Good morning. At this time, I would like to welcome everyone to the IFF Q1 2023 earnings conference call. All participants will be in a listen-only mode until the formal question-and-answer portion of the call. To ask a question at that time, please press star one on your telephone keypad. If you would like to remove your name from the queue, please press star two. 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, Head of Investor Relations. Mr. DeVeau, you may begin. Thank you. Good morning, good afternoon, and good evening, everyone. Welcome to IFF's Q1 conference call. Yesterday afternoon, we issued 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're making forward-looking statements about the company's performance and business outlook. These statements are based on how we see things today and contain elements of uncertainty. For additional information concerning the factors that can cause actual results to differ materially, please refer to our cautionary statement and risk factors contained in our 10-K and press release. 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. With me on the call today is our CEO, Frank Clyburn, and our Executive Vice President, Chief Financial and Business Transformation Officer, Glenn Richter. We will begin with prepared remarks and then take questions at the end. With that, I would now like to turn the call over to Frank. Thanks, Mike, and hello, everyone. We delivered Q1 2023 results in line or ahead of our expectations amidst a challenging operating environment. Our team successfully navigated soft end market demand and customer inventory destocking as we executed on our priorities to deliver on our financial commitments. We are proud of the results and wanna thank the entire IFF team for their contribution. However, year-on-year comparisons in a number of areas show the backdrop in which we are operating remains challenging, as I acknowledged on our last call. As you will see from our quarterly financials, we have made solid progress on our objectives of reducing costs to improve efficiency, recovering inflation, and materially reducing our inventories while improving our service levels to our customers. The key challenge remains volume growth, and our management team remains keenly focused on accelerating profitable sales growth moving forward. Before I get into our Q1 performance, I do wanna share an update on our search for our Nourish President. Over the past several months, we have engaged with various leaders about the opportunity to run our largest division. At this time, our search continues as we are looking to attract a well-regarded leader with a strong track record of success that can drive performance in this division. I am pleased with the slate of candidates that we have and look forward to welcoming a new leader in due course. We will provide further updates going forward as we progress the process. Starting on slide six, I'd like to begin with a high-level look at our performance in the quarter before handing it over to Glenn to discuss our financials and full-year outlook in more detail. In quarter one, IFF generated $3 billion in sales, which reflects 1% comparable currency neutral growth, led by increases in Scent and Pharma Solutions. As we expected, volumes in the Q1, similar to what we experienced in the Q4 of 2022, remained under pressure, down high single digits, due mainly to consumer demand slowdowns and significant customer destocking actions. It should be noted that we are also comparing to our strongest year-ago comparison, where our volume grew mid-single digits in the Q1 of 2022. Adjusted operating EBITDA finished at $503 million in the Q1 of 2023, largely was impacted by the lower volumes as well as our proactive effort to rebalance inventories to drive cash flow generation. As we shared earlier this year, we are executing our inventory reduction program, making strong progress in the Q1. As expected, while it was cash flow positive, it did lead to a significant headwind in terms of profitability as our fixed costs were absorbed over reduced manufacturing volumes, which represented approximately a 15 percentage point year-over-year impact. At the same time, we were successfully recovering our total inflation through increased pricing actions in the Q1 and executed on our internal productivity initiatives that continued to deliver strong cost and operational efficiencies. From a leverage perspective, our net debt to credit-adjusted EBITDA for the quarter was 4.6x. As we disclosed earlier in the quarter, we have proactively renegotiated our debt covenants to ensure IFF continued resilience as we navigate today's complex global macroeconomic environment. These amended agreements will provide us with maximum flexibility as we grow our business and continue to optimize our portfolio to achieve our target leverage profile. To this end, we continue to deliver on our portfolio optimization commitments. Our Savory Solutions divestiture is now on track to close at the end of May. In February, we also announced the sale of our Flavor Specialty Ingredients business to U.K.-based private firm, Exponent, for $220 million in cash proceeds, which will be used for debt repayment. We expect that this transaction will close by the end of the Q3 of 2023, subject to customary closing conditions. Moving forward, portfolio divestitures remain a central part of our strategy, and we are evaluating several opportunities to further strengthen our capital structure as we drive towards our targeted leverage profile. Turning to slide seven, I'd like to provide a bit more detail on our sales performance in the quarter. As I mentioned, we delivered more than $3 billion in sales in the Q1, which represents comparable currency neutral sales growth of 1%. Our revenue growth in the Q1 was led by continued strength in our Scent business and steady performance in Pharma Solutions. In a moment, Glenn will take you through the underlying factors driving the performance across our business segments. First, it's important I provide high-level context on what we're seeing in the environment. Scent once again delivered a strong performance. Both Fine Fragrance