Good morning, good afternoon and good evening, everyone. My name is Michael DeVoe, and I'm the Head of Investor Relations and Communications at IFF. Thank you for listening to IFF's webcast previewing our financial profile, governance and strategic transformation initiatives effective upon the completion of IFS combination with DuPont Nutrition and Biosciences. This webcast will review the press release and presentation that we filed with the SEC on January 11, 2021. The press release and presentation can be found on our IR website at ir.
Iff.com. During the webcast, we will be making forward looking statements about the company's performance and sharing our long term financial outlook based on the current state and our expectations as a combined company with N and V. These statements contain elements of uncertainty, which we have laid out on Slide 2. For additional information regarding the factors that can cause actual results to differ materially from our forward looking statements, please refer to our materially from our forward looking statements, please refer to our cautionary statement and risk factors stated in our 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 available on our website. Joining me today is IFF Chairman and CEO, Andreas Phibbe and our Executive Vice President and CFO, Rustom Chille. I would now like to turn the call over to Andreas.
Thank you, Mike, and thank you for all who are listening in. I'm excited to share a detailed look at the new IFF and our clear path to deliver shareholder value with the completion of our combination with DuPont NMB, which we expect will occur on February 1, 2021. On this call, we will preview the unmatched product and solutions offering and best in class financial profile of the new IFF, as well as our plan to capture significant synergies as we bring our compelling combination to life. In addition, we will showcase the strongest executive committee and Board of Directors that has been assembled to drive the new IFF industry defining leadership and deliver enhanced value for shareholders. Now turning to Slide 6.
Let's spend a minute reviewing the compelling strategic rationale behind the combination. As we will cover in-depth through this presentation, these two companies are highly complementary and together are poised to lead the evolution of a consumer product goods value chain. Our new company is a purpose driven enterprise, uniquely positioned at the intersection of creativity, science and innovation to shape the future of our industry. Quite simply, together, we gain a broader set of ingredients and solutions, coupled with a deeper R and D platform across the shared set of consumer product and markets. This allows us to enhance the value we can deliver to our customers in a very powerful way as we present an unmatched ability to provide integrated solutions from concept to delivery.
Now let me talk to the key takeaways I see in today's presentation of the new company. Strategically, the new IFF is set to truly redefine our industry. We will be a new company for a new era. We are reimaging the depths and breadth of our partnerships with our customers at a time when consumers are driving massive change to the entire CPG industry. Execution, which is our singular focus now, will drive significant financial benefits for shareholders.
The new IFF financial profile will be best in class in our industry when we complete our integration. We will have industry leading revenue, adjusted EBITDA margin and free cash flow generation, driven by clear and executable path to realize significant revenues and cost synergies. Capturing this potential is only attainable with flawless execution. To do that, we have an enhanced leadership team built evenly from both companies, while also welcoming an outstanding Board of Directors from diverse industries and backgrounds. Now as we look to Slide 8, our advantage in our marketplace is clear.
The new IFF will have unmatched scale, portfolio strengths and R and D leadership to create meaningful competitive advantage. Our R and D investment will be 1.5 times greater than our nearest peer. We will have number 1, number 2 positions in core categories in nutrition, cultures, enzymes, probiotics, soy proteins, flavor and fragrances. This is compelling with the broadest and most diverse customer base in our industry, more than 45,000 in total and about 48% of annual sales from small, medium and private label customers. We are well positioned to drive profitable growth for our shareholders.
We will also leverage our geographic reach to capture the attractive growth rates in the emerging markets. In these key markets, the projected disposable income is expected to outgrow developed markets. And we will see the rise of the new middle class comprising of households with an income level comparable to that households in developed markets. These markets are nurturing a rising middle class who have the same aspirations for better life and product experiences as you and I do. These dynamics will translate into an increased demand of consumer product goods.
