SXT Sensient Technologies

Steve Rolfs Senior Vice President and Chief Financial Officer
Paul Manning Chairman, President and Chief Executive Officer
Heidi Vesterinen Exane BNP Paribas
Mitra Ramgopal Sidoti
Leigh Ferst HighTower
Call transcript
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Good morning, and welcome to the Sensient Technologies Corporation 2020 First Quarter Earnings Conference call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

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

Steve Rolfs

to morning. Manning, I'm Financial like President Chief Executive this conference Senior welcome financial first results. Officer. I'm Chairman, Steve of Sensient President Rolfs, joined call Sensient's Officer to would by of Vice the Technologies XXXX all quarter Paul and morning you Good discuss Sensient's Corporation. to Chief I and

website A at we our available XXXX copy results. of released financial now the morning, This on quarter our is release first

call information our reference and substitute accordance for non-GAAP the from During results results we today, certain calculated financial not with information provide GAAP. financial performance non-GAAP of should financial will isolation believe or we be between as investors measures, These in in reporting improve company's to a which the comparability with periods. additional evaluate considered

financial in we most is of reconciliation to morning. connection and available A comments release. these with to reconciliations the the in this review comparable measures our Investor on measures non-GAAP Information section We encourage our GAAP at financial investors make of the press website directly

questions, would include I to that your everyone made forward-looking morning, like including to responses statements. remind this in comments also may

normal differ more may economic Our actual a and activity. action uncertainties governmental of view attempts remedial of by the particularly results materially, the in created at pandemic, of COVID-XX the return timing

description for factors analyze results. to you We additional financial in today. a XX-Q you read that urge of comments when forthcoming could our Sensient's our mind including these impact and factors filings, bear Please our potentially XX-K

Paul from Manning. hear Now we'll

Paul Manning

all increased solid during quarter our joining. This business across with company. Thank was sales thanks in expectations in with Sensient’s each units you, by Steve. currency for and almost showing occurred revenue the and morning growth. our line of growth the group adjusted X% approximately Good local

in the expected a call, inventory fixed in of the outlined I last quarter, from as timing be impacts cosmetics, our the in of mix higher ingredients XXXX, result actions. the product in to material first and our in our we natural reduction costs takeout profit efforts As down cost raw

expect both in as Despite for and we track continue flavors are with We the and the improvement plan our on year believe we year. outlook to colors COVID-XX, progresses. profit

Before our like I market. performance talk take the and we talk I are time of seeing would about about to to groups, what the in this COVID-XX

As considered a are to provider food, ingredients essential. markets, beverage, of personal our and the care businesses

average, and at are staffing All is of On and operating. production XX%. our facilities our facilities open at our attendance

the and our We of actively monitoring robust with addressing implications already COVID-XX GMP and are sanitation practices.

sanitation stringent and our continue products practices expectations. Our ensure quality to remain safe meet our employees our

and teams continues areas delivery stock on-time challenges. increasing supply in nearly high continually certain facilities, ensure This are monitoring our raw material supply are to and to at shipping delivered not Our XX% our safety materials been transportation easy. as to be base, chain raw working has despite

are employees personal substantially and or News full positively are COVID-XX. food their articles operations about facilities effectively. that of closing either and to our responding Overall, and care scaling due are companies stories back business

mission are manner. timely Our are safe a to fulfilling open and in products and our we customers our our facilities to deliver

a particular to saw we win home. generate in sales During from a wins working of starting decrease new level, high new in continue in result quarter, in at the first in a We as customers Asia. flavors April

sales growth, are of for each new important an in groups. the also component we While moderated wins the have attrition

channel, product sales region, geographic of varies and depending on line. COVID-XX The impact

of and until in world activity. see second of more that normal to trend orders the returned quick For however, channels. the quarter increased beyond possibly a food, the packaged for example, orders were service sales substantially rate and in down restaurant continuing We economies

up geographic in were Overall, regions. product our food and almost beverage all lines pharmaceutical and

the our North America. care While down in and was business Asia segment makeup of personal substantially

as are are down lower Within up, packaged cream, not home confectionary and but from and drinks and as ice this working foods, continue traveling. foods for certain energy and and makeup people soups, I are second demand are to prepared quarter in cereals, We possibly expect beyond. other seeing the categories such

turning Now the up flavor specifically the revenue group. X% Adjusted group currency local the approximately for to was for quarter.