and Consumer Fragrance grew double digits. Our Pharma Solutions segment also delivered solid growth, driven once again by a strong performance in Core Pharma. Nourish was flat this quarter as our Ingredients business continued to be pressured by macroeconomic factors and destocking, which offset growth in Flavors and Food Design. While certain businesses within our Health & Biosciences segment were also challenged this quarter, Cultures & Food Enzymes and Home & Personal Care were two strong performers in H&B that we expect will continue to gain share throughout the year. Taking a step back and reflecting on our performance, there are essentially a handful of categories that have disproportionately impacted our volume performance. Specifically, within our Nourish segment, our Ingredients division, which represents approximately 25% of total company sales and includes Protein Solutions, Emulsifiers & Sweeteners, core texturants, cellulosics, and Food Protection, drove about 60% of our total volume decline in the quarter. As we outlined at our December Investor Day, we are working to our improve our performance and have largely addressed our capacity issues and have improved our service levels in these businesses. We're now working on modifying our pricing strategies, enhancing our commercial coverage, and simplifying our internal processes, all to grow our project pipeline and deliver more robust growth going forward. While this will take time and attention, we are doing so with a sense of urgency to ensure that when current market challenges like destocking subside, we are well-positioned to capture market share. Looking at our profitability for this quarter on slide eight, Q1 adjusted operating EBITDA totaled $503 million, down 19% on a year-over-year comparable currency neutral basis as expected. As I shared on our last call, lower volumes related to consumer demand softness and significant customer inventory destocking, plus unfavorable manufacturing absorption related to our inventory reduction program, meaningfully impacted our profitability despite continued strong pricing and productivity gains. We were successful in generating approximately $60 million of gross productivity gains in the Q1. This strong benefit was offset by higher manufacturing-related costs, such as lower yields, slower obsolete inventory, and higher manufacturing inflation. If we look at our profitability performance, absence of the unfavorable manufacturing absorption, comparable currency neutral adjusted operating EBITDA would have declined approximately 4%. Looking ahead, we remain intensely focused on controlling our controllables, including identifying additional opportunities to further optimize our operations and strengthen our balance sheet. While we certainly have work to do to fully execute on our refreshed strategic plan, we have taken significant action to ensure our business maintains the flexibility and resilience needed to deliver in any macroeconomic environment. While we do believe 2023 will continue to be impacted by many of these factors. Depending on an improving volume environment in the back half of the year, we continue to believe we can deliver our long-term adjusted operating EBITDA growth target of 8%-10% on a comparable currency-neutral basis over the 2024-2026 time period. I'll now turn it over to Glenn to provide more context around our divisional performance, cash flow, and financial outlook going forward. Thank you, Frank, and thanks to everyone for joining us today. Turning now to slide 9, let me review our Q1 performance across each of our 4 business segments. In Nourish, sales were flat on a comparable currency neutral basis, with growth in food design and flavors offset by continued volume declines in ingredients. As Frank shared, Nourish ingredients, which includes protein solutions, emulsifiers and sweeteners, core texturants, and cellulosics and food protection, had the most pronounced volume declines in the quarter, representing approximately 60% of our total company volume decline. Despite our pricing actions and productivity initiatives in the quarter within our Nourish segment, the lower volumes and the unfavorable manufacturing absorption due to our inventory reduction program that I mentioned earlier more than offset those efforts, contributing to a 27% year-over-year decrease in currency neutral adjusted operating EBITDA at $208 million. Those same pressures impacted Health & Biosciences this quarter, with a 3% year-over-year decrease in comparable currency neutral sales and a 19% year-over-year decrease in comparable currency neutral adjusted operating EBITDA, despite price increases and strong productivity gains. While we saw solid growth in Cultures & Food Enzymes and Home & Personal Care, lower volumes and unfavorable manufacturing absorption also pressured our performance. As Frank mentioned earlier, our Scent division continues to perform quite well, delivering an 8% increase in comparable currency neutral sales and a 1% increase in comparable currency neutral adjusted operating EBITDA, driven by double-digit growth in Fine Fragrance and Consumer Fragrance. Scent's growth this quarter was driven by higher volumes, pricing, and productivity gains as the division has remained resilient. Lastly, I'm pleased to share that Pharma Solutions delivered a 4% increase in comparable currency neutral sales led by continued growth in Core Pharma. Like Nourish and Health & Biosciences, the segment was also impacted by lower volumes and unfavorable manufacturing absorption, leading to a 6% decrease in comparable currency neutral adjusted operating EBITDA. Overall for the quarter, sales and EBITDA were slightly ahead of our expectations with pricing on track, modestly better volumes and favorable productivity. On slide 10, I'll discuss our cash flow and leverage position for the quarter. Cash flow from operations to $127 million this quarter, which is an improvement versus the negative $4 million we reported in a year ago period. One bright spot in the quarter was approximately a $200 million decrease in inventory versus our year-end 2022. As I discussed on our Q4 call, we have initiated