Sensient Technologies (SXT) 10 Feb 232022 Q4 Earnings call transcript

Good morning and welcome to the Sensient Technologies Corporation 2022 Fourth Quarter and Year-End Earnings Conference Call. [Operator Instructions].

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

morning. Good earnings fourth Sensient's year and for XXXX. of call to quarter the full Welcome Senior and Vice of Rolfs, Steve I'm President Corporation. Sensient Chief Technologies Officer Financial I Chairman, Manning, Officer. by am Chief and Executive Sensient's joined today President Paul today, financial year Earlier and results. released fourth our quarter we full XXXX website of our release available the copy our investor sensient.com. A is presentation and on at

income earn-out our today, we adjusted between received and results GAAP results. with call of will The differences the an During our preparation our for results related in connection remove yogurt XXXX our payment business. be explaining to adjusted divestiture the fruit

to The the adjusted operations divestiture-related divested, remove of removal improvement related impact the costs, cost the of operational and income results the for XXXX and to of believe the We results our the the plan. periods. reflects This performance. operations comparability company's additional provides and performance with evaluates the also reporting these items and of company's investors between reviews evaluate the results and management information how improves

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

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

these in implied expressed today. that We those actual to from set Our could be filings. our read analyze our a that for forthcoming wide or mind results. in factors SEC when to SEC urge potentially due Please additional Sensient's materially you financial range our results may factors, forth differ previous filings a of may XX-K you and impact factors of including those our bear comments description

hear Paul Manning. Now we'll from

currency XXXX and that the of fourth adjusted local Steve. XXXX reported currency of communicated and XX% adjusted local report full outstanding adjusted full we pleased guidance our currency growth to for Earlier local and start morning quarter good today, exceeded very EBITDA Thanks, our adjusted growth. year in currency Good and currency revenue adjusted the groups currency EBITDA adjusted we I'm local year afternoon. currency local we delivered Each results. local EPS. had for XXXX revenue, operating of growth We XXXX. at adjusted profit revenue local the XX% and

and and XXXX the XXXX operating strong very results XXXX. financial Our strong performance in we had follows in

sales our broad result and Our our performance on customer focus a product portfolio. is direct execution as of as well service

be to a customers, reliable our sales to supplier we groups. at We to across and have continue of wins our proven customers achieve each new

fourth flavors us position of Our and in higher Overall, the to and grew for raw product see our at levels we to needed. throughout We elevated first impacted in for continue additional costs We this of our year. quarter. the with first plan implement the XXXX portfolio quarter. costs XXXX, colors technologies of until as pricing the agricultural including future actions half number continue these remain and least wide we natural to elected wait quarter in costs to continue disciplined and particularly a anticipate Input categories, materials, growth. margins which variety to of natural to pricing fourth of at

will distorted. actions, and year-to-year margin comparisons inflationary comparisons at of be last times years and X other dramatic our the the Because of timing the over environment pricing

believe full performance we to it result, the judge year. a As best our is over

and a and color in Endemix, the Color Endemix natural announced the raw acquisition integration be strengthens Color with quarter of a based Group's is now color company of existing natural in natural to bolt-on Turkey. revenue. During the acquisition color fourth extract vertical our and acquisition strategy. the we results quarter fourth portfolio This several of our included XXXX, We consistent approximately our this improves materials. key for consider X% represents Group's

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

Now driven local each outstanding growth operating XX% lines reporting XXXX The growth local adjusted single-digit profit turning group's with strong in revenue revenue results excellent XX% product local currency Food currency Group Pharmaceutical delivered profit growth volume revenue to the XXXX pricing. Personal annual and single-digit high growth. Color adjusted and had adjusted and operating currency growth. Overall, the and high an was groups. The Care and by

the Food The local stemming levels new XX% strong wins currency XXXX, and of a from service revenue level We in the achieved company's innovative Group, Color adjusted Pharmaceutical sales customer high Within portfolio. supports pharmaceutical growth. colors delivered wins. Endemix and and XXXX. I our color anticipate our acquisition new supply color product natural another year and food natural will strengthens line color have good of our natural in chain