improving paying Our and rate off. the is sales our across win group focus business retaining existing on

have Our sales year. continue win the was impact the have to a should seen in during which we quarter the years, throughout rate first highest positive

lines our Furthermore, ingredient our improving product picture and in finished in rate attrition sales extract growth our saw continues an flavors We flavor lines. and to decline. product

had business double-digits. very quarter, ingredients natural strong up Our a

prior As profit below expected, our was in year. group the quarter flavor for the

nice As a headwinds noted be inventory onion, mitigate to trends, in would expected the cost as these profit plans our progresses. costs, higher our and current result The impact upon based as as job the group expect significant down to raw materialize. profit quarter continue our first in call, our we reduction in XXXX, material and improve has I last a year of to done to in particularly the takeout of

X%. continue expect revenue sales were to single-digits adjusted Food mid colors for low I mid Group, to Color quarter. growth local currency was single-digit our revenue Within up up and guided, for Previously flavors. the approximately pharmaceutical

was products new up realize of colors, result which in as convert and solutions. launches to approximately color continue continued natural to product to a as X%, strong We natural sales growth existing

Latin quarter. saw and Personal during is flat Europe business Our We in the growth America. Care

in makeup. However, business our in lower for was and North Personal down to due Asia Care substantially demand and America COVID-XX general

order I'm business pleased in in increase patterns March. began to see our Asia the to

order unclear our and Personal quarter our component business COVID-XX the will in However, second for of impact Care it patterns the beyond. is how makeup

are from Once makeup again, in we slowdown seeing are a as people home. working

& the the I in overall Food a rate. Beverage which in Pharmaceutical. Group year, our predicted than experienced was better decrease Color and group to double-digit In are in Colors terms February. we operating attrition during with last flat seeing of profit Similar profit, was had prior call The flavors,

in in the demand cost Color the takeout makeup. However, the part some in down Group, made to to the profit Care Personal COVID-XX Asia progress actions. their substantially, overall Group solid was on Similar of weak due in impact has and Flavor

However, need to more actions potential. these full their time realize

upon profit low-to-mid continued the progresses. trends, Color growth expect year as throughout deliver our I sales improvement I to single-digit current Based expect the the year. Group

to group to a profit had benefit all growth almost the currency Our a the in mid-single-digit new Group to Asia regions, solid China to currency. quarter. sales increased current overall in continue which similar Pacific and driven colors, the profit throughout year. a the had local sales March by declined. and pleased was quarter, sales Pacific X.X% be order in in Asia expect return increased strong revenue rate XX% I favorable The will in local strong I attrition trends, to and the flavors upon wins, to book growth Pacific and for Japan see a Based deliver group year. Asia continue growth second and to Also in

focused on controlling remained company. throughout the costs We

our year cost SG&A. have a over For plants in now, our we production been structure, in and reducing both

our of I progresses. and this the the a focus on actions. the pleased also We and our these disciplined we're costs approach company focused expect benefits I'm on will year our benefit that across to efforts capital to increase expenditures. have beginning with realize as

for divestitures our divestitures product Each and fruit lines, of travel these progressing. in the all of yogurt given COVID-XX, varying prep fragrances, inks, are closure is stages restrictions the are three uncertain. of with timing The and each

groups good quickly a circumstances to start will continue and these allow. the during year We've execute had the all as quarter. We three to as to I'm first pleased push of ahead the results

are COVID-XX I on optimistic remains we unknowable. ultimate identified We the and about year of track am business, the our still impact the plans with for while

imposing sometimes uncertainty of which is changing degrees are varying restrictions, Governments abruptly, for businesses. them creating

to changes to are development, customers ways. various innovation responding while are differing and product Our keep alive. are to others trying these Certain customers projects in adapt new

While we lower drinks. in ice and are as a and care see markets, product cream, in other demand categories, an confectionery we food seeing in makeup, personal demand energy in and beverage the categories certain increase such

supply continue of overcome. be during shipping a on-time and chain continue and importance will market. this delivery to many strong transportation challenges must The we There are critical to which

the greater products. I healthy is Consumer be there to Given may of that hard demand changing, changing emphasis predict. uncertainties, confident focus true COVID-XX on demand. a buying can these products on impact heightened this of and am local more is risks our a and support

to mission support our customers a have chain We markets. supply the global in our and

work they Our in to accomplish day. mission our employees every to mission that continuing are believe and

