Sensient Technologies (SXT) 28 Apr 232023 Q1 Earnings call transcript

Good morning and welcome to the Sensient Technologies Corporation 2023 First Quarter Earnings Conference Call. All participants will be in listen-only mode. [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

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

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

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

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

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

Now we'll Manning. from Paul hear

Thanks, Good morning good and Steve. afternoon.

and by our the effective We with strong X% currency first most wins of saw sales Sensient’s businesses growth top-line during across increased quarter. pricing local implementation. revenue good

We to full-year against deliver track on our guidance. are

destocking discussed expected company. and we As as see last we continue across the to quarter,

most in market. impact the in and Flavors American North Group and The was pronounced Extracts the

decrease Additionally, lead timing levels. customers in customer we order reverted experience and to to back as inventory pre-pandemic began times a order

going are are inventory seeing development to activity. strong customers effort normalize our their a levels, through temporary still While we product

We wins our are pipeline robust. our maintaining strong new and sales sales remains

for We launch the product good year activity balance this the market. the expect activity and product good is given of launch last year's in development a low

back moderates of destocking the year, incremental half in revenue As the we improvement. expect

to our the groups. continue across had decline In in one product despite three a world. many in new new terms parts we of sales rates win high remain sales wins, all in new launches XXXX, of Our best market years of

level. the this be high our rate In new to very continued of at first win quarter XXXX,

focus sales We portfolio. continue to product on based win our our execution, new outstanding and on customer service business broad our

We new sales all to regions. these geographic and achieve throughout product most continue our lines of wins across

to during the effort we an of quarter the implement to ongoing continued pricing this have Also first year, overcome inflation. in

may outlook be in energy we costs to geographic elevated While continue improving experience certain the cost commodity and areas, chains in material regions. some supply raw overall, and

best quarterly full-year results versus quarter, performance. distort our actions be believe and indication of may As pricing we our timing year-over-year of result, cost discussed the timing of a inflation the we our as our will last the performance

an Group's growth. destocking. approximately due headwind Group XX% was from the first revenue The Revenue strong Groups. currency operating partially a quarter, low-double-digit revenue than mid-single-digit increase, local Color offset profit and a The more to had price to benefited growth X% local currency which turning growth, Now, delivering by

new lines are sales Product with than wins volume and customer level of any solid growth XX% growth. result and The portfolio innovative has Pharmaceutical revenue a offset line, these strong magnitude The The Food of a delivered destocking. service. natural Food wins as currency more of Product our and high Pharmaceutical color local delivering customer

Personal quarter, due tough mainly America destocking in prior customer first lines, year comparisons. primarily The was in North revenue the to down Care low-single-digits and product

growth We the expect to resume Personal in half Care rates back the year. of

in I Group have expect and in operating the and will and solid beyond. believe second quarter, have Color XXXX high-single-digit, throughout growth. the improved growth the of We mid profit Colors local Personal revenue will mid-single-digit but to to Care continue will to to continue deliver Food growth year. currency results the half struggle second Pharmaceutical

revenue offset was by Extracts during currency approximately the categories and in in customer product most down in rate Group’s Flavors and local downturn The win North ongoing destocking, The quarter. Group strong X% America. and were pricing market

our mentioned of during destocking experience largely and in quarter call, quarter continue in began the natural last this Within first flavor categories. XXXX, As destocking, traditional notably ingredients XXXX. fourth to most our we

levels the inventory the We quarter. begin order should In our normalize, half of Group that some mid-single-digit in its Flavors destocking Extracts in profile activities customers’ growth dramatic to XXXX. once believe were cases, and and resume the back patterns these quite

Flavors For Group year, low-single-digit revenue and and the profit operating I deliver mid-single-digit growth, now Extracts to growth. expect the

quarter, not operating continued Group local is currency impact XX% The that Asia-Pacific are and destocking profit Group the the experiencing. growth Groups Color achieved and Extract and The experiencing currency growth. several local Group last over years. performance delivered the strong Flavors In first revenue Group the the the the XX%

made Group nicely region, Group's growth believe and new across, execution position The customer in the sales we for the The from as Asia-Pacific benefit regions. to fueling continues wins all service, the current we as are Group's well continued growth. strong almost and focus the on Group investments have

example mix mid-to-high-single-digit continue profit growth quality our and Asia-Pacific a to Group to our to to higher and specialty I ability the to good growth sales deliver Asia margin products XXXX. Pacific expect defensible of shift mid-to-high-single-digit is wins. revenue higher sales in deliver operating

our of destocking the continue that due quarterly to would part distorted we quarter the inflationary performance call, be anticipated at into times that communicated during would first we environment. As and year our fourth this

