SXT - Earnings call transcript Q4 2024 | Sensient Technologies Corporation

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Operator

Good morning, and welcome to the Sensient Technologies Corporation 2024 Fourth Quarter and Year-End Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Tobin Tornehl. sir. ahead, go Please

Tobin Tornehl

I'm to Year Call Tornehl, of Financial Chief Technologies and Welcome Sensient's Paul Quarter President Chairman, Vice the and Chief and Corporation. Sensient of Full XXXX. Officer. Officer today Sensient's morning. by for Manning, Earnings Executive Fourth President joined Good I'm Tobin

are of Investor be our and the release section released we and using today, website earnings today's fourth quarter at the full we the will available year of our Earlier XXXX results. Relations during call A on copy sensient.com. slides

call the During as portfolio items financial currency optimization the we movements, our which of believe other and noted today, non-GAAP in will reference impact company's plan measures, the certain with periods. This the cost company's reflects and the of these to improve cooperations We remove provides information and and performance reviews of evaluate also reporting comparability company's items of between performance. evaluate the investors additional how management results the removal filings.

financial slides. financial information to be Non-GAAP financial available press for reconciliation accordance comparable GAAP. with to today. most a in these of connection and investors directly in considered from the A or in comments is the results release with GAAP in financial calculated We substitute measures isolation encourage measures not non-GAAP review our should reconciliations we make

forward-looking comments this including call, statements. your that may during remind made also everyone include to I'd like responses to questions,

these be start that mind results. Please throughout additional We'll factors will today's you The is for that you materially our Sensient's slide from our on those a could financial analyze referenced our SEC Slide our in on differ to that set may to including urge wide forthcoming website. potentially and or our previous filings. impact factors today. results actual comments factors, in due We read SEC XX-K filings call available be of a Our of those deck may when expressed description range implied keep forth X.

Now from I'll Paul. hear

Paul Manning

full Good fourth results. finished good very we growth, and to today, EBITDA and local pleased quarter, year XXXX afternoon. adjusted local strong fourth adjusted quarter with currency XX.X% EPS we currency X.X% local growth. delivering Tobin. Thanks, revenue I'm currency a that morning, XX.X% Earlier growth the year reported our report

year X.X% For the full currency we growth. X.X% of EBITDA reported XXXX, growth currency local revenue adjusted local and

shown groups outstanding local had Each growth. currency XXXX. currency in financial and our and growth of have operating revenue strong local Since XXXX, profit operational we

technologies. service a of continued of commercialization direct new performance and execution, Our result our customer is on focus sales

supplier colors, care we to We customers that with portfolio natural flavors and of have proven a along product and are has products. our personal natural wide reliable our a innovative variety

new capitalize market in expansion decline and launches able the XXXX, launch customers ongoing market overall 'XX The the in segments were product to local our each with on due in of customer to and volume improvement demand wins is end we groups experienced level sales of Europe. our in across America new strong regional our new North and geographies. of activity throughout an and record and we to stabilization Despite

and inventory. We continue our cost to our focus structure on optimizing reducing

million portfolio track savings on of end million to will we achieve by of Our optimization and we XXXX, our plan to annually. be approximately is completed believe the targeted $X $XX

our plans, fixed are costs do we and While optimization SG&A. relentlessly on we anticipate focused further portfolio any not managing

reducing on continue to year. focus our over next also the inventory will We

local growth and XXXX Now local XX.X% currency Color turning to currency delivering finished Group growth. fourth Slide excellent X. revenue profit operating results, quarter The XX% with

local prior XXXX For The operating of points basis XX.X%, currency year the improved an group's the Color growth margin the revenue and year EBITDA growth. increase of full currency versus Group full XXXX, to local XXX X.X% adjusted XX.X% profit year. delivered

outstanding The saw strong volume Group natural group pricing. colors. fourth lines, the XXXX sales and in had expect from The new benefiting all growth its particularly low the product Color and beyond. group wins, in success in In single-digit an is plus quarter, XXXX, continued I excellent