Steve will the on now details additional first quarter you results. with provide

Steve Rolfs

costs related comments the divested. the and adjusted In I Paul. my differences and impact results our you, the our results XXXX Thank explaining between will removed be to operations XXXX, morning, the adjusted of results. divestiture The GAAP for be this and

divestiture do costs related the related this first $X.XX related quarter costs. Included non-cash any divestiture of or divestitures primarily are million first not are product share, approximately The which our $XX.X charges of results XXXX reported lines. to in three year's per results include quarter

quarter. $X.XX quarter to year's of be share of of results and the earnings include be an costs of from quarter revenue of divested operating amount first be results diluted related the this results of reported The million income reduced divested. year's divested. include first million $XX year's $X.X and addition, by the $XX.X operations to operating and immaterial In income this operations revenue Last impact million to the divestiture-related first per to operations in

Excluding $X.XX $XX and in Consolidated of the the consolidated of divestiture-related this the year's expenditures XXXX, adjusted in to quarter operations operations was in of quarter $X.X first costs revenue current diluted increase of million million million million first to the Capital share first million to to the $XX.X was Adjusted million first XXXX approximately $XX.X in grew quarter XXXX. year's in and XX%. compared $XX.X operating be first compared income first flow XXXX. quarter of first the year's XXXX, from results in divested in were XXXX, adjusted in $XXX.X of X.X% quarter, $X.XX per an was in to earnings last quarter. quarter, quarter. Cash this compared

the $XX.X million. increased Our approximately XX% free cash in flow to quarter

to $XXX.X unutilized $XXX has flow March committed lines. XXXX. our our was liquidity needs XXst, XXXX, adequate operating compared as financial the over credit lines. and through December At of we credit available end million cash million $XXX.X as quarter, and debt on to capacity of Sensient XXst, the first Total million of have of meet

any addition, notes on In have not our we until placement private maturities do XXXX.

stress be goal limits facility our leverage within covenant ratio and the progresses. to to ratios covenant we as our tested year required a We expect credit reduce for with continue XXXX have our to

what first our during As Paul and mentioned, our quarter results with line February. last for were our in in communicated we the expectations call

charges the we and related to we revenue our and profit expect that businesses would segments be the During XXXX, call, indicated color positive from of and flavor, results our to excluding divestitures Asia operational the divested. last the in growth

In operating lower addition, we based equity flat performance-based communicated that consolidated in on on of in level because income and the an XXXX, to our non-cash basis, XXXX results. may of deducted be our that maybe adjusted earnings

which in rate expect of a a XXXX also to planning was higher We number XXXX lower our of opportunities. as compared tax rate a result

$X.XX, current includes previous to an to trends, the in exchange estimate also EPS be seeking currency to on current divest our $X.XX includes headwinds based of difficult On expenses are range in previous guidance businesses excludes a adjusted on $X.XX of of divestiture are results impacts. which based on COVID-XX basis, per guidance GAAP we related to costs, $X.XX the Based impact related reconfirming maintaining The This we approximately at to impact of $X.XX predict rates. time. foreign businesses currency is we to and the XXXX. and our the reported trends, divested of of this $X.XX divestiture share, $X.XX current operations are approximately which of of

the mentioned, As global role plays critical our chain. company a supporting in Paul supply

your for call morning. now the for Thank questions. time this open We'll you


Vesterinen We from first will question-and-answer session. of go Our ahead. BNP comes the begin question Please Exane [Operator now Instructions] Heidi Paribas.

Heidi Vesterinen

couple congratulations Hi, A today. good questions. of and morning

secondly, factoring demand on you When highlight did you cosmetics number especially by traditional of winning on you what assume people now headwinds, with in then hearing that and bigger trends are side. food And region? side, elaborate So by think anecdotally towards are the the we're continue rest year. CPGs gravitating packaged traditional companies recent of just terms in, about makeup you maybe cosmetics, for the the are Could the products made and brands. you a your bigger maybe of that big guidance, starting on

and You about have more you exposed traditional, the talked being to C B customers.

