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• Revenue: $392.6 million in Q3 2024, up from $363.8 million in Q3 2023.

• Adjusted EBITDA: Up 13% in Q3 2024 with a margin of 17.6%, up 60 basis points from the prior year.

• Operating Income: $50.5 million in Q3 2024, compared to $44.5 million in Q3 2023.

• Adjusted Operating Income: $51.7 million in Q3 2024, an increase of 17.1% in local currency.

• Color Group Revenue Growth: 13% local currency revenue growth in Q3 2024.

• Color Group EBITDA Margin: 22.2%, an increase of 250 basis points from the prior year.

• Flavors and Extracts Group Revenue Growth: 7% local currency revenue growth in Q3 2024.

• Flavors and Extracts Group EBITDA Margin: 16.4%, up 30 basis points from the prior year.

• Asia Pacific Group Revenue Growth: 13% local currency revenue growth in Q3 2024.

• Asia Pacific Group EBITDA Margin: 23.8%, in line with the prior year.

• Cash Flow from Operations: $136 million for the nine months ended September 30, 2024, up 27% from the prior year.

• Capital Expenditures: $36 million year-to-date as of September 30, 2024.

• Net Debt to Adjusted EBITDA: 2.4.

• Adjusted Tax Rate: 23.1% in Q3 2024, compared to 17.5% in Q3 2023.

• Interest Expense: Expected to increase by approximately $4 million for the year compared to 2023.

• GAAP EPS Guidance: Expected to be between $2.70 and $2.87 per share for 2024.

• Warning! GuruFocus has detected 5 Warning Signs with NWL.

Release Date: October 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Sensient Technologies Corp (NYSE:SXT) reported strong local currency revenue growth of approximately 9% in the third quarter, primarily driven by volume increases.

• The company's consolidated local currency adjusted EBITDA was up 13% for the third quarter, with an adjusted EBITDA margin of 17.6%, up 60 basis points from the prior year's third quarter.

• The Color Group delivered 13% local currency revenue growth and 31% local currency operating profit growth, with a third-quarter EBITDA margin of 22.2%, an increase of 250 basis points versus the prior year's third quarter.

• The Flavors and Extracts Group achieved 7% local currency revenue growth and 13% local currency operating profit growth, benefiting from strong new sales wins and innovative product offerings.

• The Asia Pacific Group reported 13% local currency revenue growth and 15% local currency operating profit growth, with a strong third-quarter margin of 23.8%.

Negative Points

• Higher taxes and interest expenses are impacting the company's adjusted EPS growth, which is expected to be mid-single digit despite strong revenue and EBITDA growth.

• The company is experiencing headwinds from higher interest expenses, which are expected to be up approximately $4 million for the year compared to 2023.

• Foreign currency translation reduced EPS by approximately 1 cent in the third quarter of 2024.

• The company's balance sheet, while well-positioned, still shows a focus on reducing debt levels due to the high interest rate environment.

• The EBIT margin for the Color Group was 18.4% in Q3, slightly below Q2's 18.8%, despite strong top-line growth.