Sensient Technologies Corporation Reports Results for the Quarter Ended June 30, 2022 – Business Wire
Double-Digit Growth in Reported and Adjusted Revenue
Sensient Operating at or Above its 2022 Guidance
MILWAUKEE–(BUSINESS WIRE)–Sensient Technologies Corporation (NYSE: SXT) reported consolidated revenue of $371.7 million in this year’s second quarter compared to $335.8 million in last year’s second quarter. Reported operating income in the second quarter of 2022 was $55.2 million compared to $35.8 million in the second quarter of 2021. Reported diluted earnings per share was 92 cents in the second quarter of 2022 compared to 61 cents in the second quarter of 2021. Foreign currency translation decreased revenue by approximately 3% and earnings per share by approximately 5% in the present quarter.
The 2021 second quarter reported results included divestiture & other related costs and operational improvement plan costs, which in total decreased 2021 second quarter diluted earnings per share by $0.16. The 2021 second quarter reported results also included the operations of the divested product lines, which decreased diluted earnings per share by $0.01. We did not make any adjustments to our 2022 second quarter reported results for divestiture & other related costs, operational improvement plan costs, or results of the divested product lines. The adjustments to our reported results are described in more detail under “Reconciliation of Non-GAAP Amounts” at the end of this release.
BUSINESS REVIEW
Quarter
Year-to-Date
5.5%
-2.2%
17.3%
13.3%
15.5%
11.5%
10.7%
4.6%
Adjusted
Local Currency (1)
Quarter
Year-to-Date
8.8%
7.0%
21.9%
16.8%
23.0%
18.6%
14.9%
11.6%
The Flavors & Extracts Group reported second quarter revenue of $189.3 million compared to $179.4 million in last year’s second quarter, an increase of 5.5%. Adjusted local currency revenue increased 8.8% in the quarter. The Group had favorable pricing and volume growth in Flavors, Extracts & Flavor Ingredients, and favorable pricing in Natural Ingredients, partially offset by lower volumes in Natural Ingredients. The lower volumes in Natural Ingredients were primarily a result of a limited supply of onion combined with strong 2021 demand. Segment operating income was $30.0 million in the current quarter compared to $24.5 million reported in the comparable period last year, an increase of 22.3%. Adjusted local currency operating income increased 23.9% in the quarter. The higher operating income was primarily due to the favorable pricing and volume growth in Flavors, Extracts & Flavor Ingredients, and favorable pricing in Natural Ingredients, partially offset by higher input costs. Foreign currency translation decreased segment revenue by approximately 3% and segment operating income by approximately 1% in the quarter. Segment operating income as a percent of revenue in the second quarter of 2022 rose to 15.9%.
The Color Group reported revenue of $156.3 million in the quarter compared to $133.2 million in last year’s second quarter, an increase of 17.3%. Adjusted local currency revenue increased 21.9% in the quarter. The Group had strong volume growth and higher pricing in both Food & Pharmaceutical Colors and Personal Care. Segment operating income was $31.2 million in the quarter compared to $25.6 million in last year’s comparable period, an increase of 21.7%. Adjusted local currency operating income increased 23.9% compared to the prior year’s second quarter. The higher operating income is primarily a result of the higher volumes and favorable pricing, partially offset by higher input costs. Foreign currency translation decreased segment revenue by 4% and segment operating income by approximately 5% in the quarter. Segment operating income as a percent of revenue in the second quarter of 2022 was 20.0%.
The Asia Pacific Group reported revenue of $37.3 million in the quarter compared to $32.3 million in last year’s second quarter, an increase of 15.5%. Adjusted local currency revenue increased 23.0% in the quarter. The higher revenue was a result of strong volume growth and higher pricing. Segment operating income was $7.7 million in the quarter compared to $5.8 million in last year’s second quarter, an increase of 33.3%. Adjusted local currency operating income increased 43.3% in the quarter. The higher operating income was primarily a result of the favorable volume growth and higher pricing. Foreign currency translation decreased segment revenue and operating income by approximately 8% and 10%, respectively, in the quarter. Segment operating income as a percent of revenue in the second quarter of 2022 rose to 20.7%.