And with our strong representation in these markets, we will partner with our customers to capture the growth potential. By every meaningful metric, the new IFF will be the clear leader in our industry. Focusing more closely on our solutions offering and category leadership on Slide 9, you can see that our combined portfolio stands alone. While our peers may have strong positions in 1 category or select few, the new IFF will have depth, breadth and strength of capabilities across categories, which will give us an exceptional competitive advantage. The new IFF leading position in food, beverage, health and wellness, home and personal care markets will be core to delivering a cross functional solution that we know customers are demanding.
On Slide 10, maybe the most important we cover today, the combination is fundamentally built to respond to a powerful wave of transformation flowing through the CPG value chain. For several years now, demand for natural, LCL, clean label and sustainable products have driven sweeping new expectations across consumer and markets. These shifts have created clear trends and have only accelerated through the COVID-nineteen pandemic. Over the past year, we have seen greater acceleration in plant protein, snacking, hygiene and food safety and waste, trends that are very favorable for our combined company portfolio. All of our customers are moving to respond to these trends as consumers seek out brands that fit these new expectations above all else.
In each situation, the new IFF is poised to be an even stronger partner for our customers, anticipating by evolving needs and closely aligning with each market and region. Looking at Slide 11 now, I would like to go a bit deeper on our ability to strengthen existing customer partnerships and capture new relationships. The new IFF will be the strongest partner to co create essential solutions for an on trend innovation. As we have seen with increasing the frequency, our customers are seeking co creation partners as they look for new technologies, speed of innovation and efficiency of development. While we have seen impact to small and medium regional brands as well as emerging brands in the pandemic, we fully expect the long term trends to continue where these segment of customers will return to their high growth trajectory.
The new IFF will answer this call for co creation in a way the industry has not seen before. With a laser focus on delivering stronger products, our company will drive tremendous customer benefit. With a single point of contact from concept to delivery, we will drive efficiency, quality, local relevance, global scale and differentiated product delivery. And with our best in class innovation platform, we will be well positioned to develop next gen products that continue to redefine our industry. On Slide 12, you can see how the new IFF offers a best in class solution with increasing value for our customers as we tap the full potential of our platform.
1st, we deliver the leading ingredients that will continue to be the core value proposition to all of our customers who come to us for single or multiple ingredients. This is broadly where our industry stands now and is a highly competitive field where we will continue to win based on the strength of our offering and category leadership. However, where we will grow is on the strength of how we put together the pieces of our platform to create values through product formulation. The strength of integrated solutions, we can drive broad value for customers with improved speed to market, clear control of product development to the value chain and compelling cost efficiency of a single point partner from concept to delivery. This is where the future of our industry lies.
And frankly, we see no other peer with the R and D, creative expertise, customer reach and portfolio strength to deliver such exceptional products. The power of the platform actually only accelerates when we look to the future. I see the world where the new IFF technology and innovation leadership will be a must have partnership for our customers as we work together to deliver the next gen products. For example, the combined company will have very strong biotech capabilities. On that, we will leverage to create flexibility within the food chain, improve health and well-being, preserve resources and eliminate waste.
Turning to slide 13. You can see how this all comes together. Together, we have a portfolio of ingredients and technologies that will deliver product in line with consumer expectations and unlocking important customer value across our Taste, Food and Beverage, Scent, Health and Bioscience and Pharma Solutions divisions. Core to this effort is close collaboration across our divisions to leverage the unique strengths, expertise and insights of each as we develop and deliver innovative industry defining products and participate in the end to end innovation cycle of the leading global CPG customers. Now as we turn to Slide 14, it is essential that we underscore the importance of the new IFF's commitment to ESG.
The shared commitment to do more good, the new IFF is united in our aspiration to change our communities and our world for the better. Our efforts with regard to ESG and sustainability are critical to unlock long term stakeholder value. This is not new for us. IFF has become an ESG leader in our industry, and this focus will remain fundamental to the future success of our company. Our stakeholders, including customers and end consumers, have elevated the importance of safe, sustainable and responsible operations, and the new IFF is positioned to build on our momentum in this area.