So you customer are in what seeing of trends? terms

and I Thank hearing we're you demand you. please? picking is Because And that if business. then lastly, benefit wondered perhaps, about could your that bionutrients talk up probiotics could

Paul Manning

Okay, sure thing, Heidi.

for clarification here. cosmetics, just one, everybody's number So so and

of within product about we have that we personal areas. care different talk a So lot

makeup, talk products about to we oral we hair we But also cetera. things care and So related body skin about have products we soaps, talk dyes, et care. we about and hair have like personal to care, talk care, related washes

it's pretty biggest is So makeup certainly for a But, the broad-based business. our component personal us. portfolio of care single

And took makeup towards of were traveling. category not notably headwinds a aware that aren't so, makeup in going as a they're out, because they're all not fairly – lot going work, the people you are QX. in continued here not in to Most there – – they're QX big

elements But the made we year, it will big as think for certainly, would there, by think of on. to it there point headwind there. is geography you go the how year the that's potentially as vary So us about impacts I recovering that the

So headwind was orders in for were down quarantines number were a shut Pacific China put for us. example, for in of big issued, was a QX weeks, place. Asia lockdown

So for America, impact was some more of in the North in in that and and America the so lockdowns categories. be tend feeling say less QX region. felt Latin But Asia product those started because, we pressure as most we hair more Sensient continued, in other Pacific Europe care to oversubscribed to strongly

make phase a North where lot enough, America also exposure North taking little similarly kind We've big a Europe a in of hit. got hit. in a bit, America big we're recovering of now Asia taken and So is interestingly a up to

of we we be call as for normalcy. degree to, return that guidance anticipate to of for will what and year. headwind I some yes, about how makeup plays this a to there But there somewhat rest is the out an used think So continuing expectation year, could the be I to a the guess

care and then their salons upside dying home. or be men possibly? some at hairs there care, many of us the could hair some skin for closed, Now, in being With the ladies of are

that so little of And us. certainly a provide can bit a tailwind for

say and for would down of overall down the makeup to just I that mostly would our let's that net-net, in probably factor to us. year being So an many – say, flat as flat we regions for

but about food, We obviously question to some of business food versus we've built our C CPGs your there be is B a fair of have amount weighted exposure ingredients. although truth towards Now, big have around a Yes, to of kind where do and sort more that, packaged color. customers. packaged in the we lot flavor, heavily in flavor tends to it

I got And very broad customer so, we've think a base.

restaurant type I bit foods, are is out eating think When strongly. establishment. restaurants into of that's not us, quick going market that business little of a sit is to Sensient. a is down when our be service okay, traditional of for , going packaged our when the impact that for are down, restaurants products doesn't Most headwind if but the necessarily of that part bigger good are people less, that it's trend up

is business, confectionary packaged all of there suffering headwinds say a depending is the travel. cream, all packaged be but probably Europe quite Ice big positive but I can market not on of where explanations, are of In overall prepared lot doing really for areas categories foods would – is the there lot that energy substantially our some now. we've right big of example, in there mentioned well. food are these there's is us, easy I those foods category soups, monologue, parts for that the got are right. a and drinks, So there

home. Europe. leaving the Europe by traditionally cream substantial travelers ice a effectively a consumed people is us part is their market for and headwind third of in That in So

over-weighted. that there Asia our a package So, we've it's sales, down. and not B impact a pluses, I a the strongly that I a in that words, on us think position us. big a C. the going true. it's one, mixture are are lot is in big largely whether up, this to I on C Pacific, whether B of of opposite negative customers the think a or that's CPGs can multinational flavor, nature of the In got summary think where also have of don't there the is put a would I But lot in be color, of other And and think food, we're minuses

So I work of think we kind those can through differences.

in the front, that substantial probiotics. a agree interest bionutrients been has On yes, I would there

to not probiotics I headlines suggesting in think the some opine sources the feed increase almost I news bacterial some that an of remedy, and earlier or true bionutrients sources had style in you business, on Whether that, antivirus were that seen strains. I'm our does many an demand providing benefit the not, was probiotics of that opinion tell that is that's can here but had news. the were would probiotics I of that which protein

So that's a positive. net

Heidi Vesterinen

you. Thank

Paul Manning

Okay. Sure, Heidi.


