International Flavors & Fragrances Inc. Q1 2010 Earnings Call Transcript

International Flavors & Fragrances Inc. Q1 2010 Earnings Call Transcript
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International Flavors & Fragrances Inc. (IFF)

Q1 2010 Earnings Call Transcript

May 6, 2010 10:00 am ET


Michael DeVeau – Manager, IR

Doug Tough – Chairman and CEO

Hernan Vaisman – Group President, Flavors

Nicolas Mirzayantz – Group President, Fragrances

Kevin Berryman – EVP and CFO


Mike Sison – KeyBanc

Mark Astrachan – Stifel Nicolaus

Edward Yang – Oppenheimer

Lauren Lieberman – Barclays Capital

John Roberts – Buckingham Research



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At this time, I'd like to welcome you to the International Flavors & Fragrances first quarter 2010 earnings conference call. All participants will be on 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.

I would now like to introduce Michael DeVeau, Investor Relations Manager. You may begin.

Michael DeVeau

Thank you, operator, and thanks everyone for joining us this morning. With me on the call is our Chairman and CEO, Doug Tough, our Group President, Flavors, Hernan Vaisman, our Group President of Fragrances, Nicolas Mirzayantz and our Executive Vice President and CFO, Kevin Berryman.

This call is being recorded and will be available for playback on our website. 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 risk factors that can cause actual results to differ materially from forward-looking statements, I ask you to refer to the cautionary statements and risk factors contained in today's earnings release and IFF's filing with the FCC. 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 website.

With that, I'll like to turn the call to Doug.

Doug Tough

Thank you, Michael. Good morning, good afternoon to everyone. Before moving on to discuss our very strong Q1 results, I'd like to make a few introductory comments. As you know, effective March 1st of this year, I officially joined IFF full time as Chairman and Chief Executive Officer. While it's still premature for me to make comments regarding any actions we might take on any possible changes to the strategic focus for IFF, I'd like to elaborate on some key items on which I will be focused.

Priority number one is to pressure test our current strategies and our business model to ensure we are operating to the best of our ability. While it is early in our review, I will say that my initial expectations of the organization I had prior to joining are no different after my first 60 days. I continue to believe that the IFF team has tremendous people and capabilities that provide our customers with winning products which translate into profitable growth for IFF.

Second, as I begin my new journey, it'll be imperative to ensure we continue to accelerate our short-term performance. The executive team as well as all IFF employees have done a very nice job delivering strong results in the back half of 2009 and in the first quarter of 2010. Capitalizing on this success, I expect we will continue to deliver on current commitments while reviewing options regarding our long-term strategies.

Finally, at the very heart of our organization, our most important asset are people as a critical priority. I believe that this organization has incredible talent as my objective to nurture and align that talent in such a way that I can ensure our future leaders of tomorrow are being developed from within the organization today.

I have taken a considerable amount of time to meet with many IFF employees and functions throughout various parts of the world to learn the issues and to provide a sense of my priorities and expectations. I will continue this process over the upcoming few months until I have reached all of our major constituents.

While I am focused on the long-term objectives, our organization remains committed to furthering our partnerships with key stakeholders. Starting with our customers, we continue to be an innovator of technological advancements versus a mere component of the supply chain.

Utilizing our capabilities and consumer insight in R&D and in creative insight, we partner with our key customers to create unique scent and taste experiences that our consumers love. This in turn helps bolster our customer's market share and helps grow the equity of their brands. If we continue to do this while providing overall superior customer satisfaction, we believe it will lead to increased customer loyalty that in turn drive our future business.

In order to continue to create shareholder value, we must ensure we are capable of driving consistent and sustainable long-term growth. Our recent results are an example of our financial potential. Our priorities going forward must focus on growing our top line, accelerating our productivity and investing in future growth in order to ensure that we are maximizing shareholder returns.

We also understand that our responsibility extends to being strong partners in the communities where we work and live and vigilance around our commitment to sustainability, through IFF charitable giving, we are proud to be able to provide financial support and countless hours of employee volunteerism to many community-based organizations.

And last, but not least, we will continue to support our valued employees. As our people represent a large component of our success as well as a competitive advantage, the people of IFF are a critical focus for me. As such, some additional comments are appropriate.

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