a number of actions across our business and supply chain teams, including system and process enhancements, to rapidly reduce our inventories over the course of the year. While this is adversely impacting the P&L through negative manufacturing absorption, it is a short-term impact that will be recovered over time. Looking ahead, while the majority of our efforts to reduce inventories for 2023 are behind us, we do have near-term headwind in Q2, albeit to a lesser degree than Q1, as we continue to correct our over inventory position and maximize cash flow. I also want to note that accounts payable in the quarter was adversely impacted as a result of seasoned payment patterns and by our inventory reduction program, whereby we slowed the purchase of raw materials which had a direct impact on our AP. We expect this will improve over the course of the year as we achieve our target inventory level. CapEx spending for the quarter was $175 million, or approximately 5.8% of sales. This was elevated due to project timing, and we expect to moderate through the balance of the year. We continue to believe that we will be around $500 million in CapEx for full year 2023. Our cash flow for the Q1 was -$48 million. This is consistent with the seasonality of cash flows for our business. Included in our free cash flow is about $100 million of costs primarily related to integration and transaction-related costs. In terms of leverage, we finished the quarter with cash and cash equivalents of $594 million, which includes $4 million in assets currently held for sale, while net debt totaled $10.7 billion. Our trailing twelve-month credit-adjusted EBITDA totaled approximately $2.3 billion, and our net debt to credit-adjusted EBITDA was 4.6x for the quarter, as we mentioned earlier. Importantly, we continue to actively evaluate the portfolio with consideration for further divestitures that provide additional financial flexibility and debt pay down without impacting our long-term aspirations. Turning to slide 11 for our consolidated outlook for the fiscal year 2023. As we look ahead to the balance of the year, we continue to believe our volume performance will improve, yet acknowledge that market conditions remain uncertain. In our discussion with customers, the majority have signaled that their destocking efforts are ending as they believe the consumer will remain resilient in the second half. Nevertheless, we have yet to see a broad-based volume improvement across our business. We remain steadfast in our focus to control what we can control to protect profitability, maximize cash flow, and drive portfolio optimization. For the full year, we now expect sales to be approximately $12.3 billion versus $12.5 billion previously. This change is largely related to energy and raw material pass-through price adjustments. We have a modest increase in unfavorable impact from foreign exchange. As we noted on our February earnings call, about 30% of our original 6% pricing guidance was related to energy inflation, much of which is passed through via surcharges, with energy prices having moderated significantly. We are maintaining our expectation of flat comparable currency neutral adjusted operating EBITDA growth and continue to believe adjusted operating EBITDA will be approximately $2.34 billion. Foreign exchange headwinds are expected to continue to pressure sales and comparable currency neutral adjusted operating EBITDA growth, which we now expect will adversely impact us 1% and 3% respectively. This incremental pressure is due to a handful of hyperinflationary currencies that have, and we expect will, continue to significantly devalue over the course of 2023. On a comparable currency-neutral basis, all the above noted items translate into approximately 5% versus approximately 6% previously. The sole driver, once again, is the energy and raw material pass-through price adjustments, as we continue to believe volumes will be flat for the full year. In terms of calendarization, we believe volume will sequentially improve each quarter, with a growth rebound expected in the second half of the year as the market challenges are expected to subside and our year-ago comparisons are more favorable. To provide additional context, Q1 volume performance was modestly better than we anticipated, with the Q2 modestly lower. The net result is that on a first half basis, we are broadly in line with our expectation, which we believe will be offset by a favorable second half. On a two-year average basis, we expect first half volumes to be approximately -2% reflective of destocking and second half volumes to be up +2%. For the 2Q, specifically, we expect sales to be approximately $3 billion-$3.1 billion, with volume performance down mid-single digits and adjusted operating EBITDA of approximately $540 million-$590 million. We remain intensely focused on improving our inventory levels and driving cost savings through productivity and restructuring initiatives to ensure we generate strong cash flow for the full year. As a result, we continue to target 2023 adjusted free cash flow of more than $1 billion, excluding costs related to integration, restructuring, and deal-related items. Turning to slide 12. We recognize that we continue to face a challenging environment, including reduced visibility on consumer and customer demand outlook and the path of inflation. We remain intently focused on what we can control, with the goal of continuing to strengthen IFF's operating foundation and execution performance. As we've discussed, there are a few top operational priorities that will enable IFF to not only manage these complexities, but also to drive long-term profitable growth. Our highest long-term priority is accelerating top line growth. To achieve this goal, we are making key strategic investments in key areas of our business and continue to be more surgical in our pricing actions to ensure we recover inflationary pressures while supporting volume growth. We have also made great progress in enhancing our customer service and supply chain agility to reduce bottlenecks and increase efficiency. In the Q1, we maintained strong service levels while also reducing our