Recommends Shareholders Support Sensient’s Highly Qualified Board
MILWAUKEE--(BUSINESS WIRE)--Mar. 17, 2014--
Sensient Technologies Corporation (NYSE: SXT) announced today that it
filed definitive proxy materials with the Securities and Exchange
Commission (the “SEC”) in connection with its 2014 Annual Meeting of
Shareholders, to be held on April 24, 2014.
The Board also sent a letter to shareholders and recommends that
shareholders vote FOR the election of Sensient’s highly qualified
nominees on the WHITE proxy card.
Included below is the full text of the letter to Sensient shareholders:
SUPPORT SENSIENT’S CLEAR STRATEGY TO CREATE SUSTAINABLE, LONG-TERM
PLEASE VOTE THE WHITE PROXY CARD TODAY
March 17, 2014
Dear Fellow Shareholder:
Your Board and management team are executing a clear strategy to create
sustainable long-term shareholder value. Across our businesses we are
investing in higher-margin, value-added products that leverage our
ability to deliver innovative new solutions for our customers. At the
same time, we are effectively managing our costs to drive profitable
growth and prudently returning additional capital to shareholders.
Under the direction of our CEO Paul Manning, we are extending a plan
across the Company that has already proven successful in one of our
businesses. Prior to becoming CEO, Paul led the successful execution of
this plan in our Color Group, which resulted in 15% compound annual
growth in operating profit since 2009 and 2013 operating margins of 21%
– the highest level in 10 years. Our objectives going forward are clear
– continue to deliver strong performance in our Color Group and Asia
Pacific Group and apply the same principles to increase margins within
our Flavors & Fragrances Group.
WE ARE IMPLEMENTING AGGRESSIVE PLANS TO IMPROVE MARGINS, INCREASE
THE COMPANY’S RETURN ON INVESTED CAPITAL, AND DRIVE SHAREHOLDER VALUE
Based on the success achieved in our Color Group, we are taking similar
steps to transform our Flavors & Fragrances Group into a provider of
sophisticated, high-margin customer solutions. This includes a strategic
shift from basic ingredients to more value-added products. To this end,
we are focused on a specific set of actions to bolster our top line
while expanding our margins and increasing our return on invested
Reducing costs. In 2013, we
completed a restructuring program to generate annual savings in excess
of $12 million. The program closed six facilities, four of them within
the Flavors & Fragrances Group. This restructuring project was
completed on time, on budget, and without disrupting business
operations. We recently announced a further restructuring effort to
generate up to an additional $25 million in annual savings, a
substantial portion of which will come from improved efficiencies in
the Flavors & Fragrances Group.
Aligning with our customers. In
2013, we completed a global realignment of our Flavors & Fragrances
Group along three key customer segments – sweet, savory and beverage –
to better align our efforts to meet customer needs.
Enhancing our capabilities. In
connection with our organizational realignment, we have upgraded
management talent and moved the US Flavors headquarters to a new
state-of-the-art facility in the Chicago suburb of Hoffman Estates.
Sensient is well-positioned to grow sales and margins by delivering
innovation and capitalizing on the worldwide growth in demand for
flavors and fragrances.
Establishing incentives to support our plan.
We have implemented sales and management incentive plans across
the Company to emphasize higher-margin, value-added products and
efficient use of capital. These plans are specifically designed to
drive improvement in gross margins and returns on capital as well as
efficient use of working capital.
By driving shareholder value through these operational improvements, we
have enhanced our ability to return capital to shareholders. We recently
announced a 9% increase in our quarterly cash dividend and we have begun
to repurchase up to two million shares – approximately 4% of our
outstanding shares. Over the next 12 months, we expect to return
approximately $160 million in capital to shareholders on top of the $230
million we have returned over the past five years.
OUR INITIATIVES ARE ALREADY DELIVERING STRONG RESULTS
We are committed to continuing to deliver shareholder value and the
results of our efforts are clear:
Consistently Strong Financial Performance.
Sensient has reported four consecutive years of record revenue and
earnings. Since 2009, the Company has grown its adjusted diluted
earnings per share (excluding restructuring charges) at a compound
annual growth rate of 9%.
Track Record of Delivering Value.
Sensient’s stock is at an all-time high, having delivered a total
return to shareholders over the last 12 months of 44%.
OUR COMMITMENT TO STRONG CORPORATE GOVERNANCE ALIGNS US WITH
Our commitment to Sensient shareholders extends beyond our improved
operating performance and capital allocation. Sensient’s Board of
Directors has a track record of taking actions to align the interests of
management with those of its shareholders. Over time, Sensient’s Board
has implemented a series of shareholder-friendly measures including the
Appointed an independent lead director, effective as of our 2014
Annual Meeting of Shareholders.
Increased the linkage between compensation and performance, including
our recent commitment to the use of performance equity for 100% of
executive officer awards going forward.
Added a new independent director in 2013.
Declassified our board.
Eliminated our poison pill.
Adopted a director resignation policy for uncontested director
Amended director selection criteria to ensure our practice of
emphasizing board diversity continues.
