celebrated our 130th year birthday, we delivered on all of our key financial metrics and completed the acquisition of Frutarom, the largest deal in our industry to date, all while successfully navigating a challenging and dynamic market environment. We achieved strong advancements in both top and bottom line results in 2018 that were in line with our guidance range that we set forth. Highlights include our record-setting sales of approximately $4 billion, which was a 17% increase over last year. This performance was driven by mid-single-digit growth in both taste and scent as well as additional sales related to Frutarom. We also delivered strong adjusted earnings per share, excluding amortization of $6.28 as adjusted operating profit growth and a lower year-over-year effective tax rate more than offset higher interest expense and shares outstanding, both related to the Frutarom acquisition. Throughout 2018, we had many strategic accomplishments that drove significant value creation. To highlight just a few. With the acquisition of Frutarom, we established ourselves as a global leader in taste, scent and nutrition. This combination helps us create a truly differentiated portfolio with an increased focus on naturals and health and wellness. It also provides us opportunities to expand into attractive and faster-growing categories and broadens…

Thank you, Andreas. I'd like to now give you a more in-depth review of taste and nutrition. Turning to the Taste business. In the fourth quarter 2018, currency neutral sales grew 5% with 3 of the 4 regions expanding year-over-year. This performance was led by mid-single-digit growth in North America and Greater Asia. All categories contributed to growth led by dairy and beverage. Segment profit was challenged due to higher RSA expenses and several other ongoing costs, which I don't expect to be continuing in a more of a one-off nature in the quarter. For the full year 2018, currency neutral sales increased 5%, driven by growth in all regions and across all categories. Improvements were led by high single-digit growth in North America with strong double-digit growth in Tastepoint; mid-single-digit growth in EAME, led by double-digit growth in Africa and the Middle East; and in Latin America led by strong double-digit growth in Argentina. Taste currency neutral segment profit on a full year basis grew approximately 6%, led by volume growth and the benefits from our ongoing cost and productivity initiatives. In terms of segment profit margin, we continue to see margin expansion improving 60 basis points to an industry-leading 22.7%. In the scent business, fourth quarter 2018 currency neutral sales grew 3%. Performance was driven by mid-single-digit improvements in Fragrance Ingredients and low single-digit growth in Consumer Fragrances. Fine Fragrances were down slightly year-over-year, reflecting strong double-digit growth in the year-ago comparison. For the year 2018, currency neutral sales grew 4% with the strongest improvement coming in Fragrance Ingredients, which grew high single digits. This was led by price increases and strong double-digit growth in cosmetic active ingredients. Consumer Fragrances grew mid-single digits, including price as performance was driven by double-digit growth in Hair Care and mid-single-digit growth…

Thank you, Rich. I wanted to spend a few moments to highlight our integration priorities moving forward as we end the year 1 of this 3-year journey. As we spoke about earlier, integrating IBR into LMC is imperative to strengthen the product offering and drive accelerated growth and cosmetic active ingredients. As a reminder, cosmetic active ingredients is a very high-growth and high-profitable sector that we have prioritized moving forward. We want to ensure seamless combination of the Global Savory Solutions group to address customer needs by leveraging the technologies and expertise in our various categories. By establishing a globally coordinated team, we will support strong local presence with global expertise as we offer a full range meat ingredient provider; novel flavors; functionality and technical expertise in texture, color, oxidation, plant protein and aromas to our entire customer base. We will continue to consolidate the Frutarom taste business under the IFF taste leader as we move to capitalize on efficiencies and drive accelerated growth. The plan is to leverage our strong blueprint of our Tastepoint North America go-to-market approach to strengthen our exposure with small and mid-tier customers in every market around the world. In terms of synergies, which I will touch more in a moment, we plan to capitalize on significant make versus buy initiatives across our spend to drive strong year one cost synergies, and we will continue to execute our global site rationalization for improved efficiency. Lastly, we will broaden our cross-selling activities and begin the execution on opportunities. A cross-functional global team has been established and is working diligently to generate incremental opportunities to capture a greater value. As I have said previously, I continue to believe this will provide the largest value-creation opportunity in the medium to long term. Slide 16 provides an overview on the anticipated cost synergies in year one of our three year integration plan. Our integration program is well underway, developing and refining the work plans to unlock these value-creation opportunities. As you can see, we anticipate approximately $30 million to $35 million of expected savings in year one. The $30 million to $35 million will come from accelerating the rationalization and harmonization of our procurement spend. We will leverage higher spend on overlapping direct raw materials and rationalize. We will also leverage production capabilities where we are currently buying materials or intermediates at a higher price. We will also continue to rationalize the global footprint to optimize our global sites. Note that over time the contribution of our manufacturing rationalize will increase as it takes time to work with site closures. Lastly, we will be streamlining overhead expenses by reducing nonstrategic costs and eliminating redundant expenses. This will ensure that we create an organization that focuses and directs spend to the most value-enhancing opportunities. I would now like to turn the call back over to Rich, who'll give us an outlook for 2019.

