Sensient Technologies Corporation (NYSE:SXT) Q3 2023 Earnings Call Transcript

So that’s what clouds my crystal ball because you know I have a crystal ball here. It clouds it just a little bit. But I think what I’m also seeing is bigger in the month orders, not necessarily a thing we’ve seen for the last six to nine months in parts of the company. So that’s kind of largely how I see it unfolding. So not an exact science, but I think the net-net here is I think we’re going to have a much improved in the 2024 that we’ll all be real happy with.

David Green: I seem to remember you saying at one point that you saw the destock headwind broadly was about 10%. Is that still sort of consistent with?

Paul Manning: Yes, it’s about like that in color right now. But flavors in Q3 moderated to more like a mid-single digit maybe mid to high. And Asia-Pacific kind of low single. So yes, for the overall company, we’re sort of like in the high single, probably is the net-net of that. Oftentimes it’s hard to laser cut the distinction between destocking and the product categories declining. So it’s not that precise at the customer. They deal in a lot of SKUs and where yours go and which SKUs and lining that all up by no means. Think about cutting that moment with a hammer rather than a laser. So it’s a rough estimate you’re about right.

Operator: Mr. Green. Do you have additional question?

David Green: Yes, I just had one final one there, if that’s okay. If we look across the sort of food beverage, I guess in staples universe, there seems to be a sort of a little bit of a shift in mute music in terms of, I think most companies are talking about increasing ad spend as we go through this year and going into next year. Maybe that’s a way of compensating for lower volumes. Is that something you’ve been seeing in terms of new, in terms of new tenders and new pitches for us to work?

Paul Manning: Yes, there’s definitely been a pickup in ad spend for sure. In fact, we’re optimistic that that will be continuing here in Q4, that is certainly through customer testimonials happening. But we also see that at a broader market because there’s more interest in seeing volume growth at CPG customers. And so I think they’ve been responding to that need and promotion is one of their key steps for doing that. So yes, absolutely big part of what we’re seeing now, which is a real, again, another nice positive for the business.

Operator: And once again at this time, and showing no additional questions. I’d like to turn the floor back over to management for any closing remarks.

Stephen Rolfs : Okay. That will conclude our call for today. Thank you very much, everyone, for participating. Thank you.

Operator: And with that, ladies and gentlemen, we’ll conclude today’s conference call and presentation. We thank you for joining. You may now disconnect your lines.