by in Pharmaceutical local high increase the also XXXX, The performance service and excellent primarily XX% growth. achieving growth. rebounded from its line XX% an Care Personal and line had due product a product volume Group revenue local innovative quarter, impacts current had colors adjusted are The the on adjusted fourth quarter mid-single-digit single-digit destocking. growth customer to focus Personal COVID. The currency local adjusted growth to diversification, Care fourth fueling to a strong has currency finish slowed fourth revenue XX% the & of growth. achieving also reporting Care's nicely continued group's Food strong technologies adjusted rate product The of quarter, revenue income single-digit growth. line customer in Color operating and Personal increase local growth driven low revenue currency X%. of a our currency was price XXXX,

customer currency operating expect growth as XXXX in We growth deliver declines. well-positioned improve is single-digit pharmaceutical destocking Group personal revenue will will and have food for local solid We the beyond. group believe throughout Color local mid-single-digit believe high will XXXX profit I XXXX. mid- in and to growth growth colors XXXX. and throughout care currency

currency XX% adjusted solid and & year The Group local reporting adjusted had local profit operating growth currency X% Flavors Extracts another growth. revenue XXXX, in

We an to the our operating also margin XX year. for point achieved basis improvement profit

local double-digit revenue pricing profit benefited mid-single-digit and adjusted XXXX. For These ingredients the and single-digit operating year, in lines currency flavors, high volume product from growth extracts reported and flavor growth.

Group the destocking lower we in delivered related product Ingredients down down Group lower headwinds begin increases, to revenue primarily previously actions currency pricing continue these Ingredients the in anticipate but & XXXX, implemented discussed. profit customer will growth. offset expect Natural production higher costs volumes to the destocking destocking Flavors Adjusted to had improvement and adjusted first declines, the product Group, which that X% we the in quarter customer line & operating due to these was the first volumes crop, customer Flavors to sequential currency due throughout in due local Natural in and local input Extracts was fourth The the volume primarily Revenue X% from Despite Extracts In we Flavor of XXXX, XXXX quarter lines. XXXX. to quarter. has

I year, to the growth operating the revenue high Extracts & mid-single-digit and single-digit XXXX. to expect deliver Group profit mid- Flavors in For growth

The XXXX. regions. XX% group profit reported growth. adjusted group Pacific strong almost Asia local XX% profit growth growth Asia from Pacific adjusted all an group Overall, local from local and in adjusted The mid-single-digit achieved all and revenue currency growth X% high growth single-digit adjusted revenue The in regions. revenue Pacific currency in quarter almost benefited of growth continues growth. X% pricing volume currency and XXXX, benefit operating impressive local during fourth XXXX, operating currency the In revenue Group the solid Group to the delivered Asia

from benefited mid-single-digit growth and volume a fourth Revenue the growth modest price in quarter. increase

group the will has that As benefit the to the start implemented input quarter. costs of pricing business increase, during the continue increases first

revenue mid- in high high operating to I For mid- the and profit XXXX. year, to expect deliver growth Pacific the Group growth Asia single-digit to single-digit

pleased the few XXXX with very our I'm and in performance last years. over

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

is and portfolio of remain we focused strong, on customer food, product personal markets our and key care. pharmaceutical Our

opportunities. We sensible acquisition to continue evaluate

spent in in expenditures million XXXX. capital approximately $XX We

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

Our currency be We allocation XXXX. our inventory end now the very inventory performance future levels the down of our I'm and financial adjusted currency debt. results. and our I local peaked currency guidance acquisition, quarter fourth throughout in top with local details and the will paying EBITDA an finished our will capital would at in on am EPS XXXX. additional for have on XXXX. for expect with adjusted reduction a business. revenue, focused adjusted Steve happy provide plan you I XXXX local about Absent of optimistic our

earn-out an results Sensient's quarter results fourth GAAP quarter payment included per year's plan with Paul. yogurt earnings business. connection by year's of share GAAP $X.XX, in fourth our preparations fruit these costs, related was improvement of you, included operational divestiture per income Last to Thank divestiture share are quarter $X.XX received the in share. last which and per decreased fourth diluted $X.XX approximately results

include operations. earnings the results of GAAP revenue to Our immaterial fourth XXXX expenses share an quarter of divested operating the related the per amount and in of

million. X.X% Excluding in to fourth these the currency grew $XXX.X local items, our consolidated in quarter of XXXX adjusted revenue by

