Ladies and gentlemen, welcome to the International Flavors & Fragrances fourth quarter and full-year 2009 earnings conference. Today's call is being recorded. All participants will be in a listen-only mode until the formal question-and-answer portion of the call. Participants will be announced by their name and company, and in order to give all participants an opportunity to ask a question we request a limit of one question per person please. Now I would like to introduce Michael DeVeau, Investor Relations Manager. You may begin.

Thank you operator and thanks everyone for joining us. We me on the call today in Europe it’s Doug Tough, our Non-Executive Chairman; Kevin Berryman, our Executive Vice President and Chief Financial Officer; and Hernan Vaisman, our Group President of Flavors. Also joining us today in Europe is Nicolas Mirzayantz, our Group President of Fragrances. Our call is being recorded and will be available for playback on our Web site. Please keep in mind that during this call we may make forward-looking statements about the company's performance. These statements are based on how we see things today and may contain elements of uncertainty. For additional information concerning factors that could cause actual results to differ materially from forward-looking statements, I ask you to refer to the cautionary statement and risk factors contained in today's earnings release and in IFF's filing with the SEC. Some of today's prepared remarks will exclude those items that affect comparability. These items are laid out in our non-GAAP reconciliation, which is also available under the Investor Relations section of our Web site. With that, I am happy to introduce our Non-Executive Chairman and Incoming CEO, Doug Tough.

Thank you, Michael, and good morning, good afternoon and good evening to all of you on the call wherever you are in the world. As many of you will be aware, I have been elected IFF’s new Chairman and CEO effective no later than the end of the first quarter; that is the first quarter of 2010. While I am still finishing off my current commitments to Ansell and its shareholders, I want to take a moment to make some introductory comments today. I’d like to start off by saying I am very excited to have the opportunity to join the wonderful IFF team. I have been on the board for over a year now and have also been able to meet the top 40, 50 Senior Managers in our global organization. What I have seen has impressed me, as the team is passionate and committed to our customers and their needs. We have a very good line of sight on current and future consumer needs that are required to deliver sustainable growth. IFF has weathered the global economic crisis relatively well, and has emerged focused and stronger on a number of elements with the ability to further improve all attributes of our business. I am also pleased with the strong leadership that the executive team has shown over this period of transition. In a challenging economic environment they have worked as a strong team to make tough decisions and achieve fundamental improvements in our business, which has resulted in a stronger foundation, which will support a brighter future for our company. I would like to thank them and all of their teams for all they have accomplished during this transition period. They have done a terrific job of remaining focused to drive the improved performance over the second half…

Thank you Doug and hello everyone. Before turning it over to Hernan and Nicolas, I will give you some insights on the performance of our business units. I would like to provide a brief overview of our fourth quarter performance and some perspective on 2009 results. Looking at our quarterly results, the improved trends in our performance reported in the third quarter continued through the fourth. Our worldwide local currency sales again grew 2% plus year over year in Q4 as the commercial environment continued to show improvement versus the first half of 2009. The growth in the top line when combined with continued discipline in cost management supported a substantial improvement in margin as operating profit margin improved 310 basis points year over year. I feel it is important to note that roughly 100 basis points of this improvement was related to incremental R&D credits that our finance team realized through a collective effort over the course of the year. Given the success of these efforts and the resulting magnitude of these credits in 2009, we felt it was prudent to become more in line with current reporting practices and revise these credits from income tax expense to operational expenses. It is also important to note that this had no impact on our net income; regardless, an integral part of our improved margin has been the continued discipline management of controllable costs. In Q4, we again demonstrated our ability to improve operational performance while continuing to support key growth initiative in each of our businesses. The end result allows us to report adjusted Q4 EPS growth of plus 26%. Turning to our full-year performance; it is clear that 2009 turned out to be a tale of two halves. In the first half, our financial performance reflected the difficult operating…