Overall, portfolio product is our across businesses growth robust. and proven strategy that our we supports each have our solid of

the We business. our our on levers initiatives. our we service, sales product strategic customer are on control execution, to focus portfolio can pricing grow These broad and our include: strong focused our

excited opportunities of details results. Overall, now will and business. our additional optimistic quarter within of Steve each about remain you first businesses in our with I'm XXXX about our each on the provide

$XXX.X Transient’s $XXX last comparable million million, year. revenue in compared compared Thank period quarter. was last in to you, income in the was the Paul. Operating million quarter, first year's $XX.X to million $XX.X

approximately $X was million in revenue quarter. year's Interest quarter. compared was approximately X% $X quarter. Foreign and company’s currency first first X% this expense the by last income reduced in in compared year's to consolidated in to rate in XX.X% first this quarter first quarter, XX.X% last The tax year's operating by year's million

in share in quarter. to quarter, first year's $X.XX last were $X.XX Diluted year's compared this per earnings first

EPS Foreign currency approximately translation $X.XX. reduced by

As have we discussed, levels. begun to inventory our normalize

decline flow inventory We result. have continue over March to as inventories in a plan to improving down should the our and we a seen the see cash manage level, year of our and course

million of Capital in were XXXX. $XX quarter first the expenditures

around We the capital million $XX be expect expenditures for our to year.

X.X. now adjusted net debt-to-credit EBITDA Our is

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

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

our be to to XXXX adjusted continue EPS $X.XX. currency up low-single-digits, of to expect compared to also We flat our XXXX local EPS

expense interest basis, EBITDA As believe therefore currency our is by we rate. growth of a our adjusted EPS a performance. tax will important have in discussed be measure higher an On and rate fluctuate XXXX, and our impacted our higher tax continue to local will we quarter-to-quarter

participating full Based on modestly you rates, exchange today. in favorable Thank the for to currency the we call be year. current for expect

for open now We will questions. call the

Instructions] [Operator

the first question Baird. be And ahead. W. Robert from Please Ghansham Panjabi from will go

good and Thanks everyone. morning

Good morning, Ghansham.

the portfolio so, think that the do the whether of had so in Pharmaceutical, significance a sort Food give guess, for that the supply pervasive outperformance the and can not the destocking as chain. that Food dynamics why impact of seemed is? and Color in you off on if I and Morning. across of the to you segment, rest us Has sense first any Pharma

say it was destocking, Flavors, it Colors pretty more substantially So obviously we I saw across would much pronounced or talking you're in the more whether pronounced, portfolio, Flavors.

If had destocking. you look we about Colors though, a at overall on the headwind mid-single-digit

sell to new Food colors. I us. colors. had they think business. And just a what lot Pharma and But a the trend a in efforts success segment selling a for with also of Food respect lot is within successful of this of to lot We continuing happened in got continuing Pharma won natural we and is synthetic

rate the but with destocking short about sure robust. answer is, mid-single win was very was very, digits, So there the

and to gross effectively They also managed maintain perhaps need very with even price improve margins. consistent the

So, yeah, fundamentally a really just overcoming great that phenomenon. they destocking at did, job did

I I in Okay. the in Great. just talked some you the And then, global that, expand which destocking directional being good think expected the productivity obvious, just about that in out what to categories. And context called of you'd dramatic consumer on year, think for maybe is then, related quite activities seems spending. weakness

to Just that. give you where as us color exactly saw more

about the it Okay, thing activity, a is saw We yeah, so, Europe. this was in up versus the new great XX% year. in launch prior QX Europe, launch activity product product see. on to notably most

with recall You in left like half us It XXXX. first may half down launches the and got like, were mid-teens XX%, the new decline second XXXX, XX%. Europe's product in better so, slight a at

very market. particularly product trend launches North seeing the America. improving promising, up year we're in European that So of also started in the But

So very, factor. is positive that, a very that

we interested think seeing? call, launches, kind this what folks I talked are the last in something composition Now, is the of of the that about, it are was new you

extensions, balance, being new Europe, XX% by you those to truly we launches those them line in that were of of third that break of estimates, see would if as our launches, about So, a products just be guess of to or about all down metrics are realm the how is That that's new included about of according then kind these a change, packaging also launches. in of would I be which measured which XX%. the and formulations, and more