Our quarter, interest currency of EPS and currency quarter, up primarily the the down result adjusted adjusted X% X.X% the expense. for local our was for EBITDA local under was just higher

in the by fourth adjusted decreased rates exchange quarter. approximately currency Foreign share earnings $X.XX per

made strategic main our As from investments this have the throughout is for year. we we inventory operations in lower reason this year, which our cash flow stated position,

XXXX, support are reduction supply We $XX to in debt-to-credit as levels have inventory I X.X and inventory net as levels our have and is expenditures XX, would We have our invested mentioned, position we million and for inventory we now energy ensure demand experiencing stock Paul high challenges EBITDA as and appropriate a continue. XXXX. throughout of positions safety our XXXX. believe chain the December Capital in to our adjusted expect were peaked

down dividend positioned our sensible to M&A balance be our expenditures, capital sheet long-standing remains support and pay used Our well excess any to cash will debt. and

and XXXX mid-single revenue local EBITDA to single-digit XXXX currency at to guidance, in mid- be rate XXXX Regarding compared adjusted our expect we a XXXX. to local our our digits currency grow our to high up expect revenue, we

a We compared our and adjusted EPS rate. compared expect our current $XX of interest interest Based XXXX interest to digits to low expense year our XXXX $XX.X by to to we impacted $X.XX EPS In per be our currency approximately increase higher be million. share single tax in up flat, on XXXX million or interest EPS expense will approximately $X.XX. to expense local rates, of expect higher by full XXXX, XXXX

expect full to currency continue expect we quarter-to-quarter for we measure believe be growth is around the important tax full our XXXX we Also, our Based local the modestly year. and rate of our for and on of for beginning On basis, adjusted therefore, current fluctuate, rates, a be year an a rate XX% favorable performance. tax to to headwind will EBITDA our exchange the year. the currency

today. you participating in Thank the for call

now will call questions. the open We for

[Operator the from question Instructions]. And be Baird. Ghansham Panjabi from first will

Yes. Congrats on the all progress.

you, destocking are to called throughout chain. dynamic whole the you fourth then customers So fades by us and first out, obviously, just it that that relates but with color specifically sharing the it played as can And unique quarter? first out quarter? the off, exactly rather not channel you give the the inventory likelihood also on that to more basically what on you paradigm how But supply

get there, Ghansham. Okay. question your second I the part of didn't

in in just I quarter. maybe as relates in asking levels your in I destocking about terms to are Yes. with you that What of channels confidence, inventory of terms guess, was customers sharing it first stops the channel. the and

Okay. it. Yes. Got

responding are factor no our supply bit need compensate but buying newspapers. Europe price of destocking, destocking you less strong throughout in is not disruptions. the customers seeing see levels little you would there's such for could dynamic have a to by that longer many I mostly then Asia certainly, that U.S., our and of added unlike taking and the in increases underway effectively But read the the product in you what So type say, Pacific. inventory of chain to a of we're because lines. Consumers, consumers less, down

we And hit would I it say saw what Personal S&I So Care. in hardest in second QX, to the that business. be would

we dry Colors the than Pharma, in Asia. & from while that every come from our in larger of businesses, much Food and standpoint were then Flavors there the so one color wins that we we a a of again, able impact in think, I course profit in on generated to out and standpoint destocking Extracts, and face we're revenue new ground

some to customers take inventory In dramatic. destocking we've going down or some and dramatically. testimony we're heard rather XX%, been extent the to by customers we're to In do it has cases, going other the XX% our very our from words, that

in see is than of so bigger there much a our that at was other is what belief, XXXX. my And point we or impact during QX big belief any

customers As QX business, our at destocking. I the believe and we look our lines, of our is peak product the