Thank you Kevin and good morning and good afternoon everyone. As Kevin previously noted, it is clear that the operating environment in the second half improved greatly versus the first half of 2009. For the second consecutive quarter, the Fragrance business unit has posted solid local currency sales growth. In Q4, local currency sales grew 4% year over year, as accelerated pace of new wins in all categories drove performance. In the fourth quarter, Fine Fragrance and Beauty Care trends continued to improve. Local currency sales decreased 1%, the smallest decline of 2009, as weakness in Fine Fragrance offset strong double-digit growth in Beauty Care. Fine Fragrance did improve; however, it remained under pressure as strong new win performance globally was mitigated by market inflection in the developed markets. Within Beauty Care, toiletries and hair care posted strong double-digit growth driven by new win performance in greater Asia and Latin America. For the fourth consecutive quarter, we have seen accelerated growth in the Beauty Care category. Our success can be credited to a longstanding regional expertise and continued investment in consumer insights within the key emerging markets. This investment and category expertise are the primary drivers behind overall market growth and greater momentum. For the full year, Fragrance and Beauty Care sales declined 8% as a result of sharp declines in retail consumption as well as supply chain contraction in North America and Europe in the Fine Fragrance business. Despite challenging market conditions, our Fragrance team was able to successfully maintain our share position while improve our position for 2010 as new win performance was at record levels. I am very pleased and proud of the significant progress this team was able to accomplish. Functional Fragrance continued to perform very well growing 6% in local currency in the fourth quarter.…

As we previously discussed, a loss of non-strategic business continued to impact results. In Great Asia, local currency sales were up 5% as new win performance and solid demand in Beverage and Dairy drove results. In addition, Beverage results were positive as previously discussed customer specific volume weakness or inventory destocking was eliminated. I’d also note that the underlying growth during the quarter was stronger than our final reported figures. We did experience lower sales shipment at year end as it appeared that some of our customers conservatively managed their inventory levels. This trend has reversed itself in the first few weeks of 2010 and we are expecting growth to return close to normal levels in quarter one. On a full-year basis, local currency sales increased 2% plus. Greater Asia, Latin America and North America delivered solid growth resulting from new wins and price increases that more than offset weak economic conditions. Local currency sales in Europe remained constant as the economic slowdown and inventory reductions by our customers impacted our results. In summary, I continue to be pleased with underlying demand trend behind our local currency sales performance. As we have in previous years, the Flavor teams posted solid local currency sales growth despite adverse economic conditions. The emerging markets once again are driving our results as we made great improvement in the Savory and Dairy categories. Complementing the success and together with our Fragrance team, we opened three new state-of-the-art facilities in Shanghai, China; Sao Paulo, Brazil; and Moscow, Russia, positioning IFF to better serve these key growth markets. As we look at our cost structure, margin recovery efforts including price increases, cost discipline and improved operating efficiencies drove improvement. More specifically, gross margin percentage in Q4 improved approximately 190 basis points year over year. This helped support the Flavors operating profit margin as it increased by 340 basis points year over year to 17.4% in the fourth quarter. Looking ahead, we expect local currency sales to be positive once again in 2010. While we are entering Q1, we have started the quarter in a positive note. Consistent with the second half result, we expect to see solid local currency sale growth that when combined with our continued focus on cost control initiatives should result in continued margin improvement. I am pleased with the performance of our Flavor business in 2009. Looking ahead, our vision to create differentiation and brand value for our customers remains unchanged. We continue to support our customers' brands through brand superiority that will ensure that IFF Flavors delivers on its strategic intent to gain market share and expand margins. With that, let me turn it back to Kevin.

Thank you, Hernan. I would first like to cover our Q4 sales trends. Looking at the chart, it is now clear that Q2 represented an inflection point in our industry. It is encouraging to note that our underlying trends in the categories continued to either improve or remain firmly positive in Q4, and as a result, we finished the year with Flavors, Functional Fragrances and Fragrance Ingredients categories all recording positive local currency sales growth in Q4. While Fine and Beauty Care remained negative in Q4, it is clear that weakness in the Fine Fragrance category continues to dissipate. The key takeaway here is that there has been a marked improvement across the board reflected in our second performance. Fine Fragrance remains the only business that has not returned to positive growth territory; however, we are continuing to win in this profitable category by realizing a high percentage of new wins. We remain cautiously optimistic for this part of our business going forward. I would like to cover up on the other key drivers of our financial performance, specifically input costs, research, selling and administrative costs or what we call RSA and currency. Turning to input costs, we continue to see year-over-year increases in the P&L driven primarily by the fluctuations in raw material costs. In the fourth quarter, our input cost increases represented a 2% increase in our cost of goods. As communicated earlier in the year, we did expect this cost increase to moderate throughout the balance of the year. This did happen as input cost increases versus the year-ago period were less than what we had seen in the first three quarters of 2009. However, our input cost compensation was mixed; and our Flavors business unit, input cost prices were down as we finished working through our…

