At this time, I would like to welcome everyone to the International Flavors & Fragrances Third Quarter 2013 Earnings Conference Call [Operator Instructions]. I would now like to introduce Shelley Young, Director of Investor Relations. You may begin.

Thank you, operator. Good morning, and good afternoon, everyone, and welcome to IFF third quarter 2013 conference call. Earlier today, we issued a press release announcing our third quarter 2013 financial results. A copy of the release can be found on our website at iff.com. Please note this call is being recorded live and will be available for replay for up to 1 year on our website. Before turning the call over to our senior management team, I'd like to read our forward-looking statements. Please keep in mind that during the call we will be making forward-looking statements about the company's performance, particularly with regard to the third quarter and our outlook for the balance of the year. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning factors that could cause actual results to differ materially from forward-looking statements, please refer to our risk factors contained in our 2012 10-K filed on February 26, 2013, and our press release that we filed this morning, all of which are available on our website. Today's presentation will include non-GAAP financial measures, which exclude those items that we believe affect comparability. A reconciliation of these non-GAAP financial measures to their respective GAAP measures is set forth in our press release that we issued earlier today and on our website. With me this morning are Doug Tough, our Chairman and CEO; Kevin Berryman, our CFO; Nicolas Mirzayantz, our Group President, Fragrances; and Hernan Vaisman, our Group President, Flavors. Now I'd like to turn the call over to Doug Tough.

Thank you, Shelley. In the third quarter, we achieved strong momentum in many areas of the business, propelled by new wins in both business units and continued execution of our 3-pillar strategy. We are pleased with both our top line and bottom line growth momentum. We delivered local currency sales growth of 4% for the consolidated company, reflecting 5% growth in Fragrances and 3% growth in Flavors. Both business units benefit from a high, continued level of new wins which are meaningful since they continue to be based on our proprietary technology, the strength of our creation capabilities and our deep understanding of consumer tastes and preferences. Our overall performance was led by 8% growth in the emerging markets. For the first half of 2013, the emerging markets grew at 9.5%. Emerging market growth remains quite high and is more than twice the level of the developed markets. The BRIC countries grew at 9% this quarter, and we also had strong growth in Indonesia, Mexico, Turkey and Singapore. We continue to believe that our emerging market growth strategy is robust since it is based on providing Fragrance and Flavors to markets where consumer demand and engagement is growing based on increases in disposable income. This quarter, we also had strong growth in the more mature markets of Western Europe, including France, Spain and Germany. We are very encouraged by the progress we are making in growing all aspects of our portfolio. As you may know, we are not dependent on any one product, country or category for our growth. It is this diversity which provides us with more stability and enables us to achieve ongoing growth. To provide greater perspective on the top line, we entered the quarter knowing that we faced a more challenging comparison to the prior year.…

Thank you, Doug. Good morning and good afternoon, everyone. This quarter the Fragrance business unit delivered local currency sales growth of 5%, supported by continued high level of new wins as well as continued strong growth in the emerging markets. Looking at our Fragrance compound business, we delivered local currency growth of 7%, continuing the momentum we saw in the first half of the year. We are very proud of our strong level of new wins which have been at a consistently high level every quarter this year. We have been trending significantly above levels we achieved last year, and the growth we are realizing from our new wins in the first 3 quarters of the year are the highest we have ever experienced since the first quarter of 2011. This quarter the emerging markets contributed over 70% of the growth in Fragrance Compounds, with double-digit growth in Greater Asia and Latin America. We also achieved strong growth in the developed markets of Asia, including Japan; and Western Europe, including first and foremost, France, where we won a lot of new business this quarter. We also had strong growth in Great Britain. In Fragrance Ingredients, we are beginning to see signs of stability, reflecting many of the strategic decisions we have made over the past year. This quarter Fragrance Ingredients had flat year-over-year local currency growth with a majority of the product families reporting increased volume. This is an achievement in light of the migration of volume from Fragrance Ingredients to Fragrance Compound this quarter as mentioned on our last call. Just to give you a better perspective for the progress we are making, if this volume are not shifted to our Fragrance Compounds business, the Ingredient business will have shown 4% growth. We believe we will see more stability…

