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Sensient Technologies Releases Results for Q3 2020

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The report includes divestiture and other related costs, as well as operational improvement plan costs, which decreased third quarter net earnings by $1.4 million.

Sensient Technologies Corporation has released its report for the quarter ending September 30, 2020 which reported a consolidated revenue of $323.6 million in this year's Q3, which increased from 2019's Q3 total of $317.7 million.

Related: Sensient Technologies Releases Q2 2020 Results

The operating income reported $41.2 million compared to $38.8 million for last years. Reported diluted earnings per share was $0.78 in Q3 2020 compared to diluted earnings per share of $0.75 in Q3 2019. 

Q3 2020 increased diluted earnings per share by $0.04 compared to $0.02 in the Q3 2019.

The Flavors and Extracts Group (previously known as Flavors & Fragrances Group)

  • Flavors and extracts: $182.9 million compared to $167.6 million in Q3 2019
    • Revenue: up 9.1%
    • Adjusted local currency revenue: up 12.9%
    • Segment operating income: $23.8 million  compared to $17.6 million in Q3 2019
    • Adjusted local currency operating profit: up 24.1%.

The higher revenue was primarily the result of continued growth in natural ingredients and flavors, extracts, and flavor ingredients.

The Color Group

  • Color group:  $116.4 million compared to $127.0 million in Q3 2019
    • Revenue: down 8.3%
    • Adjusted local currency revenue: down 1.5%
    • Segment operating income: $23.6 million compared to $23.4 million in Q3 2019
    • Adjusted local currency operating profit: up 3%.

The group continued to have good growth in food and pharmaceutical colors; however, this growth was offset by lower volumes in the personal care business, primarily as a result of the lower demand for makeup during COVID-19.

The Asia Pacific Group

  • Asia Pacific group:  $30.7 million compared to $30.1 million in Q3 2019
    • Revenue: up 2%
    • Adjusted local currency revenue: up 2.1%
    • Segment operating income: $6.1 million compared to $5.4 million in Q3 2019
    • Adjusted local currency operating profit: up 15.5%.

The group had favorable growth in a number of regions, which was offset by the negative impact of COVID-19 restrictions in certain countries.

Related: Sensient to Sell Yogurt Fruit Preparations Line to Frulact

Corporate and Other

Corporate and other reported operating costs of $12.4 million in the current quarter compared to $7.7 million in last year’s comparable period.

The higher costs are primarily due to the divestiture and other costs, operational improvement plan costs and an increase in non-cash performance-based compensation.

2020 Outlook

Based upon current trends, the company diluted earning's per share guidance for 2020 is $2.10-$2.35. The full year guidance now includes approximately $0.05 of foreign currency headwinds based on current exchange rates. The company also reconfirms its previously issued 2020 adjusted diluted earnings per share guidance of $2.60-$2.80, which excludes divestiture and other related costs, operational improvement plan costs, the results of the operations divested and to be divested, and foreign currency impacts.

The company is also confirming low to mid-single digit revenue growth in 2020 on a local currency basis, excluding the revenues of the product lines divested and to be divested. The company also continues to expect 2020 Adjusted EBITDA to grow at a low to mid-single digit rate and adjusted operating Income to be flat to down at a low-single digit rate, in each case on a local currency basis. Adjusted operating income will be impacted by higher non-cash performance-based compensation.

Conference Call

A replay of the conference call from October 16, 2020, discussing the financial results are available through October 23, 2020, by calling (877) 344-7529 and referring to conference identification number 10147899. An audio replay and written transcript of the call will also be posted on the investor information section of the company’s web site on or after October 20, 2020.