X. quarter, revenue delivering solid & Slide Flavors local Extracts XX.X% Group growth. The and currency had to growth profit Turning a currency operating local X.X%

growth. full to The XXXX, with adjusted Extracts to the year from and basis XX full versus reported XX.X% in its solid customer of regional benefit the group's the & currency Flavors, lines strong Extracts delivered the X.X% operating and expect XXXX. year currency which and XX.X%, I flavor local was up revenue margin product prior EBITDA leverage group year. For particularly The another continues Flavors local Group local Flavors growth group's new points good profit wins, its XXXX, operating had year sales & contributed the quarter ingredient growth a volume in base. extracts improvement. and solid The

local The Pacific Slide delivering growth Now XX.X% X. fourth Group had XX.X% currency Asia growth. profit turning operating revenue to and an local currency exceptional quarter,

the to year. all have EBITDA growth Pacific another level XX.X%, Asia XXXX, year XX% was year in currency in Pacific revenue almost prior in operating continues high For a experience regions new wins. of to local have the is and XXXX. sales group's exceptional The the I Asia strong group year group and with reported The of continues expect to which full Group full adjusted margin growth growth. a currency XX.X% local profit line

Slide over to very with last performance years. Sensient's the and XXXX I'm X. Turning few pleased in

service groups. the execution, our are growth sales each focus in on innovative Our of technologies fueling and customer

Our XXXX us currency and of growth. mid-single-digit product portfolio goals with local personal track we focused on remain long-term our key food, revenue puts customer of strong, our on care. markets and is performance pharmaceutical

Sensient's X is rate adjusted than local last annual years, more growth revenue X%. the currency cumulative Over

the last years on segments. a X and executing technologies financial underserved direct a strategy performance novel positive over of on focus Our result is with our customer

volume turning growth. local growth single-digit growth, mid-single-digit deliver for revenue XXXX. mid-single-digit currency to to I to high adjusted revenue currency rate consolidated would and adjusted to local with single-digit to at mid- and this EBITDA local double-digit I XXXX. expect pricing which single-digit volume EPS expect result in to high Now low currency grow low annual growth a

& groups, I the Asia local local I expect continue Group the Extracts Flavors margin. healthy & deliver currency margins. an Group growth. Pacific the Group Color expect to high group the Color to the Group, currency revenue Extracts revenue mid-single-digit to deliver both Flavors For Asia single-digit both to expect EBITDA Pacific the growth. improved deliver I maintain their EBITDA to I expect and And

end interest X.X of at year, in our at in last expenditures XXXX. capital spent on focused approximately burden. XXXX the We the paying reducing $XX debt is capital leverage of lowered We our from Over end and plan to X.X our the expense successfully allocation 'XX. down million ratio

and future drive be We have investment internal expenditures between good and $XX million to I that capital our opportunities XXXX. expect very million $XX should growth, in

cash portfolio. our initially acquisition can benefit technologies as capabilities or may, startup but while to to supply debt well. products. pay to on technology sensible use to excess natural our extract Food with This acquired process product example personal care that an our buy product The benefit down expect or to chain an further our recently to of focus will any back acquisition strategy Colors evaluate in small improve continuing We and diversify a innovative French color opportunities. is line, stock XXXX -- line time,

by to sensible We paying reasonable continue a approach strategy. our ensuring acquisitions multiples to to and alignment take

Before like concerning I the over synthetic discuss turn to recent colors to tariffs. call the Tobin, I'd and news

Turning synthetic to Slide XX. food a colors. there Currently, of discussion is U.S., around the in great deal

continue colors, FDA's administration, ban new the colors recent in bans of the focus Europe, the focus other more America. natural the world state in is certain and the gaining United States for the are of from synthetic natural to the traction restrictions gain as now With attention Red demand well. natural parts and X and colors on clean on or already Latin norm. colors labels In

to profit the the Colors Group. for highly more result, volumes is synthetic significantly revenue for in this synthetic colors. colors natural And for sales are overall, a Color sales the be sources portfolio will This than from color Sensient. volumes. than up increase new XXx maintaining synthetic While while and shift launches, color a natural colors similar conversion the shift as can demand Natural concentrated outstanding opportunity reduces to less an U.S.

XX% Slide to colors food the Currently, the XX. natural approximately and represent of pharmaceutical Turning Group. revenue Color of

company is of for Sensient Red from conversion FDA banned to X USD revenue. to X speaking, than has Sensient. portfolio for of a mentioned, color. has Relatively less effective straightforward January support with XX, the X a Red Red customers X.X% the natural our maintained fairly replacement colors a Red required X conversion this available is we of sells total just Sensient an X, of which date million As approximately XXXX. globally

ago. Turning than the and have years investments synthetic technologies to investments. to global colors, deliver to quality natural Slide allow chain XX. These Sensing shift supply Since then, and production from potential color R&D significant sites. a network of us made anticipated more control we centers colors through leading R&D, capital, XX

in invested our the as to sourcing of programs agronomy we in and have customers we continuity critically, these for market As ensure lead supply conversions.