Thanks, Andreas. Over the last few years, we've seen a -- the global operating environment to continue to be volatile. There are several things that have direct implications on our industry and business in 2019 that I'd like to highlight. A clear headwind within our industry is the continued rise of raw material costs. In 2019, we expect mid-single-digit inflation on our legacy IFF business as synthetic materials continue to rise, driven by several supply chain disruptions that we've faced over the last 12 to 15 months. These market disruptions continue to disproportionately impact the scent business and is more -- as it is more broadly exposed to these raw materials. It should be noted that when you combine 2018 and 2019, raw material cost inflation in the scent division is near 20%. Our strategic priority is to protect our customers business, which we were successful in doing in 2018. However, this comes at an incremental cost. This will require us to continue to work with our customers, taking additional price increases as we move through 2019 to ensure that we ultimately recover these cost increases over time. It should be noted that natural ingredients costs like vanilla and citrus markets remained elevated near historical levels. We expect to see a more muted cost increases for taste in 2019. From an economic perspective, GDP growth on a global basis remains positive; however, many estimates were recently revised downward. There continues to be geopolitical tension and uncertainties around the world with examples like trade wars and Brexit. All in all, we are optimistic about our top line, but recognize that there is risk given the constantly changing operating environment. The U.S. dollar continues to fluctuate versus the world currency. As we are in generally a strong $environment year-over-year, the euro to…

Thank you, Rich. That was a lot of very complicated slides, but I hope it helps. As we look to the future, we're reconfirming our long-term targets. We expect to deliver between 5% to 7% currency neutral combined sales growth CAGR between 2019 and 2021. We also expect to deliver 10%-plus adjusted EPS ex amortization combined growth for the same period. So 2019 is the first very important step in the journey and the foundation to achieve our long-term targets. In summary, we're pleased with our financial performance for 2018 as we delivered on all of our key metrics. We made strong advancement in both top and bottom line results as we recorded record-setting sales and adjusted EPS ex amortization. We also build an organization for accelerate -- accelerated profitable growth combining two strong organizations to create a truly global leader in taste, scent and nutrition. As we look forward, full year 2019, we expect sales to be between $5.2 billion to $5.3 billion, adjusted EPS to be between $4.90 and $5.10 and adjusted EPS ex amortization in between $6.30 and $6.50 as Rich said. The coming together of IFF and Frutarom was a momentous achievement in 2018, and we're excited to be moving forward as one company and pursuing new opportunities that benefit all of our stakeholders around the world. And with that, I would now like to open up the call to questions.

[Operator Instructions]. Our first question comes from the line of Mark Astrachan from Stifel.

I wanted to ask about Frutarom. So sales growth improved sequentially, but was still below longer-term expectations. I guess, given tough comparisons in the business prior to the deal, I assume it doesn't meaningfully accelerate until 2Q. So maybe just verify if that's kind of what you believe? And then what gives confidence that 6% remains achievable, the only thing that you've seen so far that would increase confidence in that? And I guess, sort of related to that, any idea what shipments looked like in that business relative to demand in quarters prior to the deal close, meaning, like, could they have overshipped demand?

Okay, Mark, so first of all, good morning. Let me answer the question. First of all, from the technical point of view, we certainly have much easier comparables in the second half of the year. So that's something which makes us very optimistic. We're also happy that after a softer third quarter last year, the fourth quarter was turning around. People are again focusing on the business after we have done the close on the 4th of October. We have started the integration very, very well, and as we said before, we were happy that we could close the deal a couple of weeks ahead of our original timing and that pays off because everything is going according to plan. So people can go back and focus on the customers. I believe that's super important. Leadership is clear, and we really can make sure that we see the customers and sell. What makes me optimistic is that first of all, we're in some of the faster-growing segments, which is super helpful, and particularly, in the adjacency -- adjacent business. We're with some of the faster-growing customers as well, and particularly, in Europe and in the U.S. And we haven't even tapped into the cross-selling opportunity, but we see already that our teams are generating really good ideas and having implemented a couple of pilots and that makes us pretty optimistic on the Frutarom piece. So all in all, a very, very positive picture from our point of view.

