I would like to welcome everyone to the IFF Fourth Quarter and Full Year 2022 Earnings Conference Call. All participants will be in a listen-only mode into the formal Q&A portion of the call. [Operator Instructions] I would now like to introduce Michael DeVeau, Head of Investor Relations. You may begin.

[Audio Dip]

Good morning to everybody. I want to start today's call by recognizing our teams in the incredible work they've done throughout 2022 to bolster IFF's industry leadership and also to continue delivering innovative solutions for our customers amid the challenging operating environment. As part of our Investor Day in December, we unveiled the next phase of our strategic transformation including our strategic priorities and a refreshed operating model that will better position IFF to drive long-term profitable growth and capitalize on the market opportunities ahead of us. The plan seeks to maximize our competitive advantage and ensure that we are operating as an even more innovative, efficient and disciplined company. As we delivered solid 2022 result and 2023 is in full swing, I’m pleased to share that we are advancing key elements of this plan and excited to update you on today's call. It is a true privilege to work along such talented and dedicated colleagues. Across our global platform, it is clear that our teams are committed to IFF's continued transformation as we delivered unmatched innovation, service and quality in the solutions that meet the needs of our customers, both today and tomorrow. Now on Slide 6, I'd like to reiterate the financial and strategic initiatives central to the strategic refresh that we were discussing during our Investor Day last December. Following an extensive assessment with our key stakeholders, including our customers, shareholders and key partners, we've identified several top priorities that will guide IFF's next chapter. First, we're focused on jump-starting even stronger growth across the business. There's no question that our robust portfolio provides a clear strategic advantage by doubling down on customer excellence and making strategic investments in the opportunities that will reap the greatest returns for our business will be better positioned to drive sustained…

Thank you, Frank. Greetings, everyone. Let me add my apologies for the technical issue. You should have seen we're both sweating. So I'll start off by just reiterating, as Frank mentioned, the financial and operational initiatives we implemented during the year, they have proven valuable in helping buffer the broader economic headwinds. But at the same time, we recognize, while we've taken some important steps, we have not fully delivered against our financial objectives. We recognize we have more room for improvement to realize our goals and create a more profitable organization, and I assure you we continue to be intently focused on this going forward. Looking at fourth quarter results, IFF generated $2.8 billion in sales revenue. On a comparable currency-neutral basis, sales were up 4% for the quarter with growth achieved across nearly all divisions. Our adjusted operating EBITDA in the fourth quarter was $441 million, and our comparable currency-neutral adjusted operating EBITDA declined 5%. As it was significantly impacted by lower volumes more than anticipated, which led to meaningful impact from negative manufacturing fixed cost absorption despite continued strong pricing and productivity gains. Because of this, we saw a year-over-year decline of approximately 200 basis points to our adjusted operating EBITDA margin. Despite being partially offset by lower effective tax rate, our Q4 EPS ex amortization was 12% lower due to lower adjusted operating profit. Currency headwinds also present a significant challenge in the quarter with a 7 point adverse impact on sales and an 11 point adverse impact on adjusted operating EBITDA versus the prior year. Encouraging recent trends within the currencies have been promising. Clearly, a difficult market environment has weighed on our performance in the fourth quarter. However, I am confident in the steps that IFF is taking as part of our strategic refresh…