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

Mitra Ramgopal

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

Paul, First we earlier positives, et the on essentially cetera. lot companies pulling mentioned I know then you’ve of of just But to environment their COVID a cetera. follow-up et think comments. lot wanted the of a minuses, in resulting guidance, where lot a

of extent. still that yours difficult And gives the kept of many. a is certainly you in I underlying really spaces pretty just maybe getting are your and just, a You've you but different, noticed I confidence what the that curious have terms I companies was a to lot little and for intact large environment

Paul Manning

business. is one, Mitra. this viewed essential Number what think we are I Well, as an

viewed our many personal items are as care essential. So food, pharmaceuticals and of

an strong very rallying Now that took to cry been a us for declare bit that them longer little some as us a organization. has governments But that.

be that number – one. I think would so

of confidence mission mission, and articulate work to come them many continue to to the to support the Our that we employees and that the mission. desire in gives that believe

So concerned be can you they to fearful. a very a can define for have people mission have and folks, problem, very anytime otherwise of you kind be because

Related a the to very that is we years sanitation over program. strong GMP built and

are any viruses we spiteful of our bacteria in so, always or And facilities. very

it's virus, of And but things, coli any of new it's a or Pseudomonas so is we're number of or coronavirus them. okay, listen, all scared whether Salmonella E. or

on sanitation very work around confidence employees to come common many has areas, these becoming safe a facilities. that more of ahead given were built the we We tremendous So our robust that are could well they environment. a also in in practices that infrastructure

listen we great at in defining out protocols building of to mission, short, said, expectations, necessary, levels in non-production terms initiative will in the our not only very took organization. we've were deliver on-time in well of So and at the our lay that we sanitation parts as continue business. delivering the an an delivery, I we not But that on. been the coronavirus principally will excuse, is we folks early deliver world-class –

the wait And continue we've and lot and they great the some acted. we to Took of knew don't They delivered they mission understood a we for got what company so leaders deliver. and around initiative direction. and do, around sit who to

is a that shortages there of materials of these and scare. shortages got of and company. raw world yes, initiative We transportation as shipping lot well. the ahead so to And the And raw the shortages the there well individuals this around ahead got is speaks in well We material. of

these and moderate been to impacts. of a And mitigate lot so, we've able

or tell can and didn't may stop on I is week, why been for We very did big for of close was not But particular aggressively have a success government you a that part know I we their that China other all India our of one did a that, that took be. companies our open. this few All for don't what mandate. and of our reason than Some every close remained operating, facilities weeks, open. remained government has plants mandate. in QX. challenges about

on Our across average of staffing the remains and world, throughout these has across continued be each XX% segments. to about

have things also a keeping as keep. But overall, wins confidence. the products. – deal give I continue would but me that of always essential our to like and great organization, that this of think focused we're minuses, some to for are we've business, a demand lot there those an pluses we been new we've going to But on in is So business

the this lot and of we And important for it's not in year. so seeing a you're was and know, in of incremental wins in new year rest important happened work that emphasis right for XXXX lot had revenue the see really, a of going was company, but really now good revenue execution the the QX to profoundly for I we a on be that the really XXXX, sales

assumptions or business. a We've is of in to have from headwinds that what of of built we whether attrition coronavirus, we've estimates. lot in our lot So great mitigating tailwinds a the got wins got the are around impact

feel continue we I that's so good confidence think And levels, moving in the continue business we're and execute service those the that that the benefit we're going forward. to And from on to what have quite the to to going I me wins. gives business

Mitra Ramgopal

how was great. on And again to terms affecting COVID, in then et That's and if if an front. it us is wondering cetera, potential update all divesture at can of process Okay. give buyers, you that – relates that the just

Paul Manning


selling. the the selling, in So that pieces we've we're got process three we're of

to transactions. sit and we are these little The on bit them. soon in them a it's of see times can. – buying to with other in – folks I execute both But this, to the normal I due some that parties, they, have definitive diligence the love the probably in I this been on place. due there to, there very on right that and can't think may tricky. we've now gets But site – here travel course news very it a that hopefully in with course, are, date right done that, be sure to to we're good somebody you it these they give restrictions committed bit site as as I restriction And transactions, that some they on of can I those. is getting tricky I'll or as when are are would some can us think travel very that to needs But talking tell and interested a little element in side committed you we able

certainly can So the yes, update if here But have a would then, to for next course hopefully, on well, were happen something we another available call. that you about, then in event. publicly make of before we

Mitra Ramgopal

Okay. But might've That's great. on And it, don't I you’ve it. you I Stephen basis sorry, if missed know wondering I’m if was mentioned margin the I had adjusted the gross

Steve Rolfs

The gross going for margin it's basis the adjusted on be quarter, to an XX.X%.