Thank you, Nicolas; and good morning, and good afternoon, everyone. This quarter our local currency sales grew by 3%. Although we were disappointed by the lower level of growth this quarter, which we considered to be temporary, we believe that our overall momentum remains intact and that growth will improve next quarter and be more in line with historical growth patterns. We said last quarter that we were substantially completed with the exit of low-margin sales activities. There was a small piece of volume from low-margin sales activities that were exited in the third quarter of 2012. And if we excluded this activity from the prior year's result, then the like-for-like growth for Flavors was 4% this quarter. This marks the 31st quarter of consecutive local currency sales growth for Flavors. Our local currency sales growth was driven by strong level of new wins and continued growth in the emerging markets. Looking at our new win rate this quarter, we continue to innovate on behalf of our customers to offer them solutions that address consumer demand for products with reduced sugar and salt while still providing them with preferred taste profiles and to provide them with authentic citrus flavorings that enhance customer's Beverage offerings. We continue to win new businesses based on these innovations. This quarter the strong level of new wins, which was in line with its historical levels, was offset by a higher level of erosion on existing business. Turning to emerging markets, they continue to be a growth driver for us. Although they did not grow at the robust level we have seen in the past, they continue to deliver growth that are propelling our business forward. We experience strong underlying growth in emerging market countries, including Indonesia, Thailand, Russia, Brazil and Mexico. Turning to the regions.…

Thank you, Hernan. And good morning and good afternoon, everyone. Again, turning to our third quarter 2013 financial results, I would like to provide some additional insight into the trends that we are seeing in our business. Third quarter revenue totaled $742.3 million, an increase of 5% from the prior-year period. Excluding the impact of foreign currency, local currency sales increased 4%. Although the exit of low-margin sales activities were substantially completed in the second quarter of 2012, as Hernan earlier indicated, there remains some minor levels of sales for these activities in the third quarter of last year. As a result, if we adjust our results for these sales activities, our consolidated growth would've been 5% on a like-for-like basis, which puts us right in the middle of our long-term growth objectives. The overall growth reflects a balanced mix between our 2 business units, with Flavors growth of 3% and Fragrance growth of 5%, based on a continued, strong level of new wins across both business units. The emerging markets continue to perform well, up 8%, and they're up 9% year-to-date on a local currency basis. We believe the diversity we have in all 4 regions of the world and our investments in our organization will continue to fuel our long-term growth. We are very pleased with our strong momentum in all geographic regions, especially Western Europe, where Fine & Beauty Care delivered double-digit growth this quarter. The BRIC countries generated local currency sales growth of 9% and 14% for Fragrance Compounds. Local currency sales growth in China increased strong double digits for Fragrance Compounds as well. The developed markets also performed well, including France, which reported strong growth in Flavors and Fragrances. Adjusted gross margins for the quarter increased 170 basis points to 44.2% in the third quarter…

Thank you, Kevin, Hernan and Nicolas for the comments. We are pleased with our momentum on both sides of the business and believe we are well positioned for growth both due to our steady pulse with product innovations, our infrastructure and our feet on the ground in the faster growing markets, our relationships with both our global and regional customers as well as our deep consumer knowledge of global consumers and innovative solutions on how to drive consumer engagement. Looking forward, we expect to be able to deliver continued growth in the fourth quarter, noting that we will be comparing our performance to a much more challenging quarter and that the environment still poses certain challenges. We have started the fourth quarter well and are optimistic about our forecast. We have the right teams in place to continue to provide customers with superior customized products that deliver improved performance to consumers. Our perspective for 2013 remains in line with our long-term growth targets. We expect to deliver local currency growth in the range of 4% to 6%, supported by continued new wins and volume growth in the faster growing and more mature markets. We expect to grow our operating profit in line with our long-term growth targets of 7% to 9% as we continue to stress efficiency in all that we do, exercising financial discipline while nonetheless investing in required growth activity. And finally, we are optimistic that we will be able to deliver greater than 10% earnings per share growth. In conclusion, we believe our strong performance at IFF this quarter is the result of strong execution of our strategy to leverage our geographic footprint, strengthen our innovation platform and maximize our portfolio. We believe we are very well positioned in the market, and we plan to continue to selectively invest in those areas where we see the most growth, whether in regions, countries or categories. We continue to focus on executing our 3-pillar strategy. Thank you for your participation. And I will now open up the call to questions.