Thank you, Glenn. Before I open the call for questions, I want to take a moment to reflect on what has continued to make IFF a strong, resilient organization and a category defined leader in our industry. I joined IFF almost a year ago and in an important moment in the company’s transformation and while our global business sought to navigate an incredibly complex operating environment. As I’ve mentioned before, what attracted me to IFF was its enterprise-wide purpose to apply science and creativity for a better world. Since then, I have seen this purpose serve as a guiding light as we have continued to build out our teams, expanded in new markets and strengthen our innovation portfolio and pipeline together. In 2022, we have executed tough pricing actions, rolled out new productivity initiatives and found successful ways to optimize and streamline our portfolio. So we’re investing in areas that will generate growth, enhance our profits and reduce our debt. Most significantly, we have unveiled our refreshed growth strategy and our focus on carrying out those initiatives to ensure we are delivering for our customers while also creating strong returns and sustained profitable growth into the future. Our teams here at IFF have rallied to meet the challenges in front of us, and I’m confident in our future heading into 2023 and beyond, especially based on the excellent reception from all of our stakeholders following the announcement of our strategic refresh in December. Although, we entered 2023 with a cautiously optimistic outlook, I am confident that we have the strategy and the people to address any challenge and deliver long-term value for shareholders and other stakeholders. IFF continues to play an essential role in the daily lives of so many people around the world, and I’m energized by the unique opportunity in front of us. IFF has built an incredible foundation as a trusted partner with world-class talent, a robust R&D pipeline, broad portfolio, and I’m confident that our refreshed strategic framework and new operating model will allow IFF to increase our customer centricity, more closely align with today’s marketplace and deliver most efficiently for our customers around the world. With that, I would like to now open the call up for questions.

Absolutely. [Operator Instructions] The first question comes from the line of Heidi Vesterinen with BNP Paribas. You may proceed.

Good morning, everyone. So the first question, why should we believe your full year guidance if you’re having to downgrade guidance by such a magnitude in a space of two months? And then I have a separate question on portfolio moves, if I can squeeze another. Are there now more options for you now that it’s been two years since the DuPont merger? Thank you.

Heidi, it’s Frank, and thanks for the question, and it’s really an important one. One, we did provide in our Capital Markets Day a preliminary view into 2023. With that said, I think we all feel that we own some of which you’ve mentioned maybe the change. And let me unpack what has happened and especially in Q4. As we went through Q4, Heidi, we had assumed that we would have mid-single-digit volume decline. And as you saw now our full quarter four results, we ended up having growth of 4% overall, but we saw high-single-digit volume decline. We saw that change really accelerate the decline in the month of December, in particular, Heidi. I had spoken about what we were seeing in the Health North America Probiotic business, also parts of our Nourish business, Ingredients and Protein Solutions. And in fact, in the month of December, we did see many of those businesses have double-digit volume decline primarily due to destocking. There is some end market demand impact as well. So when we saw the volume changes in particular that came through in December as well as the impact that it had on our manufacturing cost and absorption, we felt as though we had to really take a look into 2023, obviously, as we’re coming out now to guide. As I look at the trends in January, they are continuing to be very similar, Heidi, to what we saw in December. So when we think of the first quarter, especially against our first quarter comparison where we grew last year 5%, we have made the assumption that this is going to be a challenging first quarter, similar trends as what we have seen in Q4. And then as we get into the first half of the year, we also…

Thank you.

The next question comes from the line of Gunther Zechmann with Bernstein. You may proceed.

Hi. Good morning. I’ve got one for Glenn please, if I can. Glenn, could you help us reconcile what the difference is between the $600 million of the adjusted free cash that you disclosed? And we actually ended up, which is essentially flat. And then going on from that, can you talk us through the drivers for improvement in 2023? How confident are you? And I’m thinking about the $1.5 billion free cash that you outlined at the CMD in December last year, please?

Yes. Thanks, Gunther. So first of all, to reconcile for 2022, our GAAP free cash flow was negative $160 million. We had approximately $300 million of deal-related integration restructure. So on a like-for-like adjusted basis, that’s roughly $150 million positive versus the $600 million. So the $450 million difference we had communicated last year – the largest by far is working capital. We were $300 million higher on working capital for the year. The inventory of that driven by higher inventories, the total increase in working capital was nearly $1.1 billion for the full year. So it was a significant drain on our cash flow. We also – the earnings were shorter than we had anticipated, and there were some miscellaneous items, but the largest by far is working capital, which then goes to your question regarding 2023. The big swing for 2023 is largely going to be driven by the working capital area of focus where it was a use of $1 billion plus last year. We expect it to be neutral to slightly positive. The biggest focus there is obviously within the inventories, which is the biggest component of our working capital, and that decision to focus on generating $1 billion plus of adjusted free cash flow will put some pressure on the P&L. So we’re taking a hit for some negative absorption and fixed costs because volumes actually will be lower than sales. So we actually can have a decline of year-over-year production volumes, negative absorption. But basically, that is the big driver. Cash interest, cash taxes, CapEx largely will be flattish year-over-year, but the biggest difference by far is the focus on our working capital and namely inventories.