Mitra Ramgopal


Steve Rolfs

ahead… – that's go And

Mitra Ramgopal

No, seeing ready. sorry. I was they're just if

you’d some think there. highlighted I in one-time costs

Steve Rolfs

that So talked the decline to impacting quarter two a big things area high be going the segment the first profit that's the in makeup for about, in are Paul us.

is business, then mix our on on quarter bit within there just of business, costs, misalignment be impact cost for in our that of the gross first raw has just terms an but in a good margin. and little pricing. So natural we material And ingredients pricing think on of the year, we'll versus

two So that the are those are items that. impacting of

Paul Manning

– things COVID, Yes. obviously related some weren't rooms, like incremental the office there There in some you have you sanitation is typically that. in cleaning, like hour necessarily costs by – areas enhance spaces, is some to cases that yes, to where like break routinely

optimal most there, costs to have you transportation time. There options been are there So expedite been all the have don't certain have some the products. costs cost there necessarily because

annualized, continue pennies EPS So be the basis, current on see couple couple these at them – would an probably of we a pace. if costs they as EPS

diluted not gross So at probably to be something to this ignored. point, but certainly less margin

Mitra Ramgopal

I too much. that related divestiture there the around Okay. again highlight the And if I know the you move adjust costs, big side, on and guess was and SG&A

Steve Rolfs

right. That's

Paul Manning

Yes. been We folks in that. much to But out there the the much continue held the we're the for revenue, on hey, doing generate year, got organization we've that's a many to chagrin the to headcount well of throughout very company. line on going over

QX, and and we're we XXXX as that QX QX into continue in then think well. do get I and to to as going

to a So footprint have standpoint, without we only production larger from from have an much the not standpoint SG&A business, revenue a having. but

make words, to So the business for this have or to significant to SG&A continue don't we future. the grow in in production other revenue investments foreseeable of

that's think important consideration. I an So

Mitra Ramgopal

And invest talked environment Great. to to in That’s an past where as looking opposed lot the maybe in fair? companies development about fair. the to cetera, that ability in – clearly also now. you've right conserve cash, a I have are certainly holding Is activity that think you continue to et of tight

Paul Manning

Yes. right, had year of a cash, year we And speaking a standpoint. cash last nice we from flow placed

million, last cash only if but year You the compare sheet we've very a nice the cash that $XX $XX in of not flow uptick quarter. by operations, inventory reduction. saw from driven in reductions, free flow out, first to million balance lot year A see inventory, you taken this on you would

and about other reduce related to FX of the half, in our inventory related some deliberate actions that's that but to half divestitures, Now to is is businesses.

that And in be QX. going as we was a to here profit noted, headwind

said, nice wouldn't probably of QX a for I standpoint. and accounts of make course one that $XX million have and of made As would our cash have of in of that suppose tailwind but a flow had I I the we to sense could said a the from inventory other QX whole heck profit, a day, lot

output strong and right to of for sales now after There's call of to of a a why will you bit things, in it, do in very So little an also there the – like that. is lower side deliberately. the continue to all little for company around lower production months but the from few QX particular that of accounting inventory a a volumes – that's overhang reasons obvious colors, flavors as reduce a And see good effort the in in but idea. trail you even we that combination bit you

of that back going is headwind the that's bit your expect see would But what of gives that you that's profit to digested in flavors growth. as that in confidence. area about expect in particular – you the organization, QX. And here So That's to sort see me gives certainly there right for what moderates confidence. me that's in we And then flavors. another question that

Mitra Ramgopal

And Okay. I tax in for the rate forward? a going just we what moving of know the Thanks look should color then but terms for finally, on the in on quarter lot parts first underlying the that. tax rate, there of obviously, are

Steve Rolfs

last we were So year, low. pretty

were that that some had A tax probably we We year say the is planning us take this our just normal more planning lowered to a – cash XX% would XX%. XX%, XX% more to to be have rate would You'll but bit the last little normal recall to below year for XX% it that our going We may XX%. rate. be XX%. additional may some be below

Mitra Ramgopal

taking great. again That's the Thanks questions. Okay. for

Paul Manning

Mitra, thing. sure Okay,


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

Leigh Ferst

you. Thanks for morning. Thank leadership. your Good

Paul Manning

Leigh. Hi,

Leigh Ferst

Good. Hello.

