SXT - Earnings call transcript Q1 2021 | Sensient Technologies Corporation

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Operator

Good morning and welcome to the Sensient Technologies Corporation 2021 First Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Mr. Steve Rolfs. sir. ahead, go Please

Stephen Rolfs

call. Steve Sensient Vice like XXXX Chairman, the our release available investor is Technologies you quarter all I'm quarter Manning, and by this Financial we to and Sensient's Officer Officer. of earnings on morning, first A Sensient's of now Corporation. to am Rolfs morning. joined President morning at and Senior our Chief welcome I President, Paul financial Good I sensient.com.com. our Executive results. Chief This released first of website copy presentation would

our certain financial investors which be considered During GAAP. financial information call evaluate improve financial for today, from information measures including between isolation with A additional in of statements. our reference of We to we the this provide non-GAAP in as comments non-GAAP reporting we this morning. believe available comparability the financial should comparable performance a These substitute and will calculated the results we not to or accordance make to company's I your measures, in with measures results with is directly may most review questions, the in these press also morning, everyone to comments reconciliation that to remind forward-looking connection non-GAAP made reconciliations like GAAP responses release. would include investors encourage financial periods.

bear and at normal action, in urge the more created uncertainties factors We our today. remedial COVID-XX additional our timing analyze return Sensient's particularly mind governmental for of previous description XX-Q differ financial these view that you actual materially, attempts may of when activity. in Our potentially results read comments filings by the of economic pandemic, you could and of impact the a our factors forthcoming to SEC results. Please a

Manning. from we'll hear Paul Now,

Paul Manning

to morning. local Good X% pleased Steve. I'm currency growth. revenue consolidated adjusted report Thanks,

operating X% adjusted growth, profit local XXX basis currency more currency adjusted adjusted Extracts Our revenue points and the in reported local quarter. growth, profit operating Flavors & margin Group improvement than XX%

adjusted Pacific operating currency growth. Our X% XX% local currency adjusted and over Asia local profit reported Group revenue growth

strong, at we balance with the acquisition In now is currently and is our business, I'm opportunities. our year. and April, assessing to results down the sheet X.X Our year Overall, and various our first from debt-to-EBITDA ago. we Fragrances completed are sale a our of X.X, quarter start pleased

future sampling We in strong new product the continue which see pipeline, opportunities and of in requests both of to activity increase product an launches. sales are good and development indicators

throughout COVID-XX be are sales continue the rates continues in achieved The impact low line. certain Asia on region trends Geographically, Pacific we geographic countries. Our attrition to of positive to to see vary levels XXXX. and product beginning depending we at U.S. the and

America markets. product Latin vaccine standpoint, see and sweet, government continue a natural savory, ingredient continue to in growth be regulations, we to and From and lines. Europe slower impacted However, softer number rollouts, by a line our product of

to However, personal we headwinds continue see care, QSR. makeup, and in

year. of much in to expect headwind the later the We care subside personal

and Despite Brexit XXXX, mitigated have to of personal on chain Fragrance increase service, the to focused strongly During raw company material identified unusual robust report from provide on Suez weather to in and disruptions, our we number container customer in the increases. cost shortages food, I'm completes of and pharma, backups, in shortages of we April This sale quarter, shipping these continued supply first divestitures very core and product business. our pleased that an lines the three we Canal experienced challenges, care. challenges, positions early we third closed the within to in Texas. our the be and

opportunities acquisition core strategic within lines. product look at support initiatives to our sensible continue We that these

and result margin a growth local focus with The operating our strong of transition quarter & the service strong and fixed quarter. the shifts, solutions. is direct had The XXX margin to currency and mix increased a customer results. quarter continues X% Overall, and points from cost to Extracts in Group and group's strong year's sales revenue basis growth. a another operating group's growth, product The profit currency ongoing profit sales the continued adjusted group adjusted takeout XX% compared improvement more benefit to initiatives. to profit profit the group first Flavors product Turning local adjusted last value-added

basis track year. margin for XXX to on point XX goal well achieve for revenue We the growth basis improvement operating are mid-single and digit points profit to year the our our

