At this time, I would like to welcome everyone to the International Flavors & Fragrances First Quarter 2015 Earnings Conference Call. 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. In order to give all participants an opportunity to ask their questions, we request a limit of one question per person. I would now like to introduce Michael DeVeau, Vice President, Global Corporation Communication and Investor Relations. You may begin. Michael DeVeau - Vice President-Global Corporate Communications & Investor Relations: Thank you and good morning. Welcome to IFF's first quarter 2015 conference call. Earlier today, we distributed a press release announcing our financial results. A copy of the release can be found on our IR website. This call is being recorded and will be available for replay on our website. Please take a moment to review our forward-looking statements. During the call, we will be making forward-looking statements about the company's performance, particularly with regard to our outlook for the second quarter and full year of 2015. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning factors that can cause actual results to differ materially from forward-looking statements, please refer to our cautionary statement and risk factors contained in our 10-K filed on March 2, 2015 and our press release that we filed this morning. 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. With me on the call today is our Chairman and CEO, Andreas Fibig; our Interim CFO, Rich O'Leary; our…

And your first question comes from the line of Mark Astrachan with Stifel Nicolaus. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: I wanted to ask about the FX impact to your expectations for the year. So the last time you had talked publicly about numbers, it was mid-to-late March, and now current FX rates are what they are, which is to say actually slightly improved relative to then. So could you talk a bit about sort of the dynamics at play between then and now to the impact that seems to be more significant than previously expected, and specifically talk to anything underlying that within the actual operating results in the business getting worse that would contribute to that? Andreas Fibig - Chairman & Chief Executive Officer: Rich? Richard A. O’Leary - Interim Chief Financial Officer: Sure. Yeah, Mark, when we talked in March, at that point in time we were probably in a $1.10, $1.12 range – $1.12 or $1.15 range based on the forecast at that point in time. As we indicated in the call, the current outlook is based on a euro rate, based on the April forecast and the April period in time which is about $1.08. So there is a bit of a strengthening. As you said, since the beginning of May, the euro has recovered a bit. That has not been reflected yet in our outlook, in the guidance that we just gave. The underlying fundamentals have not changed significantly in terms of where we are across the business. There can be some mixed impacts country by country. Also, the phasing of the – as I mentioned in the call, the phasing of the hedging contracts are more back-end weighted, and so that's why you're going to see more pressure in the first quarter and the second quarter. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Got it. Okay. And switching to specific geographies, what's causing the weakness in recent quarters in China and what are your thoughts on when and how it can look as we go through this year? Could it improve or what's sort of the impact there? Andreas Fibig - Chairman & Chief Executive Officer: Yes. Mark, I'll give this to Matthias.

Thank you, Mark. Well, in China, in line with what we hear from our own customers, we are positively optimistic. We see particularly larger accounts being softer in the overall performance. We see, however, also greater opportunities with smaller sized companies. As you know, we have expanded our footprint in China. We are now closer to smaller sized companies as well, and we are positively optimistic for the remainder of the year. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Okay. So maybe just broadly on China then, cautiously optimistic, what is the base that you're coming from? I guess, without a comment specifically on a country if you don't want to, it seems to me at least that sales may have declined in recent quarters. Is that a fair assumption? And then as you say cautiously optimistic, does that mean for a slight positive growth?

Yes, for a slight positive growth, Mark. In China, we did not experience quarter-over-quarter declines, with the exception of what we had in Q1, but it was a very modest decline. We also had some discontinued business, which we have started in Q4 last year as we had some business which cost (22:36) very profitable, but we are not going to report it separately. Overall, again, we remain positive. We have some challenges, and I think we are in line with probably what you will hear from our customers across the categories as well. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Okay. Thank you.

Hi, Mark. It's Nicolas. Regarding Fragrances, very solid performance in Q1 for China, and we remain also cautiously optimistic for the remainder of the year, with good performance with global – regional and global accounts. Andreas Fibig - Chairman & Chief Executive Officer: Okay? Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Yep. Great. Thank you, guys.