Got it. If I could just follow up a quick one. How much of the inventory reduction would be driven by lower pricing from raw materials? And how much room left to participate?

Yes. Good question. We’re anticipating $350 million to $400 million of reduction from volume and about $150 million increase in price. So think about that as basically, I’ll call it roughly $200 million-ish of reduction of absolute inventory, which is $150 million increase in price and about a $300 million increase – or decrease or so driven by volumes.

That’s great. Thank you very much.

Thank you.

Thank you.

The next question comes from the line of Mike Sison with Wells Fargo. You may proceed. Mike, your line is now open.

Hi, guys. Can you hear me? Can you hear me?

We can.

Yes, Mike.

Yes. Sorry about that. Given recent commentary from consumer products companies, your peers, any insight into your performance in North America and China, both look notably weak relative to some of these comments. Thank you.

Yes, Mike, I’ll take this one. It’s Frank. For China, for the quarter, we did see sales down approximately 4%, Mike. So you’re absolutely right. It was another tough quarter in China as we continue to manage overall the lockdowns and then the reopenings and then some of the COVID impacts that we’re seeing throughout China. So China is still, for us, is a cautious, I would say, market. And as you are well aware, that is our second largest market. So that’s something that we are really continuing to work with our teams there. If you look at North America, you see a little bit of a tail of a couple of different stories. Mike, for the full year, we did grow 5% in North America, but we did see an impact in Q4 of 4% decline versus prior year. And that really speaks to what we saw overall of the impact it’s had in particular in Nourish, which was down approximately 4%. And then also, we saw the significant reduction in North America in the Health Probiotic business that I’ve mentioned, and that actually had H&B down in North America as well. So those are the two, I would say, dynamics in both China and in North America and in particular, North America, I would say more to destocking as we saw a big hit as we’ve been discussing here in Q4.

Thank you. The next question comes from the line of Josh Spector with UBS. You may proceed.

Yes. Hi. Thanks for taking my question. So just thinking about raw material inflation specifically, I guess, first, what’s your assumption on the percent increase for this year? And I guess if I look at fourth quarter and how you’re talking about first quarter, your top line is kind of the same. So your pricing is better. Fourth quarter, you saw some positive price cost dynamics. I guess why aren’t we seeing that in 2023? And what are the things we need to watch for in terms of better or worse inflation? Thanks.

Yes. Josh, good question. So let me unpack the roughly 6% inflation expectation for this year. That’s about 70% raws and zero logistics and the residual 30% energy. Energy, by the way, is highly volatile. So that generally is moving more favorable than when we put the plan together, although an awful lot of our energy pricing is now through surcharges. So we’re sort of hedged one way or the other relative to that. So I’ll focus on the 70%. The other thing I would note that remember the first quarter will be impacted by the inventories from last year. So sort of what hits relative to our cost structure is really already baked into sort of what’s sitting in the plants to some extent. We are expecting actually fairly ratable i.e. price equals costs pretty much quarter-to-quarter relatively neutral. So we’re not expecting any sort of big upside or downside. And part of that’s the pacing of the inventories as well. I would say that we are seeing some early signs of deflation on the raw side. However, there are certain commodities that actually have seen more increases, but I would say that you could maybe be a little cautiously optimistic that we probably have seen the peak of inflation in raws and the back half of the year may be experiencing maybe some deflation, which will be favorable for the business. In general, our pricing is pretty much locked in for the year. Most of our pricing is beginning of the year or contractually based on indices that are tracked. So I think the pricing dynamic, the pricing risk is not as significant relative to what’s locked in. Of course, if there’s a rapid level of deflation in the second half of the year, we would adopt relative to our customer dialogues and pricing actions against that. But I would say I’d have a slight lean towards a little more optimism in terms of the price/cost dynamic this year versus last year.

