Sensient Reports Results for the Quarter and Year Ended Dec. 31, 2018

Sensient Technologies reported earnings per share of 78 cents in the fourth quarter of 2018 compared to 31 cents in last year’s fourth quarter. Revenue was $324.6 million in this year’s fourth quarter compared to $328.9 million in the comparable period last year. Operating income was $45.3 million in the fourth quarter of 2018 and $47.4 million in last year’s fourth quarter. Foreign currency translation decreased revenue and operating income by approximately 2% and earnings per share by approximately 6% in the fourth quarter.
 
For the year ended Dec. 31, 2018, earnings per share were $3.70 compared to $2.03 for the year ended Dec. 31, 2017. Revenue was approximately $1.4 billion in both 2018 and 2017. Operating income was $203.4 million and $167.8 million for the years ended Dec. 31, 2018, and 2017, respectively. Foreign currency translation increased full year 2018 revenue by approximately 1% but did not have a significant impact on operating income or earnings per share.
 
For the year ended Dec. 31, 2018, adjusted earnings per share were $3.55, an increase of approximately 4%, from last year’s result of $3.42. Adjusted operating income was $203.4 million for the full year of 2018 compared to $215.9 million in the comparable period last year. Foreign currency translation increased full year 2018 adjusted operating income and adjusted earnings by approximately 1%.
 
Cash provided by operating activities was $83.5 million for the full year of 2018 compared to $36.3 million in the prior year. The 2018 cash flows provided by investing activities includes $91.1 million of cash receipts on sold receivables compared to $141.5 million in the comparable period last year that was previously reported as cash provided by operating activities. Total debt decreased $56.5 million in the fourth quarter of 2018.
 
The Color Group reported revenue of $127.1 million in the quarter compared to $126.2 million in last year’s fourth quarter, an increase of approximately 1%. Segment operating income was $22.9 million in the quarter compared to $25.5 million in last year’s fourth quarter. Foreign currency decreased both revenue and operating income by approximately 3% in the period. The Group’s lower profit was primarily driven by higher input costs and product mix. In the fourth quarter, the Company continued to experience customer inventory destocking within the Cosmetic business.
 
For the full year, the Color Group reported revenue of $553.5 million, an increase of approximately 5% from $526.4 million reported in the comparable period last year. Segment operating income increased approximately 1% to $114.9 million compared to $113.4 million reported in 2017. Foreign currency translation increased operating income by approximately 1% in 2018 and had a minimal impact on revenue during the year.
 
The Flavors & Fragrances Group reported fourth-quarter revenue of $175.5 million compared to $178.5 million reported in the comparable period last year. Segment operating income was $22.3 million in the fourth quarter compared to $24.1 million reported in the fourth quarter of 2017. The Group’s post-restructuring sales have stabilized and pricing and cost pressures in the natural ingredients business have subsided.
 
For the full year of 2018 and 2017, the Flavors & Fragrances Group reported revenue of $746.9 million in both years. Segment operating income was $96.4 million in 2018 and $114.3 million in 2017.
 
The Asia Pacific Group reported revenue of $31.1 million in the fourth quarter compared to $31.9 million reported in the comparable period last year. Segment operating income was $5.6 million and $6.0 million in the fourth quarters of 2018 and 2017, respectively.
 
“We remain confident in our long-term strategy and we are working on a number of exciting projects. I am optimistic for 2019 and beyond,” said Paul Manning, chairman, president and CEO of Sensient Technologies.
 
For 2019, the company expects low to mid-single digit local currency consolidated revenue growth. Within the Color segment, revenue growth will be driven by new project wins and conversions of existing food and beverage products to natural color solutions.
 
Local currency operating income growth within the Flavors & Fragrances, Color, and Asia Pacific segments are expected to grow at a mid-single digit rate in 2019. These expectations apply to full-year results for 2019. Results by quarter will vary and the expectation is results will strengthen after the first quarter. As an example, both the Flavors & Fragrances and Color segment results are expected to improve over the course of the year as pricing is implemented to offset input cost inflation, and as mix improves. In summary, we expect each of our three operating business segments, excluding corporate expense, to deliver mid-single digit operating income growth.