Yes. I think, Mark, from a -- as you said, I think Q1 will be the most challenging from a comp standpoint, a little bit better in Q2, obviously Q3. And the second half, as Andreas talked about, will be -- will see the fastest acceleration. I think the other thing to me was, clearly, North America was one of the challenged markets. I think we've done -- we've put the leadership in place now. There was a vacancy prior to the closing. And I think now we're getting much and much more alignment and integration between Frutarom's taste business in North America and our Tastepoint business. So that I think that will enable us to accelerate growth. I think we've already seen very, very quickly some real opportunities in terms of where we combine our two capabilities to drive growth on projects that the two companies individually weren't able to tackle.

Got it. Okay. So just to be clear, then 6% remains the target? And then I just want to switch to a separate question on free cash flow, Rich. It's diverged from an income in recent years. Does this normalize in your view in 2019? I think you'd mentioned given inventories being inflated given the supply chain challenges. So does the inventory piece specifically improve? And are there any other anticipated items that will impact cash generation in '19 as far as you can tell?

Yes, I think, to your first comment, our expectations in terms of the 6% is certainly our -- still our expectations for the Frutarom business going forward. In terms of cash flow, yes, I think that in the last two years, if I look at cash flow from operations compared to adjusted net income, it was in the 80% to 90% range. '19 was -- or '18 was clearly challenged by the inventories, which were up $130-something million. In '19, I would expect the inventory number to stabilize. I don't think it's going to get better yet. We're going to be challenged with the mid-single-digit cost increases that I alluded to on our legacy business. But I think that's where we see going forward, stabilization in '19 and then improvements beginning in '20 going forward. Overall, I would expect that cash from working capital impacts in 2019 to actually be favorable versus a big outflow in 2018. And overall, I would say, when you take that into consideration plus the increased D&A, I would expect our conversion of cash from operations versus adjusted net income to be above 100%. So much better than what we have been for the last two years.

Our next question comes from the line of Faiza Alwy from Deutsche Bank.

To talk about the Flavors business, I think the organic growth of 2% in the quarter was a bit disappointing relative to what it had done in the rest of 2018. So just as you talked about your expectation for the Frutarom business, I'd love to hear how you're thinking about your base business? So Flavors and Fragrances, it seems like you're embedding a bit of an acceleration in 2019. So if you could just break those two components out, that would be helpful?

Yes, Faiza, it's Rich. I mean, I think that clearly, there's been -- Q4 was a disappointment, but I think you also got to keep in mind the prior year comparables and a very strong Q3. I think that in -- with 2020 hindsight, it looks like a portion of the strong growth that we saw in Q3 is some element of inventory because we see -- we saw a positive impact from volume erosion, which was actually favorable in Q3 in the taste business and it turned unfavorable in Q4. So I think there's clearly an element associated with inventory adjustments and movements on the part of our customers. On a two year basis, growth for Flavors is probably around 4%, and on a full year basis, growth rates were -- on a two year basis are probably in the 5% range. So I think, partly, the fundamentals of our taste business haven't changed, our expectations haven't changed. We are clearly seeing, particularly in the fourth quarter, some volume erosion and lower volumes on -- with global customers, the large CPGs. It's hard to say right now whether that's again a continuation in the inventory correction. But I think, overall, our expectations are -- going forward have not changed significantly. I think it's still going to be a challenging year, but the potential of the business hasn't changed.

And on the Fragrance side, we can say we're winning good businesses. We had for the Fine Fragrance business, a very tough comparison for the first quarter. But looking forward, and particularly, if we look at the win rates we have in-house already, we're very optimistic on the Fine Fragrance business. I think for the Fragrance and scent business, it's not too much about the, let's say, the growth rate in terms of sales and the win rate, I think we're doing extremely well here. It's more about managing the raw material crisis, making sure that we can realize our price. And what makes us super optimistic on it is that we have won three more global core list. We never had -- we didn't have before, and that gives us just a more expanded reach of our business opportunities. Whether we can big times already capitalize in '19, I'm not sure because it takes a little bit of time, but on the midterm, I'm very optimistic on this one because these were significant wins the team brought in end of last year.