ensure are have color called we safe a the In addition, program natural deployed consumption. food sell to safety for we

the safe portfolio As color a our customers. natural products the pride providing company, most we to world offering comprehensive and in take synthetic in and

for colors synthetic world. that in brands in XX than say, the approved among have market's you years. more bears what use most food highly Most the the of are regulated been repeating to best many colors by me known heard FDA already the of the continue ingredients synthetic It Americas

and inspected introductions For petition requirements natural regulates the currently regulatory shift such example, is United certification consider supply new challenges, natural a the is complex are product in color FDA. as colors color process, There as must enhanced color every applications equivalent other the by production is hurdles market there that additive and States. significant as product program storage program. inspection well which also and single certified no that synthetic A in

challenges All that in the embraced are company through overcome the said, have investments in Sensient these and significant food the we and is color world, R&D. largest

support very a please our and colors. We capabilities natural broad to more Like portfolio production to on color have transition a take information technologies, website. customers' natural color at our natural sophisticated look

is tariffs. very dynamic. Turning about discussion The tariffs to

in be We other to do while by potential could these navigated navigate future have are impact to aspects and we potential and previous Sensient, beneficial tariffs continue said, developments tariffs There be of tariffs, we'll tariffs the negative. cases, expect monitor to that could prices. mainly able certain That the be any Sensient. I to increasing

XXXX XXXX. Overall, I'm we strategy and our the of excited and a our the about our very opportunities performance direct the markets within experiencing financial our we're opportunities the groups. of The the each about implementation prioritized. with of business. future is I'm growth in of happy growth I'm result have optimistic in

provide will details with the Tobin additional quarter on fourth now you results.

Tobin Tornehl

picture In Paul. you, I'll GAAP morning, or Thank between adjusted results. XXXX adjusted explaining and for my be the removed comments cost The and the XXXX results our differences believe of This this non-GAAP investors. portfolio results for our performance the performance. We of plan. and also reflects company's reviews produces the these of the optimization operations the company's costs management a removal clearer how

Slide fourth the $XX.X $X.X last the revenue Turning compared share the compared included million quarter. fourth million of income in million quarter $XX income XXXX portfolio to plan costs. portfolio of million XX. plan quarter year's was of period XXXX year. Operating fourth last comparable the of $X.X million Sensient's income XXXX $X.XX in to of in quarter per was to of in $XXX.X optimization XXXX in costs. $XXX.X approximately Operating of include million, fourth quarter optimization the fourth income in Operating

quarter fourth XXXX to XX.X% in period adjusted 'XX. of adjusted the prior million comparable to income in was Excluding the in local of tax compared cost in the in in consolidated XXXX to in the of year compared Interest plan, period, increase million million of company's expense XX.X% rate compared the fourth 'XX. $XX.X $X.X currency. the fourth optimization the operating of an million was quarter quarter of of the was XXXX portfolio XX.X% $X.X $XX.X quarter The fourth

in currency Local year the was fourth of quarter XXXX. of up up EBITDA XX.X% for the and X.X% adjusted full XXXX

'XX. of Foreign EPS fourth currency translation by $X.XX quarter reduced approximately in the

to $XX Slide expenditures XXXX. $XX million from was XXXX. XX, in million flow XX, flow compared compared in was Free were XX.X%. $XX an in XXXX of cash December cash million in XXXX. in to $XX million Total 'XX, compared $XXX operations increase million On was $XXX in Capital to as $XXX of million debt XXXX million XXXX

XX, December adjusted as of Our net debt credit is to XXXX. X.Xx EBITDA

our used support our or expenditures, And this time, buy and million balance any to back positioned well At be pay XXXX down our we long-standing sensible capital $XX our to sheet acquisition $XX remains to expenditures Overall, debt. stock cash and be dividend. excess opportunities capital between will expect million.

to Turning Slide XX.

guidance, our XXXX our local currency XXXX up revenue to mid-single Regarding digits. expect we be

to We currency digits expect up currency mid- our digits, high be adjusted to EPS high local to local to single in XXXX. be and adjusted double our up EBITDA

be adjusted recorded local our XXXX, expense our believe adjusted of measure of performance. a quarter-to-quarter, continue in expense slightly to we as fluctuate interest Both currency above approximately growth XX.X%. result, important we $XX.X interest to interest an our million expect expense expect and is tax We will our and and rate be our tax rate EBITDA the to