Group, Extracts very & another Flavors the business savory quarter. strong had the Within

service. and companies a proteins, foods savory business savory foodservice, and prepared plant-based of exceptional supplies found snacks, Our variety including innovative are that and customer a which business taste food as result with and to enhancers, CPG, supplied This products, are grow continues technologies flavors, in sauces, flavor its other modulators companies. strong to wide flavor of

about business this and Group our that give growth the bringing future we demand the see online opportunities. the revenue it optimistic Flavors support profit mid-single margin of expect is acquired year. operating to better additional continued for improvement to business part savory over business. we facility us long Extracts and I deliver positioned We to & digit contributing its capacity our anticipate increased quarter, forward production in service for to term. to to latter this the continue growth, ingredients and the a well I'm facility and look within Our this group first will natural In customers

as growth colors. capitalize We result technology well a launches strong strong of and use natural product The to extracts OTC pharmaceutical functional slowdown brand its Within for and for natural service, customer and food, a consumer to our us quarter the execution sales demand continues as the low-single and positions demand the is low-single-digit colors up natural this that believe focus colors. in nutraceutical, on in revenue for The group's was and used Group, Color pharmaceutical applications. food platform see quarter. colors for digits on group

second activity. Color business the due back the sample we impacts and Group, of year a negative continues new revenue improved half to a in the in quarter the new However, industry. to down makeup personal be COVID-XX rise of our care Also increasing much of customer on as result in and the request expect project

communicated first last call, XXXX half be we our that would of this the During for challenging business.

quarter. to quarter, improvement we signs operational the align are of to As already which continues The of consolidate operations structure business profit our first profit enter our volumes in the XX% in care Color is The customers operating on down local quarter. is approximately result of better lower seeing decrease personal some primarily care. second progress care we for personal adjusted The to cost was Many our the solid personal the cosmetic future. our in ongoing Group's make growth in manufacturing plan, currency designed recovery. the experienced first of

second half As are their and optimistic that should our this our quarter back results results, we be year of improved. much lags business

Turning food our to of up and many markets. pharmaceutical were We in our business.

However, we a U.S. soft product in lower mix experienced to new and market Europe launches product due unfavorable in the

this personal in Group and ahead profit business. Looking food year the and of both care to to second improve and pharmaceutical beyond, the in the Color expect we quarter

mid-single revenue subsides. expect COVID mid-single Over and care I digit once our personal pharmaceutical the impact from revenue food growth XX continue term, to business the digit growth and from long of

our local currency of service, revenue on growth revenue another regions profit Group Pacific group and and quarter solid had wins, customer sales adjusted growth. local X% had strong in a almost utilization driven with adjusted Asia currency strong XX% all technology strong by growth over Our The solid new focus platforms.

volume year. Despite growth innovation. the we deliver Over Pacific a I with on XXXX, continue year, digit group's new we good is cost the last the we bellwether along to and operating ongoing contributing with the the customer an is upon increase to growth product the has COVID-XX, requests, of mid-single throughout profit We've start sales margin reduced had continue in outlined to impact an Based of guidance, and are year. excellent current its which for track see sample trends, Group group our to structure, improvement. the Asia to the expect which

always, now quarter additional details very results. you first sales about I about and of the optimistic wins. future our I'm provide excited year our the on with will the Steve As new remain business.

Stephen Rolfs

these clear operational the In morning, GAAP our Paul. XXXX to operations This the items performance. costs, and remove provides reviews XXXX how be company's and impact also differences plan. be the and between divestiture-related results. more or investors the of costs picture will impact of comments you, results our explaining I the results removal related the the to and of divested, for the Thank company's of my adjusted this a adjusted believe the We divested our improvement management operations performance. to reflects The that

of share, earnings divestitures are diluted was million, these operational $X.X to costs of GAAP the related quarter $X.XX or first Our share plan. the in improvement the Included per $X.XX. cost results per and

addition, GAAP share million, targeted $X.XX In of divestitures. include GAAP the costs represents in revenue the the related earnings the this divestiture, our earnings quarter $XX.X Last to results include share, operations quarter. first per related for approximately or to of million of results of per which year's approximately quarter approximately $XX.X $X.XX

share operations $XX.X per of GAAP include our earnings share be approximately the per the $X.XX of divested of million addition, in In and quarter first revenue. earnings XXXX to from