OUR HIGHLY QUALIFIED BOARD IS COMMITTED TO INCREASING SHAREHOLDER
Our strong, independent Board consists of experienced directors who are
deeply familiar with the Company’s businesses, are highly qualified to
lead the Company in executing its strategic plans and are focused on
serving the interests of all of the Company’s shareholders.
Collectively, our Board brings highly relevant experience across many
areas, including expertise in food sciences and the food industry more
broadly; experience in leading innovative research and development
efforts; broad management experience, including leadership of large
multinational companies; and deep expertise in finance, accounting and
government regulation. Taken together, the experience and expertise of
our Board has been critical to guiding the Company in its current
strategy and setting the course for continued and sustainable growth.
FRONTFOUR’S NOMINEES LACK RELEVANT EXPERIENCE AND THEIR ELECTION
WOULD DISRUPT OUR PROGRESS
A hedge fund called FrontFour Capital Group LLC, which has disclosed
ownership of approximately 1.5% of Sensient’s outstanding shares, is
seeking to elect four of its nominees to Sensient’s Board. FrontFour has
also made a vague call for unidentified cost reductions, but has offered
no clear plan for delivering operating improvements at Sensient. In
sharp contrast to Sensient’s highly qualified Board and clearly defined
strategy, the FrontFour nominees lack relevant qualifications and
expertise. In addition, we find FrontFour’s critique of Sensient’s track
record simplistic and inaccurate. In our view, FrontFour is promoting
short-term actions at the expense of long-term value and the election of
their nominees would disrupt the implementation of the Company’s
strategy. Simply put, we believe the FrontFour nominees are not the
right choice to guide Sensient in capitalizing on the many opportunities
that lie ahead.
Moreover, FrontFour has made no serious attempt to engage in the type of
constructive dialogue we have with our shareholders on a regular basis.
At no point prior to their press release on February 19, 2014 did anyone
from FrontFour express any unusual level of concern about Sensient’s
strategy or direction. Instead, this "event driven" activist launched a
public campaign we believe is designed to disrupt the Company at the
expense of our long-term shareholders.
VOTE FOR THE NOMINEES WHO WILL SERVE YOUR INTERESTS
YOUR VOTE IS IMPORTANT – VOTE THE WHITE PROXY
Our current Board is committed to serving the interests of all
shareholders. We believe that we have a strong Company with the right
leaders to continue to take the right steps to position Sensient for
success and drive shareholder value for the long term.
We urge you to vote your WHITE proxy
card FOR the Company’s directors today.
The Board of Directors of Sensient Technologies Corporation
Your Vote Is Important, No Matter How Many Shares You Own.
If you have questions about how to vote your shares on the WHITE
proxy card, or need additional assistance, please contact the firm
assisting us in the proxy solicitation:
D.F. King & Co., Inc.
Shareholders Call Toll-Free: 1-888-886-4425
Banks and Brokers Call Collect: 1-212-269-5550
WE URGE YOU NOT TO SIGN ANY GREEN PROXY
CARD SENT TO YOU BY FRONTFOUR.
This letter contains forward-looking statements (as that term is defined
in the Private Securities Litigation Reform Act of 1995) that reflect
management's current assumptions and estimates of future economic
circumstances, industry conditions, Company performance and financial
results. A variety of factors could cause the Company's actual results
and experience to differ materially from the anticipated results,
including, but not limited to the factors noted in this letter and in
the Management's Discussion and Analysis in our most recently filed
annual report on Form 10-K for the year ended December 31, 2013. The
forward-looking statements in this letter speak only as to the date of
the letter. Sensient Technologies Corporation expressly disclaims any
obligation or undertaking to release publicly any updates or revisions
to such statements to reflect any change in its expectations upon which
such statements are based.
In connection with its 2014 Annual Meeting of Shareholders, Sensient has
filed a proxy statement and other documents regarding the 2014 Annual
Meeting of Shareholders with the Securities and Exchange Commission
(“SEC”) and has begun to mail the definitive proxy statement and a proxy
card to each shareholder of record entitled to vote at the 2014 Annual
Meeting of Shareholders. SHAREHOLDERS ARE ENCOURAGED TO READ THE
PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain the documents free of charge
at the SEC’s website, www.sec.gov,
from Sensient at its website, www.sensient.com,
or by writing to Sensient Technologies Corporation, 777 East Wisconsin
Avenue, Milwaukee, WI 53202, Attention: Investor Relations.
ABOUT SENSIENT TECHNOLOGIES
Sensient Technologies Corporation is a leading global manufacturer and
marketer of colors, flavors and fragrances. Sensient employs advanced
technologies at facilities around the world to develop specialty food
and beverage systems, cosmetic and pharmaceutical systems, inkjet and
specialty inks and colors, and other specialty and fine chemicals. The
Company's customers include major international manufacturers
representing most of the world's best-known brands. Sensient is
headquartered in Milwaukee, Wisconsin.
Source: Sensient Technologies Corporation
Sensient Technologies Corporation
Dick Hobbs, 414-347-3706