going to see you're that So again S&I. continue in

that of Flavors Group see will to the I a or in -- subside Care. largely to QX. bit so going impact going You're but But Extracts Cosmetics there that's little & think be in a on Personal QX, drag again come

we and QX. going we're I will for you see improve As And But think QX, I buy our very speak destocking to look will where and look think can you we in their effectively weather those QX. at and not QX. actions Asia, have hey, specific instances QX through as Color we this by into customers that customers orders declared, at I already sequentially to in also get

again, So XXXX. enough trailing think wins we I have from in

we're We very our in We've wins effective here in pricing again enough have with that 'XX. generating already QX. once been

impact of So in bottom another but slowdown year, good again all an I the but we're Color course in in we'll to & have on and little together think things going that think bit factors I in continuing with off that's off SNI, those even QX the -- largely year. those a we'll Asia to then, Flavors and and be of and we'll going overcome for top Extracts through start line, come

impact that, basket just touch as well, levels et just can you said maybe given as in your on customers then you starting what also, is well, terms on And to what guess given of just your inventory cetera? And I specific Okay. doing. just cost previous are that inflation,

Yes.

of positioned. of up So side that reliably. on were to these that X/X just product we million being inventory right it very having that. inflation XXXX. $XXX able around able to been But specific business directed the to win well About are ensure related was was in to and cost actions of account deliver We've consistently and

estimation, in investment. very good my it So was a

we you we have than if Now much historically, right? about proportion much ordinarily So And raw But types wanted inventory was raw materials. look very, the higher around, very have company, largely versus of it raw based. we of goods invest time at this a we to of higher materials had finished specific back disproportionately material a we were in. inventory percentage again, the much

and still we than that raw our materials. there's can positive taking dimmer inventory. of There's lot a or as this the absorption, So the sheet service as is the I down down. market But about that opportunity a is more areas, I going the of an we bad where would destocking manage us we settles on in economic of there's for start financial don't think switch, Sensient of be maybe have to switch an think the certain impact, off so impact say I there's manage market activity actual in we balance that in will as availability

back normal I'm So idea of that not can just this drop inventory companies there kind to yet. levels. quite their

You some the yield years S&I. know had crop over we've of issues

quite I a of know that. And bit you about frankly, tired hearing And are of folks I'm talking tired that. little about

have we investment made our once forever And in and in SNI. inventory a and so all ideally, that remediate for to big

in thing. a really good think I inventory is having And so a that investment. It's good business

and our out very of in think risk favor. to have We that's going I limited obsolescence play

more about our of good about be inventory good slow, maintaining will expect a you but with feel for hearing reductions. down, ability and It progress to reductions XX% not bring be XX% supply consistent customers. steady to to So our would I I

Heidi And next Vesterinen question the BNP is from from Paribas.

Good morning, one. questions. got X by go everyone. one I'll I've

pricing First And and question, please? your this assuming are deflation I wondered what for in any you're assuming year? guidance, inflation you

Okay.

So I interesting. think it's

could they're there is And more yes, than be think to likely inflation. need I take a additional yes, still there's pricing. --

could will be materials. in bit XXXX, at that bit expect I directed more raw you more the think pricing surgical, probably XXXX certain versus a a

see those sea inflation. actually a or cognizant to the need freight costs again, that in there We down. come some of like direction factors or the from And energy, something accordingly our we in throughout standpoint, and are are cases, stabilizing sea are cost think commodities right have from have very that like But that price do those in I say on price freight pockets of be some we unabated, freight, inflation some costs. need still but I to moving air and wouldn't they year. the continue. continuing,

inflation think at collection the seems of raw inputs that in energy overall for have I the do materials to least use. and But stabilized business we

in one. impactful was would sorry, the probably have So less was it short answer be than necessary it I -- XXXX pricing than would in or less that for

is and volume both guidance, So the mid-single-digit top price? line

Yes. price. The mid-single-digit includes revenue guidance and volume

Okay. to then maybe we And Natural Ingredients. if move

So use talked supply in you that are the of idea seeing What I of over about was materials? The issues. challenges. there's that would last supply time. raw terms destocking had I think year, know you short-term

