Ingredion Incorporated (NYSE: INGR), a leading global provider of
ingredient solutions to the food and beverage manufacturing
industry, today reported results for the second quarter of 2023.
The results, reported in accordance with U.S. generally accepted
accounting principles (“GAAP”) for the second quarter of 2023 and
2022, include items that are excluded from the non-GAAP financial
measures that the Company presents.
“Once again, our teams demonstrated an ability to adapt to
shifting market dynamics while continuing to drive strong profit
growth,” said Jim Zallie, Ingredion’s president and chief executive
officer. “The team’s nimbleness to adjust our production to
anticipated shifts in customer demand led to robust profit growth
and greater cash from operations. Our performance this quarter
further demonstrated the value of our diversified ingredients
portfolio where North America’s strength in core ingredients and
EMEA’s strength in specialties led to record second quarter net
sales.”
“Net sales growth of specialty ingredients was driven by price
and customer mix. Overall, Ingredion’s specialty ingredients led
total net sales growth for the Company, reflecting ongoing demand
for healthy and natural ingredients, such as solutions to enable
sugar reduction. Our differentiated high-intensity natural
sweeteners for low or no-calorie products continue to be recognized
for their uncompromised sweetness and flavor profile. Volumes
continued to be impacted by inventory rebalancing throughout the
food supply chain and shifts in consumer spending behavior.”
“Our updated full-year outlook reflects our confidence to
continue to deliver profitable growth this year and execute on our
Driving Growth Roadmap, creating long-term value for shareholders,”
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)
|
2Q22 |
2Q23 |
Reported EPS |
$2.12 |
$2.42 |
Restructuring/Impairment costs |
0.01 |
- |
Tax items and other matters |
(0.01) |
(0.10) |
Adjusted EPS** |
$2.12 |
$2.32 |
Estimated factors affecting changes in Reported and
Adjusted EPS
|
2Q23 |
Total items affecting EPS** |
0.20 |
Total operating items |
0.40 |
Margin |
0.75 |
Volume |
(0.21) |
Foreign exchange |
(0.08) |
Other income |
(0.06) |
Total non-operating items |
(0.20) |
Other non-operating income |
(0.02) |
Financing costs |
(0.15) |
Tax Rate |
(0.03) |
Shares outstanding |
(0.01) |
Non-controlling interests |
0.01 |
**Totals may not foot due to rounding;
Financial Highlights
- At June 30, 2023, total debt and cash, including short-term
investments, were $2.5 billion and $263 million, respectively,
versus $2.5 billion and $239 million, respectively, at December 31,
2022.
- Reported net financing costs for the second quarter were $30
million versus $17 million for the year-ago period.
- Reported and adjusted effective tax rates for the quarter were
25.1% and 28.3%, respectively, for the period, compared to 26.0%
and 26.8%, respectively, in the year-ago period. The decrease in
the reported effective tax rate was primarily driven by the value
of the Mexican peso against the U.S. dollar during the three months
ended June 30, 2023. The decrease was partially offset by an
increase in the Pakistan Super Tax rate.
- Capital expenditures, net were $153
million, up $16 million from the year-ago period.
Business Review
Total IngredionNet Sales
$ in millions |
2022 |
FXImpact |
Volume |
Price/mix |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
2,044 |
(47) |
(225) |
297 |
2,069 |
1% |
4% |
Year-to-Date |
3,936 |
(110) |
(341) |
721 |
4,206 |
7% |
10% |
Reported Operating Income
$ in millions |
2022 |
FXImpact |
Business Drivers |
Acquisition /Integration |
Restructuring / Impairment |
Other |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
213 |
(7) |
43 |
- |
2 |
- |
251 |
18% |
21% |
Year-to-Date |
423 |
(19) |
138 |
1 |
4 |
(5) |
542 |
28% |
33% |
Adjusted Operating Income
$ in millions |
2022 |
FXImpact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
215 |
(7) |
43 |
251 |
17% |
20% |
Year-to-Date |
428 |
(19) |
138 |
547 |
28% |
32% |
Net Sales
- Second quarter and year-to-date net sales were up from the
year-ago period 1% and 7%, respectively. The increases were driven
by both price and product mix, partially offset by volume declines,
including active customer mix management, as well as foreign
exchange impacts. Excluding foreign exchange impacts, net sales
were up 4% and 10%, respectively, for the quarter and
year-to-date.