inventories, improving approximately $200 million from December 2022. In conjunction with this, we will be rolling out a redesigned sales, inventory, and operations planning process. Enhancing productivity also remains essential as part of our transformation. As mentioned earlier, during the quarter, we successfully achieved approximately $60 million of productivity benefits and began seeing initial results from our restructuring program. I expect this benefit will rapidly increase over the balance of the year and be a strong contributor to our EBITDA performance this year. Lastly, we remain laser-focused on improving our cash flows and delivering our long-term deleveraging target. We expect to continue to make improvements in net working capital through the balance of 2023 and into next year. We are in parallel executing against our portfolio optimization efforts, continuing to vest non-core business. In Q2 and Q3, we expect to complete the sale of our Savory Solutions and Flavor Specialty Ingredients businesses, with proceeds used to pay down debt. Going forward, this is a central part of our strategy, and we continue to evaluate additional portfolio optimization opportunities to strengthen our capital structure. With that, I would like to turn the call back over to Frank. Thank you, Glenn. Moving to slide 13, I would like to summarize our current position, in line Q1 results, and reiterate where we are headed for the remainder of 2023. Over the years, IFF has remained resilient amid a variety of market conditions while successfully transforming the business to meet evolving customer needs. The same is true today as we focus on controlling what we can control and executing on the operational priorities outlined in our strategic refresh in order to achieve our financial vision and drive sustainable, profitable growth that benefits all of our stakeholders. We continue to believe our volume will improve, acknowledge that market conditions remain uncertain. As Glenn mentioned earlier, a majority of our customers have signaled that they expect these stocking efforts will end and believe the consumer will remain resilient in the second half. We will continue to take action to stay nimble, strengthen our financial and operational foundation, and maintain our resilience as we continue to be diligently focused on delivering our operational and financial objectives. Moving forward, we remain committed to bringing strong products and innovation to our customers as we meet or exceed their service expectations. Financially, we are focused on improving our working capital position by rapidly reducing inventory levels to increase cash flow generation. We will continue to execute on our growth-focused strategy by enhancing productivity, driving operational efficiencies, and prioritizing our highest return businesses, all while maintaining capital discipline. We have started the year in line with our objectives and are confident in our ability to continue to execute going forward. Once again, I want to thank our teams for their tireless work to innovate and bring to market the essential products and solutions that shape so many of our daily experiences. I have no doubt that we are well on track to build a more efficient, agile, and customer-centric organization poised to deliver sustainable, profitable growth in any market environment. With that, I would like to now open the call for questions. We will now begin the question-and-answer session. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. I would also like to remind participants to limit your question to one question per person. Our first question comes from the line of Heidi Vesterinen with BNP Paribas. Your line is now open. Good morning. I wondered if you could please talk more about the cadence of volume and margin performance through the quarters to get to your guidance, please. Specifically on volume, you reported Q1 volumes down high single digits, which I think is what you had guided for originally. In your speech, you said that it was better than expected. Then you're now saying, I think Q2 is looking somewhat worse than expected, and I think your guidance used to be down low single digits. Can you clarify what the guidance for Q2 please? Perhaps, you know, if you can also comment by segment then same for margins through the year, please. Thank you. Hi, Heidi. It's Frank. A couple of things. In Q1, we had guided, to your point, high single digits of volume decline, and we actually performed a little bit better than what we had assumed in that original guidance. Sales was up 1%, as you know, on a currency-neutral basis. A little bit of head in Q1. Q2 is slightly down from what we had assumed originally. However, when we take a step back, Heidi, think about the first half of the year, mid-single digit volume decline, which is pretty much right on what we had expected at the beginning of the year. Really what you're seeing is a phasing and shift, but the first half of the year, mid-single digit decline in volume. We'll talk a little bit more about some of the different areas here in just a bit. The second half of the year, what we are anticipating and assuming is against, obviously against a much easier comp as we get to the back half of the year. We are making the assumption that we will have mid-single digit growth in the second half of the year, which then when you look at the full year, has our volume being flat year-over-year. Let me unpack a little bit about some of the key assumptions as we get into the back half of the year and even into the Q2. First, destocking, we are assuming that that ends pretty much in Q2. If you think about destocking, Heidi, we saw this really come to fruition in Q4, where volumes were down high single digits of Q4 2022. We continue to see destocking in Q1, and some destocking is continuing in Q2, but we think destocking is at the end as we head into the second half of the year. This is really important for our Protein Solutions business and Health business that were significantly impacted by destocking. The assumption is that consumer trends do remain resilient. There's some uncertainty in that, but if we look at what