This includes the ways in which we approach our environment our environmental footprint, material sourcing, new product innovation, the way we treat our colleagues around the world. We are constantly evaluating opportunities to accelerate our impact and drive transformational change. As we look to the future, ESG will continue to be an important factor in how we achieve our long term company objectives, all while making a positive contribution to society. Our people understand that every day they can have a positive impact on their communities and the environments to the work that we do. Looking now to Slide 15.
We know that putting ESG considerations at the core of our purpose and strategy is of utmost importance to our stakeholders. Including investors, we expect a clear understanding for how we are addressing sustainability related topics. For this reason, communicating our commitments through improved and more transparent disclosures has become vital to advancing our overall strategy. We have worked hard to develop effective management approaches and accompanying metrics for our most important ESG topics, which has resulted in significant broad based improvements since we began our program nearly 10 years ago. We are very pleased to have our work validated by a number of independent third party providers of ESG Research ratings recognition for our investors.
Among rating and ranking providers such as Sustainalytics, MSCI and Bloomberg ESG, IFF is recognized as a global leader setting the new standard in ESG. For example, at the end of 2019, Sustainalytics ranked us with an overall ESG score of 79 out of 100, placing us in the top 96% of companies, with a relative ranking of 6 out of 127 companies in our industry. More recently, I'm proud to say that we have been named to the Dow Jones Sustainability Industries, both in the 2020 World Index and the North America Index, a distinction that validates our leadership position in sustainability performance and underscores the company's commitment to executing on key ESG priorities. As Chairman and CEO of IFF and as an Executive Committee member of the World Business Council of Sustainable Development, I'm thrilled to report that our sustainability performance is continuing to advance at IFF. We intend to build on this effort together with NMD.
Our passionate dedicated team will continue to identify innovative industry leading opportunities to update our process with a focus on efficiency and sustainability. With that, I would like to turn it over to Rustem, who will provide an update on our deal related synergies and discuss the long term financial outlook for the new IFF.
Thank you, Andreas. The strategic rationale behind this combination is compelling, but the delivery to our shareholders of the significant financial benefits expected in this transaction is going to come down to execution. On Slide 16, we are highlighting again the meaningful synergy potential that exists for the new IFF. As disclosed in our press release issued earlier today, we are at the end of the integration planning process with our run rate revenue synergy expectation remaining at approximately $400,000,000 by the end of 20 23. Execution on this target is expected to contribute at least $145,000,000 of EBITDA following the requisite investment to achieve those efforts.
Our run rate cost synergy expectation of $300,000,000 by the end of 2023 also remains in line with our previous announcements. In the following slides, you'll see more details on the progress we have made thus far in positioning our combined organization to deliver these synergies and further contribute to the shareholder value creation potential of the new IFF. Moving to Slide 17, we are providing an overview of the process in place to realize significant revenue synergies inherent in the new IFFs portfolio and also our timing expectations. Our approach has been jointly developed during a year long integration planning process by teams from IFS and NMDs divisions, guided by outside professional advisors and reflects learnings from our most recent acquisition. 1st, the life cycle from incubation to commercialization is typically 12 to 18 months, so you'll see a ramp up over time.
We also expect that early cross selling wins leading to integrated solutions will be from midsized regional players due to the nature of the product development cycle. 2nd, we are implementing lessons we've learned from prior integrations, being patient, setting clear unified KPIs and protecting our base business throughout. We understand and believe that revenue synergies are complementary. So the core business needs to perform to plan and the revenue synergies will come on top. In terms of cadence, we expect to realize a rapid acceleration of revenue synergies in year 2 post close, including realized sales of approximately $140,000,000 in 2022, approximately $300,000,000 in 2023 and approximately $400,000,000 in 2024.