XXXX, Considering a of plan costs. earnings in approximately XXXX. our headwind Based expect we approximately optimization to on in current exchange GAAP be currency to share $X.XX of we per $X.XX portfolio $X.XX rates, expect

our expect GAAP to to of be per $X.XX. share XXXX in XXXX between GAAP our to $X.XX We $X.XX EPS EPS compared

open participating call Thank comments questions end We'll the before for the the some now up call. the of call you questions. have today. to we in closing will After today, the

Operator

first from The Ghansham Instructions] Panjabi comes with Baird. [Operator question

Ghansham Panjabi

go to natural. to want comments on just I your back Paul,

dynamic? XX% I exactly that specifics the you was you give of mid-single-digit the seeing sales you're company & what You Flavors wins seeing think you more down increase on just Can activity And that a Flavors faster business about us in said than natural to in in vertical & Sensient? targeted. and rate growth actually base specific it's for in where growing it the Extracts. your that bit also activity were you are for Extracts, little for

Paul Manning

quarter, in on up double on were part and Food business. Colors our So on volume the the digits yes, so front, of natural we that revenue

there on approximately towards of So a today, contain colors is such colors. of average, conversion natural launches the natural Number around one, things. all product ongoing an that globe, XX% couple new

of a sort a launches. taking that's years So of current us, for been number new-to-the-world for strong advantage of underlying

time colors. Now the existing time, from been colors, you to prepared using referenced When and the remarks. other elected brand and piece an to that I on come market they synthetic in convert natural my will that's have this to

that, very for the and So of top we've more course, what a some to of has of the more handful seen growth group. converted. recently seeing you've been been is the outsized have favorable And line the line these bottom

rate I continue. to has for fully That would of the years So that rate XX% number been expect a now.

to the So faster state most some company. I in legislative it I've And and natural don't in is the conversion the opportunity biggest see that abating brands, anytime probably positives extent The excited soon. of about history the may initiate to high very, very I've Sensient. that conversions is the some colors, for And Sensient Corporation. of the been one this other again, actions at commentary XX-plus with of been years the the

on the focused the complexities, earlier to these of win complexities technical would all market share QC, remarks. lion's prepared supply conversions, strongly very, the we those been chain, mentioned I very we've given how in ourselves the So position

only So part I there, coming organization. you'll top our I feel to see about Colors show chances continue Food that. throughout XXXX, think the in But exceedingly growth of good XXXX, really, we of out really line the strong not

conversion, place. flavor has that of natural flavors, on this notion Now a largely taken

don't flavors. to flavors of have I already me, you the flavors or of forced number to guess, look are If XX% at XX% either was portfolio, but front were our it's natural I in our

don't flavors that you there as So such as of you in really was see And largely would see colors. very the extent part very, not portfolio, taken synthetic market, many our in synthetic nearly to as few that has many any -- synthetic conversion you the today the in place flavors world.

notably, advisers, products, side, of performing the that industry. All advancing natural much cosmetic more product referenced, I to offerings. those food the personal is pigments. down towards on surface-treated offerings have colors, line of the acquisition that end help we natural us color, now more are R&D is the offerings, care consumer ingredient compared more maybe natural No products, natural solid complex conversion most to that all natural synthetic food to So technically shortage sell, the natural this stronger from industry products than converting we products further demand

So that's another future keep as to the one your company. opportunity a eye on within

Ghansham Panjabi

natural margin differential what Okay. How components to specific is to natural again, Very back XXx -- once that helpful. increase I It your color, just seems synthetic color? because nature given on And the the the then differential? et And we should sort between well. as versus like molecules, think volume specific about going of comments to for just your cetera. guess in about enormous of I'm asking your an customers the the cost

Paul Manning

Yes.

impact in on a typical is think, well, all, low. of I first of color material packaged the exceedingly raw products a synthetic

For most expenses it's CPG product. colors almost of small materials those part very, are that in finished the very the within impact that cost And -- even marketing, raw materials, it's an distribution, a to packaging, the the is companies, picture. well, substantially more synthetic lower raw

it to nothing spending it's have at their comparison CPG materials But be cost on. that XXx in money potential to rise. to companies So may still nevertheless, raw other pales that blink

to our see an an about So you that match Sensient increase synthetic financially, that may see that -- said, volume of sell as revenue, yes, in profile, increase color. you think you will would

line. margin gross synthetic SG&A operating color would a on fixed of see you But a see on the consistency product bit erosion little a at sale. profit you base, relatively margin So the to may for that

be but revenue profit So operating stable. in a would margin be margin bit, would gross conclusion, be could eroded up,

a -- comment, important more very important very question And consideration. little on and background but a bit very, that my very, so

say this a Sensient and all like, of not so is basic buy is area. the And innovative regulatory, engineered play technically more sorts y, I'm match. the There's great lot raw going just, why supply Customers a products of that material opportunity a This to x looking it's cost real market. strong the for cost really chain I don't his part market. this is exact different. the so We We That's in within and because things "Hey, in challenge. your play for the color his." really of natural

drive a lot we so our and speak, interactions that can And of build so the to in moat, commercial and -- really lot -- a technology in market.

