EX-99.2 3 brhc10027124_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

 Second Quarter 2021 Investor Presentation 
 

           FORWARD-LOOKING STATEMENTS  2  This document contains statements that may constitute “forward-looking statements” within the meaning of Federal securities laws including under “2021 Financial Outlook” in this presentation. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors concerning the Company’s operations and business environment. Important factors that could cause actual results to differ materially from those suggested by these forward-looking statements and that could adversely affect the Company’s future financial performance include the following: the impact and uncertainty created by the ongoing COVID-19 pandemic, including, but not limited to, its effects on our employees, facilities, customers, and suppliers, the availability and cost of raw materials and other supplies, the availability of logistics and transportation, governmental regulations and restrictions and general economic conditions; the pace and nature of new product introductions by the Company and the Company’s customers; the Company’s ability to anticipate and respond to changing consumer preferences and changing technologies; the Company’s ability to successfully implement its growth strategies; the outcome of the Company’s various productivity-improvement and cost-reduction efforts, acquisition and divestiture activities, and operational improvement plan; the effectiveness of the Company’s past restructuring activities; changes in costs of raw materials, including energy; industry, regulatory, legal, and economic factors related to the Company’s domestic and international business; the effects of tariffs, trade barriers, and disputes; growth in markets for products in which the Company competes; industry and customer acceptance of price increases; actions by competitors; currency exchange rate fluctuations; and other factors included in “Risk Factors” in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and in other documents that the Company files with the SEC. The risks and uncertainties identified above are not the only risks the Company faces. Additional risks and uncertainties not presently known to the Company or that it currently believes to be immaterial also may adversely affect the Company. Should any known or unknown risks and uncertainties develop into actual events, these developments could have material adverse effects on our business, financial condition, and results of operations. This presentation contains time-sensitive information that reflects management’s best analysis only as of the date of this presentation. Except to the extent required by applicable laws, the Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied herein will not be realized. 
 

 NON-GAAP FINANCIAL MEASURES  2  Within this document, the Company reports certain non-GAAP financial measures, including: (1) adjusted revenue, adjusted operating income, adjusted net earnings, adjusted EBITDA, and adjusted diluted earnings per share (which exclude divestiture & other related costs, operational improvement plan costs, and the results of the divested operations), (2) adjusted results by segment (which exclude divestiture & other related costs, operational improvement plan costs, and the results of the divested operations), (3) percentage changes in revenue, operating income, diluted earnings per share, and EBITDA on an adjusted local currency basis (which eliminate the effects that result from translating its international operations into U.S. dollars and exclude divestiture & other related costs, operational improvement plan costs, and the results of the divested operations), and (4) adjusted EBITDA (which excludes depreciation and amortization expense, non-cash share based compensation expense, the results of the divested product lines, the divestiture & other related costs, and operational improvement plan costs). The Company has included each of these non-GAAP measures in order to provide additional information regarding the underlying operating results and comparable period-over-period performance. Such information is supplemental to information presented in accordance with GAAP and is not intended to represent a presentation in accordance with GAAP. These non-GAAP measures should not be considered in isolation.Rather, they should be considered together with GAAP measures and the rest of the information included in this presentation and the Company’s SEC filings. Management internally reviews each of these non-GAAP measures to evaluate performance on a comparative period- to-period basis and to gain additional insight into underlying operating and performance trends, and the Company believes the information can be beneficial to investors for the same purposes. These non-GAAP measures may not be comparable to similarly titled measures used by other companies. Refer to “Non-GAAP Financial Measures” at the end of this presentation for reconciliations and additional information. 
 

     Over 135 years of Industry Leadership  2  Established in 1882 as Meadow Springs DistilleryEvolved into Universal Foods as a diversified food and ingredients companyName changed to Sensient Technologies Corporation in 2000Today, we are a provider of advanced technologies, serving markets with strong growth profiles through delivery of customized solutions for food and beverages, pharmaceutical, personal care, and other applications 
 

     Innovative Technologies Creating Unique Solutions  2  Applications expertise and solutions-based sellingHigh impact relative to costTechnically-driven products that are difficult to replace Strong consumer trendsOpportunities to grow organically and through M&A 
 

     Focusing our portfolio and strengthening our commitment to the end markets  2  Investing in core focus areas of Flavors and Extracts, Natural Ingredients, Food and Pharmaceutical Colors, and Personal CareDivested non-core product lines (inks, fragrances, and yogurt fruit prep product lines)Expanded flavor portfolio and strengthened technical solutions capabilities through the acquisition of Flavor Solutions, Inc. on July 15, 2021 
 