Group reported This compared X.X% X.X% Asia up million, in an currency and in which was Flavors a growth up was local revenue of reported local items, Color currency currency result the Group down income primarily operating Extracts first Pacific result personal the the Extracts performance. operating Group these X% Pacific the and was care adjusted XXXX. was income Excluding adjusted revenue XX.X%, local Asia currency. to local growth, of adjusted XX.X% $XXX.X Adjusted consolidated currency Flavors in growth. adjusted was in XX.X% as local adjusted of which operating the The & primarily Group, income increase & the currency, quarter Group, of a local

the currency Our adjusted for quarter. was EBITDA approximately X% local up

payments flow cash the operations first cash first XXXX of primarily of Our the to quarter, was higher to compared in incentive in quarter XXXX. quarter from the due first down

our rest and to the of throughout year. capital levels the working continue We expect improvement continued focus on

We to for have range our to on a bring previously are number stated of million the identified end capital executing year. investment which and will the expenditure top us $XX plan capital our million $XX of attractive opportunity projects, of

stock. stock we to adjusted GAAP EBITDA quarter, Based company basis. adjusted bought issued guidance. trends law, approximately on currency EPS, down debt are reconfirming expect acquisition, previously $XX and EPS, and our and buy of an continue tax first to million back pay an on the current current Absent local During we the opportunistic we back

growth calls EPS for GAAP $X.XX. of EPS our compared guidance GAAP mid-to-high single-digit reported to Our XXXX

compared On divested. includes for grow to $X.XX be XXXX Furthermore, year currency to EPS XXXX and the of in of local our an mid-single to the of costs, EPS basis, grow single-digit currency low-to-mid mid-single-digit to costs, growth our we rate. a at XXXX divestiture-related guidance our plan continue rate $X.XX. EBITDA adjusted a for for businesses digit full-year the calls improvement our local Our approximately adjusted guidance currency and local operational at adjusted expect impact adjusted to revenue

proposals EBITDA local currency continue current a Given in related corporate for that measure law, to the we tax adjusted underlying reliable changes metric business believe growth. provides our to our

currency to include this year. Our due for on based our time you morning. Thank rates, earnings to $X.XX the currency. reported by the And approximately benefit we current impact results of your expect exchange for

the open now call will questions. We for

Operator

go Vesterinen from ahead. with [Operator first BNP Exane Instructions] Please Heidi Paribas. Our comes question

Heidi Vesterinen

Morning. have a I questions. just few

Paul Manning

Hello, Heidi.

Heidi Vesterinen

Hi, I rate is in there on how QX. can if exit share the you? you So, anything are wondered

the growth So second one. see is in the and the in outlook? you first talked on both you you Do update year? And already? these you slowing food product Flavors Color on to could and about and So trends Are the that then you. talk inflation us the the say highlighted? about the unfavorable that And that related more Colors. & you question slowdown the naturals might pharma, please, Thank X% launches and be is to in is slower fair specific mix also more improving. speech pricing for it and maybe lastly, you what's then saw of Extracts that's your Could that

Paul Manning

Okay.

quarter. exit digit of our rate I confident growth I So feel are about let me would achieve mid-single year. very, obviously the QX. start had say the on to first with that. outstanding one, both for for revenue Flavors goals track the very businesses an the

so growth And very there. I see good continued

it in see the a Colors, in customers I report think the bit little food note that I There are to a specific of products overall, third favorable you customers And to results of a seeing supply mentioned sit personal chain bit rebound. tends the I'll care, that's starting between starting many results. a lives, moment, of in uptick shelf to April, is our tend and be why here pharma get as already personal lag. little signs Many our heard in week but script rebounding vast cosmetics, so There we a already in to lag care. we have and that tend to to a are you me there. rather of here our that see volume. positive longer see even those of these I But we're a

that's it necessarily to was and sure has. it not QX as We So were for beyond very exciting Color. as quickly for going happen

digits mid-single the Ditto Group that's So for feel so really for Asia. I Color of balance the about good I for good and year. think the therefore, very

lot events there. able to some pretty we a lockdowns out unusual has unusual some on, and were solid growth Asia got then but eke of going