So great, there. that's sign a great

the launched about year should of we movement said, in say would expect so, expect was I and as Flavors I think dramatic. the so like to your why I we it that destocking, should unfolds. And question improvement To yeah, rather balance in activity continued

mid-single-digit twice sort about that of headwind Colors In X% it Flavors X%. in or that. was So

it And, for mean I on themes? way very be think folks it destocking? confusing at couple So, I are a can our at obviously look look I themes at of in just What about in at business of what Where different look talk look it terms to and is that easiest we the it happening? units. customers the I geography, because do ways. by destocking see, you types the I

followed third standpoint. to respect in kind from destocking say would I up an in a market Asia-Pacific, most Europe. really be organic the with the would And up geography, U.S. there by none or was was So was Asia-Pacific of LATAM, was distant pronounced

So that's one consideration for destocking.

the most of parts about market, see but of, the particularly companies the broad-based, some some think about made you saw saw and of to When inventory. certainly regionals, in categories reduction locals, popular of B's announcements of C's types most press we you types multinationals customers, the customers so larger US destocking, where of see most it and but can kind these we the in

to reduce multinationals these XX% cases, some order their patterns by In XX%.

so, pattern. this you And impact business the a there. as then, about be imagine, And could change our F&I, you could order units, saw think as phenomenon big in dramatic rather we that

big Bio-Nutrients reduction sells there. Group, which probiotics principally market, into Our the

categories, a of pull amount our big flavors, even Traditional activity there beverage back mid, destocking. then, was saw division, certainly, words, stock. in our big in Cosmetics in maybe Personal certain Say, in reduction we mid-to-high in particularly other And that there, regions. Care, fair

a So that's kind of magnitude.

get circles, through this that the I going is imagine think we're rapidly, see, there you when are that in dramatic see Now, the movements some is good. that destocking continue in which I rather destocking positive can to your they QX. But

these linger balance the year. of for we you'll it language headwinds. think I will destocking QX, in the may some But still what see of in Some of have

project magnitudes here. as to our the see How you okay. and how you customers in and get be we that's I'll we canvas QX, Customer, and need to think do as a and them an stocking that about what are not and long? I you QX, to we much think lot for at some customers we cross-section really you and here by And Perhaps that for about QX, fair phenomena, all talk if in but destocking, customers. of types confidence with degree of canvas literally heck certain we've enormous regions of talking of cases the in QX, less a concluded a it Mr.

that So, I there destocking. at your think should on get question the that largely

Yes, it did. much. Thanks so

Sure. Thanks. Okay.

go will next The be Please question ahead. Heidi from Paribas. from BNP Vesterinen

Morning.

Following up…

Heidi. Hi,

level? Hi, level? point, visibility say level destocking retailer your further various And end have so to how change, the actually that therefore, thoughts Or are do you? be even customer segments? or up you visibility the is? down the will Following extra on do on on where what at Is and for consumer so, what on it are when it stock this could have you

and up I question. our asked similar a is question a with it’s come answers Yeah, and analysis. here the we've that from great

of US the some the let's moment, filings might you've the kind heard were a we've about pre-pandemic, them concluded to. as a January, to cases ones their to days and we days, inventory, end largest happy public XX those want and for that to they some of got we conference XX they largely their that at calls, of think and have up this run looked at they but as have to suggested general, about maybe say are XX at where to heard if we XX So, had listen in whereas inventory place levels respect market look them retailers they with looked at in their with of, the that just retailer's you in

at So, to up don't retailer. see the question, we inventory piled the your

course as down XX, chain, customers, the adding Now in of so, this supply moves cases, the pandemic. had days we the customers some in XX

traditionally they XX customers, had example, where days would our ice XX days. might hold of for So, customers types common about cream, of inventory, category a have that's

like days pandemic, average. lot of on the up to During them XX went

into they out QX, in it taken in And are will program. QX really This so now of and weeks that, three four the cases go in started of kind of some inventory.

there now. from of right. right course, And reduction so, we it's It's our result, orders that customers. a then And have in as

and that a multinationals most at think in early with. The took types lot customer XXXX. of of even I level. that place end-consumer regional we familiar think of our So is At you're local, destocking level, it the brands that

of amount storage There's a finite capacity.

kind just through stuff part Steve ran early But Okay, XXXX. their bunch stocks in stores garage. a maybe of of in his about else everybody of

So we think whole really there's a don't there. lot

in at way, dramatic some so a some quite that And QX it's given those in short, substantial our in cases of bit customers in a moderated but drop-offs.