Operating Income
- Second quarter reported and adjusted operating income were both
$251 million, an increase of 18% and 17%, respectively, versus the
prior year. The increases were driven by favorable price mix,
partially offset by higher raw material and input costs and lower
volumes. Excluding foreign exchange impacts, reported and adjusted
operating income were up 21% and 20%, respectively, from the same
period last year.
- Year-to-date reported and adjusted operating income were $542
million and $547 million, respectively, an increase of 28% for each
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 33% and 32%, respectively, from the same
period last year.
North AmericaNet Sales
$ in millions |
2022 |
FXImpact |
Volume |
PriceMix |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
1,284 |
(7) |
(124) |
189 |
1,342 |
5% |
5% |
Year-to-Date |
2,458 |
(15) |
(206) |
461 |
2,698 |
10% |
10% |
Segment Operating Income
$ in millions |
2022 |
FXImpact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
161 |
(1) |
37 |
197 |
22% |
23% |
Year-to-Date |
317 |
(3) |
90 |
404 |
27% |
28% |
- Second quarter operating income for North America was $197
million, an increase of $36 million from the year-ago period, and
year-to-date operating income was $404 million, an increase of $87
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. Excluding foreign exchange impacts,
segment operating income was up 23% and 28%, respectively, for the
second quarter and year-to-date.
South AmericaNet Sales
$ in millions |
2022 |
FXImpact |
Volume |
Pricemix |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
290 |
(10) |
(42) |
19 |
257 |
-11% |
-8% |
Year-to-Date |
542 |
(23) |
(49) |
56 |
526 |
-3% |
1% |
Segment Operating Income
$ in millions |
2022 |
FXImpact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
39 |
(1) |
(15) |
23 |
-41% |
-38% |
Year-to-Date |
77 |
(5) |
(8) |
64 |
-17% |
-10% |
- Second quarter operating income for
South America was $23 million, a decrease of $16 million from the
year-ago period, and year-to-date operating income was $64 million,
a decrease of $13 million from the year-ago period. The decrease in
both periods was driven primarily by lower volumes and higher input
costs, as well as adverse foreign exchange impact in the Argentina
joint venture results. Excluding foreign exchange impacts, segment
operating income was -38% and -10%, respectively, for the second
quarter and year-to-date.
Asia-PacificNet Sales
$ in millions |
2022 |
FXImpact |
Volume |
Pricemix |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
275 |
(8) |
(29) |
29 |
267 |
-3% |
0% |
Year-to-Date |
547 |
(21) |
(54) |
72 |
544 |
-1% |
3% |
Segment Operating Income
$ in millions |
2022 |
FXImpact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
21 |
(1) |
7 |
27 |
29% |
33% |
Year-to-Date |
43 |
(2) |
14 |
55 |
28% |
33% |
- Second quarter operating income for Asia-Pacific was $27
million, up $6 million from the year-ago period, and year-to-date
operating income was $55 million, an increase of $12 million from
the year-ago period. The change in both periods was driven by
favorable price mix, partially offset by lower volume. Excluding
foreign exchange impacts, segment operating income was up 33% for
both the quarter and year-to-date.
Europe, Middle East, and Africa
(EMEA)Net Sales
$ in millions |
2022 |
FXImpact |
Volume |
Pricemix |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
195 |
(22) |
(30) |
60 |
203 |
4% |
15% |
Year-to-Date |
389 |
(51) |
(32) |
132 |
438 |
13% |
26% |
Segment Operating Income
$ in millions |
2022 |
FXImpact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Second Quarter |
29 |
(4) |
17 |
42 |
45% |
59% |
Year-to-Date |
60 |
(9) |
48 |
99 |
65% |
80% |
- Second quarter operating income for EMEA was $42 million, up
$13 million from the year-ago period, and year-to-date operating
income was $99 million, an increase of $39 million from the
year-ago period. The changes were driven by favorable price mix,
partially offset by lower volumes, higher input costs and foreign
exchange impacts. Excluding foreign exchange impacts, segment
operating income was up 59% and 80%, respectively, for the second
quarter and year-to-date.