As sample pipeline at I good really, again there, look I here. really all activity groups, at I across really three look the the feel

As of a bit off the the say, launches, what more some launches U.S., we say number it the launches, in which larger in in fairly perhaps in might the the the was this impactful launches of launches the not consistent. is the industry who difference non-COVID product and of different, you stock but in think a in find nature any launches, XXXX little XXXX big larger from terms too of bit the Europe and of total total one was XXXX, took in Europe slowdown product I have little was an market it versus to had were food were year. in number smaller The The aggregate But CPGs across far interesting. XXXX. launches of is would the launches number U.S. those of

good win So QX. our continues rate was quite here be win rate to quite and good our in

slowdown Now, period, that are and XX-day these any food things the say. happen would pharma, in in can I

with some do to has launches. this timing of Some of

You think perhaps later perhaps even being they even and earlier. they're QX going to QX or up wind or be

think that factor. a So was I

a types terms the of I mix slowdown were bit little than There the Europe. think what in different that overall of seen. is was a products we've in launched

that growth, to here. very really there's that overcome. I I business was think good activity. of that We've rest strong feel colors and you very portfolio. very believe I been have is would on continue we that nice about invest to had see has I very, very of kind the We undeniable. a in that's tell year. a long for That But that tricky QX run see only we I nothing we think continue. systemic good and and strongly and to business, the going invested natural very very, We've

and colors. of as reflective color We we company, and so and access, customers. the launch factor which are natural very the We that regarded near very food good then that very big access, in is have activities top say broad-based that's and yet things generally nature to small much of for a customers here another are enjoy

customers. would to on about Flavor that of traditionally some of market focus Color we tend big feel impact the B little tying good bit where fewer type comment that as the we more that But very, customers So C having I the say to launches, strongly a see or versus in here. very segment we my describe no,

an think continue but think of quite I good there. thing. I the can prospects kind is to These things intermittent this just be happen,

year. in more, substantially a But a a you're COVID vaccinated an from it. Nutraceutical area as the year, level COVID as least certain have there I during did noticed okay, same and markets, we at products in don't there is last is categories. you would argue, nutraceutical see benefited folks people markets naturally OTC-related has pharma, Now slowdown of up begin that get been most slowdown saw as open certainly that going think that I to to I nutraceutical think

world. parts that's of in certain So natural easing restrictions COVID the of a I certain think of outcome

a you the So bit slowdown a part know. but that's little that's a of as portfolio, there, smaller of

your be a of is think us. and already last guiding talk to I been raising And that's There not So businesses as towards pricing certain certain elimination a lot discounts. then don't are prices. going last of saw for headwind so inflation. CPGs question, their raising we much out significant that year was prices there, What necessarily

certainly year CPGs you this I but their projecting raising we're well, of two for you raise about prices reduction lot we if promotions, or what in prices. to a want other instead a we're is, seeing two-for-one, think So seeing brands two. pay of And and saw announcements their

we're seeing materials China some produced raw our certainly what some in So inflation in trouble We're transportation. suppliers, seeing either from are seeing having that in we're exported. inflation being or

is of I could at that, Could sure. a year? but there point. wave for factors other we I with inflation see this be like massive anticipate this next surcharges some of can think and don't inflation we handle Oh, some that

think personal helping raw that an would a overcome tend I in food as a be not successful to think our be as a with that material we pricing to but fairly business, -- significant that's of ingredients, I inflation surprise care and ingredients organization, own. me,

those on there But are concerns So items. I pretty able transportation-related right successfully. there are been individual don't we've far, mitigate have increases. now. cost inflation thus any major Yes, Yes, to

Heidi Vesterinen

you. Thank

Paul Manning

Okay, sure.