And next sort to primarily could Thank year-on-year? and the were called more or factors? Extracts, other Flavors any about the do movement there comes the issues margin from margin volume of you. drivers talk question mix leverage in the with of or they're any then, price But negative match you there

It's volume. we volume. a had year This big less Last lot volume. year, we had

that appreciable how change in no cost fixed appreciable change structure. no in our product out There see financially. can you mix. so, was plays was our And There

our fact, would has I argue during mix, QX. In even product improved

of We just Pricing, in very were low average. I XX% of think getting we pricing. kind effective pricing took our on XX%, north

So I to that continue we've very think can that been we say effective. very,

certainly to covering are a that margins. on bit more gross input Perhaps road We maintaining costs. the than our

is answer volume. short the So,

across as year better in for a you continue, market back think portfolio. output more categories the the these to the these Sensient improve, really much then continues I launches So, destocking the half moderates and see as volume as market in of robust general, should

the pricing. moderating. So, very, about it I Well, about see moderating. feel as I as overall inflation think, we inflation talk good Folks very

the food in energy, you the still correct. in cars like we a and When things and mid-teens the we of European factor measure look that's as in food firms, So and at at construction, food and other measure inflation, food, when of in IRI folks sources inflation and we you as look inflation, inflation see lot Europe. US who

whereas, mid-teen substantially is So and or still down X%. inflation this X% maybe may Food coming be level. it's in energy

trying predict a continue I costs address it's we inflation pricing I'm to and hard input when but can't moderates, it's it to when will been with - say to I've as needed. will, not predict So, because those

Thanks. being Food sort QX. to was unrelated actually have natural Skittles a increased And financial positive so from one Do that discussion standpoint banned conversion of legislation-driven from the be in a think Natural I conversion would you there colors? Sensient? last one about for Colors, And recent to California. see could we synthetic

So, yeah, change certainly I'm the potential aware California. in of

be opinion in simply my California. just banned in the that would of been think State I has the item next that

on will of with tell impact you that the are the I customer who's profound we So would very aligned have industry. well behavior? Possibly. a who

are perhaps could changes at if at as colors? tell are that in to change products folks in as did So the and if Certainly of there remind consequence it right the FDA the Possibly. legislations legislation, California, my in I tell every Food Federal the convert lead and that are would far would those of that, one I to maybe broader world. would, most but natural regulated level, there I’d you Colors you. be that than the up conversions, we Could entire as in opportunities to a even that they competing and opinion, accelerate market like single

FDA. to of has batch certified by Every colors the be synthetic food

success. if needs think the many a portfolio United in customers. ability of them And their to that messaging lot continue The a lines. So, gives a in States overhaul colors is, be enjoyed good change I their and in to our have other natural that Nevertheless, my product converted cases, phenomenon. ready brands cases. be in it But to It's would it we're will that the opinion. tough of a this legislative a, is have market-driven to make meet to positive

a we customers lot so And of see implementing this. successfully

that the do it able natural short to synthetic Of company, way well. natural. of synthetic that colors to the color course, a as match achieve. if lot be. they converted not they more are the that that a tend selling But we the do, to you're more that Efforts in volume shades be it to could beneficial portfolio from be sure would would We fall

launched But, products successful. customers Others successfully be helping launched have with many natural. our in customers we're synthetics. interested And in products successfully

XX% above well is business Our color natural now.

So prepared that outcome be yeah, could certainly with deal standing But to and financially. helpful we any potential there. are by

You could easily argue for us.

Thank you.

Heidi. Thanks, Okay.

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

Yes. Hi. the questions. for taking Good morning, and thanks

Yeah, hey, Mitra.

Hi, Paul.

