Ingredion Incorporated Reports Continued Strong Growth in Third Quarter 2022

• Third quarter 2022 net sales of $2,023 million, 15% higher on a reported basis and 19% higher excluding foreign exchange impacts compared to the same period in 2021
• Third quarter 2022 reported and adjusted EPS^* were $1.59 and $1.73, respectively, compared to third quarter 2021 reported and adjusted EPS of $1.75 and 1.67, respectively
• The Company updates its outlook for full-year 2022 adjusted EPS to be in the range of $7.00-$7.45 versus the previous outlook of $6.90-$7.45

WESTCHESTER, Ill., Nov. 03, 2022 (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 2022. The results, reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for 2022 and 2021, include items that are excluded from the non-GAAP financial measures that the Company presents.

“Ingredion delivered another strong quarter with net sales up 15%,” said Jim Zallie, Ingredion’s president and chief executive officer. “The results were driven by solid demand across both core and specialty ingredients combined with in-year, dynamic price management in each region led by our pricing centers of excellence. We fully offset higher input costs, expanded gross margins and delivered strong operating income growth.

“Specialty ingredients continued to grow double digits as we executed against our Driving Growth Roadmap, with net sales and gross profit margins higher across all four of our regions versus last year,” Zallie continued. “Among the highlights in the quarter, we commissioned our new Shandong, China production facility, more than doubling our local starch production capacity to serve this large and growing market. This well-timed expansion also enables us to leverage our new network capacity to support our European customers who are concerned about anticipated industry shortages for some starch products due to the severe summer drought. Additionally, supporting our sugar reduction growth platform, we received European Union approval for our bioconverted Reb M stevia solutions which further positions us to grow our PureCircle franchise.

“While the macro environment remains uncertain, our team continues to do a great job offsetting inflationary and foreign exchange headwinds while overcoming supply chain challenges to deliver growth. As we look forward, we are closely monitoring customers’ demand, and are currently working to ensure we meet their needs now and into the future,” Zallie concluded.

*Adjusted diluted earnings per share (“adjusted EPS”), adjusted operating income, adjusted effective income tax rate and adjusted diluted weighted average common shares outstanding 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; ***Related to the Argentina joint venture announcement, 2021 reported results reflect a $340 million assets held for sale impairment charge, net of a $20 million favorable adjustment made in the third quarter of 2021, including $311 million of cumulative translation losses.

Financial Highlights

• At September 30, 2022, total debt and cash including short-term investments were $2.4 billion and $298 million, respectively, versus $2.0 billion and $332 million, respectively, at December 31, 2021.
• Net financing costs for the third quarter were $24 million versus $20 million for the year-ago period.
• Reported and adjusted effective tax rates for the third quarter were 32.3 percent and 30.6 percent, respectively, compared to 22.2 percent and 21.5 percent, respectively, for the year-ago period. The increase in the reported effective income tax rate was primarily driven by U.S. international tax implications including foreign tax credits and an impairment charge adjustment in the third quarter of 2021.
• Year-to-date net capital expenditures were $196 million, up $10 million from the year-ago period.

Business Review

Total Ingredion
Net Sales

* Related to the Argentina joint venture announcement, 2021 reported results were part of the transferred business

Reported Operating Income

Adjusted Operating Income

Net Sales

• Third quarter and year-to-date net sales were up from the year-ago period. These increases were driven by strong price mix and volume, partially offset by lapping of prior year consolidated Argentina net sales volume. Excluding foreign exchange impacts, net sales were up 19% for the quarter and year-to-date.
  

Operating Income

• Third quarter reported and adjusted operating income were $182 million and $191 million, respectively, an increase of 6% and 17%, respectively, from the same period last year. The increase in reported operating income was driven by favorable price mix partially offset by the prior year favorable adjustment to the Argentina held for sale impairment. The increase in adjusted operating income was driven by strong price mix that more than offset higher corn and input costs. Excluding foreign exchange impacts, reported and adjusted operating income were up 12% and 23%, respectively, from the same period last year.
• Year-to-date reported and adjusted operating income were $605 million and $619 million, respectively, an increase of 170% and 8%, respectively, from the year-ago period. The increase in reported operating income was attributable to the prior year’s held for sale impairment charge related to the Argentina joint venture. The increase in adjusted operating income was driven by strong price mix that more than offset higher corn and input costs. Excluding foreign exchange impacts, reported and adjusted operating income were up 179% and 12%, respectively, from the same period last year.