you're discussed mean was SNI, of we that So XXXX. right. sort I -- it throughout

the as crop as I XXXX, we bears. ahead taken XXXX. as think as some make and more well we've we'll sure supplied XXXX that what as the progresses throughout go are But think I know earlier definitively the to we to question, I year referenced look we to to steps, into

the servicing each of point. customers. product of phenomenon. report at did we're to our in each our this lines, dramatic Again, types destocking nothing note different of In So I businesses,

the it's different safe from think of is so of have of to And rest to say higher may Extracts. businesses & the exposure certain types bit customers Flavors SNI, that its I composition customers. And a certain

more the impact that's, with we why with so profoundly did them felt balance of the to that portfolio. than degree, we some destocking And

in look and yes, mid-single-digit think growth. our at SNI, And I you year we XXXX, the goes but still fine will But did able profit that back revenue deliver issues we these to as there. XXXX, in on double-digit as Flavors do our was have

we've friction a done of of So very despite those job managing portfolio. points in the nice of some

and XXXX we as that and did so XXXX I in And -- think well.

business, could we've again, there Group. Extracts got place, program this overall think we think to -- in & can the product we've some I that line but done I make improvements a still additive I'd -- this like good Flavors So be more so

is final given about a anything you changed customers? one what innovation. among on Sensient then talk And And rates challenging about? some your Could additionally, are innovation Has you're environment? excited that innovations the

Okay.

of So first that terms the in that innovation, see. we on the I'll describe launches

profile our were data and to the So like double X% half our according the the XX%, and half, reduction or Europe minus down a like a experience, moderated XXXX, flat and of Europe, our U.S. first In about our in launches XX%. did, launches. in to In like that second observations.

I So really a that XXXX. think that's nice well improvement. And bodes for

U.S., about more like they in for XXXX an in down year, were were to actually whole about down which the when Similarly, like is X% the launches like activity QX, Europe, X%, slightly. up in launch is from improvement But U.S. the just XX%.

to I really, consider. are those important think, So factors

do inflection So call point, I this launch for about the really guidance, our revenue when you and get our it, think we as there. bodes really, leverage I'd why some will degree, about To well and feel profit our us. confident

a bit. changed the little of launches the nature Now has

here, I'll profile of -- to give little regions sense things. If a of again, our you one you

were kind and packaging. maybe extensions So world, the that beverage and of X/X, we of were last launches Europe, those XX% really about line the if XX% measured year of was new just then modification you about in XX% a actual product food that look launches of at

in way not we about new it. traditionally So launch necessarily think a the would

towards at So those much super a nevertheless, how But some that certainly higher compare and to more it's is towards the are packaging, would launch level Sensient. impactful weighted years new little launch past, extensions. bit for positive and a line

Natural continue and products to that several the got have colors of very that that and and respect we've converting to with and an we're to more products take in Now launching interest it being are with we launching our idea really Color exciting the products about, make those. improve portfolio do there economics the quite for how we in performance been excited natural to enticing customers

I So we'll think ongoing will be with. that be happy very an program that

food heard results. coming strong is the color, of A talk me about really there. from lot that our You innovations

We have Personal innovations Care number a in our of business.

this matters say, technology matters is As performance where I always like more. business and even to a

So we and of launches with number color products. natural different ingredient-based makeup have to natural respect a

exciting. we'll -- in that very, I And growth we're a term are these think going see segment. So lot very of to long

novel in that lot part of complex number We Flavors new manufacture have of extracts internally. not Extracts are able enhanced have sourced new launches the sort to & a a provide only portfolio, taste within and a of These we extracts, our more profile applications. and of product

So exciting. we not that very Bionutrients in that business, And those of one are course, talk much. then, our about

part of We number in plant way rates nutrition a of super a to to any the potentially around enhance launches compelling could world. growth yields crop of that in have growers be number portfolio our our and interesting

percentage driven we sort just a of the is of being more but yes, that's revenue launches, a of very launches. closely by what level our high track few recent of So new