Just pretty know up the I listen if things here wanted the of nicely in outlook, to to tone you. for lining are terms

I half in year. will of second less issue as destocking the think be you the mentioned an of the

You're pricing costs actions. having with success dealing input terms in great the and of

You've new products. launched

headwind So, was a a you we just lot you very for favorable. would if curious consider as on the like the company? what potential take longer-term look I

accepting largely from in these to cited increases be shorter Well, aside And you've of will were other right that the to be. inflation the going consumers already think price or trading inflation. branded to products. not headwind, sort longer-term be the are now, folks some that it could appear although of down are I'd certainly but term like a destocking, there signs options headwind

to just will But to about we longer natural very there colors, very The more Heidi. ingredients, I favorable continued long-term very, company technology-driven company. we conversion opportunities portfolio with think within Personal with to for think Care talked which the natural think, the just respect be there's I changes great term, the

more always sugar, modulation, to of nature, We're markets. factors. these positive alone The really in extract-related the a headwind, removing The competition continued market headwinds, of right? is solutions, that really, evolution taste not things and all extracts, flavors

product we be our would businesses, there of be We markets, some competitors. But restructured lot were they that, this a of if competitive we my headwinds there. businesses think lot were better business. have different, off portfolios, to ultra those I cyclical, in a We sold have a heck decline, than still dated if answer

competition. create we've There's listen, of disruption But, company in in there's the always legislation, the always of systemic potential changes which business. could, released many So these headwinds.

and in a need have to need is - be a But to to type to I And that buy fine-tuned we just there in and there is drink. always have Sensient invested at to simply fixture Food, not that underlying not I to we've think an but may and I company categories, really need eat. types because being in of think large, portfolio these the to Care, a of why buy house, by right an need need products. really the the I these of are be those I car, to as market may Personal but those fundamentals is markets. of looking I is type where be

Okay.

helpful. Now that's very

in a gears the expense, interest terms issue this debt of little capital switching year. certainly allocation. an given Just level Obviously,

exploring opportunities Just curious pandemics like potential we in on reduction additional debt focus think the maybe terms of versus that? about how should and

I projects allocation, is with top our lot growth areas very We're investment good right some invest Mitra, a our company our of for believe got now. That’s internal We've on we portfolio mentioned. there savings. happy first there's and priority. in in and Paul priority to capital as think the the

I to Beyond would terms M&A, M&A. of we look at that bolt-on expect that continue in would

mentioned. you that acquisition the like things So

go debt technology of excess bring because reduction a rate So, might supply at of add-on this time sort that then, pointed deals the that you would or environment advantage. the smaller interest And chain towards out.

for Okay. the questions. That's taking for it Thanks me.

Okay. Thanks, Mitra.

David ahead. from Please question Boldhaven. the Green from And is next go

Hi Stephen, you how doing? are

I to you show were up. was David, Hello wondering when going

I'm still here.

All right.

end-market demand. of couple I you questions you guess, one dynamics. of on which a One, SNEs was from me. specifically and alluded is - that about the Just to talked other couple a

just off those in the within any looks with to and F&E, terms specifically? And that's just just a you two, what us would could that. pipeline momentum little wins on helpful I'll color is in that am specifically, So then, bit be get what start I okay. more give of like really of I – if terms color And new

to let prices, down. the here. sheet, so so, is are can can things you them read volume. grab perhaps many trade-offs you are are volumes customers this many as end-market of my off pricing I few increasing their again, that demand, And where a think between our QX, I and making of Okay, me see

into so, of may where And trading selling for segments plays we're those that customers be or some certainly out down us when whatnot.

see in number some You temporary declines a categories. of these

for during was pet bit a the year-end, much growing right? unabated food, down unusual, the given the example, year, grown It's for dog for of the that So soup for course it's had quite for the how quarter, not pandemic. quarter. refrigerated, like and food, But, frozen the something

drinks We're of are Improvement way beverage some the then QX. I nice down a in seeing but shall other world. course recovery But again, side, energy confectionery of or the a of the lot up, on categories touch say, beverage right, say in the are

these around So, to many of lot a again phenomenon temporary are brands. owing pricing of the the activity with

customers as longer And end-customers sort where going good their are prospects they're where at. prices and out to here think out term the so, - money settle I spend

to, So you the coming expressed the maybe categories back can a kind number the folks coming earth years many that's of that of harder pre-pandemic of some lot certainly to of levels. hot over see some of interest the of categories some and are pandemic during are in traditional back beverage predict. have to of the last But

those spend are new I think our very, focusing I can wins? enough Do the get control new as people win get control. things go continue enough generate customers have wins? rate, I and we question our servicing to we on Are you momentum those a customers about good. winning? of to we to to to And we can those time those business are have lot wins And right, sales that and the very how pipeline, your much wins? Do about

wins ahead. last I still or that a you're us talking for opportunities whether year, talking trend we continuing very, about of dairy, very in And As new year you're had is beverage, based, broad lot about in Flavors. great mentioned

people pipeline, they're about yeah, and question are And And so, of are there hell the to the very, and our the that again out customers. very are there for very your business. their we I'm new they demanding out sales pipeline generating very, aggressive, servicing