Operator

with next Mark Stephens. The Please from Connelly ahead. go question is

Mark Connelly

because on of that's was side? of but sort Color other involving had overall, trying follow sort sense sense is cosmetics Can sequentially on, to significantly going I'm and less part performance get or than expected you. a to Thank modeled. than of your we This question the a cosmetic whether of up of just a better you give bad little I was were or better what's pieces hard the

Paul Manning

probably part business, literally, bit help hair give I our think personal bit were be in is less expected. now. of to there in further portfolio, even care, is. But was the have would we was more Yes. of about right you your some things yes, was Hair market And hit continues very it very, very, our little little portfolio. worse as a smaller but to was dealing to got about very and answer a not But makeup. Skin we I a part care all in in signs where seeing maybe good our as it If skincare. good a that when okay. a think what cosmetics you generally would what question good QX It positive makeup, hard were part of we're very idea there. Really we're considered,

some was think of that those see Asia life of activity so definitely started And yes, I that, was Particularly there markets. in positive. some to in we've signs

and at rest and on for I the as look so over And makeup the year, think that I cosmetics we would rest feel tell look QX, really what of as back and -- at look month segment. I I've see you quarter pretty coming daily right I this of already based the this good the really good now, in I they sales, about

second and really my pharma, for Group. Food be half back that's I of most the for comments the the you year there. heard to the quarter significant Color for and think going factor the

be going good. to very very, I think we're

that cosmetics we big half, think I'm I think coming back. pretty happen as I would that's really but coming about is And till I thing solid feeling didn't be as second but speak. said, the back we're the good there, that to going

So positive. that's a high real

Mark Connelly

That's really you. helpful color. Thank

sort QSRs they things in that their items the food bring to of is menus new we hearing one keep of and may from slowly. particular more that So companies

to overall QSR may about shift slowly. made But more keep wins, food You end-all. the hearing normal the talk comfort product and talked isn't I new sort to and of necessarily know evolve the you be-all how about back we they

CPG now, products we're Their new the you just separately. in does So, we think as as products, of But seeing different. different is early of of that about the stages? that referenced kind about think back coming you're a it in kinds little the seeing the behavior kinds product suggest right development or you a you are

Paul Manning

question. Yes, that's interesting very a

to I broad-based that degree some think the at COVID trends a during saw before continue we very COVID. level,

colors, foods natural be and going in before believe high So, is for is level away in a that market, we that continues of levels and don't those example, coloring consistent market, natural I the what with very trend and during the to their U.S. macro products believe colors the be to and European saw continue COVID. usage very, I

They extracts. flavors questions in that very some pipeline our naturals, presence, robustness if is predict very, built on want want fall they of the taking shelf really natural they maintain launching, business One in want and an area share, you're could product off space, continue this aggressive. That of of level what colors they our to I predict, that I many a emphasize we've me that lot and launches. they could I be want the categories of well do in to be noted keep I may keep things of folks, things they we've the online one C customers, nutraceuticals, those today. product to think of and asking a yes, that B based the see very around, to these so may are and would, But

so, think be those to strong. continue very and trends And amongst I very, the B Cs

we've things of an that SKU the the many is of parts noted one think rationalization in definitely acceleration from I market.

similar to to saw COVID-XX. during So, if question, menus, they be pandemic. the your they them, What foodservice, very what certainly for rationalized with? it before come back you surprised of I yes, was many wouldn't their example,

big are the our looking customers necessarily -- for customers types customers end in of big, the don't a for. I that therefore and see are products shift looking So are

the remains to it they're considerably. but maybe might launches, incremental, a big on are to there approach. are line be call also But more really pipeline again ticket feeds big really tap more both, kind extension seen, going you the our bonanza incremental type I Now launches there don't product. think nature launches of of because that change

Mark Connelly

just squeeze more That's helpful. in. one If I super could

You logistics. your keeping because is or either quarter been are or hearing difficult. What's this sick quarter it and more worse? getting about workers fully difficulty This experience talked hiring better plants has about more past lot a we're because quarantined in staffed, or got