           7  Color Group2020 Revenue: $501M 2020 Adj. Revenue*: $487M Core Areas of Focus: Food and Pharmaceutical Colors and Personal CareFlavors & Extracts Group2020 Revenue: $742M 2020 Adj. Revenue*: $642MCore Areas of Focus: Flavors and Extracts, Natural Ingredients, and Other Flavor IngredientsAsia Pacific Group2020 Revenue: $121M 2020 Adj. Revenue*: $121M Core Areas of Focus: Flavors and Colors for food and beverage  Global Revenue by Group  2020 Global Revenues include intercompany sales which are eliminated on a consolidated basis.*Adj. Revenue is a Non-GAAP metric, please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

           8  Global market leaderNatural color innovatorUnmatched innovation & applications expertise      Color Group 
 

 9  Color Overview  Food and Pharmaceutical  69% of Segment Revenue 71% of Adj. Segment Revenue      LC Revenue Change Q2 ’21 +3.6%YTD ’21 +2.4%  Market trend toward natural colors in food and beverageUnique value proposition for Pharmaceutical customers includes colors, flavors, coatings, and extracts  Personal Care  28% of Segment Revenue 29% of Adj. Segment Revenue      LC Revenue Change Q2 ’21 +16.8%YTD ’21 +2.1%  Demand for innovative products with multiple benefitsProduct line includes formulation aides and ingredients for color cosmetics, hair care, and skin careRecovery from negative COVID impacts underway  Inks  3% of Segment Revenue    Completed divestiture in June 2020  2020 Revenue: $501M 2020 Adj. Revenue*: $487M  *Local-currency (LC) revenue and adjusted revenue are Non-GAAP metrics, please see our GAAP to Non- GAAP Reconciliation at the end of this document. 
 

 10    Flavors & Extracts Group  Broad product offeringUnique ability to service global, regional, and local customersLeading technology platformsUnmatched applications expertise   
 

 11  Flavors & Extracts Overview  Flavors, Extracts, and Flavor Ingredients  54% of Segment Revenue 62% of Adj. Segment Revenue      LC Revenue Change Q2 ’21 +11.2%YTD ’21 +10.3%  Opportunities for on trend products with extracts, taste modulation, and natural flavors  Natural Ingredients  33% of Segment Revenue 38% of Adj. Segment Revenue      LC Revenue Change Q2 ’21 +5.3%YTD ’21 +6.6%  Leading provider of dehydrated onion, garlic, and other products  Fragrances & Yogurt Fruit Prep  13% of Segment Revenue      Yogurt Fruit Prep (2% of revenue) divested September 2020Fragrances (11% of revenue) divested April 2021    2020 Revenue: $742M 2020 Adj. Revenue*: $642M  *Local-currency (LC) revenue and adjusted revenue are Non-GAAP metrics, please see our GAAP to Non- GAAP Reconciliation at the end of this document. 
 

 12      Asia Pacific Group  2020 adjusted revenue of $121 million and adjusted operating income of $22 millionSensient’s sales of flavors and colors for Food and Pharmaceutical are managed on a geographic basis and reported as a separate segmentManufacturing capabilities in Australia, New Zealand, China, Japan, Philippines, Thailand, and India; R&D capabilities in Singapore, Thailand, and ChinaQ2 2021 local currency adjusted revenue and operating profit improved 11.3% and 21.6%, respectively  * Adjusted revenue, local currency adjusted revenue, adjusted operating income, and local currency adjusted operating income are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

 13    2021 Q2 Segment Results  Color Group second quarter revenue increase was primarily driven by the start of the color cosmetic market recovery in Personal Care. Operating income was up in the quarter primarily due to volume.Flavors & Extracts Group reported higher revenue in the quarter driven by growth in all product categories. Operating income was up as a result of the higher volumes and product mix.Asia Pacific Group second quarter revenue increased double-digits with growth in almost all regions. Operating income improved in the quarter due to volume growth.  Local Currency Adjusted Revenue*      Local Currency Adjusted* Commentary:    Q2  YTD    Color  +7.1%  +2.3%    Flavors & Extracts  +9.1%  +9.0%    Asia Pacific  +11.3%  +7.8%    Local Currency Adjusted Operating Income*        Q2  YTD  Color  +5.2%  (5.0%)  Flavors & Extracts  +13.2%  +17.1%  Asia Pacific  +21.6%  +26.6%  * Local-currency (LC) adjusted revenue and adjusted operating income are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

