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| Statement |
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| So, yes, the volume comes and to your point we should have really nice operating leverage in the businesses |
| Within our Flavors and Extracts group, our new sales win rate is robust |
| At the mass market level, that's where there was a considerable degree of destocking and perhaps even a reduction in consumer demand, that though is very good for our business because in terms of the product that we develop and the portfolio that we have, it can not only serve the mass market, but in particular can serve the prestige market quite successfully |
| With respect to cosmetics though, you have somewhat of a mixed bag at the prestige level, the high-end level, we see good volume growth and we see good volume opportunities |
| Local currency revenue in both Color and Flavors improved sequentially in the fourth quarter of ‘23 from the third quarter |
| That gives me a great deal of confidence |
| That gives me a great deal of confidence |
| We expect sequential improvement in our volumes throughout 2024, and I expect a much-improved financial picture, including solid sales, volume growth, local currency, revenue growth, and local currency adjusted operating profit growth |
| But for right now, I think this is a pretty good start to the year and a pretty good guidance that I think we could all feel very committed to achieving |
| Our sales win rate remains at a high level and we are generating incremental sales wins across most of our product lines and geographies |
| But I'd like to set kind of the floor where we're going to be and I feel very confident that unlike '23 where there was a tremendous amount of volatility in destocking and all these other factors, our guidance kind of signals that we believe that, that is over and the magnitude of our new wins would be able to overcome any market dynamics |
| But the pace of our wins right out of the gate in January, I'm quite excited about |
| And then of course our S&I business, part of our Flavors Group, we had a series of very, very interesting and significant wins in our onion and our garlic business |
| And so, we have uncovered some very good opportunities there |
| We continue to make very, very good progress there, not only with respect to natural colors and these over the counter nutraceutical applications, but also in flavors |
| I expect good operating leverage and margin improvement across our groups as we experience improved fixed-cost coverage and a lower inflationary environment |
| So those are some very exciting wins there |
| You may recall last year, Q1 Color had a pretty good, I think it was something like about 9% or 10% top-line growth |
| The group delivered a high level of new sales wins in 2023, and we expect strong new sales wins in 2024 |
| So as our strategy has been focused in the food color business on accelerating our innovation there, our supply chain and our production capacity, we were able to really leverage all three of those in developing some very, very unique applications and technologies for a number of customers, not only for new to the market launches, but actually some compelling and very interesting conversions from synthetic colors |
| But overall, still very strong new win rate across each of the groups |
| And so, we had record wins in 2022 across each of the groups |
| Therefore, I expect the flavor group to have a much improved 2024 with low to mid-single-digit local currency revenue growth |
| The color group also had an outstanding new sales win rate in 2023, particularly in natural colors, and we expect an equally robust new sales win rate in 2024 |
| Our sales pipelines remain strong and we continue to work on new product applications with our customers |
| Asia Pacific's focus on sales execution, customer service, and broadening its product portfolio has positioned the group nicely for 2024 |
| These new wins will continue to benefit 2024 and expect the group will deliver new sales wins at a high rate again in 2024 |
| Overall, our balance sheet remains well-positioned to support our capital expenditures, sensible M&A and our longstanding dividend |
| As of December 31st, 2023, Sensient's improving cash flow allowed us to reduce debt by $13 million in the fourth quarter, and by $43 million in the second half of 2023 |
| I'm optimistic about 2024 |
| Statement |
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| Revenue in the age-specific group was down mid-single digits in the fourth quarter, primarily due to destocking |
| The Asia Pacific Group reported a local currency operating profit decline of 12% |
| Both Color and Flavors reported local currency operating profit declines of about 16% in the fourth quarter of 2023 |
| Our consolidated adjusted local currency EBITDA was down 5.9% for the full year of 2023 |
| So, I think those three factors come together and I think, again, we have a little bit of a choppy Q1 owing to that destocking, but not as a result of a poor win rate or poor pricing or out of control inflation |
| Revenue in the Flavors and Extract group was flat in the fourth quarter, and the Color Group was down high single digits in local currency |
| Adjusted local currency EBITDA was down 8.5% in the fourth quarter of 2023 |
| But then again, if I'm wrong, I'm in big trouble |
| For the company, local currency revenue was down low single digits in the quarter and was about flat for the full year of 2023 |
| But on the negative side, right, there's still elevated energy costs in parts of the world |
| I mean destocking did have a negative high single-digit impact from a revenue standpoint |
| The underlying growth in the food industry in North America continues to be, well, in Q4 of 2023, it was negative |
| From that sense, these two facilities were the two lowest, probably the two lowest returning facilities in the company |
| From that sense, these two facilities were the two lowest, probably the two lowest returning facilities in the company |
| It was actually a decline of 1% or 2% in the overall market |
| Revenue and volume growth resume profit improvement will trail sales improvement by a quarter or so |
| But I think that, the plot will continue to unfold as the year progresses, but I would say we're cautiously optimistic following the results we saw in January |
| As predicted, we continue to experience destocking throughout the fourth quarter as many of our customers continue their efforts to reduce their inventory and right-size their balance sheet by year-end |
| So, I think that as you look at Q1 here, there'll be a touch of destocking in both food and cosmetics, but you can only get your inventory levels so low before you have to start ordering |
| The group has been impacted by destocking at certain larger multinational companies |
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