Paul Manning

Our attendance from COVID-XX somebody has to been the absolutely today. day outstanding said

So been very proactive. we have very,

a We foods. for in important to have the talked sorts our talked position of our we've importance coming talked and about We've very about your work with mission we protein manning about for and lot about of folks, pharma, produce, and servicing talked vaccinations the very, about customers, all that areas. flavors we've

and And in mission really they so very the our I think strongly. very, employees believe it understand

So has our been great. attendance

I of folks the vaccinated around think lot gotten company. our a that we've

been many months have for We our proactively now. testing employees

into so has to And a very, folks come very confidence safe very very, we've think I in created our giving really working work. far environment, which gone

was door. high significant Probably And the part to us. out yes, not that -- would not still as And it now. but products of customer easy I've of tell not really very as I before? is our that the that about, as the of continues folks the things to of I all a is you that tell is business it delivery be our We're one a been you We're figures. still getting that wouldn't on get workers my easy so, world fundamental. hitting to again, XXX% element that be it factor service every is, for on-time not, was before. problem world get right list very, as is would talked But But

Mark Connelly

you, news lot good there. Thank A of Paul. Super.

Paul Manning

Thanks, Mark. Okay.

Operator

Mitra Please from [Operator ahead. Instructions] question The go is Sidoti. with next Ramgopal

Mitra Ramgopal

good hi, taking for morning. Yes, questions. Thanks the

Paul Manning

Hey, Mitra.

Mitra Ramgopal

Paul, First operational going? is to in improvement. just want of it Hey, plan a the how sense get terms

mid-year. still think finished scheduled to that was track? I that on Is be

Paul Manning

if in referencing Well, personal the you're one yes. care,

Mitra Ramgopal

Yes.

Paul Manning

back only world with on because business And one. to that is not fixed lower helpful to as really back, going yes, with to business that be revenue, in hear. are come every but the comes track costs that's We going which really, that accountant loves with

Mitra Ramgopal

Okay. you No, the -- then costs can this are inning maybe if to should we give great. When reduction And a you're cost implementing. I'm the to us don't along obviously effort? we audit as that's what sense know sure overall I

Paul Manning

Well, I of we're less guess, a baseball We're it think practicing. as baseball costs, out then as always practice. always I or would game taking

of I with it's raw how costs, operate where where SG&A, our in out you've that every out taken month. very reviewing a presidents taken much think material we fixed part group you've out costs. I'm we've where taken

become out So experience from made years the I as fixture these of over you pretty figuring this has in a organization more restructuring. years and ago, good stemming it more that at our really but how had in with to remember, We us some bumps, do think things the future.

more as So -- ongoing, that of think that's Mitra. just

Mitra Ramgopal

Okay.

Paul Manning

and heard Asia as flavors little is me that a care personal a you more going to That's continue. one, reference well. recent colors, bit think but of for I

Mitra Ramgopal

Paul, Okay. talked No, opportunities. of know that's good. I acquisition about And you a then, lot

color Both can And in wondering obviously, the that give was you distribution also if expanded more I meaningful First, is. products mentioned of are Univar. New Chile Mexico, in little us how terms of acquisition, you Mexico. a

increased to expand should looking to. Just desire we if there overall the maybe be is again there your curious some presence and forward an acquisition just of opportunities

Paul Manning

Yes.

you incremental So, capacity as well. very on to was that noted, is very in give facility closed recently, to and do continues a we us SNI that New which business very, our Mexico, Chile, going

give will capacity, us business. proximity give certain improve that to also growing particular will we that greater believe only but not it So will our areas which us logistical for cost

about in the we in be Mexico shareholders' and lot of here, think that New is wealth M&A talk a the opportunities good commentary there being really Southern So talk think there our in opportunities general, facility I referenced New that's may -- wise with that acquisitions, a an we very sensible acquisition we I a about Mexico. lot some there.

