Ingredion Completes Reorganization, Reports First Quarter Earnings Under New Segments and Raises Gui

• First quarter 2024 reported and adjusted EPS* were $3.23 and $2.08, an increase of 13% and decrease of 26%, respectively
• Completed sale of South Korea business, another step in reshaping the portfolio and redeploying assets
• Raising guidance for full-year reported EPS to be in the range of $10.35 to $11.00 and adjusted EPS to be in the range of $9.20 to $9.85
• For the second quarter 2024, the Company expects operating income to be up low to mid-single-digits

WESTCHESTER, Ill., May 08, 2024 (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 first quarter of 2024. The results, reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for the first quarter of 2024 and 2023, include items that are excluded from the non-GAAP financial measures that the Company presents.

“Against a strong comparison with last year's record first quarter performance, this quarter’s results exceeded expectations. As anticipated, our net sales volumes in the quarter improved sequentially, despite the impact of extreme cold weather on shipments in the U.S. and taking into account the sale of our South Korea business,” said Jim Zallie, Ingredion’s president and chief executive officer. “Furthermore, we maintained our gross margins above 22% as the strength of our business model effectively managed the impact of variable rate contracts which require the pass through of lower corn costs.”

“Looking forward, our Driving Growth Roadmap continues to guide our long-term value creation. Also, in support of our new Winning Aspiration, the reorganization is enabling clearer focus on the opportunities presented by our global customers to drive growth. We are encouraged by the levels of customer engagement, particularly in our texture solutions business. Additionally, we anticipate deploying cash this year toward organic investments, dividends, and a step-up in share repurchases,” Zallie concluded.

As previously disclosed, effective January 1, 2024, Ingredion will report financial and operational results under its new reporting structure. For comparison purposes, results for the first quarter of 2023 throughout this news release are unaudited and have been revised to reflect the new reporting structure in which there are three new reportable segments as described below.
*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

Other Financial Items

• At March 31, 2024, total debt and cash, including short-term investments, were $1.9 billion and $445 million, respectively, versus $2.2 billion and $409 million, respectively, at December 31, 2023.
• Reported net financing costs for the first quarter were $19 million versus $32 million for the year-ago period.
• Reported and adjusted effective tax rates for the first quarter were 21.0% and 28.4%, respectively, compared to 25.1% and 27.7%, respectively, for the year-ago period. The decrease in the reported effective tax rate was primarily driven by the low effective tax rate on the sale of our South Korea business during the first quarter of 2024.
• Capital expenditures, net were $65 million, down $10 million from the year-ago period.

Business Review

Total Ingredion

Net Sales

* Represents loss of volume due to the sale of South Korea business

Reported Operating Income

Adjusted Operating Income

Net Sales

• First quarter net sales were $1,882 million, a decrease of 12% from the year-ago period, driven by both price mix and volume declines, partially offset by foreign exchange impacts. The impact of the South Korea divestiture resulted in a $51 million decrease in sales volume for the period. Excluding foreign exchange impacts, net sales were down 13%.

Operating Income

• First quarter reported and adjusted operating income were $213 million and $216 million, respectively, a decrease of 27% for both, versus the prior year. The decrease in reported and adjusted operating income was driven by downtime associated with cold weather, hyperinflation in Argentina, and the carry-forward of higher cost inventory. Excluding foreign exchange impacts, reported and adjusted operating income were down 28% from the same period last year.

Texture & Healthful Solutions

Net Sales

Segment Operating Income

• First quarter operating income for Texture & Healthful Solutions was $74 million, a decrease of $53 million from the year-ago period, driven by less favorable price mix and the carry-forward of higher cost inventory. Excluding foreign exchange impacts, segment operating income was down 41% for the first quarter.

Food & Industrial Ingredients - LATAM

Net Sales

Segment Operating Income

• First quarter operating income for Food & Industrial Ingredients - LATAM was $101 million, a decrease of $21 million from the year-ago period, driven primarily by the devaluation of the Argentina peso on results of our Argentina joint venture as well as higher fixed costs and utilities. Excluding foreign exchange impacts, segment operating income was down 21% for the first quarter.

Food & Industrial Ingredients - U.S./Canada

Net Sales

Segment Operating Income

• First quarter operating income for Food & Industrial Ingredients - U.S./Canada was $87 million, a decrease of $5 million from the year-ago period, driven by downtime due to the impacts of cold weather, partially offset by strong industrial demand during the quarter.

All Other**

Net Sales

* Represents loss of volume due to the sale of South Korea business

Operating Income (Loss)

• First quarter operating loss for All Other was ($4) million, up $4 million from the year-ago period. The change was driven by lower operating loss for protein fortification and other factors.

**All Other consists of the businesses of multiple operating segments that are not individually or collectively classified as reportable segments. Net sales from All Other are generated primarily by sweetener and starch sales by our Pakistan business, sales of stevia and other ingredients from our PureCircle and Sugar Reduction businesses, and pea protein ingredients from our Protein Fortification business.

Dividends and Share Repurchases

In the first quarter of 2024, the Company paid $51 million in dividends to shareholders and declared a quarterly dividend of $0.78 per share that was paid on April 23, 2024. During the quarter, the Company repurchased $1 million of outstanding shares of common stock.

Updated Second Quarter and Full-Year 2024 Outlook

For the second quarter of 2024, the Company expects net sales to be flat to down low single-digits and reported and adjusted operating income to be up low to mid-single-digits.

The Company now expects its full-year 2024 reported EPS to be in the range of $10.35 to $11.00, which includes the impact of the gain on the divestiture of the South Korea business completed on February 1, 2024, and adjusted EPS to be in the range of $9.20 to $9.85.

Excluding the effects of the divestiture of the South Korea business, the Company expects full-year 2024 net sales to be flat to up low single-digits, reflecting the pass-through of lower corn values. Reported and adjusted operating income is expected to be up mid-single-digits.

Corporate costs are still expected to be up mid-single-digits.

For full-year 2024, the Company now expects a reported and adjusted effective tax rate of 24.5% to 25.5%, and 26.5% to 27.5%, respectively.

Cash from operations for full-year 2024 is still expected to be in the range of $750 million to $900 million. Capital expenditures for the full year are still expected to be approximately $340 million.

Conference Call and Webcast Details

Ingredion will host a conference call on Wednesday, May 8, 2024, 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 at https://ir.ingredionincorporated.com/events-and-presentations 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 2023 annual net sales of approximately $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.

To view full release, please visit: https://www.globenewswire.com/news-release/2024/05/08/2877588/0/en/Ingredion-Completes-Reorganization-Reports-First-Quarter-Earnings-Under-New-Segments-and-Raises-Guidance.html

CONTACT:
Investors: Noah Weiss, 773-896-5242
Media: corpcomm@ingredion.com