I an the factor, certainly And growth we growth XXXX. important in and future think, so for expect in that's our

Mitra And the Sidoti. is from Ramgopal question next from

the new Just customers it continue you're growth for the existing it, think how guidance versus me. expand and a your we as to couple relates XXXX just maybe the Paul, customer volume of to in should for guess, services wins? terms expecting, I about to

could of and some folks growth can I'd mid-single-digit there the to Sure, inclusive Yes, The number be be to that there Steve's like think earlier mid-single-digit take Could price volume. that, you expectation is with I'll the start a this. bank. guidance would some to upside? guidance, answer, be that upside.

price a was There givebacks. lot questions about of you XXXX, destocking look at and there questions. If was

successfully XX% navigate metrics through in that and volume the some And you of were culminated to the able for off. that company. that so growth read think a heard I And I we year

nice lines. So our businesses we many of volume really, in growth had really and product

a I could But can -- you be bit either the about some And again, the on a think again, well, volume top volume reliable very line conservative. set maybe that have and/or it's So you year. wanted throughout upside I there of guidance, expectations to price. maybe think,

To lot Flavors come C, call and the question may of Extracts, going revenues the going is I a an coming on as Flavors company I are new about, & a expanding them. I these customers that much really so to focus are We a Extracts that's B of new going from to essentially lot customers, a as as think success, that from the the continued in customers. do we or to attention part be these in existing local regional customers? lot of our & think be and

that of interesting still But we range lot customers, a to very revenue generate we group. a access Group, strong in of wide what's also new have in is where our Color customer-related

have percentage breakdown don't I for So a you.

you You could commercially region be successful certainly and customers. to conclude by by more existing more it's and look product efficient simply more selling and line that may by

revenue-generating cases, and growth more customers have maybe who expectations, But in more turning case, which new you're may some have launch customer to model. more in a modest other modest you

would probably I be And percentage give there. bag. best mixed So answer each certainly the our have a businesses don't but across it's within for it's our you you, I a of could thinking again,

in interest a expense obviously, be then year. helpful. terms very is that's switching going gears EPS No, significant little, of And for this to headwind

your Just repurchase, can still focusing get curious of about we M&A if that? it's thinking or sense terms and aggressive you're a looking you in on maybe debt to maybe share priorities, allocation to capital revisit dividend causing how be maybe if reduction more

Yes, Mitra, I still is would very rate. say at reasonable our leverage a

So X.X debt-to-EBITDA.

to plenty what of to we flexibility need have do. do We

lot We have good investment opportunities in business. the a of

step continue small expenditures, up our capital to So look continue to are we bolt-on and going to going we're to acquisitions. at

not we after we but to think that anything of priorities, there's really I debt. do change, view, any remaining point pay have from down will So those look

accurate. think I that's

of increases, it just maybe look then significant mentioned and couple know you on the a obviously, if you at with And Okay. I following CapEx, 'XX ago, versus up years step-ups.

curious investments the we at And of Just CapEx any future? in do continue elevated feel terms you need the expect foreseeable to point? for you this major should to

last lot So I ROI we've a would we've of projected that years, the in projects lot couple of for XXXX. got say over we invested got a

I our chances a have. those. to product And They're much in we lot so really lines that like the very of related core

to I the you $XX that as So think and is around say to million, want about, million is it's existing $XX well, I depreciation longer is this of or to say that million term what $XX right kind And baseline to be our question here stay? about runs would the would amortization. $XX million.

that. we much how below So being are above, I us imagine can't

ROI in the many higher we would that complete projects the course can really would of how meaningfully render year. What than substantially be us

to capital be potentially These size look you're you down can add implement how or can our the at course when business, to of locations, some business, something of out. you So shutting plant year, do the take you of things have our number much structural a a expect of right? the parts something in disruptive limitations to reasonably