Ghansham Panjabi

one just for Paul, a And just Okay. me. final one put on. kind to of

basis? So 'XX X you XX% terms your of it with to to points sales, will, if that the sales that sort of in plus, sales about and that's growth? digits, of growth, is up a builds natural guidance right go-forward base mid-single that mid-single-digit the Is is XX% color that growing on think core if way

Paul Manning

So XX% color colors. that. is food Color yes, About within that, is our bit a natural is than Group colors. XX% natural And more of about

to So XX%. whatever XX% would that be

would may natural in your far from So expectation contribution and be not yes, think too be colors, there. I the that you

mid-single digit, achievable quite that, feel very as we that's well of So Group the yes, company course, level. confident Color for for the and, a

pace and the of of I I don't these control Now launch control pace activity. conversions, the don't

the we talk so year. volatility about in any given There quarter. can be And

where or up You a X% may X%. see we're quarter

average, by X we years on I I level. X% colors. up But of we land point, think, range, is as around the X%. for have natural mid-single-digit very last your significantly we're activity led think But plane quarter a see the may You a this or to achievable each

want it's I from dramatic I say it's don't So departure past. to a the think --

top timing consistent and considerably point. any these add those given to their at fairly it's think the line launches Again, could of I that then

Operator

question Paribas with comes The from BNP next Nicola Exane. Tang

Michail Paraskevopoulos

and on few that around a penetration in a the and talking you're size about then same slides big interesting and out might as I about Thanks to just Sensient. understand opportunity more other on new think wanted start the U.S. colors things I you the product well. be to this much to ask I'll bit today, natural just want and for for topic launches. talk about colors very information the we where and

versus side in the I you XX% look ago, Europe. a later think wondering estimate old couple from in of like and natural in talked the first an years an a was one. what they of from might food in colors something like U.S.? rate what had conversion the about That's today I penetration if XX% and was

Paul Manning

could Sure. easily Yes. There's no reference. official database for this one that

we plus So about looking typically foods the to rate. what either customers would natural you don't describe good it's that colors probably X/X you're probably to of more that or U.S., numbers to that wave don't at that the market tell market U.S. a penetration has synthetic In like converted I the XX% has Europe, of the converted designation. colors. coloring -- use use foods. We in In natural the coloring colors

And of And a X/X going Lat you vary than then by like XX%. and really figure country. in you're Asia the in converted. places about somewhere to Am, And so considerably between to it's XX% go about bit Pacific, that, then U.S. market has lower

example, bit But the in terms even China, the a estimates majority U.S., there would a natural penetration. little probably in the below market U.S. in colored. the for be closer Japan, be to of So would of perhaps

if a of And of the again, third runway. kind long to us, I inning, maybe really of well. is care that, bottom convert like this we're short, top a the like, of lot of X. third. you the, X runway in folks third in market to personal a So we're baseball Phase seem the food see as of of analogies, opportunity or kind to Lots early as ahead Phase in

ahead opportunities of growth lot us. a So of good

Ming Tang

this versus in I bit investments in the synthetic And talk that in entry in competitive put the a colors? time, a higher and in to generally. could and the barriers landscape naturals leader there to you you complexity the talked just in natural interesting. about being colors, difference Really if topic, on wonder over and you

