Ingredion Incorporated Reports Strong Third Quarter Results and Raises Full-Year Outlook

• Third quarter 2023 reported and adjusted operating income* grew 17% and 15%, respectively, compared to PY
• Third quarter 2023 reported and adjusted EPS* were $2.36 and $2.33, an increase of 48% and 35%, respectively
• The Company raises its full year adjusted EPS outlook to $9.05-$9.45, up from $8.80-$9.40

WESTCHESTER, Ill., Nov. 07, 2023 (GLOBE NEWSWIRE) -- Ingredion Incorporated (NYSE: INGR), a leading global provider of ingredient solutions to the food and beverage manufacturing industry, today reported results for the third quarter of 2023. The results, reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for the third quarter of 2023 and 2022, include items that are excluded from the non-GAAP financial measures that the Company presents.

“We continued to successfully manage our business in the third quarter with our approach to product pricing and customer mix, while also driving operational excellence and productivity to mitigate the impact of cost inflation. This enabled us to deliver 15% adjusted operating income growth for the quarter,” said Jim Zallie, Ingredion’s president and chief executive officer.

“Our business continues to demonstrate resilience, evidenced by the diversity of our markets and product portfolio, and the strength of our business model. For example, our Food Systems business in Europe demonstrated mid-single-digit volume growth from greater penetration into private label. While lower corn costs around the globe contributed to lower net sales growth, we were encouraged by sequential quarterly improvement in sales volumes despite inventory rebalancing by customers that continued to work its way through the supply chain.”

“Our updated full-year guidance reflects our confidence to deliver revenue and profit growth above our four-year growth outlook. We continue to execute against our Driving Growth Roadmap creating long-term value for shareholders, and are committed to total shareholder return as evidenced by the increase in the dividend rate and shares repurchased during the quarter,” Zallie concluded.

*Adjusted diluted earnings per share (“adjusted EPS”), adjusted operating income and adjusted effective income tax rate are non-GAAP financial measures. See section II of the Supplemental Financial Information entitled “Non-GAAP Information” following the Condensed Consolidated Financial Statements included in this news release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.

Diluted Earnings Per Share (EPS)

Estimated factors affecting changes in Reported and Adjusted EPS

**Totals may not foot due to rounding;

Financial Highlights

• At September 30, 2023, total debt and cash, including short-term investments, were $2.4 billion and $341 million, respectively, versus $2.5 billion and $239 million, respectively, at December 31, 2022.
• Reported net financing costs for the third quarter were $26 million versus $24 million for the year-ago period.
• Reported and adjusted effective tax rates for the quarter were 13.5% and 17.3%, respectively, compared to 32.3% and 30.6%, respectively, in the year-ago period. The decrease in the reported effective tax rate was primarily driven by a recently issued IRS Notice 2023-55 allowing the Company to claim certain foreign tax credits against U.S. taxes, favorable country earnings mix primarily due to Brazil tax law developments, and a related increase in the Company’s foreign-derived intangible income deduction.
• Capital expenditures, net were $231 million, up $35 million from the year-ago period.

Business Review

Total Ingredion
Net Sales

Reported Operating Income

Adjusted Operating Income

Net Sales

• Third quarter and year-to-date net sales were up from the year-ago period 1% and 5%, respectively. The increases were driven by both price mix and foreign exchange impacts, partially offset by volume declines. Excluding foreign exchange impacts, net sales were flat and up 6%, respectively, for the quarter and year-to-date.

Operating Income

• Third quarter reported and adjusted operating income were $213 million and $219 million, an increase of 17% and 15%, respectively, versus the prior year. The increases were driven by favorable price mix, partially offset by higher input costs and lower volume. Excluding foreign exchange impacts, reported and adjusted operating income were up 16% and 14%, respectively, from the same periods last year.
• Year-to-date reported and adjusted operating income were $755 million and $766 million, an increase of 25% and 24%, respectively, versus the year-ago period. The increases in reported and adjusted operating income were attributable to favorable price mix, partially offset by higher raw material and input costs and lower volume. Excluding foreign exchange impacts, reported and adjusted operating income were up 28% and 27%, respectively, from the same periods last year.

North America
Net Sales

Segment Operating Income

• Third quarter operating income for North America was $171 million, an increase of $45 million from the year-ago period, and year-to-date operating income was $575 million, an increase of $132 million from the year-ago period. The increases for both periods were driven by favorable price mix, partially offset by higher input costs and lower volume.