Corporate & Other reported operating costs of $13.7 million in the current quarter compared to $20.2 million in last year’s second quarter, a decrease of 32.3%. Adjusted local currency operating expenses for Corporate & Other increased 14.0% in the quarter primarily due to higher performance-based compensation.
2022 OUTLOOK
Sensient is reconfirming its expectation for 2022 full year GAAP diluted earnings per share to grow at a high-teen growth rate compared to the Company’s 2021 reported GAAP diluted earnings per share of $2.81. Our full year 2022 guidance does not include any material divestiture & other related costs, operational improvement plan costs, or results of divested businesses.
The Company now expects 2022 revenue to grow at a high single digit rate in local currency compared to the Company’s 2021 adjusted revenue(2). The Company’s previous 2022 revenue guidance was for a mid-to-high single digit growth rate in local currency. The Company is reconfirming its expectation for 2022 adjusted EBITDA(2) and diluted earnings per share to grow at a high single- to double-digit rate in local currency compared to the Company’s 2021 adjusted EBITDA(2) and the Company’s 2021 adjusted diluted earnings per share(2) of $3.13.
The Company now expects full year 2022 earnings per share reported on a U.S. dollar basis to be impacted by approximately twenty-three cents of foreign currency headwinds based on current exchange rates. The Company’s previous guidance anticipated twelve cents of foreign currency headwinds.
The Company’s guidance is based on current conditions and trends in the economy and the markets in which the Company operates and is subject to various risks and uncertainties as described below. The Company will continue to monitor the impacts of the ongoing COVID-19 pandemic and the conflict between Russia and Ukraine on our business.
(2) See “Reconciliation of Non-GAAP Amounts” at the end of this release for more information.
USE OF NON-GAAP FINANCIAL MEASURES
The Company’s non-GAAP financial measures eliminate the impact of certain items, which, depending on the measure, include; currency movements, depreciation and amortization, non-cash share-based compensation, divestiture & other related costs, operational improvement plan costs and income, and the results of the divested operations. These measures are provided to enhance the overall understanding of the Company’s performance when viewed together with the GAAP results. Refer to “Reconciliation of Non-GAAP Amounts” at the end of this release.
CONFERENCE CALL
The Company will host a conference call to discuss its 2022 second quarter financial results at 8:30 a.m. CDT on Friday, July 22, 2022. To participate in the conference call, contact Chorus Call Inc. at (844) 492-3726 or (412) 317-1078, and ask to join the Sensient Technologies Corporation conference call. Alternatively, the call can be accessed by using the webcast link that is available on the Investor Information section of the Company’s web site at www.sensient.com.
A replay of the call will be available one hour after the end of the conference call through July 29, 2022, by calling (877) 344-7529 and referring to conference identification number 5230009. An audio replay and written transcript of the call will also be posted on the Investor Information section of the Company’s web site at www.sensient.com on or after July 26, 2022.
This release contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2022 Outlook” above. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the impact and uncertainty created by the ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers, and suppliers, the availability and cost of raw materials, energy, and other supplies, the availability and cost of labor, logistics, and transportation; the uncertain impacts of the ongoing conflict between Russia and Ukraine on our supply chain, input costs, including energy and transportation, and on general economic conditions; governmental regulations and restrictions, and general economic conditions, including inflation; the pace and nature of new product introductions by the Company and the Company’s customers; the Company’s ability to anticipate and respond to changing consumer preferences and changing technologies; the Company’s ability to successfully implement its growth strategies; the outcome of the Company’s various productivity-improvement and cost-reduction efforts, acquisition and divestiture activities, and operational improvement plan; changes in costs of raw materials, including energy; industry, regulatory, legal, and economic factors related to the Company’s domestic and international business; the effects of tariffs, trade barriers, and disputes; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; currency exchange rate fluctuations; and other factors included in “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, as updated and supplemented by the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, and in other documents that the Company files with the SEC. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations. This release contains time-sensitive information that reflects management’s best analysis only as of the date of this release. Except to the extent required by applicable laws, the Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized.