 14    2021 Q2 Consolidated Results    Q2  YTD  Local Currency Adjusted Revenue*  +9.1%  +6.4%  Local Currency Adjusted Operating Income*  +5.8%  +2.9%  Local Currency Adjusted Diluted EPS*  +8.6%  +5.6%  Local Currency Adjusted EBITDA*  +6.0%  +4.0%  Q2 consolidated local currency adjusted revenue was up due to continued strong growth in Flavors & Extracts, Colors and Asia Pacific groups. Savory and sweet flavors, natural colors, and personal care product lines had healthy growth within the quarter.Q2 consolidated local currency adjusted operating income was up due to the overall volume growth across our businesses; however, the operating income improvement was partially offset due to higher year-over-year Corporate expenses related to performance-based compensation.  * Local-currency (LC) adjusted revenue, adjusted operating income, adjusted diluted EPS, and adjusted EBITDA are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document. 
 

 15    Capital Allocation  Prioritize ROI capital projects  Maintain dividend payout ratio  Debt reduction to maintain targeted leverage  Maintain financial flexibility to pursue M&A  Excess capital returned to shareholders through opportunistic share repurchases                                          $50  $87  $77  $50  $54  $57  $62  $66  $81  $56  $51  $39  $52  $31  $25  $9  $87  $118  $-  $50  $100  $150  $200  $250  2016  2017  2018  2019  2020  DOLLARS IN MILLIONS        Share Repurchase    Acquisitions  Dividends    Debt Repayments  Capital Expenditures     
 

 16    2021 Financial Outlook  * Local-currency adjusted revenue, adjusted diluted EPS, and adjusted EBITDA are Non-GAAP metrics. Please see our GAAP to Non-GAAP Reconciliation at the end of this document.  Metric  Guidance  Comments  Diluted EPS (GAAP)  Mid-to-high single digit growth  Includes approximately 25 cents of divestiture & other related costs, operational improvement plan costs, and the results of the divested operationsAt current rates FX provides a 10 cent benefit  Adjusted Diluted EPS in Local Currency*  Mid-single digit growth  Excludes divestiture & other related costs and operational improvement plan costsExcludes results of the divested operations  Adjusted Local Currency Revenue*  Mid-single digit growth  Excludes revenue of the divested product lines  Adjusted Local Currency EBITDA*  Mid-single digit growth  Excludes divestiture & other related costs and operational improvement plan costsExcludes results of the divested operations 
 

   Why Invest?    Strong competitive position‘Sticky’ business (& low portion of customer costs) Global presenceExposure to stable and growing markets Focused on improving returns and on growth  17 
 

   ESG Information    Click here to access our  Environmental  Sensient is committed to the principles of sound environmental stewardship and the responsible and sustainable use of energy and natural resources.Long-term goals to reduce Energy, Water, and Hazardous Waste intensitySeed-to-shelf program focused on sustainable supply chainEmphasis on new products and technologies that minimize waste and environmental impactsChemical Risk Strategy implemented to identify and reduce risk in our portfolio  Social  Sensient strives to conduct business in an ethical manner and to make a positive contribution to society through our product offerings and business activities.Sensient’s Code of Conduct and Supplier Code of Conduct require strong ethical behavior, fair employment practices, and strict human rights practices and product safety standardsRobust product, environmental, and raw material safety programs designed to exceed industry standards.Raw material traceability and sustainability programsSupport for our local communities through volunteerism, financial donations, sponsorships, and employee education opportunities  Governance  Sensient is committed to maintaining the highest standards of professional conduct and strong corporate governance practices through our comprehensive corporate governance framework.Board comprised of a majority of independent directors with diverse and accomplished backgroundsCommitted to board diversity and refreshment, we are a 2020 Women on Boards Winning Company for the seventh year in a row and we have added seven new directors since 2013. 40% of our Board is female.Robust Code of Conduct built on a foundation of ethics, safety and quality, and professionalism resulting in ethical and lawful conduct of our business  18 
 