around You dynamic you demand that more the elaborate just that a little in fits natural about on your discuss also or if natural health trends there supporting talked changing side? what changes pleased trends product products bit in local and the and trends. is business Could into

Paul Manning


the business. help how market get So more of how in health and understood if little consumer demand, bit you correctly, our that can sort and I or trying hurt a to the you're changes color around

going sample chew but are so home, I eating to don't a at right? about size what's is, You to I'm right, weight because more, eat that's lot at COVID-XX joke great I for wondering, maybe I sort not a that of yes, can think myself of this the after gaining thing, just one how so So know, when a how of this I it's everybody's happen question, and hear meaningful. people home but And COVID speak unhealthy. just

a pretty very our natural interest within color. the sugar, more obviously business, the an been salt, whether more of marketplace products extract have derived natural businesses broad closely cosmetics has beverage That our flavor been whether has from for and based healthy our an products, in there trend much nevertheless, we most that inks ongoing that's less food in health, less or saved, a in But or nature, a it's business, business.

this of customers many how our pandemic, can And so impacted out there that trend is right. depending that strongly be of on come

of emphasis we continue because of a new of going companies a So right now that business many I for to caution little on only little core buying scale bit less benefit launching a would may the That's products. have products, confident very back their that scale equation on launches, to think we they're understanding. are focus of if a that I if us. back some strong see that. they're existing new okay, But part But you're becomes a on more them that of that the headwind not and bit.

and into is as China But benchmark of many we're colors, cosmetics city what use in any of – original China, our to in seeing and by customers it order pipeline of back here city. going vary bit certainly not by of we customers last the very open. our go does to is and little vary China if the book does it's the customer quite China of that resuming have. were flavors, of customer a the come they health April. a which and couple our access the they on free of here, Many the that were betterment certainly to now related any them their But to strong are for weeks want back focus many working of March products product and and has again portfolio on, restrictive It's you

is Middle East. at or in we the indication of China the data and a the and could that emerging see hopefully, good East Far any for type Americas, us, trend least point if So Europe

to that I'm of So perhaps the circle may that of as be focus not also much could promoting and that happen, but kind brands I'm be core wagons may want their health on optimistic trend. that some products, the which there there just out cautious

a that lot our – we In good of natural category, the in nothing else wins question your growth market. and would interest a of still natural existing if XXXX. XXXX that did in again, I in up see we products, around terms on in colors combination backs obviously a of anticipate of those this our year, strong that and conversions well very of wins new had would the that X%, quite early customers, again

bit think products. we market say, natural to a that types a or more certainly a cosmetic think eventually of here If or wins continue return we'll again, there the had, not a to colors, that customers bit. incentivize of in continue and at that a headwind for slow customers I can to flavors say minimum, XXXX. launch natural those launching little a little for will could natural the I and we've think, ride is a with that again, But optimistic interest composition, is I I'm consumer become that with be extracts these the products abated our down But areas on

Leigh Ferst

and note And surprising transportation it? a on color you. a little and that shipping give some more to piece it's that Thank had you but could challenges, how not manage you on different us

Paul Manning

lot a India. and of on you those yes, saw saw were you lockdowns lockdowns early in as China in So

to long here. pretty I I some need about go we in key what guess assumptions of that essential that and when well, How manage driving think revenue. very good closely operation making to are raw most the we ability raw some ones impacted back certainly March our get to was some materials, We materials. going we that that on our started said, our happen the was to

or cases another even that chain. is before think we the challenges a things well important we we're matter raw took some were were of sources, we we have we addition on That supply long some I our so fact bought And going since shortages was action in to we and dual were of the to in key shift those able three and there of of this ahead scale. great materials. But transportation

until to If to bit a which going were you April, the you bigger is have little probably behind some were eight you say, challenges. waited ball,

how good to a So supply that people there a your now for And idea still supply was are. it's we've Switzerland, creative. matter really is. line no very chain there got from train but who've just of had China I example, very, been good people, chain

transportation and we clever help to to very, very very options found so novel continue And very, our along. businesses move

why or strong is company. delivery say, the this on-time still say, you And that's really factor I in

a found still because So we a people no find the did. XX%, said And is people expectation way. way excuses

those of some have tell that would three done you I be that. the say in we four I there's today, or backlog would So probably still India. ways

or I just the was instituted other think bit of a based. different was how some that enforced a had kind of than countries of lockdown of broad down. that is a more shut was a Everything systematic that more

of So there backlog but nice a China a catching there's up, delay India. still of really out still is is China. done job a of out lot of shipping

material So company. last is of make no the the I'll raw so we're not anybody by that means out any strongly here, But one woods. point this in on is Leigh, dependent

think revenue. I or from of X% impact the any revenue maybe X% our about raw materials, of biggest

footprint So pretty success a that's I chain. to important diversified supply we've And comes aspect our of our got as there it real think been when well. a

Leigh Ferst

interesting. That you. Thank was

Paul Manning

sure Okay, thing.


