Sensient Technologies Corporation · NYSE:SXT
Sensient Technologies — Q1 2024 Earnings Presentation
27 slides from Sensient Technologies's earnings presentation, Apr 26, 2024
Slide 1: First Quarter 2024 Investor Presentation
First Quarter 2024 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 “2024 Financial Outlook” in this presentation. Such forward-looking statements are not guarantees of future performance and inv
Slide 3: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES Within this document, the Company reports certain non-GAAP financial measures, including: (1) adjusted operating income, adjusted net earnings, and adjusted diluted earnings per share (which exclude restructuring and other costs, including the Portfolio Optimization Plan
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: 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 7: Committed to ongoing portfolio optimization to drive margin improvement
Committed to ongoing portfolio optimization to drive margin improvement Expanded flavor portfolio and strengthened technical solutions capabilities through the acquisition of Flavor Solutions, Inc. in July 2021 Strengthened extensive natural color portfolio by acquiring Endemix, a vertically integra
Slide 8: Global Revenue by Group
Global Revenue by Group Color Group 2023 Revenue: $608M Core Areas of Focus: Food and Pharmaceutical Colors and Personal Care Flavors & Extracts Group 2023 Revenue: $741M Core Areas of Focus: Natural Flavors, Extracts and Natural Ingredients Asia Pacific Group 2023 Revenue: $146M 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 2023 Revenue: $608M Food and 74% of 2023 Segment Revenue Pharmaceutical LC Revenue Change* • Market trend toward natural colors in food and beverage Q1 ’24 (2.7%) • Unique value proposition for Pharmaceutical customers includes colors, flavors, coatings, and extracts Personal Care 26%
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 2023 Revenue: $741M Flavors, Extracts, 67% of 2023 Segment Revenue and Flavor LC Revenue Change* • Opportunities for on trend products with extracts, taste modulation, Ingredients Q1 ’24 (1.5%) and natural flavors Natural Ingredients 33% of 2023 Segment Revenue LC Revenue
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 2023 revenue of $146 million and operating income of $30.8 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, Philipp
Slide 15: 2024 Q1 Segment Results
2024 Q1 Segment Results Local Currency Revenue* Local Currency* Commentary: Q1 Color Group reported lower revenue in the quarter due to lower volumes related to end market declines in certain product categories and modest Color (1.7%) customer destocking. Volume growth as a result of new sales wins
Slide 16: 2024 Q1 Consolidated Results
2024 Q1 Consolidated Results Q1 Local Currency Revenue* +3.8% Local Currency Adjusted Operating Income* +2.6% Local Currency Adjusted Diluted EPS* (1.3%) Local Currency Adjusted EBITDA* +2.2% Q1 consolidated local currency revenue increased due to volume growth in the Flavors & Extracts and Asia Pac
Slide 17: Capital Allocation
Capital Allocation $250 $200 Prioritize ROI capital projects $118 $14 DOLLARS IN MILLIONS $150 $23 Excess free cash flow to be used for $87 $61 debt reduction $79 $88 $100 $52 $39 $67 Maintain prudent level of leverage to $50 support Sensient’s long-standing $62 $66 $69 $69 dividend and opportunisti
Slide 18: 2024 Financial Outlook
2024 Financial Outlook* Revised Previous Metric Comments Guidance Guidance Mid-single-digit Low to mid-single- Local Currency Revenue** growth digit growth • Excludes the impact of share-based stock Mid-single-digit Low to mid-single- Local Currency Adjusted EBITDA** compensation and the costs relat
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 emissions intensity, water withdrawal, and landfilled waste Environmental • Seed-to-shelf program focused on
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures Three Months Ended March 31, 2024 2023 Operating income (GAAP) $ 49,406 $ 50,838 Portfolio optimization plan costs – Cost of products sold 107 - Portfolio optimization plan costs – Selling and administrative expenses 2,705 - Adjusted operating income $ 52,218 $ 50,838 Net
Slide 23: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) Three Months Ended March 31, 2024 Foreign Adjusted Exchange Local Revenue Total Rates Adjustments* Currency Flavors & Extracts 8.0% 1.1% N/A 6.9% Color (0.7%) 1.0% N/A (1.7%) Asia Pacific 0.6% (3.5%) N/A 4.1% Total Revenue 4.2% 0.4% N/A 3.8% Operating Income Flav
Slide 24: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) Three Months Ended March 31, 2024 Foreign Exchange Revenue Total Rates Local Currency Flavors, Extracts and Flavor Ingredients 0.0% 1.5% (1.5%) Natural Ingredients 26.4% 0.0% 26.4% Flavors & Extracts Group 8.0% 1.1% 6.9% Food and Pharmaceutical (1.4%) 1.3% (2.7%)
Slide 25: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) Results by Segment Three Months Ended March 31, Adjusted Adjusted Operating Income 2024 Adjustments* 2024 2023 Adjustments* 2023 Flavors & Extracts $ 23,678 $ - $ 23,678 $ 22,180 $ - $ 22,180 Color 31,679 - 31,679 31,885 - 31,885 Asia Pacific 8,776 - 8,776 9,241
Slide 26: Non-GAAP Financial Measures (Cont'd)
Non-GAAP Financial Measures (Cont’d) Three Months Ended March 31, 2024 2023 % Change Operating income (GAAP) $ 49,406 $ 50,838 (2.8%) Depreciation and amortization 14,709 14,150 Share-based compensation expense 1,995 2,267 Portfolio optimization plan costs, before tax 2,812 - Adjusted EBITDA $ 68,92
Slide 27: Sensient
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