Paul Manning

of does the all it only Yes. coloring that foods. companies Well, the one and synthetic, so natural world arguably in we're

example, manufacture simply offer synthetic, may not They're basic, they're competitors them. they Some for but trading them. don't

and -- a just what who colors, natural that's there's yes, of that they do. competitors there's they And synthetic really that's what do. so And and do a group group competitors of do

natural our many the doing we've in a both, incumbent think world around and sales years. the great considerably really I regional a and the force I largely local ourselves all many the customers So over level, which at multinational colors by we particularly challenges X the in is established the that selling invested colors, That model, It's effective advantage have QC customers. a is is production at most the challenging in described. formulation problem for and and as of other our level, lot

salesperson a huge, really is Sensient. So direct a for huge advantage having

associate so focus natural competitors They earlier, it's good described would camps. market compete, this really the doesn't sort There's significant or technical taken colors. among I want when how natural strongly are itself But around it the synthetic as X, in, we you to one that oh, synthetic I sure. outthink And it try from the on have have Sensient technically to very those more match for very put new can into and learned I you divide natural that the market. go this, matter to challenges color. we it order world, outsmart brand But exact you have the out synthetic is I to now. think to some also which X focused you you match. as it's convert we the color, on in by When to or don't work color tends lesson an of every Camp think, No challenging colors, in may match to

that Those strong large are really in really, Perhaps these ability on, like. the this area. our what And terms to projects leverage over and last businesses work that's advantages the capitalizing really have scale we the we ones decade so conversions. those in to some of are we R&D spend like the of the can we our

a the doesn't work. they more synthetic little of market, part a the color. a problems, kind other don't of that life suffer products, basic from a be though, readily necessarily applications of mundane the more stuff. or require it of so And But formulation available. can the lot exactly stability It's of the materials bit are those Raw stabilization, lot match -- shelf

that's biggest we'll advantage time but there play area So that see from really to the not the to Sensient. time, we

pursuing So formulated enough these shade products. matches well and they of really market the fortunately, exact is want

And so they the some more is block building nature that you markets. different than in time understand that of lot of from model time basic see the a may to the

Ming Tang

Just airtime of a notable given in other divisions as I to was in policy Especially some could that. of driving wondering of give was local bit the the well. growth. strength Pacific Asia terms you what if explain

local currency in as just what's You for new sales single-digit you understand growth could us help underpinning your division the more outlook mentioned wins, but high well. bit be a specific? And then

Paul Manning

they elevate awesome sales year So Asia, technical applications to awesome in trying And we've been groups yes, -- their fourth over their investing an an Asia really Pacific, working in quarter. years, on and there. portfolio, for force, the had

really culmination of the of what business that lot is seeing strategy the side of and the of years focus on work and the portfolio. think I so effort you're a of And

all And Asia these Pacific. well comments colors so -- making of pursuit I'm executed exceedingly about in we've flavors, natural the in

is they come hustler to to and among team work we emphasize and to mentality want strong I like who and force well We all not and alive apply. really have The others want at a but there. folks speak there, win to to succeed, Sensient. they sales very can't need leadership the others

new execute the in high elevated us performance has was exceedingly really the the region. think and really, really of helped And folks that as well. win, I So quarter sales we've which on in that a

lot had emphasis on been X bear we've kind those there's a Yes, or expansion a more had brought as expanding markets, years. really really Asia, Asia. on Asia has we go our that in of have So that talking into geographic or we've lot X about of left over well factors helpful. new in Southeast no turn. the opportunities China really, really of we're segments to the We've new can still really, But India, stone Whether really after.

I Now second about high part the the digit. hear single didn't Nicola,

catch You that part, single that Nicola? Can about the you digit. high repeat

Ming Tang

to the just about confidence division and high the underpinning for was XXXX your guidance ask in It single digit? the for what's

Paul Manning

Yes.

Okay.

continuation So it's emphasis I've just continuation and of new really for on bit flavor. what it's of heavier than customers, think the digits the wins, I of which single A it's being be Asia, well, more think yes, Yes, would local. fast, effectively same. color the more a touch -- a described. I high the a being And servicing of strategy,

we our for feel 'XX. good chances in So quite about Asia

Ming Tang

Okay. stop then if EBITDA ambition mention I'll didn't the you actually don't currency of long-term you slides, reiterated final revenue then you mind, one, questions. local in that the outlook high I a the single-digit hogging noticed And growth. that the and just long-term

So that, I wondering, was was that check just target want I still relevant?