Dividends and Share RepurchasesIn the first
half of 2023, the Company paid $95 million in dividends to
shareholders and announced a quarterly dividend of $0.71 per share
that was paid on July 25, 2023. 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.
Third Quarter and Updated 2023 Full-Year
OutlookFor the third quarter of 2023, the Company expects
net sales growth to be up mid-single digits and operating income to
be up high-single digits to low double-digits compared to the third
quarter of 2022.
The Company expects its outlook for full-year 2023 reported and
adjusted EPS to be in the range of $8.95 to $9.55 and $8.80 to
$9.40, 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 to
high 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 volumes and
increasing costs; South America operating income is expected to be
down mid to high-single digits, 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 50% 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 25.5% to 27.0% and 27.0% to 28.5%,
respectively.
Cash from operations for full-year 2023 is now expected to be in
the range of $600 million to $700 million. Capital expenditures for
the full year are expected to be approximately $300 million.
Conference Call and Webcast DetailsIngredion
will host a conference call on Tuesday, August 8, 2023, 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 CompanyIngredion 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 $7.9 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 third quarter 2023 net
sales and operating income, full-year 2023 reported and adjusted
EPS, net sales, reported and adjusted operating income, segment
operating income, corporate costs, reported and adjusted effective
tax rate, cash from operations, capital expenditures, and any other
statements regarding the Company’s prospects and its future
operations, financial condition, volumes, 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 therein 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 reflected 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 effects of the conflict
between Russia and Ukraine, including the impacts on the
availability and prices of raw materials and energy supplies and
volatility in foreign exchange and interest rates; 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, 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 impact of COVID-19 on our business, the demand for
our products and our financial results; 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; price fluctuations, supply
chain disruptions, and shortages affecting inputs to our production
processes and delivery channels, including raw materials, energy
costs and availability and freight and logistics; 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; operating
difficulties at our manufacturing facilities and liabilities
relating to product safety and quality; 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; economic, political
and other risks inherent in conducting operations in foreign
countries and in foreign currencies; 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; the failure to maintain satisfactory labor relations;