we have heard from our customers and as we're working with them in bringing innovative solutions. In Home & Personal Care, we saw good growth in the Q1. We anticipate that will continue. Dish detergent, a lot of innovative projects that we're working on, and we see good progress and acceleration as we go into the second half of the year. We think food and beverage will still remain resilient. Obviously, our Flavors business is really important there, grew in Q1, and we anticipate we will see accelerated sequential performance as we go throughout this year and in the back half. We also are focused on improving our Ingredients business. We've discussed that, really a focus on putting some additional resources behind Ingredients. Our customer service has improved significantly. We have the capacity to serve customers. That's something that we are also assuming as we go forward in our Ingredients business. We're seeing resilience in Consumer Fragrance and in Fine Fragrance, and we anticipate that to continue. Also pharma continues to be resilient as well. When we take a step back from a volume perspective, Heidi, think of first half down mid-single digit volume, second half up mid-single digit volume, and then ultimately volume flat for the full year. The third thing that we are seeing that we believe will accelerate in the back half of the year and improve sequentially is geographical volume growth in the back half. For instance, China this quarter, Heidi, was up 2% in sales. Asia Pacific, or I should say Greater Asia, was up 1%. As we talk to our teams in Asia and in China, while the opening is still slow in parts of China, we are seeing improved signals from customers, and that gives us confidence as we get into the back half of the year that you will see geographical improvement. We've also noted that North America has been challenged for us over the last couple of quarters. We anticipate sequentially that will improve as we get to the back half of the year. That's the assumptions from a volume perspective. A lot of, like we said, there's some uncertainty, but we're believing that those three assumptions and drivers are what gives us the assumption at this point in time to hold our volume flat for the year. In addition to that, as you look at the back half of the year, there's a couple other things I will highlight. On the call, we spoke about the fact that absorption in the Q1 was a headwind for us. It will be a headwind in Q2 to a lesser degree. Obviously, as you get to the back half of the year, that will go positive and help us. In addition to that, if you recall, we highlighted that we have our cost reduction program. Full year, we highlighted a cost reduction program of $100 million. We highlighted a run rate of $70 million-$75 million for the year. If you look at the back half, that is where you'll see the majority of that benefit in the second half of this year as we execute on our cost and people reduction program. When we take all those things into account, Heidi, that is why we feel as though holding our EBITDA guidance to the $2.34 billion that Glenn highlighted was the appropriate assumption at this time. Thank you. Our next question comes from the line of Mark Astrachan with Stifel. Your line is now open. Yeah, thanks, and morning, everyone. I wanted to ask about guidance and then some of the troubled areas within the business. In your opinion, are you being more conservative or optimistic than you were, you know, previously? It seems like underlying assumptions, maybe from a consumer dynamic, has changed to be more positive within the underlying guidance. I'm curious if you could comment on that. For the more challenged portions of the portfolio, things like the legacy N&B and ingredients in terms of what you highlighted, what proactive steps are you taking to offset what seems like perhaps more permanent and structural volumetric share loss? Meaning like, improving service levels doesn't seem like it could be enough to change the trajectory of the business, but perhaps I'm wrong. Just sort of curious how you're thinking about what you can do to improve those pieces of the business which have been dragging performance and losing share? Thanks. Mark, it's Frank. A couple of things. One is with regards to the businesses that were challenged, Some of these, as we have highlighted clearly were due to what we see more destocking and end market demand and not necessarily share loss. I will also acknowledge there has been share loss in parts of our business. For instance, in health, Mark, you highlighted, we have discussed that the probiotic market in North America several times. In that business in particular, we have been really focused on our resources into that marketplace. That is really the down in volume has been driven much more by destocking and end market softness. With that said, we have a strong focus with our health team. There's a lot of reviews with our commercial team. We are starting to see sequential improvement in that business, Mark, as we go forward. In our Ingredients business, as I just highlighted, there's a couple of things that we have put in place. One, our customer service levels were not where they needed to be. We highlighted that during our investor day. They have improved significantly, Mark. That is a big, I would say, plus for us, and we're getting good positive feedback from customers. Customer service levels in the on time performance range of 90%-95% is really important, and we're there. Second, we now have the capacity we need to supply customers. We had run into capacity challenges in the past, so we now have the supply that we need. Third, we are putting targeted resources in specific markets that are gonna be focused on commercial customers around Ingredients. Additional resources, Mark, to your point, are also a part of what we are doing. Four, what has been encouraging, we had gotten away from really good pipeline development with our customers in that space. I can tell you this is gonna take some time, but we are seeing good projects now come to fruition, and we are seeing pipeline progress in Nourish and in Ingredients and specifically. Those are