Following a thorough review not only of the new ISF's expanded capabilities, but also of the needs and expectations of our customers, we work to ensure that our teams are positioned for success. On Slide 18, you can find several examples of high value opportunities that leverage the full capabilities of our combined portfolio. We have already winnowed a list of 100 down to 40 focused high value projects with near term and medium term expansion opportunities. And focus is what is needed to transform revenue synergy ideas into value. Our success will sometimes require a coordinated go to market approach between divisions and integrated solutions, something Andreas has been repeatedly emphasizing all year, and our integration offices worked hard to sharpen this approach.
The potential of our platform requires focused execution, so that's why we're engaging with customers to understand exactly where near term opportunities lie. Through this integration process, we've done account by account reviews, created work plans and aligned resources to be sure we go to market swiftly, efficiently and with clarity of purpose. As we pivot to the cost savings potential for the new IFF, Slide 19 outlines our expectations in terms of run rates and timing of P and L realization. Again, we expect a total run rate cost synergy contribution of $300,000,000 by the end of 2023. On a full year basis, we expect to generate approximately $45,000,000 of realized P and L savings in 2021, while exiting the year with run rate savings of $120,000,000 50% of the $300,000,000 of cost synergies are expected from procurement, which is why you see a run rate savings ramp ahead of realized savings as it takes time to capture the savings from inventories into the P and L.
The balance of our savings will come from reductions in general and administrative costs, about 35% of the potential, and operations, which represents approximately 15%. In the end, through our focused through our heightened focus on execution, the achievement of the $300,000,000 in run rate cost synergies represents approximately 2 75 basis points of improvement in our EBITDA margin from where we are on a pro form a basis in 2020, a significant value creation opportunity. Note that in 2021, we expect approximately $50,000,000 of realized EBITDA benefits between the combination of revenue and cost synergies. Looking more closely at our cost synergy execution plan on Slide 20, there are clear and meaningful opportunities to optimize non strategic or low value add costs. From the ways in which we source materials to how we operate our corporate functions and manage our physical footprint, we are committed to creating a more efficient organization that allows our teams to focus on growth initiatives while reducing costs.
Out of the gate, we have fully developed work plans for approximately 85 initiatives that will drive our targeted savings. We will have a cost synergy lead executive, whose focus will be on execution and timely realization of our cost synergy commitments. And as we move forward, we will have constant internal updates to ensure we are delivering on our commitments as expected, and we will regularly update our investors on our progress. On Slide 21, we've shared our expectations regarding 4 key financial metrics that showcase the powerful value creation potential of our company in the years ahead. Beginning with the top line, we expect currency neutral organic sales growth of approximately 4% to 5% over as over the next few years driven by unmatched products and solutions offerings, our industry leading R and D and the revenue synergies covered earlier.
We also expect to see meaningful operating margin improvement for IFS moving forward, including an estimated adjusted EBITDA margin of approximately 26% in 2023. That's up around 400 basis points from our 2020 pro form a. The new IFF will continue to generate strong free cash flows and we expect a significant increase to approximately $2,000,000,000 in 2023. Delevering will remain a core priority for the new IFF post close as we target a less than 3 times net debt to EBITDA ratio 24 to 36 months post close and reaffirm our commitment to maintaining our investment grade rating. Slide 22 highlights the new IFF's enhanced financial position among industry peers.
In addition to clear scale advantages as the industry's largest company by revenue, our company will have a leading successful execution of our strategy, will position us to create substantial value for shareholders over the long term as we deliver results in line with our potential. Slide 23 illustrates our balanced approach to capital allocation. 1st, we'll invest in our businesses to ensure adequate capacity, upgrade our IT systems and improve efficiency and the necessary capital expenditure has already been built into our 3 year projections. We will strengthen our strong balance sheet and use our free cash flow to enhance total shareholder returns. We remain committed to maintaining IFF's current dividend policy.