You're welcome.

Your next question comes from Lauren Lieberman with Barclays.

Thanks. Good morning. Andreas Fibig - Chairman & Chief Executive Officer: Good morning, Lauren.

Good morning, Lauren.

First, I just wanted to know, in the Q, I noticed there was a mention of extra selling days in the quarter. So did that have any kind of financial impact on the local currency sales growth reported? Richard A. O’Leary - Interim Chief Financial Officer: Yeah, Lauren. It had, I'll call it, a modest impact. The estimate is probably about a point impact in growth on the quarter.

Okay. And then if I hear correctly that the Ottens Flavors is not included in the outlook right now? Richard A. O’Leary - Interim Chief Financial Officer: Correct. It's not in the outlook.

Okay. So 4% to 6% top line is ex Ottens? Richard A. O’Leary - Interim Chief Financial Officer: Ex Ottens.

Okay. And then Latin America on Beverages, I know you had broad-based strength everywhere in Beverages, but that was the one market where you mentioned proprietary delivery systems. So I was just wondering if some of the wins you've had in Latin America, if that's reflected globally yet with those proprietary systems or if that's still isolated to Latin America, and should we think about that materializing this year if it's something that would come further out? Andreas Fibig - Chairman & Chief Executive Officer: Matthias?

Thank you, Lauren. Well, in Latin America, it was one of the first regions where we deployed our new technology. That's why also we had a much stronger growth performance versus other regions. We are seeing good traction in other regions as well. In Latin America, it's mainly for Beverages, but the technology as such is also very impactful when it comes to other categories such as gums, for example, where customers constantly are looking for differentiation, but also in Savory. We are very positive that we will see a good traction going forward also in other regions, though I have to say, even the last few quarters, the impact of new wins through this technology is material.

Okay. And just in that Latin America business in particular, was there any kind of pipeline fill, like that up 21% -- would you expect that moderates from here, that there was just some initial stocking on that (25:48).

I think it will moderate, but it's not a pipeline filling; it's just a lot of new wins which we had. Unfortunately, I'm not expecting the very same growth dynamics of 20% for the quarters to come. But frankly, while still early in the quarter, we also expect a very solid momentum in Q2 going forward in Latin America.

Okay. And just one last thing, if I may, on the guidance. Where I'm a little bit confused on including FX is that at least my recollection is that previous guidance was for 7% to 9% operating profit growth, emphasizing the low end of the range, but that included a 4% headwind from currency. So you said it was only 4% to 5% from currency, so it's one point worse, but I don't know why low single digits would be on the table for EBIT growth unless there's something I'm missing. Richard A. O’Leary - Interim Chief Financial Officer: Yeah. Lauren; you're right. I mean it's probably somewhere between a point – it's probably 1.5 point additional currency headwind based on the current outlook. As Andreas already talked about, reflected the outlook is initiating some of the investments that we've identified to drive long-term growth associated with the strategy. That's now been incorporated into the forecast that was not in the outlook at the beginning of the year as the work had not been identified yet. And I think the other part of it is that we're being, I'm going to say, cautious about some of the pressures that we're seeing in terms of price and input costs, particularly on the Fragrance business, as well as Fragrance Ingredients top line and a little bit of pressure on Fine Fragrances. And so there's a mix impact there also.

Okay. All right. Thank you.

Your next question comes from the line of Jeff Zekauskas with JPMorgan.

Good morning. It's Silke Kueck for Jeff. How are you? Andreas Fibig - Chairman & Chief Executive Officer: Good. Good morning. Richard A. O’Leary - Interim Chief Financial Officer: Good morning, Silke.