the areas of focus. The team is spending a lot of time really looking at how we can accelerate our sales performance in those areas. Thank you. Our next question comes from the line of Gunther Zechmann with Bernstein. Your line is now open. Hi. Thank you. Hi, Frank. Hi, Glenn. Can you please provide your insight into the cash flow progression, the cadence throughout the year and the $1 billion free cash flow, adjusted free cash flow target? And also within that, could you just discuss and outline what you've embedded in terms of working capital improvement, please? Good afternoon, Gunther. Thanks for the question. I think the summarized version is we're actually tracking quite well against our objectives. I want to sort of unpack, as you know, the 2 big contributors relative to our adjusted free cash flow, combination of achieving our earnings guidance and then secondarily, all the work on working capital. We had a very good quarter relative to our expectations around working capital. As a reminder, our full year objectives for working capital consisted of a $200 million point on point, year-end to year-end reduction in inventory, and then a $100 million increase between payables and receivables for a net $100 million reduction in net working capital. The biggest driver of that obviously is inventory at that 200. That $200 million reduction is actually a $350 million volume reduction with a $160 million of basically price escalation, i.e., raw material cost increases coming through. In the Q1, focusing on inventory, we actually were over $200 million down inclusive of around $80 million of price escalation. The volume component in the Q1 was $280 million against our full year objective of $350. We're trending quite well. We will probably actually get to the full sort of our initial level of inventory reduction by the end of the Q2 at this point in time. Payables and receivables, they're a little lumpy seasonally. We're feeling very good about achieving those objectives at the end of the year. Overall, we feel very good, particularly relative to the working capital improvements. Thank you. Thank you. Our next question comes from the line of John Roberts with Credit Suisse. Your line is now open. Thank you. How do you explain what appears to be underlying consumer strength in fragrances versus the underlying consumer weakness in food ingredients? Or maybe the question should be, how did the channels get so overstocked in food ingredients and not so overstocked in fragrance consumer products? Are there significant divergences in the current point of sale volumes between packaged food and fragrance products? Yeah. Hi, John, this is Frank. What we have seen in Consumer Fragrances in particular, we saw a very strong Q1. In fact, we also saw a very strong Q1 in Fine Fragrances as well. We feel really good about what we're seeing. I think Consumer Fragrances, it was a lot of, I would say, pent-up demand. I think you are seeing clearly some positive trends on what we have been working with our customers, in particular bringing new innovation to Consumer Fragrances. We've worked with a lot of the large consumer packaged good companies over the last several years, and I think this is where we really have brought strong innovation in our consumer business. We feel really good about that. There clearly was an inventory build significantly in Ingredients, as we've highlighted. You could see it as you go through the first part of 2022, and then you look all the way back to 2021. I think that what took place in those businesses, in particular, uncertainty around supply chains and companies wanting to make sure that they had the supply necessary as you went through a lot of volatility in the supply chains, which is what caused the build. Obviously now is what we're seeing is some of the destocking from those efforts in those businesses. Thank you. Our next question comes from the line of Joshua Spector with UBS. Your line is now open. Good morning. This is Lucas Beaumont with Josh. Just wanted to focus on the production cost under absorption. Could you please tell us what was the actual size of the impact there in 1Q? Looked like maybe $150 million or so in the EBITDA bridge. Looking at 2Q in the second half, how much residual impact are you assuming in each period as the year progresses? Finally, if we get a scenario where volumes kinda disappoint to the downside, would that get larger? Thanks. Hey, thanks for the question. This is Glenn. Within the Q1, the negative absorption impact was $100 million, which translates actually into 330 basis points of impact on EBITDA margin. That represented a year-over-year volume decline of about 20%. Think about our annual fixed cost base for our manufacturing base of about $2 billion. Every 1 point on an annualized basis is basically worth about $20 million. Hence why we're able to reduce our inventory so significantly, took production down significantly. I'll say a one-time event of $100 million. We are expecting, as I mentioned, to continue to make progress on reducing inventories and expecting to have mid-single digit down volume in the Q2. That translates into another $50 million of negative absorption. We are anticipating actually positive absorption in the second half of the year. As Frank mentioned, we're expecting mid-single digit growth in the second half of the year, production volume is being up year-over-year. Again, the context of the risk associated or opportunity associated with declines or increases in manufacturing at one point on a full year basis is equal to $20 million of negative absorption. If you think about two points in the second half, that would be the equivalency of that $20 million. We have discussed in the past, we will have to continue to consider that if we continue to see volume softer than our expectations, what will be the balance of continuing to manage cash flow and keep our inventories in the right place for production efficiency purposes versus basically the earnings profile. They're clearly in a softer environment than anticipated. There is some risk of further negative absorption in the second half of the year. Thanks for the question. Thank