Volume Outlook
Q: Are you being conservative with your volume guidance?
A: Management expects volumes to soften in the second half due to ongoing consumer softness in the U.S. and EU, and they can't expect significant market tailwinds. " " They believe destocking has mostly ended outside of Pharma Solutions, but until consumer markets strengthen, they are cautious about volume growth. " " "

Margin Sustainability
Q: Can EBITDA margins remain at 20% for the rest of the year?
A: Management anticipates EBITDA margins will decrease from the first quarter's 20% to around 18.5% for the rest of the year. " This decline is due to lower volumes, mix changes, and timing of expenses. " While the first quarter benefited from net price-cost realization and some timing benefits, they do not expect these to recur to the same extent. " "

Divestitures and Portfolio
Q: Will you pursue more divestments after Pharma Solutions?
A: The focus is now on strengthening the remaining four business units—Nourish, Scent, Health & Biosciences, and Functional Ingredients. " Management is conducting a strategy review for each business but did not commit to any further divestitures at this time. "

Cash Flow Confidence
Q: Are you confident in achieving your free cash flow targets?
A: Management is trending more favorable and now expects free cash flow closer to $600 million, up from the initial $500 million target. " This improvement is due to earnings momentum, better working capital performance, and timing on taxes. "

Functional Ingredients Turnaround
Q: Can Functional Ingredients return to prior sales and earnings levels?
A: Management believes the first quarter marks the beginning of improvement in Functional Ingredients. " They are focusing on strengthening execution and conducting a strategy refresh. " They aim for a strong improvement in 2024 and continued progress into 2025 and beyond. "

Scent Division Performance
Q: What drove strong performance in Scent, especially Consumer Fragrances?
A: The Scent division saw 9% volume growth in the first quarter. " " This was driven by world-class perfumers and a focus on bringing leading innovation to customers. " Management expects continued strong performance under new leadership. "

Productivity Gains
Q: Is the $150 million productivity gain target increasing?
A: Management is now expecting $200 million in productivity gains for the full year, achieving about $50 million per quarter. " This increase is due to operational efficiencies, procurement improvements, and opportunities in manufacturing. "

Organizational Changes
Q: What are the implications of the new organizational structure?
A: The company is moving to an end-to-end business unit model to drive clarity in strategy and execution. " " Functions like finance and HR will now report directly into business units, aligning incentives with business performance. " " Management believes this will unleash the full potential of their people and capabilities. " "

Market Demand Trends
Q: What are customers saying about future demand and innovation?
A: Customers are pivoting towards needing more innovation, as they can't rely on price increases for growth. " They're seeking leading innovation from IFF to help profitably grow their businesses. " Management sees this as a tailwind, as innovation is central to their strategy. "