So the Ottens acquisition closed in May. And as the average operating margin is similar to what IFF reports, like it should contribute like a $0.05 to your earnings this year. Is that the way you see it? Richard A. O’Leary - Interim Chief Financial Officer: No. Silke, you also have to remember that we have to look at it on our basis and, basically, the purchase accounting related to the price we paid for it. So there's step-up in the assets and then there's amortization related to that. So I think the impact – we believe that the impact – we still have to finish that assessment -- but we think the impact from an operating profit standpoint will be a modest impact.

A modest impact. Okay. In terms of the negative price raw material issue, is the issue that the raw material cost curve is sort of flattish and your prices are down? Like I'd be surprised if your raw materials are up. Richard A. O’Leary - Interim Chief Financial Officer: As we talked about on the last call, where we're seeing the greatest amount of pressure is on the naturals in both businesses and then there's things like patchouli. But the biggest part of our portfolio are the natural ingredients. And that's where we're seeing upward price pressure, particularly in the Fragrance business, and that's more than offsetting any potential benefit we see down the road from oil-related derivatives.

Okay. Are your pricing trends generally flattish? Richard A. O’Leary - Interim Chief Financial Officer: There's some pressure on the Ingredients business, on the commodity end of the business. So it was not significant, but was down slightly in the quarter.

Okay. And I guess I have two last questions. So do you expect the Fine Fragrance business to be up year-over-year on a neutral currency base for 2015? And secondly, I was wondering whether – what your share repurchase goals are for the year. Thank you very much. Andreas Fibig - Chairman & Chief Executive Officer: Nicolas?

Hi, Silke. It's Nicolas. As you remember in Q1 last year, we came out at a very, very strong Q1 performance of 10%, and it was our very strong year-ago performance, especially in Europe of 19% and 29% in North America. So, Q1 faces a tough comparison. Moving forward, we expect momentum to improve in our Fine business.

Okay. Michael DeVeau - Vice President-Global Corporate Communications & Investor Relations: Silke, I think there was one more question you had.

Yes. And I was wondering whether you – what your share repurchase goals were for the year? Richard A. O’Leary - Interim Chief Financial Officer: We repurchased – as I said, we repurchased about $11 million in the first quarter. Our authorization at this point is based on a share price value matrix. And so for the time being, I would expect that that rate would continue given the current price levels or we expect that to continue certainly into the second quarter. We do our annual capital structure review with the board mid-year. But at this point, I would count on a similar rate than what we saw in the first quarter.

Thank you very much. I'll get back into queue.

And your next question comes from Faiza Alwy with Deutsche Bank.

Yes. Hi. Thank you. Good morning. So I wanted to ask about Fragrance margins. So I think there might be two dynamics at play, one is sort of the weaker Fine Fragrance performance, and then some of it might be ingredients. So I was wondering if there is a way to quantify how much was the impact from both of those factors, and then if there's anything else at play? And then how we should view Fragrance margins sort of going forward through the rest of the year? Richard A. O’Leary - Interim Chief Financial Officer: I think, Faiza to your point, I think the year-over-year performance for Fragrance is there's certainly an impact on the Fine Fragrance side from a mix standpoint. We had very, very strong growth in the year-ago quarter versus negative growth in the current quarter. So that's – I'd say that's probably the biggest impact of it. Second is, as I mentioned earlier, there is pricing input cost pressures which had a negative impact in the quarter. Those are probably the two biggest drivers of year-over-year margins.

Okay. So as Fine Fragrance performance improved through the rest of the year, we should see margins improve also? Richard A. O’Leary - Interim Chief Financial Officer: Yeah. I think you also have different comparables in the second – for the balance of the year last year, some of that will spin to offset each other going forward.

Okay. And then... Richard A. O’Leary - Interim Chief Financial Officer: (33:06)

Okay, great. And then, I just wanted to ask a little bit more about the increased investments that you mentioned in R&D. So should we expect the R&D ratio to be above the 9% range for the year or if you could just expand a little bit more on that? Andreas Fibig - Chairman & Chief Executive Officer: No. Faiza, this is Andreas speaking. No, we – you should not expect that because it's early days of our, let's say, implementing some of the steps for our refreshed strategy and it will certainly not go above 9%, that's very clear. But we do a couple of strategic hires for the programs we have selected and that's what we will present second of June to you, but it's not that this is crazy for the rest of the year.