You may hear soon. about here

hands care So of and we've dynamics in three one technology-driven businesses, really in believe those we potentially the future very, areas. portfolio so ourselves don't and -- will our part of those somebody in core of acquisition markets, the we've the see the works be got those divested are that food, and But else. fundamentally of sound, great pharma, you in any businesses, could very personal an better

expand to you right point These so, there the really wouldn't and we're anything focused you portfolio. don't geography of I we're would That's your in I over-attempt very, bet-the-farm and an technology, now. Mexico, at Univar -- our far question about acquisitions integration not focused be would mind tell presence But incremental These priced, New enhancements limited Chile. that. So, disruptive to highly that would on probably sensible sensibly is this really less per Mexico, on very se. in on with to activities. tell bolt-on, that any have be I really --

there some sure. or talk yes, opportunities could So, for front future the on about that in be

Mitra Ramgopal

you're Okay. you completing divestitures, you underlying today No, forward you're the you at are were there now, on that's going comfortable the look divestitures, at as in great. And with. then planning curious where again, pretty just mix comfortable you looking terms know always pretty have ones to. of I congratulations And and the I'm feel business, you

Paul Manning

about great feel the I Yes. portfolio.

Steve, that there Steve than Mitra. paper Now, somewhere be anything we're good, I that, dye but other feeling sell, million-dollar there wants really may no, think some business to is you-

Stephen Rolfs

is of of these the I the years. over think moves all after shape last portfolio couple No, in good

Mitra Ramgopal

quarter the Nice taking again. for Thanks, great. thanks and Okay, questions.

Paul Manning

Mitra. Thanks, Okay.

Operator

HighTower with Please is go Advisors. ahead. Leigh question Ferst next from The

Leigh Ferst

emerging Can year? of kind outlook quickly. the better puts external talk do in growth the Good through markets for rest not picture of outlook? now. of those Maybe have Like are rolling as takes getting terms is Color that said, your are you. factors question. kind recovering through of year about the and of your the the rest your of you you Thank I How morning. some big

Paul Manning

sampling, think anything, And openings. taken I post EPS to about broader as we've very, of say top But list to general, of surprises very those built Well, we I faster Yes, our out how real into in I macro back than some anybody's has But many would nutraceutical consider. much care Certainly, factors new we maybe as in these we solid our I maintains coming account if are our think no to personal be thought. out our in built there COVID-XX factors projections, is guidance. pipeline. questions trends continue there. think

good. that's So

interesting implications certain large so see outlets in markets or is customers, share I markets they have been aggressive of But that mentioned B our made in there fairly once are plays think have to to seen out a how that retail where larger among trying that and participants very remains perhaps shift we're I foodservice some a certain some types in in there. or one them of some in share had be in customers, C who seeing take share, potentially being customers. and other there, what call out. could kind we inroads could

always could business. think factor. things I like have these I that external you fix that. here a in why problems you be certainly but an issues talk logistic there's That's always because things, about have to folks

was things there's one problem like that systemic like yes, I much see there. will Canal, we Suez really the don't through mitigate that happen, in a bottleneck but unusual a can event, those. rather and Okay,

lawnmower doesn't back you winter what your kind really, off try it the garage you parts in and like you really start to leave necessarily spring, warning try and to chain and turn is, up world highly all of of certain in think on immediately. start without you when suddenly It's finely-tuned is you it then that's the it a efficient supply I it and off a it's turn up, then turn really tough. it

challenge I get But re-optimize inventory, by we've more these producing mitigated again, so our to holding we customers more bit that supply startup with a to forecasting that And more, mitigated chains. have standpoint trying that really one. through little think of from through there's that

So, I certainly yes, chain COVID, about of it's inflation would logistics and supply came it's and it's factors. Question the around up say for trends nutraceutical, XXXX. the some

terms that don't that's some see broader goals mid-single-digit think of foregone there'll I impact being our in that probably achieving be our of an a conclusion but growth. inflation, as I

Leigh Ferst

Thank you.

Paul Manning

Thanks, Okay. Leigh.

Operator

ahead. question Green next Boldhaven. is Please The from with David go

David Green

Paul. Hi, Stephen. Hi,

Paul Manning

Hello, David.