Thank you. The next question comes from the line of Ghansham Panjabi with Baird. You may proceed.

Thank you. Good morning, everyone. Given that it’s clear that consumer is exhibiting greater elasticity, just given the extent of price increases, a lot of your CPG customers have been instituting. Frank, just based on your direct conversations with customers, do you sense that there will be a change in their price or volume strategy as we push further into 2023? And just your sense as to how the elasticity dynamic varies globally?

Yes. Ghansham, thanks for the question. We do anticipate just as you think about what we saw in Q4 to continue as I mentioned, in Q1. The elasticity question is a really important one. I would say that most of what we are seeing and in discussions with customers, you’re seeing some trade down with regards to quantities. You are seeing some trade down to private label, but it’s not significant. I mean it’s in different parts of the world. I think you’re seeing more price elasticity honestly, in some of the Asian markets, where clearly, you’re seeing some trade-offs there. But overall, we’re not seeing significant trade-offs at this time. With that said, many of our customers are expecting, and I think you’ve seen some of them announce that it’s going to be likely a continued challenging first half of the year from a volume perspective. They are continuing to increase prices and I think that’s going to continue as well for the foreseeable future. So that’s at least at this point in time, how I kind of see the elasticity question. We’re seeing some in Europe, one last geography I would mention, but nothing significant to really point to in other geographies.

Thank you. The next question comes from the line of John Roberts with Credit Suisse. You may proceed.

This is probably for Glenn, so I’ll just ask them together. Frank, I assume you’re still interim head of Nourish. Can we get an update on that process? And did less new wins or a slowdown in new products contribute to the lower volume in Nourish? And then, Glenn, I have in my notes that there were two other small divestments expected to be announced by the end of this quarter, I think, totaling about $300 million in gross proceeds. Is that still the case? And you didn’t provide EPS guidance. So could you talk about how EPS dilution or accretion could play out as the deals close through the year?

John, it’s Frank. I’ll get started. So one, no, we do not think that the volume declines are specific to any transition in Nourish. I think they’re much more market-driven as we’ve been discussing around destocking. And in fact, in our Flavors business, which is one of our most important businesses. I think we’ve honing very well versus competition. As far as the process, I am working very urgently, John, to get that position filled and my hope is to be able to announce something very shortly on who will be leading theirs going forward. Glenn?

Thanks. Good morning, John. So just a reminder, a year ago, we had talked about four transactions in total with a probability of $1.5 billion to $1.7 billion in gross proceeds. We announced the largest of those transactions in Savory Solutions, which will be over $900 million of gross proceeds in the fourth quarter. And we’ve mentioned we have two other sort of in the near window. We do believe one of them circa $200 million more likely than that. It’s not final will be announced within the quarter. The other two deals, which are relatively small, we are putting on hold. The reason is we are, at this point, actually taking a more comprehensive review of our portfolio and want to focus on sort of what makes sense sort of longer term relative to the overall portfolio. So our efforts are really against the larger portfolio opportunities at this point versus the residual. But I do anticipate between the Savory Solutions and the latest probably $1.1 billion-ish or more of gross proceeds. Relative to full year EPS ex amor, it’s likely to be down circa 15% that’s really driven by the dynamics of the first quarter versus prior year. For the balance of the year, it will be flat to modestly up for the last three quarters of the year. Thanks, John.

Thank you.

Thank you. The next question comes from the line of David Begleiter with Deutsche Bank. You may proceed.

Frank, with the change in the 2023 guidance relative to the IR Day, does this change your expectations the 2024 to 2026 period in terms of 4% to 6% sales growth and 8% to 10% EBITDA growth. And just on the productivity program, I know you’re looking to accelerate it. Any plans potentially to expand it as well? Thank you.