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, 2022, and our
subsequent reports on Form 10-Q and Form 8-K filed with the
Securities and Exchange Commission.
Ingredion Incorporated |
Condensed Consolidated Statements of Income |
(Unaudited) |
|
(in
millions, except per share amounts) |
|
Three Months EndedJune 30, |
|
Change% |
|
Six Months EndedJune 30, |
|
Change% |
|
|
|
2023 |
|
|
2022 |
|
|
|
|
2023 |
|
|
2022 |
|
|
Net sales |
|
$ |
2,069 |
|
$ |
2,044 |
|
|
1 |
% |
|
$ |
4,206 |
|
$ |
3,936 |
|
|
7 |
% |
Cost of sales |
|
|
1,628 |
|
|
1,654 |
|
|
|
|
|
3,278 |
|
|
3,167 |
|
|
|
Gross profit |
|
|
441 |
|
|
390 |
|
|
13 |
% |
|
|
928 |
|
|
769 |
|
|
21 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
188 |
|
|
179 |
|
|
5 |
% |
|
|
375 |
|
|
348 |
|
|
8 |
% |
Other operating expense
(income) |
|
|
2 |
|
|
(4 |
) |
|
|
|
|
11 |
|
|
(6 |
) |
|
|
Restructuring/impairment
charges |
|
|
— |
|
|
2 |
|
|
|
|
|
— |
|
|
4 |
|
|
|
Operating income |
|
|
251 |
|
|
213 |
|
|
18 |
% |
|
|
542 |
|
|
423 |
|
|
28 |
% |
Financing costs |
|
|
30 |
|
|
17 |
|
|
|
|
|
62 |
|
|
41 |
|
|
|
Other non-operating expense
(income) |
|
|
2 |
|
|
— |
|
|
|
|
|
2 |
|
|
(1 |
) |
|
|
Income before income
taxes |
|
|
219 |
|
|
196 |
|
|
12 |
% |
|
|
478 |
|
|
383 |
|
|
25 |
% |
Provision for income
taxes |
|
|
55 |
|
|
51 |
|
|
|
|
|
120 |
|
|
105 |
|
|
|
Net income |
|
|
164 |
|
|
145 |
|
|
13 |
% |
|
|
358 |
|
|
278 |
|
|
29 |
% |
Less: Net income attributable
to non-controlling interests |
|
|
1 |
|
|
3 |
|
|
|
|
|
4 |
|
|
6 |
|
|
|
Net income attributable to
Ingredion |
|
$ |
163 |
|
$ |
142 |
|
|
15 |
% |
|
$ |
354 |
|
$ |
272 |
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
attributable to Ingredion common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
66.3 |
|
|
66.4 |
|
|
|
|
|
66.2 |
|
|
66.6 |
|
|
|
Diluted |
|
|
67.3 |
|
|
67.1 |
|
|
|
|
|
67.2 |
|
|
67.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share of
Ingredion: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.46 |
|
$ |
2.14 |
|
|
15 |
% |
|
$ |
5.35 |
|
$ |
4.08 |
|
|
31 |
% |
Diluted |
|
$ |
2.42 |
|
$ |
2.12 |
|
|
14 |
% |
|
$ |
5.27 |
|
$ |
4.04 |
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion Incorporated |
Condensed Consolidated Balance Sheets |
|
(in
millions, except share and per share amounts) |
|
June 30, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
257 |
|
|
$ |
236 |
|
Short-term investments |
|
|
6 |
|
|
|
3 |
|
Accounts receivable – net |
|
|
1,366 |
|
|
|
1,411 |
|
Inventories |
|
|
1,618 |
|
|
|
1,597 |
|
Prepaid expenses |
|
|
64 |
|
|
|
62 |
|
Total current assets |
|
|
3,311 |
|
|
|
3,309 |
|
|
|
|
|
|
Property, plant and equipment – net |
|
|
2,414 |
|
|
|
2,407 |
|
Intangible assets – net |
|
|
1,311 |
|
|
|
1,301 |
|
Other assets |
|
|
564 |
|
|
|
544 |
|
Total
assets |
|
$ |
7,600 |
|
|
$ |
7,561 |
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
Current liabilities |
|
|
|
|
Short-term borrowings |
|
$ |
522 |
|
|
$ |
543 |
|
Accounts payable and accrued liabilities |
|
|
1,198 |
|
|
|
1,339 |
|
Total current liabilities |
|
|
1,720 |
|
|
|
1,882 |