Paul Manning

it think I Yes, is.

year, a was you ranges. a I Things There tariffs. little There a about customers companies a of high delay the January those of think Every EBITDA. in on But quarter you think launches reluctance is was is Every notably or choppiness volatility. can wanted as XX-day revenue, land promotion XXXX, news in because some launches. over year. some focus the they change activity. for lot look to mid- conduct the launch we as Others to most the again, in year can keen we a of unique see guided period, we've look a bit very at lot was example, unusual launch. that There a on have certain mid products. the month. XXXX, I on plane about to news a Take

very look the of parts reason, we our started very, building in light started in And the when January for at most switch So the at then new whatever up end slowly orders January, wins up and coming the again. world. started organic January, off and again then of went a

much that starts then And better sort March. February so of out and a playing

across think I so X%, year, delivered, for wouldn't and And -- as last QX board. X%. be the saw, it's we that so in business I X% or moments like that comes X.X% you can surprised maybe year, have we you the But in if said mid-single the

consistent can So a panicked that. necessarily in the I really at get anything good a macro about think, think happen, year, should is I don't guide. things like over markets, folks that like and Stable markets level particularly

to So for good EBITDA, the that yes, very sure. mid- drive our to feel will about lead that controlling will mid-single-digit, I cost, good mix high product single-digit

should -- and less much a you a a year being this more translation so interest year, growth. you see EPS of headwind of being headwind a And the the with lot the and less lot course, of to efficient know, tax then, this as

headwinds, not mention will how change, EPS of FX once I into European. on we to because have calculating tune dollars of and to again that didn't I Now being now, we're say, if And That that headwind. $X.XX we're $X.XX to based a but business think translate this higher that, $X.XX right EPS number can which repeating. $X.XX $X.XX. is sometimes that bears the we back have $X.XX is to where things U.S. we'd to of

get creates So end the of part, a for year, a for positive XX to good years. We've real headwind that every we growth. of negative And but been end years XX now, don't getting to act most EPS that that. not the the

what's we the matters, to you in FX in business, have speak So over. EPS control local which translational these absent terms happening no will we growth help of really see

about the I through part kind buybacks talked more And here, So that's picture think I certainly think part in sure, how for really specifically, that in we a of a could the of picture here the P&L but XXXX. of XXXX. or be bigger flow should that haven't

Operator

comes David next Green The with Instructions] from question Boldhaven. [Operator

David Green

as I well. question just for around time, that you're the new driven those business been annualize. quick group a At at wins. -- obviously, guess QX And to has same a it of rate very level, exit ongoing take obviously large a XX X.X%. clear by think that And I was winning part new it's months the

bit link color very was of guidance it's in to obviously get again, guidance of whether at I mid-single-digit if a mid-single-digit really could I a to conservative? just And around terms simplistic of know it, of more that observation, that the mid-single the growth. just Flavors guiding level just into nuanced is so And you've with just color element digit. should and that you're APAC. that your XXXX talked for know given -- wondering I'm feels sort to a little digit size and Because single fairly APAC the if high an I digit. just group I mid-single tie it conservatism?

Tobin Tornehl

that. But Yes. exactly David, I you're kind can right. take of

currency X%. local QX, look when total about just at So our was revenue you

new really we all before, And of groups. year. we benefit our wins across the they good roll we're also in, then into talked So had X wins that they that those about quarter and next new

So and that on all segments. we're sales across and we realizing different a force the the got wins we're our new realizing, healthy program

the So standpoint, as positive, helps us we into that also it's and next it roll from year.

year, has the at So that a but from of see started said, starting as a we're this little Paul year beginning slow little standpoint. to now the increases

of our groups each in is group color, Asia the slightly standpoint. across and above guidance then in Pacific Our digits were from flavor, mid-single that

the the on at then where overall, that probably feels will point. mid-single-digit how mentioned first right of year, quarter, X% progresses. it, X% in for the we'll of the see full we to consolidated is with basis be we quarter range kind good growth kind So probably and from a year Paul first for started. looking how

David Green

seeing about any know outside fair there word a this amount the X, better compounds -- you In the And to seeing terms conversion conversion, more significant? some be come see And incoming through? But are regard that of one already. Colors to I benefit Natural just your you other that Red sounds talked the -- a of apologies, talked it of are being you've like about with starting accelerate? of for are could conversion? you Are already

Paul Manning

So colors, the synthetic is quite small. analysis in X Red

like outlawed has a synthetic regulate FDA couple in the years super X, I to The X point, big be Red ban. X, their X some here. and colors, at named But Green things Those either are Red may with the like ones states small. this in them Yellow or Red Yellow date smallest. second technically small. is X proposed the think XX, have other the it's sunset legislation of

calling school. around largely they're castable of The been small But school, drinks and all kids so foods that be who for in them. has other to of first states, ban phase the go to would

So how this shakes out is anybody's guess.

question FDA And so X. only of picked considered But the being to answer this at think at that your I the point, is Red are has them this all level. short

the time FDA a not delisted times before. happened world the first is history This this that synthetic a color. the the of has number of in Now has