Kevin, thank you very much. (Operator instructions) We will begin with Jeff Zekauskas at JP Morgan. Jeff Zekauskas – JP Morgan: Hi good morning. Your capital expenditures came down this year from about $85 million to $66 million, and you have been – your volume growth profile moves along in general slowly and you have been closing facilities. So is it the case that your CapEx is going to stay at this level over the next several years or maybe even go down?

Good morning, Jeff. This is Kevin. Let me kind of respond to your question. I think in actuality we are going to be ramping up our capital to ensure that we are supporting where we are expecting to grow, and specifically as I alluded just briefly in the call in terms of our outlook for capital expenditures going forward given what we consider to be a more robust growth environment from the emerging markets, we are going to be supporting our growth opportunities there through some incremental expenditures. We are also currently spending against the restructuring plan that has previously been announced. So if I were to talk about the general view of our CapEx going forward, that will continue to be the normal maintenance spend to ensure that our facilities are operating at high efficiency levels, and there potentially could be some restructuring dollars more oriented against our developed market positions. But we will have incremental capital in the emerging markets to support what we consider to be a strong growth dynamic going forward in those particular key growth areas for us. So as I mentioned, we are talking about closer to a 4% number of sales going forward, and we would expect to be kind of in that neighborhood. Jeff Zekauskas – JP Morgan: So the level of – can you talk about -- can you quantify your levels of capital expenditure that you expect?

Roughly in the neighborhood of 4% of sales. So, we are at something like $2.5 billion in revenue. You can kind of calculate the number. We are getting close to the three digit number. Jeff Zekauskas – JP Morgan: Okay, thank you very much.

Moving on now to Mike Sison at KeyBanc. Mike Sison – KeyBanc: Hi good morning, welcome on board Doug. Just sort of a question for you, I know it is -- I can’t go into much detail, but when you take a look at the opportunity to improve IFF over time, are there any particular areas that you see the biggest opportunity maybe, is it the costs side, is that the top line side, or any other area that you have sort of observed over the last year?

Sure, a good question. I would probably answer it by saying I am pretty pleased with all that I have seen so far, maybe you would expect that given I’d come on to the board having done some due diligence. I think the company is – the overall goal that the company and the board have and I do too is really to grow the business profitably and I don’t make that as a trait statement, but the focus on growth is obviously a function of the top line and the profitability is both through the top line but also through what I think are some efficiency opportunities, Kevin touched a moment ago on some operational opportunities through restructuring which we have done in the past and we will continue to look forward to do so. I think the hallmark that I have probably noticed in my time on the board so far is really what the need will be to be discriminating in terms of the many growth opportunities that we have. When you take a look at IFF’s geographic footprint, and these are elements which attracted me at the offset, the diversity of our footprint from a country point of view, Flavors versus Fragrances, the channels, and also the variety of wonderful customers that we have there is really a tremendous opportunity for growth across all of those. They will all take resources, so we are going to be strategically discriminating on where we put those growth opportunities. Now obviously within the efficiency footprint, as I will work with the senior team and all those around the globe, we have to look for those productivity improvements. So and making the comment about growth being priority one, not trivializing for an instant the need to continue to get efficiencies which I would look, I think the whole team would look to do. And maybe the final comment really in response to your growth issue is really the challenge that the board has thrown against the entire management team that being to look at all avenues for growth, organic and also external, but certainly the good news from my point of view is that in evaluating the organic or internal growth opportunities that have been briefly touched upon by Nicholas and Hernan today, there are just a tremendous number of those internal organic opportunities for growth which I would look for us to maximize going forward. Mike Sison – KeyBanc: Great. And just a quick follow-up Nicolas, if you don’t mind; in terms of the Fine Fragrance business how has that business changed during this downturn? At some point, do you think the consumer will come back and view this as an item they would buy more or have there been any major structural changes in the way customers deal with you now, just sort of an update there? And just curious what the outlook would be for Fine Fragrance in your recovery?