   APPENDIX – NON-GAAP TABLES 
 

 20  Non-GAAP Financial Measures  Note: EPS Calculations may not foot due to rounding differences      Three Months EndedJune 30, 2021      Three Months EndedJune 30, 2020      Six Months EndedJune 30, 2021      Six Months EndedJune 30, 2020  Revenue (GAAP)  $  335,827    $  323,090    $  695,529    $  673,767  Revenue of the divested product lines    (2,207)      (28,217)      (27,777)      (64,802)  Adjusted revenue  $  333,620    $  294,873    $  667,752    $  608,965  Operating income (GAAP)  $  35,753    $  42,125    $  82,650    $  76,686  Divestiture & other related costs – Cost of products sold    3      1,749      28      1,939  Divestiture & other related costs – Selling and administrative expenses    11,685      (3,276)      13,232      8,377  Operating loss (income) of the divested product lines    459      (331)      (2,468)      (1,716)  Operational improvement plan - Selling and administrative expenses    (3,494)      -      (2,493)      -  Adjusted operating income  $  44,406    $  40,267    $  90,949    $  85,286  Net earnings (GAAP)  $  25,936    $  30,620    $  57,604    $  51,393  Divestiture & other related costs, before tax    11,688      (1,527)      13,260      10,316  Tax impact of divestiture & other related costs    (1,689)      509      (896)      (425)  Net loss (earnings) of the divested product lines, before tax    459      (331)      (2,468)      (1,716)  Tax impact of the divested product lines    (115)      203      608      500  Operational improvement plan income, before tax    (3,494)      -      (2,493)      -  Tax impact of operational improvement plan    455      -      159      -  Adjusted net earnings  $  33,240    $  29,474    $  65,774    $  60,068  Diluted earnings per share (GAAP)  $  0.61    $  0.72    $  1.36    $  1.21  Divestiture & other related costs, net of tax    0.24      (0.02)      0.29      0.23  Results of operations of the divested product lines, net of tax    0.01      -      (0.04)      (0.03)  Operational improvement plan income, net of tax    (0.07)      -      (0.06)      -  Adjusted diluted earnings per share  $  0.79    $  0.70    $  1.55    $  1.42 
 

 Non-GAAP Financial Measures (Cont’d)  Revenue  Total    ForeignExchange Rates    Adjustments*    AdjustedLocal Currency    Total    ForeignExchange Rates    Adjustments*    AdjustedLocal Currency  Flavors & Extracts  (2.3%)    3.7%    (15.1%)    9.1%    2.8%    3.1%    (9.3%)    9.0%  Color  9.8%    5.3%    (2.6%)    7.1%    1.6%    3.8%    (4.5%)    2.3%  Asia Pacific  15.9%    5.5%    (0.9%)    11.3%    13.4%    5.7%    (0.1%)    7.8%  Total Revenue  3.9%    4.4%    (9.6%)    9.1%    3.2%    3.5%    (6.7%)    6.4%  Operating Income Flavors & Extracts  7.8%    3.1%    (8.5%)    13.2%    18.2%    2.6%    (1.5%)    17.1%  Color  15.1%    5.4%    4.5%    5.2%    0.5%    4.1%    1.4%    (5.0%)  Asia Pacific  19.5%    (0.6%)    (1.5%)    21.6%    26.6%    0.3%    (0.3%)    26.6%  Corporate & Other  160.9%    0.1%    131.4%    29.4%    17.0%    0.1%    (7.1%)    24.0%  Total Operating Income  (15.1%)    4.5%    (25.4%)    5.8%    7.8%    4.3%    0.6%    2.9%  Diluted Earnings Per Share  (15.3%)    5.5%    (29.4%)    8.6%    12.4%    5.0%    1.8%    5.6%  Adjusted EBITDA  10.4%    4.4%    N/A    6.0%    7.5%    3.5%    N/A    4.0%  Three Months Ended June 30, 2021  Six Months Ended June 30, 2021  * For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, Diluted Earnings per Share, and Adjusted EBITDA, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income.          21 
 

 Non-GAAP Financial Measures (Cont’d)  22    2021  2020  % Change    2021  2020  % Change  Operating income (GAAP)  $ 35,753  $ 42,125  (15.1%)    $ 82,650  $ 76,686  7.8%  Depreciation and amortization  13,018  12,118      25,817  24,522    Depreciation and amortization, divested product lines  (48)  (16)      (97)  (96)    Share-based compensation expense  2,075  1,485      4,188  2,662    Divestiture & other related costs, before tax  11,688  (1,527)      13,260  10,316    Results of operations of the divested product lines, before tax  459  (331)      (2,468)  (1,716)    Operational improvement plan costs (income), before tax   (3,494)   -         (2,493)   -      Adjusted EBITDA   $ 59,451 $ 53,854 10.4%    $ 120,857 $ 112,374 7.5%   Three Months Ended June 30,  Six Months Ended June 30, 
 