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and marketer of colors, flavors, and other specialty ingredients. Sensient uses advanced technologies and robust global supply chain capabilities to develop specialized solutions for food and beverages, as well as products that serve the pharmaceutical, nutraceutical, cosmetic, and personal care industries. Sensient’s customers range in size from small entrepreneurial businesses to major international manufacturers representing some of the world’s best-known brands. Sensient is headquartered in Milwaukee, Wisconsin.
www.sensient.com
2022
2021
% Change
2022
2021
$
371,706
$
335,827
10.7%
$
727,227
$
695,529
4.6%
240,703
224,233
7.3%
471,378
468,322
0.7%
75,759
75,841
(0.1%)
147,816
144,557
2.3%
55,244
35,753
54.5%
108,033
82,650
30.7%
3,083
3,322
6,076
6,755
52,161
32,431
101,957
75,895
13,514
6,495
26,239
18,291
$
38,647
$
25,936
49.0%
$
75,718
$
57,604
31.4%
$
0.92
$
0.62
$
1.81
$
1.37
$
0.92
$
0.61
$
1.80
$
1.36
41,893
42,135
41,879
42,199
42,208
42,267
42,178
42,328
Revenue
2022
2021
% Change
2022
2021
$
189,337
$
179,401
5.5%
$
372,064
$
380,312
(2.2%)
156,268
133,207
17.3%
304,706
268,927
13.3%
37,328
32,317
15.5%
73,793
66,157
11.5%
(11,227
)
(9,098
)
(23,336
)
(19,867
)
$
371,706
$
335,827
10.7%
$
727,227
$
695,529
4.6%
$
30,013
$
24,536
22.3%
$
57,592
$
51,554
11.7%
31,178
25,615
21.7%
61,835
52,209
18.4%
7,721
5,793
33.3%
15,925
12,545
26.9%
(13,668
)
(20,191
)
(27,319
)
(33,658
)
$
55,244
$
35,753
54.5%
$
108,033
$
82,650
30.7%
June 30,
December 31,
2022
2021
$
25,271
$
25,740
295,948
261,121
452,161
411,635
48,146
42,657
821,526
741,153
417,538
435,009
443,675
446,478
120,483
122,853
$
1,803,222
$
1,745,493
$
140,776
$
125,519
26,624
8,539
96,516
98,247
263,916
232,305
498,715
503,006
28,193
28,579
53,431
43,178
958,967
938,425
$
1,803,222
$
1,745,493
2022
2021
$
75,718
$
57,604
26,180
25,817
8,691
4,188
(38
)
206
–
13,511
12,244
1,702
(41,592
)
(26,902
)
(51,768
)
19,357
(25,919
)
(15,573
)
20,501
9,632
(4,188
)
(3,944
)
2,765
1,953
199
1,710
22,793
89,261
(32,468
)
(25,550
)
92
169
–
36,255
1,571
(254
)
(30,805
)
10,620
69,424
25,997
(31,547
)
(62,578
)
–
(22,507
)
(34,446
)
(33,027
)
(2,056
)
(582
)
1,375
(92,697
)
6,168
1,352
(469
)
8,536
25,740
24,770
$
25,271
$
33,306
2022
2021
$
0.82
$
0.78
Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
% Change
2022
2021
% Change
$
371,706
$
335,827
10.7%
$
727,227
$
695,529
4.6%
–
(2,207
)
–
(27,777
)
$
371,706
$
333,620
11.4%
$
727,227
$
667,752
8.9%
$
55,244
$
35,753
54.5%
$
108,033
$
82,650
30.7%
–
3
–
28
–
11,685
–
13,232
–
459
–
(2,468
)
–
(3,494
)
–