Mike, this is Kevin. Before turning over to Nicolas, I think obviously we had commentary on that subject in the past. I think the way we are approaching Fine, though, just to give you an overall color is that we are cautiously optimistic on the business, but we are managing it in such a way that we are not assuming anything as it relates to that business going back to the days of old. And so we are being quite prudent in terms the management of the portfolio and how we add resources or not as the case may be. So our expectation is that we are going to be able to be successful from a margin perspective regardless of what the future might hold. So we are certainly managing forward from that perspective. So we are not leaning in front of ourselves, I guess, from that perspective. I think Nicolas would certainly have some additional color on in terms of kind of the consumer and the future of that business.

Hi Mike. Definitely Fine category disproportionately felt the impact of the external environment and very often in the category we talk about destocking at the retailer level. It was also at the consumer level. And we know that after two years of lot of innovation, consumers were in possession of several bottles of fragrances, and when we look at product rotation at retail and when we look at also the different face of buying we believe that the consumers were sitting on some inventory as well. So we probably have not seen them for quite a lot of time. I think that the prestige market has been most affected in North America, as you know, which was really the most challenging market last year. We are seeing some retailers -- we are seeing some brands trying to focus on different initiative either focusing on supporting some of the classic or trying to brining innovation. We understand that market is still soft and we had to focus ourselves on investing on strong business and creative fundamentals. Right now, we feel very positive about our new win momentum regardless of the soft market. Mike Sison – KeyBanc: Great, thank you.

We have a question now from Barclays Capital, Lauren Lieberman.

Hi, good morning. This is Ryan Bennett sitting in for Lauren today. I guess my big question really just deals with North America, and I was hoping you could give a little more visibility on that market. I guess, significantly we were a little surprised that sales decelerated sequentially, and then I was wondering if you could talk about what’s happening there, is there a divergence in trend in North America versus what you are seeing in Europe, and how much your outlook is for 2010 in that market?

Ryan, this is Kevin. How are you doing?

Good.

Any specific business or just from an overall perspective?

I think – yes, I mean, just generally all the segments, except Ingredients, just a little decelerated sequentially, I know the comp is a little bit tougher, but just wondering if there’s something happening in the market that we would expect it to be a quicker rebound just given what we are seeing with some of the customers.

Well, I think there are a couple of things. I don’t know that we are noting any change in trend. But I would say a couple of points, one of which you’ve already mentioned, relative to comp versus year-ago, fourth quarter it was actually a pretty strong year-ago period. So that’s one area. I think the fourth quarter was the only quarter a year ago where we had some solid North American growth. So I think that’s part of the deal. And I think the dynamic as you think about kind of Christmas and what’s happening from that perspective, that clearly plays a role in terms of what’s happening in that fourth quarter period. So though, flavors had a really strong quarter, fourth quarter year ago. So there was a slight change there in terms of comparing versus that strong quarter. And from a Fragrance perspective, I think it maintained – we maintained our position. Hernan mentioned it a little bit, but we did get a sense over the course of the quarter where some of our customers seem to have taken a position on inventories right at the end of the year as we were seeing some pretty strong growth and right at the end of the quarter things fell off. So it certainly appears that there was an impact there, different dynamic than what we saw a year ago. So I think that that’s playing a little bit of a dynamic in terms of comparing the numbers. If we look at kind of where we are right now in the preliminary trends as we kind of turn the corner into 2010, things are actually looking pretty good. So we are pretty comfortable that there were some inventory positioning being taken by at least some of our customers.

Great, thanks so much.

Sure.