 Non-GAAP Financial Measures (Cont’d)  23  Note: *Fragrances was divested in April 2021, Inks was divested in June 2020, and Yogurt Fruit Prep was divested in September 2020.  Revenue  Total    Foreign Exchange Rates    Local Currency    Total    Foreign Exchange Rates    Local Currency  Flavors, Extracts and Flavor Ingredients  15.8%    4.6%    11.2%    14.0%    3.7%    10.3%  Natural Ingredients  5.4%    0.1%    5.3%    6.7%    0.1%    6.6%  Fragrances*  (100.0%)    10.2%    (110.2%)    (47.6%)    8.9%    (56.5%)  Yogurt Fruit Prep*  (61.4%)    0.0%    (61.4%)    (59.6%)    0.0%    (59.6%)  Flavors & Extracts Group  (2.3%)    3.7%    (6.0%)    2.8%    3.1%    (0.3%)  Food and Pharmaceutical  8.7%    5.1%    3.6%    6.1%    3.7%    2.4%  Personal Care  22.6%    5.8%    16.8%    6.1%    4.0%    2.1%  Inks*  (76.6%)    3.8%    (80.4%)    (90.2%)    2.0%    (92.2%)  Color Group  9.8%    5.3%    4.5%    1.6%    3.8%    (2.2%)  Asia PacificTotal revenue including the product lines divested  15.9%3.9%    5.5%4.4%    10.4%(0.5%)    13.4%3.2%    5.7%3.5%    7.7%(0.3%)  Three Months Ended June 30, 2021  Six Months Ended June 30, 2021 
 

 Q2 Divested Operations  24  Results by Segment Three Months Ended June 30,            Adjusted            Adjusted  Revenue  2021    Adjustments*    2021    2020    Adjustments*    2020  Flavors & Extracts  $ 179,401    $ (1,415)    $ 177,986    $ 183,611    $ (24,742)    $ 158,869  Color  133,207    (792)    132,415    121,296    (3,501)    117,795  Asia Pacific  32,317    -    32,317    27,873    (213)    27,660  Intersegment elimination   (9,098)     -      (9,098)     (9,690)     239      (9,451)  Consolidated   $ 335,827      $ (2,207)     $ 333,620      $ 323,090      $ (28,217)     $ 294,873   Operating Income                        Flavors & Extracts  $ 24,536    $ (45)    $ 24,491    $ 22,752    $ (1,619)    $ 21,133  Color  25,615    504    26,119    22,263    1,347    23,610  Asia Pacific  5,793    -    5,793    4,849    (59)    4,790  Corporate & Other   (20,191)     8,194      (11,997)     (7,739)     (1,527)     (9,266)  Consolidated   $ 35,753      $ 8,653      $ 44,406      $ 42,125      $ (1,858)     $ 40,267   * For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income. 
 

 Q2 YTD Divested Operations  25  Results by Segment Six Months Ended June 30,            Adjusted            Adjusted  Revenue  2021    Adjustments*    2021    2020    Adjustments*    2020  Flavors & Extracts  $ 380,312    $ (26,304)    $ 354,008    $ 370,109    $ (52,187)    $ 317,922  Color  268,927    (1,328)    267,599    264,791    (12,573)    252,218  Asia Pacific  66,157    (295)    65,862    58,322    (334)    57,988  Intersegment elimination   (19,867)     150      (19,717)     (19,455)     292      (19,163)  Consolidated   $ 695,529      $ (27,777)     $ 667,752      $ 673,767      $ (64,802)     $ 608,965   Operating Income                        Flavors & Extracts  $ 51,554    $ (2,925)    $ 48,629    $ 43,623    $ (2,837)    $ 40,786  Color  52,209    544    52,753    51,927    1,214    53,141  Asia Pacific  12,545    (87)    12,458    9,908    (93)    9,815  Corporate & Other   (33,658)     10,767      (22,891)     (28,772)     10,316      (18,456)  Consolidated   $ 82,650      $ 8,299      $ 90,949      $ 76,686      $ 8,600      $ 85,286   * For Revenue, adjustments consist of revenues of the divested product lines. For Operating Income, adjustments consist of the results of the divested product lines, divestiture & other related costs, and 2021 operational improvement plan costs and income. 
 

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