And hang if of for That so, and of for this is it sort not happen and get to it a doesn't noticed. out does, very not kind come doesn't here. long. a salesperson place happen And

effectiveness demands the to So, force then, the of we course, and place that this a a rewards lot of managing we sales of that give comes the and success. down for

a success have this very very award the high to and retention very which We we in people. company for I good well, tolerance very, think of folks, speaks those

momentum metrics are to a very, on I think them is And supporting good, lot so, good of brought back the most by the service you very folks office very salespeople, meaningful. customer that

as pipeline the And point drives to into the that launches. again, and about my really XXXX. dynamic awesome we new get earlier increase of That's a

more that is F&E to the those? across increase new colors or one launches specific in of either bright in On

The had Well, launches color outsized. I some quite this. natural that wins are in would were you new We Color tell bigger.

outsized. synthetic also color we some had quite course, Of were wins that

biggest that we a As sell the broad smallest you know, Color from the customers of to. range the very to Group has

some and technology right wins this and so, big you right factors. natural conversion the have the pretty hit all colors, with you to ongoing can And those service when levels other

And wins well really But in be like based flavors. represented the may the would pretty are And the broad so, beverage wins bit little portfolio. the say or then few in actually wins, sweet we you, it's throughout a I Flavors. good for nevertheless, also savory, something last see months, fairly tell lighter

is operating we less covered pricing. seen by leverage two raw top-line. there's then, been And so I bit What your questions probably costs fully One was have had far expected than And in can? we've that more Right. around that and strength if the just been given weren't specifically. on comments the margin Colors material a would

more It more feels leverage a a that's should forward? operating going like any operating we leverage little there bit coming Is quarter. bit there through see that this and was now signs normalizing

should improvement answer continue see So leverage. operating the the you in is to

prepared and you the a pricing the a has negotiate in to As those Steve there When lot input get you I timing. noted lag. costs noted, remarks, with successfully do the could be when or of this maybe increases,

kind if one done a up Now, in you much catch or thing, of faster. inflation see one-time the a was operating would leverage

inflation and ongoing chasing delay. certain you thing and when in customers, with be may that categories can certain But an you see is cost

noted sense improvement it's is elevated So to staying inflation what but leverage and speaks in decelerating. the the broad certainly not is least at operating that at ascending not level else slope you further, that nothing any the in to,

splittingly just a to XX%. Color share close was

profit So good in and potentially the bit, an if holds yeah, And see about Color leverage again, progresses the here little a and their I the Group. even inflation even recedes operating nicer levels. but you'll as improvement of feel really year -

Great. And on one APAC. for final me one

sort rate. it's going double-digit to time same would think, can the this this margin kind you I on growth And this bearing we look be delivering yet, which and continue every of question, reply about for? sort improvement say, sort way, still you And you level is, really of consistently hard of of to associated. long you're I of growth ask this in carry think in how level

forward? business? think And - going growth about you do do sort and thinking the of should really How be about cadence we then how growth that how we

markets. in they cases multinationals that are Well, opportunities I for think lot markets a a a Regional US. in that go think commanding big led time I many and there really Europe all by in we've that market I the large got local are Asia. the cases these lot us. for it's not example there's so, of I people - you every see, with They and companies, in companies, of are noticed

bit of more base. a broader customer So broad it's little a -

I so that's think helpful. been And quite

listings. and within there don't they have guys listings. listings. core of necessarily best deal have Flavors core Sure They regional people don't a they the constraint have that they have You core sales with the producer. But deal with they of are multinationals and the here, lot

may perhaps to are And the see not parts in they wedded of world. as other you history

leadership got great think great Asia. in a had Asia. that And people we So, for We in counts lot. I

sustainable is like like on I'd for that's of well a above high been number to to awesome. mid that that the it got that years we've top-line. into and pretty in think We've future. So

is I as mid-to-high well. that darn I be a long-range to good about I framework thinking about Asia-Pacific’s of great. you're And top-line good X hey, is pretty sort at Q to think as think I think, year looks But think look the going growth. But as

On mix we have that been? if down price, the would and XX.X, into break it what volume

Little that bit better volume. XX% than was of

Thanks again. Right.

Okay, David. care. Take

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

That will thank you. for tuning Okay, our call. today. you conclude in Thank everyone

The conference concluded. has

You now may disconnect.