Moving on to John Roberts, Buckingham Research. John Roberts – Buckingham Research:

My pleasure. Thank you. John Roberts – Buckingham Research: Could you give us your thoughts on acquisitions, either as you observed consolidation in the flavors and fragrance industry or maybe any relevant experience that you had in Ansell or in your prior positions?

Sure, and I guess as you can probably appreciate the company doesn’t make comment about any M&A activity. So I won’t even think about going there. I would revisit the brief that the board has understandably provided to the incoming CEO and probably any CEO, which is to evaluate any and all opportunities for growth. So I and the management team will do see that the industry has a number of wonderful competitors who frankly challenge each other which is a very healthy dynamic. The number of competitors is sizable that obviously the customer base as well as the consumer base around the world is huge and therefore it supports the kind of competitors that exist in the marketplace. So I admire them and I will come to understand them better going forward. But I probably would reiterate the challenge notwithstanding what the board has said, evaluate everything. When I have looked inside the company at the strength that we have in our people, the diversity of our customers, the R&D strengths that we have as well as the global footprints in Flavors and Fragrances, there is a tremendous number of internal options to pursue for growth which we will do as the number priority. To answer the second part of your question I have had extensive experience in M&A activity through both Ansell and previously. They happened to be very good strategic moves in the context of entering new markets and/or acquiring new businesses and new challenges. So I was to have had that experience and it seemed that to be very beneficial for companies. It is not necessarily a platform at all for going forward for growth at IFF. John Roberts – Buckingham Research: Okay, thank you. Then, Kevin, maybe just a follow-up, I think earlier you targeted up to $20 million in annualized savings from the recent restructuring beginning in the second half of 2010. The recent 8-K that you filed revising some of the management compensation objectives does that signal any change to that target either coming earlier or maybe having some upside?

No. Completely different in terms of – and not connected, but we’re continuing to work through that transition and at the end of the day it’s going to translate into us really thinking about 2011 being the full benefit. And we are currently in the midst of the final negotiations with our employee representatives Drogheda, Ireland. And so we are not even through that process and that certainly is important for us to effectively ensure we get through that process in a way that works for both parties. So the numbers that we are expecting may have some benefits at the end of 2009, but they really will be relatively small and really I would counsel you that suggest that it’s going to be more a 2011 benefit. The one last comment I would make is we targeted a $17 million to $20 million number, you quoted $20 million and I hope that’s the number, but certainly from our perspective that’s the range that we have communicated to you guys so far. John Roberts – Buckingham Research: Okay, thank you.

We have a question now from Edward Yang at Oppenheimer. Edward Yang – Oppenheimer: Hi Kevin, could you provide the local currency breakdown between pricing and volume by segment?

We can – we would be happy to share with you, kind of we have to go through that just because it’s that intensive now. So we will – Edward Yang – Oppenheimer: Okay, sure. I’ll take that offline. In terms of the outlook for 2010, just drilling down a little bit deeper, is 2% a good local currency run rate for 2010, and you mentioned some margin improvement, could you quantify how much you expect in 2010?

As you know, we don’t provide a robust level of guidance. But I would say the following. Certainly as you heard our commentary, we were talking about leaving 2009 in a better place than we entered 2009, and I think if you focus on what was transpiring over the balance of the second half you start to get a better idea of kind of how we are feeling about 2010. So the momentum that we were certainly seeing as we ended the year, we would expect that certainly in the beginning of 2010 we would be able to see that kind of momentum carrying forward. And as we suggested we will continue to be disappointed in terms of our management of costs such that regardless of what the top line is doing given certainly the economic volatility and uncertainty, let’s call it uncertainty as we approach 2010 we are going to be able to afford any investments in resources and R&D that will ultimately position us for higher levels of growth going longer terms. So I think we are feeling better as we enter 2010 and I think that we will see how that plays out, but certainly as we started the year we are feeling good because remember the fourth quarter was impacted by this kind of slowness at the very end where inventory positions were taken; so underlying trends continue to be strong. Edward Yang – Oppenheimer:

