Sensient Technologies Corporation Q1 FY2026 earnings call

• Strong start to 2026 with 7% local currency revenue growth, 10% local currency adjusted EBITDA growth, 14% local currency adjusted EPS growth. • Color Group has 12.3% local currency revenue growth and 13.2% local currency operating profit growth, commercial activity around natural color conversions strong. • Flavors & Extracts Group has 1.7% local currency revenue growth and 5.1% local currency operating profit growth. • Asia Pacific Group has 4.7% local currency revenue growth and 14.5% local currency operating profit growth. • Strong new sales wins across groups, sales pipelines growing. • Preparations for U.S. wholesale conversion to natural colors priority, $1 billion natural color sales goal. • Continuing investments in production capacity, product portfolio optimization, resilient supply chain. • Innovative technologies like Avalanche (clean label alternatives to titanium dioxide) and extrusion stable natural colors highlighted.

Color Group: 12.3% local currency revenue growth, 13.2% local currency operating profit growth, adjusted EBITDA margin 24.4%, expects double-digit local currency revenue growth in 2026. Flavors & Extracts Group: 1.7% local currency revenue growth, 5.1% local currency operating profit growth. Asia Pacific Group: 4.7% local currency revenue growth, 14.5% local currency operating profit growth, adjusted EBITDA margin 26.1%.

• Increase local currency revenue range to high single to double digits from mid-single to double digits. • Increase local currency adjusted EBITDA and EPS growth range to high single to double-digit rates from mid-single to double-digit and mid-single to high single-digit respectively. • Expect consolidated capital expenditures of $150 million to $170 million in 2026. • Anticipate increase in natural color working capital and aim to significantly improve ROIC to mid-teens over next few years. • No share buybacks anticipated at this time.

• Monitoring situations like conflict in Iran, working to mitigate potential supply chain risks from fuel and commodity price increases. • Input inflation including logistical inflation from energy, packaging with petroleum-based inputs, and potential impact on synthetic and natural color raw materials.

Q: Just give more color on what drove first quarter results, was it faster conversions, load-in benefit, etc.?

A: More wins than thought, including natural color wins, Asia Pacific wins, and less tariff distortions.

Q: How to think about cadence of growth in segments from 2Q through 4Q?

A: Q2 should look similar to Q1, Q4 may see inflection point in natural colors.

Q: Confidence around timeline of natural color conversions now vs 3 months ago?

A: Very confident, no slowdown at customers, many committed.

Q: Margins in Color Group, expectations for 2Q, 3Q, 4Q?

A: EBITDA flat for quarter, variables like capital expenditures and revenue flow affect margins, net-net for year likely flattish.

Q: Companies getting more competitive, solidifying plans sooner?

A: Bulk of activity in 2027, significant in 2026, competitors may push activity, tipping point possible.

Q: FDA involvement with natural colors?

A: FDA involved with approval process for natural colors, many petitions and approvals, active process.

Q: Update on revenue related to conversion of synthetic colors?

A: Invoiced about $20 million of natural color conversions in U.S. over last 9 months.

Q: EPS guidance, understanding of upgrade?

A: Raised guidance due to strong revenue control, but factors like interest expense, tax rate, and FX affect EPS.

Q: Inputs, expectations for this year?

A: Need to take pricing to address input inflation, including logistical, packaging, and raw material costs for synthetic and natural colors.

Q: 2Q guide and impact of transport logistics?

A: Not assuming negative impact or pricing in Q2, but expecting to address inflation with pricing.