Okay. Richard A. O’Leary - Interim Chief Financial Officer: And part of it also, Faiza, is on the commercial side also. It's both commercial and R&D resources.

Okay. And then just one last question, if you could just talk about currency impact for 2016, I know you told us before how much you were hedged and at what rate for 2016. So, I wonder if there's an update on that. Richard A. O’Leary - Interim Chief Financial Officer: At this point, where we are – our hedge program has obviously extended forward from where we talked about earlier in the year. Right now, we're about 40% hedged for all of 2016 at a rate a little bit above $1.10. Andreas Fibig - Chairman & Chief Executive Officer: And, Faiza, it's so volatile at the moment, the whole market that I think it would be a bit early to talk already about 2016. But let's talk about it when we are later in the year and we know a bit more when particularly the euro will develop.

Okay, great. Thank you.

And your next question comes from Jonathan Feeney with Athlos Research.

Good morning, guys. Thanks very much. My one question is you called out some strength in the Beverages business. And it's – I guess I know there's some new technology at play, but I kind of wanted to parse how much was that and how much was maybe other technology or innovation versus sort of the base business in your global Beverages business within Flavors? Thanks.

Good morning. This is Matthias speaking. Well, I cannot give you an exact rate, but I can tell you that majority of new wins are the results of health and wellness solutions. We have fantastic proprietary tools, which help taste – calories-reduced beverages taste better and we constantly make progress. It's not like we have few molecules and we only deploy them and we rely on the success of few of them. Over the last few months and quarters, the teams have made significant progress to come up with additional new solutions. And frankly, we feel really excited. So, first of all, the opportunities which we have; second also on the success rate; and third, on partnering much closer with our customers together.

Got you. Thanks very much.

You're welcome.

And your next question comes from John Roberts of UBS.

Good morning. Andreas Fibig - Chairman & Chief Executive Officer: Good morning. Richard A. O’Leary - Interim Chief Financial Officer: Good morning.

The decline in the North American Ingredients business, is that sales out of the U.S. or sales into the U.S. that declined? I should know that, but it's a simple question. And how much of the decline is, you're using more ingredients internally, or is the decline really all external market?

Hi, John. It's Nicolas. It's purely external sales and here it's very much targeted towards one specific segment of the market. So, we had some visibility into it and what we decided is not to participate in some lower margin business. And as you know, we have been rationalizing both our portfolio and our footprint in Ingredients, especially in North America. You remember that we had closed our manufacturing unit of August last year because we knew that we will be facing some pressure. So, it was a decision for us not to participate in some specific contracts. Richard A. O’Leary - Interim Chief Financial Officer: And, John, from a definitional standpoint, it's sales in the U.S. market, not exports from the U.S. market.

Okay. And I thought we were largely through that, so we'll have this comp issue now for another three quarters, sort of? Andreas Fibig - Chairman & Chief Executive Officer: For the year, you will see some pressure in North America for Ingredients and then that will be a new base for the future.

Okay. Thank you.