Okay. So Andreas, you mentioned the -- managing the pricing amid this raw material inflation. Like what is sort of -- what is embedded in your outlook for '19 for pricing? And how much of that pricing have you already taken? And how much do you have to go back to the -- to your global customers and try to get that pricing?

I mean, Faiza, that process is already underway. I think, when you look at the guidance and our expectations for 2019, it's about 1.5% of pricing and all in the scent business. And that process is already underway. I think it's as -- that's the same thing -- it's like rewind button. It's a tough discussion, but Nicholas' team has done -- they understand the importance, our customers understand that we work through the normal mechanisms of price and other activities to do that. I think we did an excellent job in 2018. And our price realization was in line with our expectations. What was the surprise was the cost impact as we progressed through the year continued to increase and accelerate. So I'm confident in the medium- and long-term that we're going to recover the price increases, but '19 is going to be another challenging year.

Yes. And actually, if you compare ourselves to one of our bigger competitors, then you see that the erosion of the EBITDA margin was actually less. So that basically it is a testament for me that the teams are doing a good job here.

Our next question comes from the line of Kate Grafstein from Barclays.

If we could talk a little bit about gross margins for 2019, if you could walk through some of the moving pieces? And how should we think about incremental pricing needing to cover inflation in Fragrances? And can we assume gross margins could actually be up as that pricing comes through in the back half of the year?

I mean, actually, no, I think, as I said, we've got about 1.5% built in to the targets for our objectives for 2019 in terms of pricing. Again, all of that -- substantially all of that in the scent business. I think that on the taste side, it's more flat from a pricing standpoint. From a margin standpoint, it's going to be dilutive because we're going to have the sales and we're recovering -- we're looking to cover the cost increases and we're playing catch-up again versus what we -- the way we exited 2018, and then on top of that, we've got additional increases expected in 2019. So there's going to be a time lag as it has been. And in time, there is a level of this magnitude of 20% over a two year basis. From an overall margin standpoint, I think the other thing to keep in mind is the mix impact between the three businesses. And so you've got Frutarom that's going to represent about 1/3 -- about 30% of the overall total from a sales standpoint. Their margins or our gross margins when you look at how we report are from the U.S. standpoint -- U.S. GAAP standpoint. They're in the high 30s, about call it 38%, in that range, in that high 30s. So that has a dilutive impact. So our margin year-to-year is going to be -- it's going to be diluted and not going to go up in 2019. I think will help -- some of the synergies will help, but that synergy is going to get split between overhead expenses as well as cost of goods sold. I think we'll get some, but it's not going to be a significant step up from '19 to '18 or '18 to '19.

You will see it probably in 2020 because then the synergies on the manufacturing side start kicking in and taking into -- let's say, taking the assumption, which I think is fair that the raw material inflation hopefully will stop this year, then you -- we will see a significant improvement in 2020.

Our next question comes from the line of Mike Sison from KeyBanc.

In terms of Frutarom, could you walk us through what the expectations should be for sales in '19, I guess, from the $1.1 billion that you noted in the presentation? And then, I guess, when you report operating income for '19, what should that look like, you'll be reporting it with amortization, right?

Correct.

Yes. So if you take the $1.1 billion we've got -- we've adjusted for the -- you basically take out about, as I said, about $45 million of business. That -- we -- the biggest piece of that we sold in the fourth quarter. There is a small piece that will be discontinued. We expect it to be discontinued in early 2019. So then the base is net of those two elements. And then, from there, I would say the 6% that we've talked about is our expectation for 2019. From a profitability standpoint, the amortization will be included in the division results as it is for all three divisions. We do that to maintain. That's how we measure the business performance. It's how we look at it from an incentive comp standpoint. And it's how we keep things tied back to our economic profit principles. And that's why we look at it both -- at a division level on a segment profit basis, including amortization, and on a corporate level, we've added the element of ex amortization from an overall cash flow standpoint.

Our next question comes from the line of Gunther Zechmann from Bernstein.

Mike and Andreas, two questions. Just, can you talk a bit about the sales leverages that we're expecting for the Frutarom business? I think I remember you saying 50 bps per annum. When do you see that really kick in? And also, if you can discuss what the incremental margins are that you expect from that? That's the first one. The second one is pretty quick I have. In the 5% to 7% sales growth guidance for 2019 that you put, is it fair to assume that, that's organic sales growth or is it just local currency with some bolt-ons as well?

Maybe you take the last one, and I think I'll take the other one.