|
|
|
|
|
|
Long-term debt |
|
|
1,939 |
|
|
|
1,940 |
|
Other non-current liabilities |
|
|
466 |
|
|
|
477 |
|
Total liabilities |
|
|
4,125 |
|
|
|
4,299 |
|
|
|
|
|
|
Share-based payments subject to redemption |
|
|
43 |
|
|
|
48 |
|
Redeemable non-controlling interests |
|
|
43 |
|
|
|
51 |
|
|
|
|
|
|
Equity |
|
|
|
|
Ingredion stockholders' equity: |
|
|
|
|
Preferred stock — authorized 25,000,000 shares — $0.01 par value,
none issued |
|
|
- |
|
|
|
- |
|
Common stock — authorized 200,000,000 shares — $0.01 par value,
77,810,875 issued at June 30, 2023 and December 31, 2022 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
1,142 |
|
|
|
1,132 |
|
Less: Treasury stock (common stock: 11,688,205 and 12,116,920
shares at June 30, 2023 and December 31, 2022,
respectively) at cost |
|
|
(1,116 |
) |
|
|
(1,148 |
) |
Accumulated other comprehensive loss |
|
|
(1,119 |
) |
|
|
(1,048 |
) |
Retained earnings |
|
|
4,469 |
|
|
|
4,210 |
|
Total Ingredion stockholders' equity |
|
|
3,377 |
|
|
|
3,147 |
|
Non-redeemable non-controlling interests |
|
|
12 |
|
|
|
16 |
|
Total equity |
|
|
3,389 |
|
|
|
3,163 |
|
|
|
|
|
|
Total liabilities and
equity |
|
$ |
7,600 |
|
|
$ |
7,561 |
|
|
Ingredion Incorporated |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
|
(in
millions) |
|
Six Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
Cash provided by (used for) operating
activities: |
|
|
|
|
Net income |
|
$ |
358 |
|
|
$ |
278 |
|
Adjustments to reconcile net income to net cash provided by
operatingactivities: |
|
|
|
|
Depreciation and amortization |
|
|
109 |
|
|
|
107 |
|
Mechanical stores expense |
|
|
33 |
|
|
|
27 |
|
Margin accounts |
|
|
(10 |
) |
|
|
(5 |
) |
Changes in other trade working capital |
|
|
(218 |
) |
|
|
(454 |
) |
Other |
|
|
7 |
|
|
|
43 |
|
Cash provided by (used for) operating activities |
|
|
279 |
|
|
|
(4 |
) |
|
|
|
|
|
Cash used for
investing activities: |
|
|
|
|
Capital expenditures and mechanical stores purchases |
|
|
(154 |
) |
|
|
(144 |
) |
Proceeds from disposal of manufacturing facilities and
properties |
|
|
1 |
|
|
|
7 |
|
Other |
|
|
(7 |
) |
|
|
1 |
|
Cash used for investing activities |
|
|
(160 |
) |
|
|
(136 |
) |
|
|
|
|
|
Cash (used for)
provided by financing activities: |
|
|
|
|
Proceeds from borrowings, net |
|
|
(17 |
) |
|
|
38 |
|
Commercial paper borrowings, net |
|
|
— |
|
|
|
308 |
|
Repurchases of common stock, net |
|
|
— |
|
|
|
(83 |
) |
Issuances (settlements) of common stock for share-based
compensation, net |
|
|
15 |
|
|
|
(1 |
) |
Purchases of non-controlling interests |
|
|
— |
|
|
|
(27 |
) |
Dividends paid, including to non-controlling interests |
|
|
(95 |
) |
|
|
(90 |
) |
Cash (used for) provided by financing activities |
|
|
(97 |
) |
|
|
145 |
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash |
|
|
(1 |
) |
|
|
(15 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
21 |
|
|
|
(10 |
) |
Cash and cash equivalents, beginning of period |
|
|
236 |
|
|
|
328 |
|
Cash and cash equivalents, end of period |
|
$ |
257 |
|
|
$ |
318 |
|
Ingredion Incorporated |
Supplemental Financial Information |
(Unaudited) |
|
I.
