The second component of the plan will generate operating efficiencies throughout the Company. The plan will reduce headcount and consolidate several facilities throughout Europe and North America. The Company expects to reduce its global headcount by more than 200 employees, and consolidate several manufacturing sites during the next twelve months. These changes will not impact the Company’s sales coverage, and will result in a more efficient utilization of our human and capital resources. We expect to incur approximately $10 million in one-time personnel related costs and $8 million of one-time non-cash costs related to the write-down of assets and other costs during the next twelve months. The Company expects to reduce its annual operating costs by about $10 million as a result of these changes.
“We achieved record revenues and earnings for a third consecutive year despite a very challenging environment,” said Kenneth P. Manning, Chairman and CEO of Sensient Technologies Corporation. “We increased our dividend, repurchased shares and continued to reinvest in our business during 2012. The Company is strong and the 2013 restructuring activities will give us better access to our customers, increase our efficiencies and improve our operating margins. We continue to see growth opportunities and I am very optimistic about the Company’s future.”
The Color Group reported record revenue of $494.1 million in 2012, up from $491.9 million in 2011. Operating income grew to $94.1 million, an all-time high and an increase of 4.3% over the $90.2 million reported in 2011. In local currency, revenue increased by 4.1% and operating income grew by 8.0% during 2012. The Color Group’s operating margin was 19.0% in 2012, an increase of 70 basis points over the 2011 result of 18.3%. The record results for 2012 were driven by strong performances from the North American food and beverage business and the digital inks business.