Yes. Do you want me to go first? Okay. So out of the -- in the 5% to 7%, there is, as I said, about 1.5% related to price. There is about some -- a little bit between 50 basis points and 100 basis points or call it a middle 75 of impact related to the 53rd week and a small amount of M&A and the balance is organic volume.

Yes. And on the cross-selling, we will be -- first of all, we will be more, let's say, concrete on it when we do our Investor Day in the mid of the year. But what we see and the teams are working on it that we have the first, let's say, pilots running. We had the first couple of wins, small ones, but we see that they are really good and significant sizable opportunities. So I believe, it will actually start probably at the end of the year, and then going into 2020 that we see an impact on the cross-selling, which is really, really good. And we will make sure on the margin side to answer that question that we go into this more higher-margin business that we'll certainly put our resources behind the areas and categories while we can earn better margin than we have, and we'll probably let some of the lower-margin business go. So that's as an answer, and by the way, on the growth rate, as Rich said in one of his bridges, we have lost a couple of sales as well because we have sold or we are selling some of the smaller business from Frutarom just as an FYI.

Our next question comes from the line of John Roberts from UBS.

In the Frutarom shareholder filings, they had a 2018 projected revenue number of $1.75 billion. And so, on Slide 20, if I take your $1.1 billion and add your fourth quarter of $360 million, coming up about $300 million short today, finished the year like the -- was the fourth quarter $300 million below what they were thinking earlier in the year? That seems like way too bigger gap, like the math is wrong here somehow?

Yes, John, its Mike. Just remember, from a Frutarom guidance standpoint pre the acquisition, that was a 2020 guidance, right. So that $300 million was a number they had that was going to go out in another couple of years.

But look, clearly, John, I mean, third quarter built in -- at that point, in the numbers. They were not expecting to have a negative growth in Q3, and they were not expecting -- I don't think those numbers were based on having 3%, 4% growth in Q4. So the second half of the year was clearly weaker than what that was projected. There is a currency element between that and what we built into our assumptions for 2019. And clearly, there is -- I think there was M&A that they had expected to occur during 2018 that has not occurred. So I think it's a combination of all of that that much but it's not $300 million in the fourth quarter that was causing the difference.

No. No.

Our next question comes from the line of Daniel Jester from Citi.

Just on the cost synergies side, now that you have the asset for a couple of months, can you talk about your confidence level in getting that $145 million target? And if we do see a slowdown from a macro perspective, is there anything you can do to accelerate those cost savings?

Yes, let me take it. First of all, our confidence level on the synergies is very, very high because we see it already on the run rates we have for some of these elements like procurement and even the footprint rationalization. I'm saying run rate because of P&L impact. We had to go circa to inventory in 2019 to make it happen, but confidence levels is very, very, very high. If the economy is going down or is not growing as fast as we saw it in 2019, we have other levels -- levers to play here as well to make sure that we reach our numbers, but I'll give it to you Rich.

I think what built into the guidance that we have for 2019 is investments that we've -- we want to make to drive future growth. I mean, Nicolas -- Andreas talked about Nicolas' business and the new core list that we've gained access to. In order to realize that potential, we've got to invest in resources, whether it's commercial people, boots on the ground, C&A resources, consumer insights and research, that's embedded in that -- in our guidance for 2019. It's probably 300 to 400 basis points of investment. If the year unfolds differently, we can certainly slow that down and make choices as we've done over the last 2 to 3 years as -- particularly in '16 and '17, we slowed back investment and we cut it back to try to mitigate the impacts of weaker top line. That will always be part of our management process and then trade-offs that we have to evaluate. Part of that 300 to 400 that I talked about is really playing catch-up, and while we -- as we progress through 2019, that's the first thing we'll do is say, are we on track from an external in looking viewpoint and what do we do as a result of that?

Our next question comes from the line of Jeff Zekauskas from JP Morgan.

Just a couple of questions on Frutarom. In your descriptions of the taste and scent business, you talk about local currency growth or currency neutral growth, but in the Frutarom business, you talk about 3% growth on a like-for-like basis. Can you remind me what like-for-like means? And how that factors in acquisitions or currencies or whether it does or it doesn't? And then secondly, Frutarom's sales were much higher in the first and second quarter, they were $385 million and $401 million. Why were the sales for Frutarom so much higher in the first and second quarters than they were in the third and the fourth?

You do the first one.