As mentioned previously, debt repayment is a priority and a commitment and it's central to ensuring the long term health of business. We therefore are intent on deleveraging our balance sheet both through paying down debt and by growing EBITDA. As announced in our Q3 earnings call, we are evaluating some of the smaller non core operations in our existing business portfolio. Upon the completion of the NNB transaction, we also intend to evaluate possible non core divestiture candidates from that business portfolio, subject to reverse Morris Trust requirements. And the proceeds of any divestitures will be used primarily to achieve the leverage reduction commitments.
More to come on this, but we wanted to highlight that portfolio optimization will be a core part of the strategy of the new IFF as we move forward. Lastly, we believe that well executed share buybacks can contribute significantly to value creation. We do expect to reauthorize the share buyback program, but only after we achieve our stated goal of reducing leverage to less than 3 times net debt to EBITDA. With that, I'd like to now turn it back to Andreas, who will address the teams and leadership in place to carry out the vision of the new IFF.
Thank you, Rustom. Turning to Slide 24 now. As I hope you have gathered from the presentation so far, the tremendous value creation of this platform in our hands, but only if we execute. We have made tremendous amount of progress throughout the integration planning process to ensure that our teams are positioned to success from day 1 forward. There's a clear ownership from business activation and powered leadership from an integration management office directly overseen by myself and Wissam with regular updates to a dedicated subcommittee of our Board of Directors at each Board meeting.
As part of this effort, we are also appointing a cost synergy lead who will report directly to me, ensure that we achieve the cost savings objective that we have identified. This person has significant experience in overseeing transformational cost saving initiatives, and we are confident in his ability to deliver. We have the benefit of an enhanced full leadership team, including an NMB team that has integrated more than 4 large scale transactions with significant margin expansion. We have the benefit of more than 1 year of integration planning, building rapport and clarity between 2 companies with shared cultures. Russum and I have focused on overseeing these efforts and empowering the IMO to take decisive action that will allow our teams to achieve the ambitious objectives that we have identified.
We acknowledge that the integrations are complex and issues may arise, but we are confident that we have put a well defined structure in place to ensure successful delivery of our plan. We are especially fortunate that we have identified an exceptional leadership team to guide the new IFF as outlined in Slide 25. This is a diverse group with featured the best and brightest from both IFF and NNB as well as leaders that are new to the organization. In addition to the accomplished Executive Committee that we have in place, I'm thrilled that we also have announced the extended leadership team of more than 125 leaders with a great representation between NMP and IFF, who will be ready to execute worldwide on day 1. Moving to Slides 2627 now, where you can find additional details on an impressive Board of Directors for the combined company, several of which were just announced today.
This is a group of proven executives with deep experience leading global organizations overseeing transformative merger integrations and executing business strategy across a diverse set of industries. I look forward to especially working alongside the directors new to IFF, including Ed Breen, who is set to become a lead independent director later this year. I would also like to thank and acknowledge the 4 directors that will be departing our board upon the completion of the merger. Marcelo, David, Catherine and Liwei have provided invaluable leadership and expertise as IFF has pursued our transformation and created this foundation for the next stage of growth. I wish them all well in their future endeavors.
As we conclude on Slide 28, I would like to make a few closing remarks to underscore the exciting future ahead of the new IFF. For the completion of the NMP transaction just days away, IFF sits at an important moment of transformation. With our unmatched scale and incredible deep portfolio, it's clear that we have tremendous opportunities to strengthen our partnership with customers and capture market growth. But just as important as identifying a winning strategy is establishing a team and a set of processes needed to achieve these objectives. I'm confident that following a lengthy and thoughtful integration planning process and with the benefit of previous lessons learned, the new IFF is ideally positioned to succeed as we entirely focus on execution and delivering our commitments fully.
With the organizational model and structures in place, the new IFF will deliver significant value for shareholders for years to come. We are thrilled to lead the bright future that lies ahead of IFF and hope that you will join us this transformational journey. I'm excited for our colleagues across the globe as we combine our passions, our talents and our imagination to meet the world's challenges and create a better world. Thank you.