CapEx is elevated. growth the very these in maintain it's on move to yes, we very, So and I of historically, of our a going types million $XX we're of ability heels the come as businesses, to forward our our happy to accelerate even of -- going with lot implementation. somewhat some But think be

a or to of as I there's XXXX, I good think this -- think even I $XX $XX lot projects. million lot think And I think still as there. million, year, really there's I So a of ahead really to in good stuff

here earning So it for company. opportunities the the Those that's comes capital see to thing. allocation. as are I the it when super positive highest

expect hey, guiding in harvest again, is -- to realm us we places would got probably we your And XXXX. we $XX that the this million want these in be I -- metric. to to investments minimal, in XXXX, we're this use we've we'll we'll been kind So of making. continue as type to close to but XXXX. maintain too see, some But probably to get of

back Okay. circle then maybe sort what Care you back that No, on of things the that's finally, out office. played in for expect further to a has in I know don't business, little of little still terms terms a sort of great. of down and And Personal you? have settled if back just bounce your seeing, expectations, remote obviously, you're or

as We I in as XXXX, rebound Well, nice QX I had bit QX, part I the as markets, I think a get culprit in care, also these there. in hair was slowdown But or sorry, into 'XX destocking they're we are mentioned, and think resilient, a mean, great a the I had, certainly. of 'XX, Personal in yes, very call. little we care, Care skin think of discussed principally, makeup,

into China Extracts continuing. that's super Pharma probably and I mean, for help kind for our that the for some China. positives the Colors of One care coming strong as not for year or Flavors is as, But Food good, got market & I a of prospects is North QX business only think 'XX we've personal for and of and America, the nice destocking to Europe matter. are us. for say, the us reopening matters going

it's -- business. So -- a driven business, very a ongoing it's an but great technically

there, to of and very diversifying I around a some not that. program a think opportunities And about lot good and out for to happy But some nice personal super progress continues, we've there's segments made having super well. activity of yes, helpful folks growth NPD wearing Our into these there, lot out of care. as about generate and masks that's anymore, us continue

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

up some on of of couple the questions ones. following previous A

the that I But year. it's levels the of given price taking terms early the appreciate might pushback from on you very and customers, risk thoughts any demand do of in color they In on sort this or of backdrop? inventory and consumer have price have year, the have any had especially of the you

one Yes. a Well, I of price salesperson a is would to favorite with customer the tell has you a least increase. probably going conversations that

that's than now Maybe bit think year likes price So on little easy. were increase, listen, I they're new a ago they nobody a a price and front. about don't anything unhappy increases. never there's But more that

to to And build the And of ability to into and sensitive that of still model the magnitude his about be that timing economic very thoughtful make so money. you to have the have that. very, you be customers' and

got in you the win-wins here find So market. to

think example. And stops like markets that and earlier, key inputs into XXXX, to I so we is mentioned normal. energy, some and that like X, I button for inflation the I'd everything to think get largely But on as back like don't some there's stabilized July key inflation, the in as of magic has

anybody's there think when this is will is be key a materials these whereby I deflation big other how and and guess. some inputs. But process of in some raw

everybody fact, that's what guessing this. In is is doing, about

sell costs, stuff. have they should you on much very, have guess may but continue wasn't of inflation my to stabilize very I then -- going average, would need need pockets think be closely cost cover And pockets selling to kind -- we we'll So stuff, with We we They work downward. stop still our good. to up. your covering to we're our to customers

need largely we to reason XXXX, board. do be no in covering to find in I at in effective you not costs. win-win, will the a but believe our XXXX, least very have effective So were we across

it's not moment. post give Yes. at goal this, a moving And the any whether on or given can you granularity

things inflation year you thinking few down. of I have to some was specific think this probably prices just a forward in sort XX%. come touched running cost at to this of X% year, for terms I'm on commodity

down. costs have called in also You've energy gone Europe, well. got sea historically thing as you which down been has freight out One coming

an So it inflation Or I point? 'XX? this of for much just for at be guess, a guess cost is speaking, would too what expectation broadly more