Stephen Rolfs

David. Hi,

David Green

A very you couple much. of Thank questions.

any could end-to-end and party that great. the seeing color that and in the where flow or the really synthetic give any trends sort an are where dynamic? of Are that comments any there, sort another regard up there solution, you you really, be potentially on address seeing within want you you verticals you impact something need Second that's can general with is generation On more specific taking to new would shift Just the well trend you customers off? could as you're ongoing generally, of just if team just of verticals of the any more changes to any are make whether or Fragrances how question natural, cash there. balance that in sheet, from update disposal give us your

Paul Manning

Okay.

fill Let Steve me synthetic and certainly natural majority vast and sheet The natural, take some that, from the there. balance to trend will new based. broad really launches we your blanks When measure contain start pretty item colors. product it's of then in off it's

that would across that's all and suggest So categories. that,

pet So it's colors. whether launches contain the you're talking or beverages, new food about or snacks of product vast majority natural

conversions in was colors there natural? the It going XX% But of number, not broad-based those me a lot well. colors last lot as say fact of it's product are new happen existing a XX% huge right COVID, changed and can says of front a certainly has whole natural I into the contain right sitting I of Now, launches would got synthetic Not now. but report one in to there.

there. about changed The lot up. has question a not So teaming

one. you're getting that at selling? where you are Let Now, me to go integrated understand trying with more

David Green

part you thinking which but another you guess provide whether asking you of for. it's that, was to guess customer just of were I end-to-end they about color a the there asking more I'm an I couldn't component that solution that something whether is provide was would not that I sure be where of

Paul Manning

Okay. product. provide necessarily fully a some Well, formulated product. yes, elements customers their of you all formulated whatever providing of been sell butter, we it, you're always and so That ingredients, food but bread speak, has always want to our and to them backward these integration, call our we forward you'd fully look at integration those word doesn't mean

the And my knowledge, products so a necessarily consumers. may our it, And really something business, that engage in BXB. a unless is ingredient that's we as needs. that will of you want far XX% value of But, of Steve? of where approach, don't position of we're we as an a supplier, just to the needs lot I'm majority no, think production right in happens. we handful strongly The of To sure. go vast Do think have customers. terms now seismic the continue lot directly for as We like take and concerned, in sheet balance we our that probably we most create their the to we development with one,

Stephen Rolfs

Sure.

first So off the divestiture. on

the that range. divestiture on we'll the be all of million realize sum the in low-$XX Fragrance will So proceeds the

Some end now Most the QX. some non-cash. of of that closed, will come charges be divestiture the There it those of to are related is came that that in quarter. right in the at will largely but

in inventory, in to flow realized of outside from were slightly where areas the So there's where a business the cash Last well, been there up payments. we've charges the that, areas we our successful of have cash cash won't cash a million, inventory, flow still we little expect have of But we inventory On for first very to flow bit, year up very in of opportunity down general, a other build the remainder and over strong cash we primarily for lot of because particularly commercially. year. $XX quarter year. incentive in but of ingredients and natural we held lot be need the

capital. cash the high-quality this some to from earnings have as year So, capital, I growth more opposed would still expect working we but working of flow come to opportunities in

David Green

we what natural? think remind you of do revenues is at percentage the as Great. portfolio look from Could just me you today,

Stephen Rolfs

-- our a business naturals is product we're could new quite business, there cosmetic in solutions, food interest seeking color that the of the not There's So, personal as lot XX% in in tell have certainly still care is as varying but and But well. the not in there's natural probably of in as and it's you natural. clearest about and of a lot and I there's interest natural bright white. personal area, in food there well. the you and of black care, distinction development Across naturality, a degrees used the as where of most our area there's products rest synthetic lot a in line,

David Green

Great. Many, thanks.

Paul Manning

Okay. Thanks, David.

Operator

the to would to questions back remarks. further closing no company turn the for are There conference at time. this I any

Stephen Rolfs

their to and morning thank you. for like call. everybody time I'd that conclude our Okay. will Thank this

Operator

in concluded. for now has participating conference The conversation. you Thank today's

now may disconnect. You

Sensient Technologies (SXT) 23 Apr 212021 Q1 Earnings call transcript