(2,493
)
$
55,244
$
44,406
24.4%
$
108,033
$
90,949
18.8%
$
38,647
$
25,936
49.0%
$
75,718
$
57,604
31.4%
–
11,688
–
13,260
–
(1,689
)
–
(896
)
–
459
–
(2,468
)
–
(115
)
–
608
–
(3,494
)
–
(2,493
)
–
455
–
159
$
38,647
$
33,240
16.3%
$
75,718
$
65,774
15.1%
$
0.92
$
0.61
50.8%
$
1.80
$
1.36
32.4%
–
0.24
–
0.29
–
0.01
–
(0.04
)
–
(0.07
)
–
(0.06
)
$
0.92
$
0.79
16.5%
$
1.80
$
1.55
16.1%
Three Months Ended June 30,
Revenue
2022
Adjustments (1)
Adjusted
2022
2021
Adjustments (1)
Adjusted
2021
$
189,337
$
–
$
189,337
$
179,401
$
(1,415
)
$
177,986
156,268
–
156,268
133,207
(792
)
132,415
37,328
–
37,328
32,317
–
32,317
(11,227
)
–
(11,227
)
(9,098
)
–
(9,098
)
$
371,706
$
–
$
371,706
$
335,827
$
(2,207
)
$
333,620
$
30,013
$
–
$
30,013
$
24,536
$
(45
)
$
24,491
31,178
–
31,178
25,615
504
26,119
7,721
–
7,721
5,793
–
5,793
(13,668
)
–
(13,668
)
(20,191
)
8,194
(11,997
)
$
55,244
$
–
$
55,244
$
35,753
$
8,653
$
44,406
Six Months Ended June 30,
Revenue
2022
Adjustments (1)
Adjusted
2022
2021
Adjustments (1)
Adjusted
2021
$
372,064
$
–
$
372,064
$
380,312
$
(26,304
)
$
354,008
304,706
–
304,706
268,927
(1,328
)
267,599
73,793
–
73,793
66,157
(295
)
65,862
(23,336
)
–
(23,336
)
(19,867
)
150
(19,717
)
$
727,227
$
–
$
727,227
$
695,529
$
(27,777
)
$
667,752
$
57,592
$
–
$
57,592
$
51,554
$
(2,925
)
$
48,629
61,835
–
61,835
52,209
544
52,753
15,925
–
15,925
12,545
(87
)
12,458
(27,319
)
–
(27,319
)
(33,658
)
10,767
(22,891
)
$
108,033
$
–
$
108,033
$
82,650
$
8,299
$
90,949
5.5%
(2.5%)
(0.8%)
8.8%
17.3%
(3.9%)
(0.7%)
21.9%
15.5%
(7.5%)
0.0%
23.0%
10.7%
(3.4%)
(0.8%)
14.9%
22.3%
(1.3%)
(0.3%)
23.9%
21.7%
(4.6%)
2.4%
23.9%
33.3%
(10.0%)
0.0%
43.3%
(32.3%)
0.0%
(46.3%)
14.0%
54.5%
(5.8%)
31.2%
29.1%
50.8%
(4.9%)
34.2%
21.5%
22.6%
(4.1%)
N/A
26.7%
(2.2%)
(2.1%)
(7.1%)
7.0%
13.3%
(2.9%)
(0.6%)
16.8%
11.5%
(6.6%)
(0.5%)
18.6%
4.6%
(2.8%)
(4.2%)
11.6%
11.7%
(1.2%)
(6.4%)
19.3%
18.4%
(3.6%)
1.3%
20.7%
26.9%
(8.9%)
(0.9%)
36.7%
(18.8%)
0.0%
(38.2%)
19.4%
30.7%
(4.3%)
12.5%
22.5%
32.4%
(4.4%)
17.4%
19.4%
18.2%
(3.2%)
N/A
21.4%
Three Months Ended June 30,
Six Months Ended June 30,
2022
2021
% Change
2022
2021
% Change
$
55,244
$
35,753
54.5%
$
108,033
$
82,650
30.7%
13,124
13,018
26,180
25,817
–
(48
)
–
(97
)
4,528
2,075
8,691
4,188
–
11,688
–
13,260
–
459
–
(2,468
)
–
(3,494
)
–
(2,493
)
$
72,896
$
59,451
22.6%
$
142,904
$
120,857
18.2%
2022
2021
% Change
2022
2021
% Change
$
23,685
$
60,297
(60.7
%)
$
22,793
$
89,261
(74.5
%)
(19,732
)
(11,306
)
(32,468
)
(25,550
)
$
3,953
$
48,991
(91.9
%)
$
(9,675
)
$
63,711
(115.2
%)
Category: Earnings
Amy Agallar
(414) 347-3706
Amy Agallar
(414) 347-3706