And so unusual that's an not fact. necessarily

decide market or So FDA the not come the parties comes ultimately let will which takes whether both whether product or question takes the drives and to timing market the pace action a or action state from. and and the effectively the

yes, in a in So continuation customers time will and different definitely tell. natural in fall acceleration a we're an buckets. seeing number some segments, But others of towards but colors

One we of those natural buckets pace colors. with on to is were we -- going guys, just continue

of have on legislated various convert." that going this. constituents, gets so or whether be, And do going And different speak, the may other not, bucket it we're a "Hey, buckets, little you to Another question. have in mindset of this maybe we're bit a to news, then to light

that's driving I I And now. any wins as yes, accelerate a certainly, what's lot two, that point. those So at right could first think noted, of the

David Green

you'll quantum terms be low soon to in Xs comfortable in to the down just And terms How of thinking you're and with should of about sort 'XX. we in fairly buyback, the the where probably the on of about how thinking you reference of buybacks? the Should that? be you or to sort be about max leverage think terms going is take to more you X.X%? magnitude han about of it we think in of want would Or leverage,

Tobin Tornehl

really take in interest Yes. our hard that I'll from ratio to No, one, We and debt David. that worked and X.X is pay about down burden our 'XX lower standpoint. that expense Yes. leverage

our So good expenditures. rolling about our year dividend, in capital this into XXXX, feel we

You probably range. noticed we our increased

million we're from Flavor about ROI lot projects, million $XX especially to We've a this that good $XX standpoint. year. Group got So in of our

good feel we standpoint. from that So

stock. excess So will we to buy cash, back use

different is number cash a of flow of because standpoint our cash first from just standpoint lowest The a usually from payments. quarter ops, quarterly

program, of So of we'll don't we we'll during start kind where think the quarter. we we necessarily is second mentioned, in that but at up the as kind staying have. reassess go X.X? to Xs I we're look low want at, probably quarter. around to stay X.X, it you you the Can enter But second and

about now. thinking we're what right that's So

Paul Manning

Yes.

of today one. steady David, think, kind and I that slow wins on

some going all anticipate don't at So massive buyback. we're once I to

many most I to of responsive and is investors. best of for It want this certainly, the a think efficient earns steady to asked shareholders. slow return. the It's investors And tax-efficient return execute to way be -- use we our ultimately to returns question, it.

is have very, is appreciable think But say debt-to-EBITDA opportunistic, with which the too. respect an we wouldn't So conceptually very to it this ratio. sometimes positive. But excess hey, cash, to increase on

reiterate dynamics. and those given the QX And be solid think lot other business, into of the that. we every big that's is natural of in We on to But I But I'd of happening. confidence lot activities in message typical a We program. patches see just feature going out, take Asia. the here and a single probably with inventory steady of of colors activity the the so Could QX a built and have future not opportunism yes, slow want a lot going between got upside here. of lot of to a of we in a still be lot

with going sure. the part of is are cash? for what picture we So be going to all Well, this do this to

David Green

on of Is the Or which plan, just any I we sort final much incremental portfolio in there there? savings expectations? like feels much for are just on just question line it's one a track. scope optimization guess with pretty very

Tobin Tornehl

to our No, million right. $X in We're $XX Yes. with line exactly original you're million.

kind we late So started that right now on of and done and at is this of end track we're as the plan just year, be year. to moving last

savings of So within to million million that and $X $XX identified cost of we $XX the million. the

So moving along.

Paul Manning

your Now you've your chat we've got fireside now. got --

Tobin Tornehl

there Are questions? further any Yes.

Operator

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

Tobin Tornehl

Okay.

also to to like just for today, I'd expectations for our call quarter. Before joining. everyone summarize the first thank conclude we the like I'd

between and We currency revenue be first X%. X% growth quarter our expect local to

We Flavors expect for be around margin the XX.X%. Group our adjusted Extracts EBITDA -- to also &

to Group for Our around XX.X%. and the be XX% EBITDA Pacific's be adjusted adjusted Asia EBITDA margin margin to Color around

in be interest the and significant rate $X.X in expect our be adjusted million quarter. tax around quarter, for XX.X% share buybacks anticipate to to the not any around the We first do expense We quarter.

call you today. our concludes that joining. So for Thank

Thank you If at please the you. contact directly company. us questions, have follow-up any

Operator

concluded. has conference The

disconnect. may You now

Sensient Technologies (SXT) 14 Feb 252024 Q4 Earnings call transcript