you. Our next question comes from the line of Ghansham Panjabi with Baird. Your line is now open. Hi, everyone. Good morning. Yeah, just judging by some of the comments from your major customers out of this earnings season, it, you know, clearly looks like the global consumer is a little bit weaker. Just curious, given, you know, inflation has peaked and just your more recent conversations with your customers, do you get a sense as to whether, you know, some of the promotional activity that you know, your customers typically resort to during periods of weakness, are they starting to contemplate that? Just trying to get a sense as to the risk profile as we cycle through the rest of the year because you will be past the shocking, but we still have a weaker consumer. Thanks. Hi, this is Frank. I think as we talk to our customers, at least the big consumer good companies, I would say they're probably cautiously optimistic on the resiliency of the consumer. They are stepping up in certain categories, promotional activities and efforts. We have clearly seen a lot of, I would say, good focus from them on innovation and looking for new projects, as they continue to focus on building out their future offerings to consumers. I also think that what is taking place is if you look at from our lens, and it goes back to what I was highlighting, we do anticipate that sequential improvement will continue from a volume perspective. Just to reiterate a couple of points, in particular in the areas that are really key for us, the sequential lift going from, you know, first half down mid-single digits to positive, mid-single digits in the second half. We do continue to see, working with our customers, very clear opportunities for that sequential step up, especially against a softer back comparison, quarters in the back half. We believe that our consumer companies that we're working closely with are the ones that are highlighting differentiation and innovation has been key, and that's something that we will continue to focus and work on as a company. Thank you. Our next question comes from the line of Andrew Keches with Barclays. Your line is now open. Hi, good morning. Glenn, I was hoping we could get a little more context for your deleveraging plans over the next, this year and next. You came into this year a little over 4 times on the net basis. That figure has gone up, I think as expected. You do have those divestitures announced which will help you get leverage back down, it looks like, to about where you came into the year. I think it still looks like we're gonna end the year around flat in 2023 from a leverage standpoint. I guess that leaves you with a lot of wood to chop next year to get down to that 3.0 times target. I guess the question is, do you expect to get there organically? At this point, do you actually need those additional portfolio actions to drive the accelerated deleveraging and actually get you there next year? Related to that, it's not lost on me that your dividend is really absorbing all your cash flow at this point. To the extent that conditions do deteriorate from here or you can't optimize the portfolio further, are you open to considering a dividend reduction or cut at some point to preserve the investment grade status? Hey, Andrew. This is Glenn. Thanks for the question. Agree relative to wood chopping. That's why I have a hatchet with me today. Relative to your assumption for this year, you're correct. We were a little over 4 times the beginning of the year. We will be receiving net proceeds after tax distributions transaction over $750 million, combination of this quarter and next quarter related to the sale of Savory Solutions and FSI, which will all go to debt paydown. Relative to getting to the three times or less by the end of next year, we are fully committed to that. That will be achieved through a combination of three elements. One, we continue to have opportunity to improve our working capital position. We expect to continue to make progress next year from this year. Secondarily, we do expect the earnings trajectory will improve significantly next year. Part of it is overlapping some significant items such as $100 million of negative absorption, and then getting the top line going with our productivity program. That's the second thing, i.e., the denominator improving. That all being said, divestitures clearly play a role in getting to that less than three times. We have been very active in reviewing the portfolio. We are proceeding on multiple fronts. We are fully confident that we have an attractive set of assets that actually aren't ideal fits for our portfolio. We are past the two-year anniversary of the reverse Morris Trust considerations as of February this year of note, and we are proceeding quite well on that path. I'd say, confidence remains high and commitment, remains high to get to less than three times. Regarding cutting the dividend, that is not on the table at all. Thank you. Our next question comes from the line of Christopher Parkinson with Mizuho. You may proceed. Thank you. You adjusted your revenue guidance a little bit. You're citing some energy and raw movements. Just can you remind us of just how much of your portfolio passes through? Just as a corollary of that, can you also just give us a real quick update on price cost movements, you know, for the balance of 23 and just what portion of your portfolio you believe will remain resilient in terms of pricing? Thank you. Yeah. Yeah. Hey, Chris, it's Glenn again. Relative to energy, as a reminder, in our original guidance at the beginning of the year, we had 6% gross pricing in the P&L. 30% of that or a little less than 2 points was associated with energy. About 75% of our energy prices are either directly via an index or indirectly via a line surcharge attached to energy passed through to customers, and they are generally reviewed on a quarterly basis. We expect that, as we mentioned, we're taking 1 point out of that just because of a very significant decline in energy prices globally. We believe that that'll be relatively net neutral this year, in part not only because the pass-through, but secondary timing. The