North America
Net Sales

Segment Operating Income

• Third quarter operating income for North America was $126 million, an increase of $6 million from the year-ago period, and year-to-date operating income was $443 million, an increase of $40 million from the year-ago period. For both the quarter and year-to-date, the increase was driven by favorable price mix that more than offset higher corn and input costs.
  

South America
Net Sales

* Related to the Argentina joint venture announcement, 2021 reported results were part of the transferred business

Segment Operating Income

• Third quarter operating income for South America was $48 million, an increase of $13 million from the year-ago period, and year-to-date operating income was $125 million, an increase of $17 million from the year-ago period. For both the quarter and year-to-date, the increases were driven by favorable price mix and higher volumes that more than offset higher corn and input costs. Excluding foreign exchange impacts, segment operating income was up 43% and 16%, respectively, for the third quarter and year-to-date.
  

Asia-Pacific
Net Sales

Segment Operating Income

• Third quarter operating income for Asia-Pacific was $27 million, up $6 million from the year-ago period, and year-to-date operating income was $70 million, flat compared to the year-ago period. For both the quarter and year-to-date, the change was driven by favorable price mix that more than offset higher input costs and foreign exchange impacts. Excluding foreign exchange impacts, segment operating income was up 43% and 10%, 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 $30 million, up $7 million from the year-ago period, and year-to-date operating income was $90 million, up $4 million from the prior-year period. For both the third quarter and year-to-date, favorability in Europe was partially offset by challenges in Pakistan and foreign exchange impacts across the region. Excluding foreign exchange impacts, third quarter and year-to-date segment operating income was up 52% and 20%, respectively.
  

Dividends and Share Repurchases
For the first three quarters of 2022, the Company has paid total dividends of $133 million, and in the third quarter declared a quarterly dividend of $0.71 per share payable in the fourth quarter. This was a 9% increase from the prior dividend and is the eighth consecutive annual increase. During the quarter, the Company repurchased $29 million of outstanding shares of common stock, bringing Ingredion’s total share repurchases for the first three quarters of 2022 to $112 million. On September 26, 2022, the Company authorized a new stock repurchase program for up to 6 million shares through December 2025, replacing the previous program. Ingredion considers return of value to shareholders through cash dividends and share repurchases as part of its capital allocation strategy to support total shareholder return.

2022 Full-Year Outlook
The Company now expects its outlook for full-year 2022 reported EPS to be in the range of $6.90 to $7.20. Adjusted EPS is now expected to be in the range of $7.00 to $7.45, compared to adjusted EPS of $6.67 in 2021 and versus the previous outlook of $6.90 to $7.45. This expectation excludes acquisition-related integration and restructuring costs, as well as any potential impairment costs.

The Company expects full-year 2022 net sales to be up mid-double digits and adjusted operating income to be up low-double digits.

Compared to last year, the 2022 full-year outlook assumes the following: North America operating income is expected to be up low to mid-double digits, driven by favorable price mix more than offsetting higher corn and other input costs; South America operating income is expected to now be up high double-digits, driven by favorable price mix; Asia-Pacific operating income is expected to now be up mid-single digits, driven by PureCircle growth; and EMEA operating income is expected to now be flat to up low single-digits, driven by favorable price mix partially offset by higher input costs and foreign exchange impacts. Corporate costs are expected to be up mid-single digits.

For full-year 2022, the Company now expects a reported effective tax rate of 28.0 percent to 31.5 percent and an adjusted effective tax rate of 28.5 percent to 29.5 percent.

Cash from operations for full-year 2022 is now expected to be in the range of $225 million to $275 million, which reflects an anticipated increase in our working capital balances due to higher corn costs. Capital expenditures for the full year are expected to be between $290 million and $320 million.

Conference Call and Webcast Details
Ingredion will host a conference call on Thursday, November 3, 2022, at 8 a.m. Central Time / 9 a.m. Eastern Time, 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 2021 annual net sales of $6.9 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.

Forward-Looking Statements

This news release contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends these forward-looking statements to be covered by the safe harbor provisions for such statements.

