International Flavors & Fragrances Inc. (NYSE:IFF) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 10:00 am ET

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International Flavors & Fragrances Inc. (NYSE:IFF) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

At this time, I would like to welcome everyone to the IFF Third Quarter 2019 Earnings Conference Call.

[Operator Instructions] I would now like to introduce Michael DeVeau, Head of Investor Relations, you may begin.

Executive
Michael DeVeau

Thank you. Good morning, good afternoon and good evening everyone.

Welcome to IFF's third quarter 2019 conference call. Yesterday evening, we distributed a press release announcing our financial results. A copy of the release can be found on our IR website at ir.iff.com. Please note that this call is being recorded live and will be available for replay.

Please take a moment to review our forward-looking statements. During the call, we are making forward-looking statements about the company's performance, particularly with regard to our outlook for the fourth quarter and full year 2019. These statements are based on how we see things today and contain elements of uncertainty.

For additional information concerning the factors that could cause actual results to differ materially from our forward-looking statements, please refer to our cautionary statement and risk factors contained in our 10-K filed on February 26, 2019 and in our press release, all of which are 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 yesterday and is on our website.

With me on the call today is our Chairman and CEO, Andreas Fibig and our Executive Vice President and CFO, Rich O'Leary. We will start with prepared remarks and then take any questions that you may have. With that I would now like to introduce, Andreas.

Executive
Andreas Fibig

Thank you, Michael. On the call today, I would like to provide comments on our third quarter financial results and give an update on our integration progress. Once, finished, I will ask Rich to give a more in-depth financial review of our business performance and provide an update on our outlook for the balance of the year. Then we will take any questions that you may have. Let me start by saying that positive momentum is building at IFF. And the third quarter, we delivered a sequential improvement in our combined currency neutral top line growth rate.

Scent continued to perform well, growing low single-digits with growth in all regions and nearly all categories. On a standalone basis Frutarom sales increased 5% including the net contribution of acquisitions and divested businesses. Organically, sales were flat in the third quarter, a sequential improvement for the second quarter results with an improvement across many sub-categories. In Taste, our win rates remain at a high level. However, performance, continue to be impacted by volume erosion primarily with multinational customers. It should be noted that on the two-year basis growth remained solid when we factor the 7% growth we achieved in the year ago period. We are pleased to also report a continued improvement and profitability as we grow a 60 basis point improvement