And you have a follow-up question from Mark Astrachan with Stifel Nicolaus. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Yeah. Thanks, again. Which quarter will be impacted by the extra selling days this year to offset the first quarter benefit? Richard A. O’Leary - Interim Chief Financial Officer: Fourth quarter, Mark. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Okay. So, it's similar expected impact, roughly 1%? Richard A. O’Leary - Interim Chief Financial Officer: Yeah. I think, yes. I mean, that's the best way to think about it. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Okay. And then Andreas, not to steal your thunder from the strategic refresh event in a month, but I guess you just need to think about FX being incrementally worse than where you were when you joined the company and then now to use incremental investments as it relates to refresh. Should we be thinking that there will be some offsets to come in terms of efficiency programs and like to basically be able to redeploy some of that? Andreas Fibig - Chairman & Chief Executive Officer: Mark, good question. We certainly look what can we do to fund the journey internally so that we reallocate some of our resources towards our new programs. And that's what we are doing. Secondly, we certainly look at, let's say, our footprint. And we already have, I would say, a pretty good natural hedge, but we have to look into it whether we can do some of these programs in areas where we have at the moment a euro exposure, like in Europe. And as you well know, we have around about one-third of our employee base in Europe anyway. So that's certainly in the cards to look into it, how we do it in the most efficient and effective way for us. So these are the things we are looking into. Mark S. Astrachan - Stifel, Nicolaus & Co., Inc.: Okay. Thank you.

Okay. The last question comes from the line of Curt Siegmeyer with KeyBanc Capital.

Morning. Richard A. O’Leary - Interim Chief Financial Officer: Good morning. Andreas Fibig - Chairman & Chief Executive Officer: Good morning.

Hey, just a couple more on the Fragrance side. You mentioned – I thought that you do expect a little bit of improvement on the Fine Fragrances piece of the business. Is there anything, I guess, a little bit more tangible or is it just more a function of easier comps as we move through the year?

I think it was easier comp. I mean, if you look at the growth of 10% last year in Q1, you know very well that the market did not grow 10%. And that growth really was primarily driven by new wins, but also by a customer pre-building inventory before the implementation of SAP, something that reversed itself over the course of 2014. So factoring that comparison and looking at the business over a two-year period, performance in Q1 2015 actually accelerated on a two-year average. As such, we will expect our performance to return to growth going forward.

Okay. And then just maybe one more on the margin for the segment as a whole. Are there any other levers you guys can pull? Or if you don't see any raw material relief, if it kind of stays at these levels, should we anticipate margins down year-over-year over the course of 2015? Or you mentioned productivity in sort of other maybe areas where there might be pricing opportunity, I guess. Is there any other levers you guys can pull there to offset some of the raw material pressure? Richard A. O’Leary - Interim Chief Financial Officer: Yeah. Curt, I mean, I think there's – we're always looking at – I mean, I think the levers that we can pull are looking at the spend and trying to be focused in terms of where that spend occurs and make sure it's focused on driving the business, whether it's on the R&D innovation side or in the commercial side to drive and accelerate the growth. From a productivity standpoint, we look at opportunities day-to-day in our manufacturing operations, whether it's the capital investments or process improvement, to try to gain some leverage and that's inherent in our model. And so I think those efforts will continue. We may have some pressure near term when you combine currency and in some of these new investments. But long term I think the model still works.

So you think then for the year, is it going to be tough to offset sort of the hole that we're in after the first quarter in terms of keeping that margin flat year-over-year. Would that be too difficult to get back to? Richard A. O’Leary - Interim Chief Financial Officer: Well, we're flat year-over-year as it is in the first quarter. So I think we've always said, look, we're not going to expect to have kind of margin expansion that we had in prior years, that's not possible. I think we're going to be challenged by some of the mix impacts on the Fragrance business, but I think there are some opportunities that we'll look at, but there is some challenges from a timing standpoint.

Got it. Great. Thanks.

This does conclude. I will now turn the call back to the speakers. Andreas Fibig - Chairman & Chief Executive Officer: Okay then, let me conclude the call. So we are pretty pleased with our first quarter performance, very robust in terms of 6%, which is certainly outperforming the market, which we expect 3% growth. We have given you our outlook for the rest of the year, so we expect that in currency-neutral terms, we will stick to our guidance. And we certainly have an opportunity, 2nd of June to update you on our, let's say, five-year strategy for 2020. Thank you very much for participating. And I hope I see many of you in New York here on 2nd of June. Thank you and good-bye.