Yes, let me take -- I'll take the first one, Jeff. You're right, it's a different methodology. I mean, they've always used like-for-like. And we'll evaluate as we go forward if there is a way to combine the two methodologies. Like-for-like represents that if -- what they do is they then back in and say if there is an acquisition that was done in the middle of any year, they take the prior year growth and put it back, prior year sales and compare prior year sales for the acquisition to current year sales for the acquisition. So again, it's almost -- it's measuring on a pro forma basis as if the acquisition -- any current year acquisition was affected as of the first of the prior year. So they're looking at the organic growth of that business plus the organic growth of the existing businesses. So it's a slightly different methodology. It's almost like same-store sales. It is a bit different than what we're doing. But it was the most practical way for the time being for us to look at it on a combined basis.

Okay. And I think that's important that we have to, let's say, bring it all at the same level that we can compare apples-to-apples. Let me take the second piece of your question, Jeff, is on Frutarom first half to second half. Certainly, seasonality plays a role. Second, we had an unfavorable currency situation at the second half of the year as well because it's a lot of euro denomination in their sales. For the consolidation to our numbers, the three days we're missing because we closed on October 4. And then what we should not underestimate, particularly in the third quarter, that there was certainly a distraction of the organization to get the closing of the deal done. We are happy that we closed actually ahead of time, as we said, but that was certainly a couple of weeks or months even of the organization where they were more focused getting the closing done than selling to those customers. And then we're very happy and actually are optimistic because it turned around already in the fourth quarter and that's a very good sign. So that's the explanation for the sales first compared to second half of 2018.

Our next question comes from the line of Jonathan Feeney from Consumer Edge Research.

Just a quick one. Andreas, you're on the board, and I know, Rich, you were there, I think, you were controller for a lot of the cultural changes under Doug and Kevin that took place, I think, just focusing on more profitable briefs, like that's sort of business process stuff. Could you compare the culture at Frutarom and the integration challenges or integration opportunities you see just as far as the cultural organizing from most profitable, least profitable and basically risk adjusting, all of that, to what you went through back then? And if there is that kind of opportunity, how that plays into your synergy plan?

I would say, Jon, a very interesting and good question because here are certainly opportunities for us to look at the profitability of the different businesses. And we're doing it even much broader that we look into all categories and all customers right now. And we will present to the board in May by the way to look where we put our dollars behind and where we might walk away or make sure that we don't invest too much money to make sure that we're really going after the opportunities, which are giving us the best yield for our dollar. So that's good. In terms of the culture, what is good is that with the acquisition, we got a lot of energy from the company, which is very commercially focused and that will help us as well to focus on our customers and make sure that we get the best out of the customers and that we have a good service in place here as well. So that will be my answer, but Rich, you please supplement.

Yes. I think, Jon, it's -- in some ways, the fundamentals of the cultural change are similar in the sense that the biggest thing back under Doug, Kevin was a shift in focus and understanding from just top line growth to profitability and margins and accretive business, the whole EP focus. And I think I can clearly tell you that the Frutarom mentality, Frutarom DNA is all about profitable growth. And they focus on margins day in, day out. You've heard me take about their Executive Information System and they live through that day in, day out. They're focused on what are the -- what's the margin expansion, what's the mix improvement. So I think, from that standpoint, it's very similar in terms of we both companies recognize the importance of profitable growth. I think the challenge that we were going to have to manage through as an executive team is, now we have a much bigger business and the choices that we have are much bigger. And so we're going to have to manage through that because we don't have endless resources. So it's both a benefit and a challenge that now we have to allocate those resources and prioritize across a much wider spectrum of businesses.

And that was actually one of the reasons for the acquisition, as we said, we wanted to increase the option space for us because now, as Rich said, we can -- we have natural colors, we have health ingredients, we have food protection, we have flavors, we have fragrances, we've active cosmetics, and that gives us good choices. And actually, it helps us as well to balancing a very weaker global environment as well. So we believe it's good to have options, and we have no more options than we had ever before, probably more options than many of our competitors, and we believe that has positioned us actually in a very, very, very good spot. With that, I think, Mike, we will close the call for today, but I would like to remind you that we are at CAGNY next week. And we have a CAGNY dinner where we will display all of these new franchises and categories we have now in store, and we'll give you an explanation what we can do with it. And you can experience it, you can taste it, you can smell it, and we believe it will be great. So I hope to see a lot of you next week in Boca actually with much warmer and better weather. And you will see it will be spectacular. Thank you very much. Take care.

This concludes today's conference call. Thank you for participating. You may all disconnect. Have a great day.