Geographic Information of Net Sales and Operating
Income |
|
(in millions, except for
percentages) |
Three Months EndedJune 30, |
|
Change |
|
ChangeExcl. FX |
|
Six Months EndedJune 30, |
|
Change |
|
ChangeExcl. FX |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
$ |
1,342 |
|
|
$ |
1,284 |
|
|
5 |
% |
|
5 |
% |
|
$ |
2,698 |
|
|
$ |
2,458 |
|
|
10 |
% |
|
10 |
% |
South America |
|
257 |
|
|
|
290 |
|
|
(11 |
)% |
|
(8 |
)% |
|
|
526 |
|
|
|
542 |
|
|
(3 |
)% |
|
1 |
% |
Asia-Pacific |
|
267 |
|
|
|
275 |
|
|
(3 |
)% |
|
— |
% |
|
|
544 |
|
|
|
547 |
|
|
(1 |
)% |
|
3 |
% |
EMEA |
|
203 |
|
|
|
195 |
|
|
4 |
% |
|
15 |
% |
|
|
438 |
|
|
|
389 |
|
|
13 |
% |
|
26 |
% |
Total Net Sales |
$ |
2,069 |
|
|
$ |
2,044 |
|
|
1 |
% |
|
4 |
% |
|
$ |
4,206 |
|
|
$ |
3,936 |
|
|
7 |
% |
|
10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
$ |
197 |
|
|
$ |
161 |
|
|
22 |
% |
|
23 |
% |
|
$ |
404 |
|
|
$ |
317 |
|
|
27 |
% |
|
28 |
% |
South America |
|
23 |
|
|
|
39 |
|
|
(41 |
)% |
|
(38 |
)% |
|
|
64 |
|
|
|
77 |
|
|
(17 |
)% |
|
(10 |
)% |
Asia-Pacific |
|
27 |
|
|
|
21 |
|
|
29 |
% |
|
33 |
% |
|
|
55 |
|
|
|
43 |
|
|
28 |
% |
|
33 |
% |
EMEA |
|
42 |
|
|
|
29 |
|
|
45 |
% |
|
59 |
% |
|
|
99 |
|
|
|
60 |
|
|
65 |
% |
|
80 |
% |
Corporate |
|
(38 |
) |
|
|
(35 |
) |
|
(9 |
)% |
|
(9 |
)% |
|
|
(75 |
) |
|
|
(69 |
) |
|
(9 |
)% |
|
(9 |
)% |
Sub-total |
|
251 |
|
|
|
215 |
|
|
17 |
% |
|
20 |
% |
|
|
547 |
|
|
|
428 |
|
|
28 |
% |
|
32 |
% |
Acquisition/integration costs |
|
– |
|
|
|
– |
|
|
|
|
|
|
|
– |
|
|
|
(1 |
) |
|
|
|
|
Restructuring/impairment charges |
|
– |
|
|
|
(2 |
) |
|
|
|
|
|
|
– |
|
|
|
(4 |
) |
|
|
|
|
Other matters |
|
– |
|
|
|
– |
|
|
|
|
|
|
|
(5 |
) |
|
|
– |
|
|
|
|
|
Total Operating Income |
$ |
251 |
|
|
$ |
213 |
|
|
18 |
% |
|
21 |
% |
|
$ |
542 |
|
|
$ |
423 |
|
|
28 |
% |
|
33 |
% |
II. Non-GAAP Information
To supplement the consolidated financial results prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”), we use non-GAAP historical financial measures, which
exclude certain GAAP items such as acquisition and integration
costs, restructuring and impairment costs, Mexico tax (benefit)
provision, and other specified items. We generally use the term
“adjusted” when referring to these non-GAAP amounts.
Management uses non-GAAP financial measures internally for
strategic decision making, forecasting future results and
evaluating current performance. By disclosing non-GAAP financial
measures, management intends to provide investors with a more
meaningful, consistent comparison of our operating results and
trends for the periods presented. These non-GAAP financial measures
are used in addition to and in conjunction with results presented
in accordance with GAAP and reflect an additional way of viewing
aspects of our operations that, when viewed with our GAAP results,
provide a more complete understanding of factors and trends
affecting our business. These non-GAAP measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP.
Non-GAAP financial measures are not prepared in accordance with
GAAP; so our non-GAAP information is not necessarily comparable to
similarly titled measures presented by other companies. A
reconciliation of each non-GAAP financial measure to the most
comparable GAAP measure is provided in the tables below.