Yes, David, thanks for the question. So the answer is we’re still sticking with what we talked about at Capital Markets Day, the 4% to 6% top line growth, 8% to 10% EBITDA growth over the 2024 to 2026 time frame. If you take actually a two-year look back, David, which I did – our business grew approximately volume about 3%. So if you recall, we're in a market that is 2% to 3% in more normal conditions, which obviously, we're all looking forward to those coming back. But we still believe that profile that we put forward at this point in time is achievable for Capital Markets Day. And we are accelerating productivity, as we've mentioned, we are bringing forward cost reductions this year. Nothing else additional to announce at this point in time. But obviously, myself, the management team, especially during some of the challenging macro environment we talked about, we're going to continue to look for ways to drive additional productivity as we go forward, but nothing additional than what we've already shared.

Thank you.

Thank you. Next question comes from the line of Mark Astrachan with Stifel. You may proceed.

Thanks and good morning, everyone. So I wanted to follow up on an earlier question and ask a related question. So it just seems from the outside perhaps that this business could be too big an unwieldly to run effectively and efficiently. What would you have to see and by when would you consider a more larger scale divestiture – divestitures to essentially shrink and deemphasize some of the acquisitions, which have been made. And related to that, recent volume trends have been pretty consistently below peers last year, year before, et cetera. So what is that attributable, and when should investors expect IFF to at least grow in line with the peer group? And how do we measure that?

Yes, I'll get started, Mark. I think the volume question is a fair one, but let me look at the portfolio from a couple of different lenses. In our Scent business, we feel as though our volumes are very comparable to peers and the competitors. In fact, there are some instances, I think where we're even gaining share in parts of the Scent business, and we saw very strong volume growth in Fine Fragrance as an example. In Health and Biosciences, Mark, we clearly see good performance in food and culture enzymes. We feel as though we're very competitive in home and personal care. What you're really seeing is the dynamic and the impact on that business is really within health. And we've talked a lot about the shift and change in market demand as well as destocking, but we think overall, our H&B business is very important for the future, but there are some clear volume challenges in that one segment with good growth in other parts of that business. If you come to Nourish, in Nourish we are very competitive. If you look on a two-year basis, Mark, because you have to take into account, we had a very strong volume growth in 2021. But two-year basis, Flavors is growing approximately 5%. So we feel as though we're in very good position within that business. I think the question really volume-wise is within the ingredients business, and we've spoken about. We were capacity constrained in some of those businesses, which impacted some of our volume opportunities. And then we were very aggressive on pricing and made some trade-offs to preserve margin in that business, and we did probably see some share loss within the Ingredient segment, in particular Protein Solutions. So I think overall, Mark, to your broader question, we feel as though the portfolio is the right one. We hear from our customers and in fact, many of our team was down at ACI, just this – or last week a lot of excitement about the innovation, a lot of excitement about our portfolio. But the proof will be we've got to execute against it, like I mentioned at Capital Markets Day, and that is our focus. We are going to continue to obviously, as Glenn mentioned, we'll get the entirety of the portfolio to make sure that it works strategically and also achieves our other objectives of driving profitable growth. But we feel as though the portfolio overall is the right one. And now we're focused on executing as we've been discussing.

And Mark, I'd add a couple of other items to the Frank's point is, lots of benefits across the portfolio. A lot of our work is on aligning and integrating and maximizing the portfolio. So aligning against three divisions, customer-backed, making sure that we have all the sales and operating teams focusing on the revenue synergies across the how systems work relative to advancing that is important. And then on the simplification of the portfolio, Microbial Controls exit, Savory Solutions. These are businesses that add a lot of complexity. Savory as an example, is a business that has 16,000 customers, 8 different businesses for the ERPs. And to Frank's point, we're going to continue to look at our portfolio and what they may be less core to the overall portfolio as we go forward to continue to simplify as well.

Thank you. The next question comes from the line of Adam Samuelson with Goldman Sachs. You may proceed.