Okay. Significant questions in there. Let me try to deal with them little by little. The transition I would concur seems to have taken a significant amount of time. That was a function of a contract that I have with Ansell and the obligations that I have to the board to fulfill that contract. It would run through the early part of March. So we are clearly at the tail end. To build on parts of your question, I’ve used the opportunity to get to know the senior team quite. I’ve used the opportunity to read immensely to try to understand what are the critical issues going forward. But I've been a little faithful to my Ansell duties but also have extreme confidence which was well placed in the operating committee, the senior leadership team here at IFF who have stewarded the ship in an exemplary fashion. I am quite at the speed on issues through that reading and understanding and attending a variety of meetings, but all the credit goes to them. But I should hit the deck and I will hit the decks running in the not-too-distant future. Turning now to really the heart and soul of your question, the company is in a very good position with the current platform that it has. It took a number of difficult, but necessary steps during the last year to restructure cost management, margin management to come out of the year quite strong. Nicolas and Hernan have already touched about the broad scale, wonderful position our businesses find themselves in with the notable exception of fine, but that's well understood. So the geography that we have, the customer base, the cost rigger that’s been taken in the current R&D pipeline gives certainly me great confidence going forward that we can achieve what goals we need to achieve through, what I would call, non-transformational. Any CEO change and particularly operating from a position of some strength allows the company and the board to deliberate on any and all options, and they will be considered. I think the really good news in response to your question is that this company does not need to make any transformational moves out of a position of needing to do something critical in order to make its -- achieve its goals. That might occur but I definitely wouldn’t want you to bank on that, and that’s really a function of the great footprint we have going forward from an organic point of view. As I said, I'll hit the decks running. I'm quite knowledgeable on issues and delighted to be going to work with a wonderful group that already exist here. Edward Yang – Oppenheimer: Okay. Thank you for the insight.

We will take a question now from Sam Yake at BGB Securities.

Yes, hello, good morning. I a new analyst covering IFF, and I have to say like Mr. Tough, I am really impressed with the company’s potential.

Thank you.

I just had one quick question. It has been a historical problem that the currency is going to impact your results greatly, and I know that you were looking at possibly engaging in a hedging program. Do you have any thoughts on possibly hedging currencies in the future?

We're exactly evaluating that as we speak. I had discussions internally and certainly the discussions with the board as it relates to that effort. And so I would say philosophically that we need to make sure that we protect the economic dynamics of what can transpire from a currency perspective. I am less concerned about the translation related issues, although we all know that they have an impact. But we are evaluating that and to the extent that we do any particular work there, certainly we'll advise as appropriate.

Okay, thank you very much.

Now a question from Erik Sjogren at Morgan Stanley.

Yes, good morning, Erik Sjogren from Morgan Stanley here. First of all, very impressive cost control at the RSA costs, I think taking out the R&D credits, it’s roughly 100 basis points of underlying improvement here. Do you see this as a run rate now going forward if your savings programs continue to deliver, the top line growth holds up and the raw materials stay where they are?

How are you doing Erik? Good afternoon. I guess, I assume you're over in Europe these days.

Nope. Good afternoon.

All right, great. Thanks very much. And then if I could just follow up very quickly on the balance sheet, and obviously cash generation was very strong in the fourth quarter. So I think appears about two times net debt now. Could you give any comments on what kind of debt levels you are comfortable with or plans for investments going forward here?

Well, as you know and we’ve talked in the past Erik, we were committed to strengthening the balance sheet over the course of 2009 to the extent that we could and certainly we’ve done that. So I think that at a $1 billion debt level, which is kind of where we are right now and two times as you mentioned, we are feeling good about that position. We also know that we have some great growth opportunities. So we will continue to be focused on our working capital front, which hopefully should supply us with additional cash inflows. And that will ultimately allow us to have the cash to ensure that we are tackling those organic growth opportunities that are available to us. So I would say we’re certainly feeling much better about kind of where we are from an overall debt structure at this point in time.

Okay, great. Thank you very much.

With that there are no other questions in the roster. I will turn things back over to our speakers for additional or closing remarks.

Thank you all for your attendance today, and there was a follow-up question which comes through Michael DeVeau which we'll happily answer, and I will look forward to talk to you the quarter. Thank you.

Thanks once more for joining us everyone. That will conclude today’s call. Again, thank you for joining us.