Just Well, answer that don't with my short hard want on. bad out to whatever sort know. is I think guess of to as me I is to -- guess, anybody right? pricing. think no my if is I if year as is, Again, the as different XXXX, But don't guess, I you to guess, right, cover it's be goes which able be you're going I we'll you find guess else's it from

part, keep that, thing costs mind -- products second, a knees stepping our still along is our think everybody generally, can here But a I can account pricing, as to on drives our and pricing customers up it back maybe for things actions for we pass necessitates is I in But inflation and to our about the our we're say inflation. do colors in we're customers but from good to not way high businesses customers wonderful typically not and not input cost may it's constitute not help which our food their substantially them. be right? products like flavors thing very cost, on to have -- ordinarily, sell the coming So a that we would that a of significant our that can is bringing owing our to customers, substantial we successful,

I it's in coming be to customers. our going to forms think other

which cover can kind to and need pricing retain get costs. that's think we business. tactically I So our get then speaking, here, big the of that is we to say, the picture to the

think No, I to because quick great. very like I've about anyway. want me got didn't much Okay. that to which SNI, on talk going don't you that's question you're a

kind could I about of maybe come for feel on expect think rebound we'd much generate? being, and F&E a drag and this take, this just might a to have may on a that spoken it X% And tailwind to year year. for wanted basis, you try get give I SNI of unwind through how what XXXX. or that

Yes.

yes, So a in XXXX. drag SNI was

discussed. of I think will some that I've reasons the in rebound XXXX for SNI already

Flavors portfolio think it our broaden these I a business does fundamentally terrific at it's it's many a have benefit as customers. & Extracts business related that of So yes, and in tremendous to

to be that would I success would rebound the to place going And So add in not rebound I tell the tell that But in will Extracts yes, you Flavors of QX. and I only going XXXX. you the group. take the is that's to think

Great.

quick Just question. one final

higher obviously, new on line product in products XXXX. extensions Just the versus launches. earlier of about And mix touching on a you talked question

towards XXXX, on extension? products. a line Just there contribution in for dealing of wondering product when more if new that or difference with Is sort a versus a terms profit new of you mix big revenue are changes

so products I necessarily look kind I at this and think profit launch. The our I there's of be pipeline difference would the as opposed question, to more difference part stemming the your would magnitude. extension. in tends about as year. to from just a a first a a say wouldn't style Well, the of line that anticipate, new-to-the-world significant line versus be new there extension

a launch of a launch line but greater a new significantly a be is than a heck extension, line may magnitude the lot new than a So of riskier extension.

and line pretty Think Jaws like risk, line. movie extend to you're a of right? lends of itself a good. extension Jaws kind of But to launching cinematic other potentially there pretty It that much got sequel, I've like whole X, metaphor go of the product idea hand, a category X on a good a new thriller along were with a different X here. of X. Not this to

potentially, So risky. be lot bigger but impact a more it can

launches is or line the for that real versus, nature a that start. extension, that doesn't several So could in tightening profile recessionary launches very which X say, that you the of see And feel good environment it's later starts away, goes why you fewer when have thing years. risk months

was to about point positive. there's been 'XX me thoroughly that's their about market really inflection regardless potentially That that an what some me a demonstrates I take risks. in to new customer's and optimism type the comment of So how launches, gives even eagerness in made very super engage earlier a

there gentlemen, the further closing back this to at and remarks. I will are no any conference time. the Ladies turn company questions for

year expect comments, some we be to rate. level I slightly expense rate be expecting We're comments indicated we million about I to that. in up in our help Since you. XXXX, Thank Okay. starting with made tax the the reiterate XX% interest XXXX. tax prepared a just to $XX did higher. over for our are new modeling indicated, would we

One our in we've compensation. expense corporate corporate has about now I And item had I X% last more corporate increased inflationary that, expense, expense. would the say expect our that has years unallocated of other significantly a comment on would that reset of normalized. that's our our couple increase to performance-based normal line because a

look would about I level of at So million that for at XXXX. the $XX

comment was it half XXXX, for year are last the But the will a moderate FX be on today, based quarter be FX a second where expect then of one a I made should And in then where more we headwinds, of headwind. do rates tailwind after us.

conclude our for us Thank everyone, you, morning. we'll with call. So joining this comments, those

The conference concluded. has

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