[Operator Instructions] And your first question comes from Mark Astrachan with Stifel, Nicolaus. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc., Research Division: I guess, Doug, curious what your interpretation of the word moderate. What does that mean for fourth quarter growth? I guess, my math suggests you need 2% to 3% in fourth Q to hit the low end of sales growth target. Maybe just a little bit of color there would be helpful, please.

Sure, Mark. I'll be glad to provide the color. I guess, just a couple of generation comments. I think we probably categorize this quarter as moderate as well. And you're trying to dimensionalize some targets. But I think I want to just put into context a couple of things and tie them together which have come out in this morning's call. I mean, I think we've touched upon -- the last year in Q4 of 2012 was our most challenging. And on a like-for-like basis, Fragrances is going up against 13% growth and Flavors is going up 7%, which are significant targets. So that was kind of the context of putting in moderate. We expect as we've kind of achieved the year somewhere in the range of 5% YTD through the first 9 months we'll end the year generally in that range as well. So our context of moderate is still satisfactory results and ending up in the range, but we're cognizant that we've got the most stretching target. But the last comment here is looking at our Q4 order book progress to date, it's very positive on both sides of the house. And it's most encouraging on Fragrances so far because it's up against the most challenging target. But Hernan has already touched upon the expectation that there'll be a resumption of more traditional growth above what we did in Q3. So putting them all together, we're optimistic. But it's early. And the one other complicating factor is a lot of companies, including this one, were slightly disrupted year ago by the hurricane which hit the East Coast, so the comparability to the order book isn't going to get sorted out for a couple of weeks yet. But so far, what we see is quite positive. So moderate, Mark, is really quite encouraging and an expectation of broad continuation of what we've done, YTD. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc., Research Division: That's great. Maybe just a follow-up then from a Fragrances standpoint. Nicolas, so positive local currency growth in the fourth quarter in spite of the comparisons, is that reasonable then?

Yes. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc., Research Division: Great.

That's the trend, the way things are going, Mark, yes.

And Mark, really, as I have mentioned, it's continued momentum and good traction in Compounds and somehow muted by the strong comp from last year, but the momentum is still there.

Your next question comes from Michael Sison from KeyBanc Capital Markets.

Nicolas, could you comment on sort of the order patterns heading into the holiday season for Fine & Beauty? What type of growth or -- that your customers were looking for, for the holiday season?

Look, it depends where you are around the world obviously; and it's very, very different region to region. Obviously, our numbers are augmented by a very, very strong pipeline of new wins this year. We had a very strong new wins of activity. But overall, the overall order book is positive, but people obviously remain cautious for the holiday season. Now I understand that there are some pockets of pressure in different parts of the world, but this is offset by a good pipeline of new wins for us.

Okay, and a quick follow-up. Fine & Beauty in North America was down for the first time. Was that sort of just a one-off in the quarter?

I think that you have to take into consideration 2 different dynamics, Michael. First, the strong comp of 12% last year, number 1. And also, it's coming on the heels of also a very strong second quarter at plus 13.5%. So probably, some of the launch we have some early intake for the pipeline. So we were putting these 2 quarters into perspective but also compared to last year. And it is true that a lot of the new wins intake and measure initiatives impacted us positively in Q2, and we have the same magnitude of intake for Q3.

[Operator Instructions] And your next question comes from Jeff Zekauskas from JPMorgan. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: This is Silke Kueck for Jeff. The first question I have is that what sort of interesting when I look at your 9-months result is that the North American local currency -- or I'm sorry, the Latin American local currency comparisons have been strong very year-over-year. They were great last year, and they are great this year. And similar for Greater Asia. But in North America, it seemed like for the 9 months last year North America didn't really grow. And for the 9 months this year, it didn't really grow. So one of the question is just like what happened? And are you optimistic that these trends should improve and why? And I have one follow-up to that.

Silke, is your question skewed to Flavors, Fragrances? Just guide us a little bit, please. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: I looked at it just on a combined basis. I just looked at North America in total for like the 9 month last year versus the 9 months this year. And it just sort of like didn't grow in either period or maybe grew a little bit last year and like for the 9 months really didn't grow at all this year.