Hi, thank you. Good morning, everyone. I want to – Frank, you referenced in an earlier response kind of 2024 kind of still thinking growth could get back in that high single-digit range. I just want to maybe unpack that a little bit in the context of 2023, where it would seem like one of the bigger deltas obviously, volume is not growing, but there's a pretty significant cost under absorption issue as you worked on inventories and presumably, that's weighted in the P&L in the first half of the year. If you're going to 2024, and we presume that there's some growth in the underlying market and your working capital inventories are in a better position, why would we not have faster growth in 2024 on an earnings basis if we're lapping pretty significant under-absorption charges this year.

Yes. And I'll just start. I think I will hold any additional comments on 2024. I think you're right. It's a short-term impact that will be on the P&L, as you've mentioned, as we work down our inventories and have additional absorption, I think we need to really focus right now on 2023. Like I said, we have a guidance that's out there for 2024 to 2026 and in that 8% to 10% range. I think at this point in time, I'd like to hold it there for now and let us work through 2023 and come back to you, okay?

Thank you. The next question comes from the line of Jonathan Feeney with Consumer Edge. You may proceed.

Good morning and thank you. So it seems like over the past decade, IFF enjoyed this ability to price and have good visibility regardless of the cost cycle. And it just seems lately – and when there were problems that was internal, it was getting the disciplines in place and awareness in place. You look at some of these more recently acquired businesses, it just feels like maybe they were always less sustainable margins and more volatility in terms of just they're more opaque, particularly some of the businesses that saw the volume variances this quarter. So how would you comment on that? And is this kind of volatility in both margins and volume maybe more of a new normal? Thanks.

Yes, this is Glenn, Jonathan. Relative to the first part of your question, clearly, in the last now 18 months, we have significantly improved the discipline, awareness and processes relative to pricing from tools and cross-training to best practices, to much, much surgical application by customer geography, et cetera. And I think that is here to stay in terms of optimizing the business going forward. Not all segments and regions are created equal. Some have greater ability to price than others and some geographies such as Greater Asia, in general, are more competitive, particularly in this environment. So we're being very, very thoughtful. In general, I would say that the N&B portfolio is about equivalency to the F&F portfolio relative to pricing capabilities or ability to pass through pricing, some of the ingredients portfolio are a little more difficult just given slightly more commoditized nature of this businesses. But I do not think there's really a significant difference in what we've seen from an execution standpoint between the legacy IFF and the legacy DuPont businesses and would again iterate that we've done a lot to actually tremendously sort of advance our capabilities to basically be much, much smarter and surgical in our pricing capabilities.

Thank you. The next question comes from the line of Christopher Parkinson with Mizuho. You may proceed.

Great. Thank you so much. Just going back to the portfolio optimization comment a couple of questions ago, you had a very helpful slide in your Analyst Day, I think Slide 12 of Frank's presentation about optimizing some of the underperformers. You mentioned Protein Solutions. I would love to get a little bit more color there on how you see that progressing throughout the year and what's embedded in your assumptions and then perhaps multipliers as well. And then on the positives, any update on Food Design ex Savory? Thank you so much.

Yes. Thanks for the question. And as we go in – as we were communicating on that framework, and remember, it is a framework. What sits in that 20% is really we're going to look at it from two different lenses. One, and you mentioned Protein Solutions and you have some of your specialty proteins, your value proteins that are going into meat alternative products. We're going to continue to look at that business right now. We see it as an important part of our overall offering that we bring to customers because that's oftentimes an entry point in the customers for driving some of our flavor opportunity and other opportunities in the portfolio. With that said, from an ROIC lens, we'll continue to look at it and look at ways to improve the profile of that business. Food designs ex Savory, we see also as an important part of the portfolio going forward. This is all like I said, aligned around our whole Nourish offerings. And if you think about where we're going to really shift to more of an end market focus, in particular around food and beverage, we think that business can really help us to bring a lot of integrated solutions and opportunities to customers going forward. So that's how I would answer it. And we are, though, continuing to stare our portfolio in its entirety through that ROIC lens to make sure we're making the right portfolio choices and putting our resources against the winners that you see on that slide as well.

Thank you. The next question comes from the line of Jeff Zekauskas with JPMorgan. You may proceed.

