Sensient Technologies Corporation · NYSE:SXT
Sensient Technologies — Q2 2023 Earnings Presentation
25 slides from Sensient Technologies's earnings presentation, Jul 21, 2023
Slide 1: Second Quarter 2023 Investor Presentation
Second Quarter 2023 Investor Presentation
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS This document contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2023 Financial Outlook” in this presentation. Such forward-looking statements are not guarantees of future performance and invo
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Within this document, the Company reports certain non-GAAP financial measures, including: (1) percentage changes in revenue, operating income, diluted earnings per share, and adjusted EBITDA on a local currency basis (which eliminate the effects that result from translati
Slide 4: Sensient Overview
Sensient Overview Provider of customized solutions for food and beverage, pharmaceutical, and personal care customers Global market leader offering an extensive portfolio of natural flavor and color technology platforms and solutions Exceptional innovation & applications expertise with unique abilit
Slide 5: Innovative Technologies Creating Unique Solutions
Innovative Technologies Creating Unique Solutions Applications expertise and solutions-based selling High impact relative to cost Technically-driven products that are difficult to replace Strong consumer trends Opportunities to grow organically and through M&A 5
Slide 6: Focusing our portfolio and strengthening our commitment to the end markets
Focusing our portfolio and strengthening our commitment to the end markets Investing in core focus areas of Flavors and Extracts, Natural Ingredients, Food and Pharmaceutical Colors, and Personal Care Divested non-core product lines (inks, fragrances, and yogurt fruit prep product lines) in 2020 and
Slide 7: Natural solutions provider focused on consistent and sustainable supply chain
Natural solutions provider focused on consistent and sustainable supply chain Provider of natural solutions to support health & wellness and clean label consumer trends Robust agronomy program ensures responsible procurement and traceability of sustainable ingredients Committed to delivering safe, a
Slide 8: Global Revenue by Group
Global Revenue by Group Color Group 2022 Revenue: $604M Core Areas of Focus: Food and Pharmaceutical Colors and Personal Care Flavors & Extracts Group 2022 Revenue: $738M Core Areas of Focus: Natural Flavors, Extracts and Natural Ingredients Asia Pacific Group 2022 Revenue: $144M Core Areas of Focus
Slide 9: Color Group
Color Group Global market leader Natural color innovator Excellent innovation & applications expertise 9
Slide 10: Color Overview
Color Overview 2022 Revenue: $604M Food and 73% of 2022 Segment Revenue Pharmaceutical LC Revenue Change* • Market trend toward natural colors in food and beverage Q2 ’23 +4.3% • Unique value proposition for Pharmaceutical customers includes YTD ’23 +9.9% colors, flavors, coatings, and extracts Pers
Slide 11: Flavors & Extracts Group
Flavors & Extracts Group Broad product offering Unique ability to service global, regional, and local customers Leading technology platforms Outstanding applications expertise 11
Slide 12: Flavors & Extracts Overview
Flavors & Extracts Overview 2022 Revenue: $738M Flavors, Extracts, 67% of 2022 Segment Revenue and Flavor LC Revenue Change* • Opportunities for on trend products with extracts, taste modulation, Q2 ’23 +0.8% and natural flavors Ingredients YTD ’23 +0.4% Natural 33% of 2022 Segment Revenue Ingredien
Slide 13: Asia Pacific Group
Asia Pacific Group Portfolio of food and beverage flavors and colors R&D centers in key strategic markets to support local and regional customer base Ability to deliver localized solutions and technology platforms 13
Slide 14: Asia Pacific Overview
Asia Pacific Overview 2022 revenue of $144 million and operating income of $29 million Sensient’s sales of flavors and colors for Food and Pharmaceutical are managed on a geographic basis and reported as a separate segment Manufacturing capabilities in Australia, New Zealand, China, Japan, Philippin
Slide 15: 2023 Q2 Segment Results
2023 Q2 Segment Results Local Currency Revenue* Local Currency* Commentary: Q2 YTD Color Group reported higher revenue in the quarter due to pricing actions across the Group and volume growth as a result of new wins, Color +1.6% +5.7% partially offset by lower volumes related to customer destocking
Slide 16: 2023 Q2 Consolidated Results
2023 Q2 Consolidated Results Q2 YTD Local Currency Revenue* Flat +2.6% Local Currency Operating Income* (7.3%) (4.4%) Local Currency Diluted EPS* (12.0%) (10.0%) Local Currency Adjusted EBITDA* (6.6%) (4.4%) Q2 consolidated local currency revenue was flat due to pricing actions and volumes from new
Slide 17: Capital Allocation
Capital Allocation $250 $200 $31 $- Prioritize ROI capital projects $118 $14 DOLLARS IN MILLIONS $51 $23 $150 $87 $61 Maintain financial flexibility to pursue M&A $57 $79 $100 $52 $39 $67 Excess capital returned to shareholders $50 $77 through dividend and opportunistic share $62 $66 $69 $43 repurch
Slide 18: 2023 Financial Outlook
2023 Financial Outlook Revised Previous Metric Comments Guidance Guidance Mid-single-digit Mid-single-digit Local Currency Revenue* growth growth Mid-single-digit Mid-to high single- • Excludes the impact of share-based stock Adjusted Local Currency EBITDA* decrease digit growth compensation High si
Slide 19: Why Invest?
Why Invest? Strong competitive position Defensible and ‘sticky’ business (& low portion of customer costs) Global presence Exposure to stable and growing markets Focused on improving returns and on growth 19
Slide 20: Appendix
APPENDIX* *Amounts in thousands, except percentages and per share amounts
Slide 21: ESG Information
ESG Information Sensient is committed to the principles of sound environmental stewardship and the responsible and sustainable use of energy and natural resources. • Long-term goals to reduce Energy, Water, and Hazardous Waste intensity Environmental • Seed-to-shelf program focused on strengthening
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended June 30, 2023 Six Months Ended Jun 30, 2023 Foreign Foreign Exchange Local Exchange Local Revenue Total Rates Currency Total Rates Currency Flavors & Extracts (0.6%) 1.0% (1.6%) (1.3%) 0.1% (1.4%) Color 2.7% 1.1% 1.6% 5.6% (0.1%) 5.7% Asia Pacific (3.5%
Slide 23: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) Three Months Ended June 30, 2023 Six Months Ended Jun 30, 2023 Foreign Foreign Exchange Local Exchange Local Revenue Total Rates Currency Total Rates Currency Flavors, Extracts and Flavor Ingredients 2.4% 1.6% 0.8% 0.6% 0.2% 0.4% Natural Ingredients (7.1%) (0.1%)
Slide 24: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 % Change 2023 2022 % Change Operating income (GAAP) $ 51,591 $ 55,244 (6.6%) $ 102,429 $ 108,033 (5.2%) Depreciation and amortization 14,440 13,124 28,590 26,180 Share-based compensation expense 2,49
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