I think that -- Silke, it's Nicolas. I think that we're getting tractions by getting access to more quality [ph] opportunities, new business opportunities. We have to remember for some categories some customers are manufacturing in North America for the rest of the world, so there are maybe also related to some performance of some of our key partners. But overall, we're getting traction, and we're getting access to more business opportunity. And the pipeline of new wins for the future and the pipeline of new projects that we're working on is strong and healthy. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: Okay. So if I understood that right, it seems that some of your larger multinational customers are also shifting manufacturing from the North American region to someplace else, and that's sort of like reflected in your regional performance as well?

No, that's not what I meant. I said that some customers are manufacturing in North America for the rest of the world, so some challenge that might be seen in some parts of the world are affecting our local sales in North America. Silke Kueck-Valdes - JP Morgan Chase & Co, Research Division: I see. And my follow-up is this. I was wondering whether you're sort of like caught up in terms of compensation accrual for the year and how you think your fourth quarter global corporate expense -- what it may look like and whether it's like a double-digit number or like a single-digit expense number?

Silke, this is Kevin. Just a couple -- a follow-up question on your first -- follow-up comment on your first question as well. The other thing that you have to remember is that a big impact on the Flavors business in North America was this exit of lower margin sales activity. So that was a big impact on our year-to-date figures. I think it was 6 or 7 percentage points of growth in Flavors. So you have to really take into account that dynamic because that was one of the material impacts in Flavors. So you take that and that will fundamentally improve your North America numbers at a pretty material level, 3 to 4 percentage points, I would say, on a consolidated level. That's first comment. Second comment is as we look at Q3 quarter to date, as we have said in the past, we kind of true-up our performance levels through the quarter depending upon how we are performing at that particular point in time. So our true-up in the final quarter of the year relative to incentive comp will be dictated by how we perform in the fourth quarter. I will say that one point is that as we've talked all year long, we were concerned about our plan and our execution in the fourth quarter relative to our fourth quarter local currency sales growth because of the strong comparability issue that has already been highlighted. And given the renewed outlook that we have or revised outlook, which shows us coming in levels that are more in line with kind of our year-to-date figures, you can pretty much assume that, that will require some incremental incentive comp in fourth quarter could the expectation would be that we will be growing faster than what we would've originally envisioned.

Silke, it's Hernan. One more comment following your question regarding North America. I mean in some way complementing what Kevin mentioned. If you go like-for-like basis, in last year North America Flavors has a growth of double digit. And this year, like-for-like is 6%. So I could say that the performance of North Africa Flavors in the last year was very really, very positive.

Your next question comes from Mark Astrachan with Stifel, Nicolaus. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc., Research Division: I feel bad ignoring, Hernan. So 2 questions for you. Some thoughts on Asia Flavors in the third quarter. Maybe just talk sort of broadly about what you're seeing over there. And then how much of the impact in the quarter was the slowdown that you alluded to in India? And then just more broadly, from an operating margin standpoint, so you're now basically done lapping the exit of the low-margin businesses. The operating margin was up year-on-year. It was just up less than we've seen in prior quarters. So I guess, I'm just trying to get a sense of whether this is a good run rate going forward or not?

Okay, Mark, let me start with the first one. Obviously, I mean, Greater Asia was not growing as quickly as they had been in the past. It's still have been growing a very solid path. I will say you have -- we have been in this quarter a kind of mixed bag. They were countries, as I mentioned before, that were doing pretty well, like for example, Indonesia, that is really delivering very good growth. India is a matter of concern. I mean, we -- everyone, not only IFF, is recognizing that the economy is hitting severely in the country. We used to grow at the high double-digit, and we are now in the mid-single digit. And we don't see that it's going to recover in the short term, but it's not forever. We still believe that the growth story in India is still there, and we will be there for many, many years. So we say it's a kind of mixed bag. And now as mentioned by Doug and myself, the orders in hand, order book, is much stronger at the back of some slowdown in the third quarter. So as already commented, we saw some slowdown, but we strongly believe that our fundamentals and the fundamental of the emerging market will be there for many times -- for many years to come. And regarding your question in margin. As you can see, I mean, we really delivered a very high -- I mean in gross margin. We always strive for improvement. Of course, when you get at that level, it's becoming kind of uphill. But then we in every single year, we work out with the teams initiative to improve productivity. So we believe that even though at the very high level we have some room to improve.

And I'm showing no further questions at this time.

Thank you very much for your participation in reviewing the IFF third quarter results. We're confident with our strategy, and we look forward to updating you in 3 months on Q4 results. Thanks very much.