Thanks very much. I think during 2022, when you thought about raw materials and price, what you thought is that raw materials were worse than price in 2021 by $200 million, you'd be roughly even in 2023 – in 2022. And then in 2023, you would be $200 million to the good in the price raw material balance. And now you think that you'll be about flat with inflation. So what happened? That is why did you think you'd make $200 million, but you didn't – what happened to, I assume, price conditions? And second, what are the cash restructuring outlays – outflows that you expect in 2023?

Yes. Hey, thanks, Jeff. Good morning. Good question. So you already harken back a year ago, which seems like a decade ago, we originally had $600 million of inflation, pricing/inflation embedded. What happened is two additional rounds of inflation. So we had another $400 million last year, and we have circa $600 million-ish plus in this year. So there's a lag effect. So we're sort of kind of just running through the cycle from a kind of a timing standpoint and standpoint. We haven't sort of talked about sort of how this flows through the 2024, but I think it's reasonable to assume either a combination of stabilization and some deflation in the environment. On the back end, we will pick it up. So I think that's still a very reasonable assumption over the time horizon. The horizons just extended because there's been more sort of systemic inflation over the last few years than we anticipated at that point in time. Relative, we have – as Frank had mentioned, we have an incremental cost productivity program of $100 million targeted. We expect to get probably circa $70 million of that to hit the P&L this year. We're estimating around $70 million-ish to $75 million of onetime expenses associated with that restructuring.

Thank you. The final question comes from the line of Lauren Lieberman with Barclays. You may proceed.

Great. Thanks so much. We covered a lot. So I guess I have a couple of questions still. But I guess, primarily, when we think about 2023, I think, Frank, Glenn, the three of us have discussed it being a transition year, and there's a lot of things that you laid out on kind of what you want the business to look like as you hit 2024. But now you're talking about not just the curtailing production, but also accelerating cost savings going after G&A and so on. So to what degree do you think – should we worry about you being able to manage through the cash flow situation kind of shoring up working capital and making these short-term changes you need to make, but still being able to fully execute and get to where you need to be so that this can be the transition year that you discussed it being?

Yes, Lauren, I'll – good start. Thanks for that question. I think – it's a really great question, an important one. What we've done on is we're really focused on really prioritizing our activities across the company and the management team. First priority, Lauren, is clearly doing everything we can to make sure that we do have the right investments in the innovation that we deliver, in R&D and also making sure we can accelerate our sales performance, and we are spending a lot of time with our commercial teams, working on ensuring good capability build and making sure that we are ready to enhance our pipeline as well as our win rate going forward. So that's priority one, Lauren, and that's a big focus for us. On the cash flow and inventory work, I think we're in a good position. We brought in a new team. Glenn is going to be very intimately involved with our new Head of Operations and our business leaders. We are going to build that into our incentive system, cash conversion this year, Lauren, and we feel as though there is a very good path forward to deliver the short-term because we have to improve our cash flow, and we have to reduce our inventory, and we have a laser focus on making that happen. And I feel like we've got the right team and we're putting in place the right processes to execute against that. That's pretty much number two. And then number three, we are working towards, as you mentioned, getting the organization aligned to more of an end market back view. We are starting that work. We'll have more to communicate here as we go throughout the year. But I feel good by the end of this year, that alignment will be in place and we have the right people, right teams align with our customers. Just one anecdote. Many of our customers that I've spoken to as well as that we've engaged with really like the way we're thinking about operating and aligning IFF to how they're organized. So we think that is something we will focus on. So while there are a lot of activities, think of it three laser-focused priorities the team are aligning behind, Lauren, to execute to your point, to make sure that we can deliver on the future profitable growth agenda that we have, okay. So thank you.

Thank you.

With that, I want first – I want to – yes. Just a couple of last comments, I want to first, thank everyone for joining. Our apologies again on our start. We appreciate everyone hanging in with us. We know this went a little bit longer because of that and we look forward to seeing you here and speaking to you very soon. Thank you, everybody. Have a good rest of the day.

That concludes the conference call. Thank you for your participation. You may now disconnect your lines.