South America
Net Sales

Segment Operating Income

• Third quarter operating income for South America was $32 million, a decrease of $16 million from the year-ago period, and year-to-date operating income was $96 million, a decrease of $29 million from the year-ago period. The decrease in both periods was driven primarily by lower volume and higher energy costs. Excluding foreign exchange impacts, segment operating income was down -40% and -22%, respectively, for the third quarter and year-to-date.

Asia-Pacific
Net Sales

Segment Operating Income

• Third quarter operating income for Asia-Pacific was $33 million, up $6 million from the year-ago period, and year-to-date operating income was $88 million, an increase of $18 million from the year-ago period. The change in both periods was driven by favorable price mix, partially offset by higher input costs and lower volumes. Excluding foreign exchange impacts, segment operating income was up 22% and 29%, respectively, for the third quarter and year-to-date.

Europe, Middle East, and Africa (EMEA)
Net Sales

Segment Operating Income

• Third quarter operating income for EMEA was $32 million, up $2 million from the year-ago period, and year-to-date operating income was $131 million, an increase of $41 million from the year-ago period. The changes were driven by favorable price mix, partially offset by lower volume, higher raw material costs and foreign exchange impacts. Excluding foreign exchange impacts, segment operating income was up 13% and 58%, respectively, for the third quarter and year-to-date.

Dividends and Share Repurchases
In the first nine months of 2023, the Company paid $143 million in dividends to shareholders. The Company declared a quarterly dividend of $0.78 per share that was paid on October 24, 2023, which represented a 10% increase from the prior quarterly dividend rate, for the ninth consecutive annual increase. During the quarter, the Company repurchased $101 million of outstanding shares of common stock. To support total shareholder return as an important element of its capital allocation strategy, the Company is dedicated to returning value to shareholders through cash dividends and share repurchases.

Updated 2023 Full-Year Outlook
The Company expects its outlook for full-year 2023 reported and adjusted EPS to be in the range of $9.25 to $9.65 and $9.05 to $9.45, respectively. This expectation excludes acquisition-related integration and restructuring costs, as well as any potential impairment costs.

The Company now expects full-year 2023 net sales to be up mid-single-digits reflecting softer volume demand. Reported and adjusted operating income are both expected to be up high double-digits.

Compared to last year, the 2023 full-year outlook now assumes the following: North America operating income is expected to be up 20% to 25%, with price mix continuing to outpace lower volume and cost increases; South America operating income is expected to be down mid to high-teens, with higher input costs more than offsetting favorable price mix; Asia-Pacific operating income is expected to be up high double-digits, driven by favorable price mix and PureCircle growth, partially offset by higher input costs; and EMEA operating income is expected to be up 40% to 45% driven by favorable price mix. Corporate costs are expected to be up high single-digits.

For full-year 2023, the Company expects a reported and adjusted effective tax rate of 22.5% to 23.5% and 25.0% to 26.0%, respectively.

Cash from operations for full-year 2023 is now expected to be in the range of $650 million to $750 million. Capital expenditures for the full year are expected to be approximately $310 million.

Conference Call and Webcast Details
Ingredion will host a conference call on Tuesday, November 7, 2023, at 8 a.m. CT/9 a.m. ET, hosted by Jim Zallie, president and chief executive officer, and Jim Gray, executive vice president and chief financial officer. The call will be webcast in real-time and can be accessed at https://ir.ingredionincorporated.com/events-and-presentations. A presentation containing additional financial and operating information will be accessible through the Company’s website and available to download a few hours prior to the start of the call. A replay will be available for a limited time at https://ir.ingredionincorporated.com/financial-information/quarterly-results.

About the Company
Ingredion Incorporated (NYSE: INGR) headquartered in the suburbs of Chicago, is a leading global ingredient solutions provider serving customers in more than 120 countries. With 2022 annual net sales of nearly $8 billion, the Company turns grains, fruits, vegetables and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing and industrial markets. With Ingredion’s Idea Labs® innovation centers around the world and approximately 12,000 employees, the Company co-creates with customers and fulfills its purpose of bringing the potential of people, nature and technology together to make life better. Visit ingredion.com for more information and the latest Company news.