The next follow-up with Vesterinen Please Exane. question a go from ahead. is Heidi

Heidi Vesterinen

this? there? was few growth as please, you where quite questions both? What focused about will talked there this why mix really was of you. talk And more of volume And but or your or in Hi, a Could segment outlook outlook this. Asia-Pacific what positive the about you please. And well. had so much too natural you drive ingredients Thank was some strong, price the drove strong, what's on

Paul Manning


– onion, ingredients so other capsicums, parsley, garlic, vegetables. natural So

for So of a couple reasons. was it strong

of continue generated business. We have wins a base we've new got – customer to expand. so We we that a in lot that very broad

one. China with given little preference think or the customer that the been capsicums I cases garlic share in and other or some a of in least two, at the we be parts there onion would of source shortages a and of domestic might a say, have a number for U.S. Number more So bit world. of foreign again, some supplier out

that that is I was So on service just we top of helpful. really, unbelievable think I had think But level.

our which in they it was with because it. really the reliable. recognized focused wanted the quarter, very, that a they're very on-time like stick XX% about Heidi, delivery they're think unbelievable good that business, just very to customers was source And on in I and is and

is not is to purchasing perhaps concluded really and of you're And providing assurance saving time, need factors. think both folks right some about – now think reliability I are those the and at now a penny. good really we What have

I some that So things would first results. our the think quarter really buoyed those of be

year. I for see think in just good the really can to results that you business continue

the well. inflation continue on by What goes as going also to going see year costs raw material see onion, you're is you're as as to these moderate that to

picture confidence So we've to certainly, the the there that group yet growth of looking me, will been and flavor operating another that the source will be change for. for another on factor that continue profit

the how we've great We a region. strong very got been talked in in strategy. investments, about Now somewhat Asia-Pacific the have talked areas side we've sales investments Singapore, again, made leadership got here in We've and other about the technical we've previous in they and with of and to us necessary Asia-Pacific. as headwind the of customers years. to on really couple for otherwise enhance for were I've an commented very for the us SG&A deal capabilities the desirability calls, last But

and that is think the you're those of of I fruits changes. labor seeing investments those some So now right and what

but think whereas China, And helped in were a don't. we in in was impact the guess much Thailand, had say didn't China, undersubscribed down New many are we as wins as China, – we because and that that us it India, might in We also I to say as do new business greatly is regions. throughout we what in companies China us just great have others Asia-Pacific we substantial Australia, don't have presence in region, other Zealand. I other

also I helped. And those think so

I've had that of And referenced course, before. attrition we've this then of less

rest in as five or it's going respect what's a with or closed, of optimistic transportation continue six be pretty China improving some front we into situations. what's for those And and I'm front. go have India are the the whether to important issues and a Japan factors So to on we open still year, Asia-Pacific. were But customer to

quick parts We service. other have Asia of shutdowns big it to headwinds pertains as the also related in to

So we've got more we’re our any – subscribed regions. in QSR perhaps other Asia strongly segment of to than

we that the again, momentum that growth wins, to of mid our that to the from have I overcome tailwind the think us a from be So as that year. for is and there represents of have revenue going the headwind. a what But allow tailwind to enough the single-digit bit described I rest


conference turn our the like to concludes This over any company session. would for the back question-and-answer to closing remarks. I

Paul Manning

thanks. other Are Okay, there questions? any


in are questions there the no other queue. No,

Paul Manning


you other and do to we you us say to have like. something any call any if but else? questions, happy type wanted conversation we're And give certainly Steve, continue So a you'd of – talk, always can

Steve Rolfs

everyone. us. as you Thank No, any say, just would if follow-ups Thank our Paul, you. contact that call. are And concludes please I there


The now presentation. concluded. Thank today's you has attending conference for

disconnect. now may You