Forward-looking statements include, among others, any statements regarding the Company’s expectations for full-year 2022 net sales, adjusted operating income, reported and adjusted EPS, segment operating income, reported and adjusted effective tax rates, cash flow from operations, and capital expenditures, and any other statements regarding the Company’s prospects and its future operations, financial condition, net sales, operating income, volumes, corporate costs, tax rates, capital expenditures, cash flows, expenses or other financial items, including management’s plans or strategies and objectives for any of the foregoing, and any assumptions, expectations or beliefs underlying any of the foregoing.

These statements can sometimes be identified by the use of forward-looking words such as “may,” “will,” “should,” “anticipate,” “assume,” “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” “continue,” “pro forma,” “forecast,” “outlook,” “propels,” “opportunities,” “potential,” “provisional,” or other similar expressions or the negative thereof. All statements other than statements of historical facts in this news release or referred to in this news release are “forward-looking statements.”

These statements are based on current circumstances or expectations, but are subject to certain inherent risks and uncertainties, many of which are difficult to predict and beyond our control. Although we believe our expectations expressed or implied in these forward-looking statements are based on reasonable assumptions, investors are cautioned that no assurance can be given that our expectations will prove correct.

Actual results and developments may differ materially from the expectations expressed in or implied by these statements, based on various risks and uncertainties, including the impact of COVID-19 on the demand for our products and our financial results; changing consumption preferences relating to high fructose corn syrup and other products we make; the effects of global economic conditions and the general political, economic, business, and market conditions that affect customers and consumers in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products, including, particularly, economic, currency, and political conditions in South America and economic and political conditions in Europe, and the impact these factors may have on our sales volumes, the pricing of our products and our ability to collect our receivables from customers; future purchases of our products by major industries which we serve and from which we derive a significant portion of our sales, including, without limitation, the food, beverage, animal nutrition, and brewing industries; the uncertainty of acceptance of products developed through genetic modification and biotechnology; our ability to develop or acquire new products and services at rates or of qualities sufficient to gain market acceptance; increased competitive and/or customer pressure in the corn-refining industry and related industries, including with respect to the markets and prices for our primary products and our co-products, particularly corn oil; the availability of raw materials, including potato starch, tapioca, gum Arabic, and the specific varieties of corn upon which some of our products are based, and our ability to pass along potential increases in the cost of corn or other raw materials to customers; energy costs and availability, including energy issues in Pakistan; our ability to contain costs, achieve budgets, and realize expected synergies, including with respect to our ability to complete planned maintenance and investment projects on time and on budget as well as with respect to freight and shipping costs; the effects of climate change and legal, regulatory, and market measures to address climate change; our ability to successfully identify and complete acquisitions or strategic alliances on favorable terms as well as our ability to successfully integrate acquired businesses or implement and maintain strategic alliances and achieve anticipated synergies with respect to all of the foregoing; operating difficulties at our manufacturing facilities; the behavior of financial and capital markets, including with respect to foreign currency fluctuations, fluctuations in interest and exchange rates and market volatility and the associated risks of hedging against such fluctuations; effects of the conflict between Russia and Ukraine, including impacts on the availability and prices of raw materials and energy supplies and volatility in exchange and interest rates; our ability to attract, develop, motivate, and maintain good relationships with our workforce; the impact on our business of natural disasters, war, threats or acts of terrorism, the outbreak or continuation of pandemics such as COVID-19, or the occurrence of other significant events beyond our control; the impact of impairment charges on our goodwill or long-lived assets; changes in government policy, law, or regulation and costs of legal compliance, including compliance with environmental regulation; changes in our tax rates or exposure to additional income tax liability; increases in our borrowing costs that could result from increased interest rates; our ability to raise funds at reasonable rates and other factors affecting our access to sufficient funds for future growth and expansion; security breaches with respect to information technology systems, processes, and sites; volatility in the stock market and other factors that could adversely affect our stock price; risks affecting the continuation of our dividend policy; and our ability to maintain effective internal control over financial reporting.

Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement as a result of new information or future events or developments. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of these and other risks, see “Risk Factors” and other information included in our Annual Report on Form 10-K for the year ended December 31, 2021, our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2022, and our subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission.

CONTACTS:
Investors: Noah Weiss, 773-896-5242
Media: Becca Hary, 708-551-2602