majority of our energy prices actually sit in inventory because they're part of production costs. With 140 days of inventory, they sort of match by the end of the year. There should be some overlap as we roll into next year, but for this year, we're assuming that the energy net is sort of neutral from a P&L standpoint. In general, we are seeing positive deflationary trends not only in energy, but in logistics as well as in certain raw materials. That is favorable relative to the portfolio. As we've mentioned in the past, we believe that that is a potential upside. It would be either late this year because how generally the roles obviously run through inventories, but could be meaningful next year. You know, relative to our portfolio, we would say that, you know, roughly 60 to two-thirds of our portfolio has some degree of resiliency, i.e., less commoditized, more uniqueness relative to characteristic. I would caution we're in the early days of deflation, so I think it's a little early to declare sort of significant, you know, margin capture, you know, relative to improvements in raw material and other other costs as well. Thanks for the question. Thank you. Our next question comes from the line of Lauren Lieberman with Barclays. You may proceed. Great. Thanks. Good morning. In the prepared remarks, you guys commented on pricing, particularly in Nourish as a revisiting of pricing strategy. I was just kind of curious. If we could talk a little bit more about that, kinda where you think there are areas to adjust, what you kind of meant by that. A corollary would be just a discussion on Nourish margins over time, kind of been in that like 12% range over the past two quarters, and I was just curious, you know, how you're thinking about Nourish profitability, you know, perhaps looking further out and also again, not, you know, notice, you know, adjustment and pricing strategy. Thanks. Yeah. Hey, Lauren, it's Frank. On the pricing strategy, we are working with customers to balance price volume opportunities. Clearly this is not across the board, but very surgical, Lauren, in our practices, in particular in certain geographies, and I would highlight in greater areas of China and certain markets where there is more price sensitivity. We are looking at price volume, but not across the board. Very surgical approach to pricing. Margins will improve, Lauren, over this year and over time. Remember that Nourish, based on the Q1, a lot of the manufacturing absorption impacted the Nourish division in Q1. There'll be some impact as we've highlighted in Q2, and then things will improve in the back half for Nourish and for the company. Thank you. Our next question comes from the line of Matthew DeYoe with Bank of America. Your line is now open. Morning, everyone. Frank, you talk a little bit about the enzymes business. I know it's a big consumer of energy and footprint is pretty European-based. The gas price in Europe, you know, with that coming off a lot, is that an area where energy will be given back in price? Do you think you can hold on to it there? I guess given all the volatility on the cost center, I mean, where are margins now for enzymes versus maybe where they were in 2021, and where do you think they may be by the end of the year? Yeah. I'll have to take a look back in 2021, but let me give you the enzyme business and take a step back. One, we think this is a really important business for us, and we're seeing great innovation in our enzyme business. As I highlighted, we saw really good growth in Home & Personal Care. We've continued to see really good growth from our Cultures & Food Enzymes, and we're seeing encouraging now trends as destocking improves in our probiotic business. Grain Processing, Animal Nutrition & Health is still somewhat challenged, but we are working very diligently on those businesses. From a margin perspective, I'll take a look. Remember that, as we look at 2021, our overall margins were obviously, I think better in 2021. We did see a, obviously decline, based off of what has happened from inflation. Clearly that has impacted us in 2022. Manufacturing absorption also impacted us as we hit the Q4 of last year and the Q1 of this year. Over time, we're really confident the margin progression and improvement in the Health & Biosciences business as we go forward. Thank you. Our next question comes from the line of Silke Kueck with JPMorgan. Your line is now open. Hi, good morning. There's like $52 million in severance charges you recorded this quarter. Is that roughly like, you know, 500 people that are supposed to leave? Can you tell how many have left so far and how many are to leave? I have a follow-up on volumes. If your volumes without mid-single digits for the quarter, does that mean they were down high single digits in nutrition and in Health and Bio? Thank you. Hey, Silke. This is Glenn. We are expecting charges of roughly $75 million full year for the cost reduction program. That will be an annualized impact of about $100 million. We expect it to be kind of around $72 million to hit the P&L this year. For obvious reasons, I'm not gonna describe sort of the pace at which exits in the organization are happening from the standpoint. That covers that. Can you remind me the second question again? I was wondering whether volumes were at high single digits in both Nourish and in your Health and Bio segment. Yes. Yes. As we had mentioned, the softest part of our business from a volume standpoint was in Nourish. More specifically, that really was in the Ingredients portfolio, which is roughly $3 billion of Nourish on an annualized basis. For Flavors and Food Design generally were fine. Thank you. There are no further questions. I would like to turn the call back over to Frank Clyburn for closing remarks. Thank you everyone, and appreciate the time today for our Q1 earnings call. We look forward to future updates and continuing our transformation and our overall path to a very strong, profitable growth profile company in helping consumers around the world. Look forward to speaking to you soon. That concludes today's call. Thank you for your participation. You may now disconnect your line.