Ingredion Incorporated |
Reconciliation of GAAP Net Income attributable to Ingredion
and Diluted Earnings Per Share ("EPS") to |
Non-GAAP Adjusted Net Income attributable to Ingredion and
Adjusted Diluted EPS |
(Unaudited) |
|
|
Three Months EndedJune 30,
2023 |
|
Three Months EndedJune 30,
2022 |
|
Six Months EndedJune 30,
2023 |
|
Six Months EndedJune 30,
2022 |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
Net income attributable to Ingredion |
$ |
163 |
|
|
$ |
2.42 |
|
|
$ |
142 |
|
|
$ |
2.12 |
|
|
$ |
354 |
|
|
$ |
5.27 |
|
|
$ |
272 |
|
|
$ |
4.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
— |
|
|
|
— |
|
|
|
3 |
|
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4 |
|
|
|
0.06 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
(7 |
) |
|
|
(0.10 |
) |
|
|
— |
|
|
|
— |
|
|
|
(14 |
) |
|
|
(0.21 |
) |
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (v) |
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
— |
|
|
|
— |
|
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income
attributable to Ingredion |
$ |
156 |
|
|
$ |
2.32 |
|
|
$ |
142 |
|
|
$ |
2.12 |
|
|
$ |
344 |
|
|
$ |
5.12 |
|
|
$ |
274 |
|
|
$ |
4.06 |
|
Net income, EPS and tax rates may not foot or recalculate due to
rounding.
II. Non-GAAP Information (continued)
Notes(i) During the six months ended June 30, 2022, we recorded
pre-tax acquisition and integration charges of $1 million for our
acquisition and integration of KaTech, as well as our investment in
the Argentina joint venture.
(ii) During the three and six months ended June 30, 2022,
we recorded $2 million and $4 million, respectively, of
remaining pre-tax restructuring-related charges for the Cost Smart
program.
(iii) During the six months ended June 30, 2023, we recorded
pre-tax charges of $5 million primarily related to the impacts
of a U.S.-based work stoppage.
(iv) We recorded tax benefits of $7 million and $14 million
for the three and six months ended June 30, 2023,
respectively, and a tax benefit of $1 million for the six months
ended June 30, 2022, as a result of the movement of the Mexican
peso against the U.S. dollar and its impact on the remeasurement of
our Mexico financial statements during the periods.
(v) This item relates to net prior year tax liabilities and
contingencies, impacts from the Pakistan Super Tax and tax results
of the above non-GAAP addbacks. These were offset by interest on
previously recognized tax benefits for certain Brazilian local
incentives which were previously taxable.
Ingredion Incorporated |
Reconciliation of GAAP Operating Income to Non-GAAP
Adjusted Operating Income |
(Unaudited) |
|
(in
millions, pre-tax) |
Three Months Ended June 30, |
|
Six Months Ended June 30, |
2023 |
|
2022 |
|
2023 |
|
2022 |
Operating income |
$ |
251 |
|
$ |
213 |
|
$ |
542 |
|
$ |
423 |
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
— |
|
|
— |
|
|
— |
|
|
1 |
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
— |
|
|
2 |
|
|
— |
|
|
4 |
|
|
|
|
|
|
|
|
Other matters (iii) |
|
— |
|
|
— |
|
|
5 |
|
|
— |
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating
income |
$ |
251 |
|
$ |
215 |
|
$ |
547 |
|
$ |
428 |
For notes (i) through (iii), see notes (i) through (iii)
included in the Reconciliation of GAAP Net Income attributable to
Ingredion and Diluted EPS to Non-GAAP Adjusted Net Income
attributable to Ingredion and Adjusted Diluted EPS.
II. Non-GAAP Information
(continued)
Ingredion Incorporated |
Reconciliation of GAAP Effective Income Tax Rate to
Non-GAAP Adjusted Effective Income Tax Rate |
(Unaudited) |
|
(in
millions) |
|
Three Months Ended June 30, 2023 |
|
Six Months Ended June 30, 2023 |
|
Income beforeIncome Taxes
(a) |
|
Provision forIncome Taxes
(b) |
|
Effective IncomeTax Rate
(b/a) |
|
Income beforeIncome Taxes
(a) |
|
Provision forIncome Taxes
(b) |
|
Effective IncomeTax Rate
(b/a) |
As Reported |
|
$ |
219 |
|
$ |
55 |
|
25.1 |
% |
|
$ |
478 |
|
$ |
120 |
|
25.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
— |
|
|
— |
|
|
|
|
5 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
— |
|
|
7 |
|
|
|
|
— |
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
219 |
|
$ |
62 |
|
28.3 |
% |
|
$ |
483 |
|
$ |
135 |
|
28.0 |
% |
(in
millions) |
|
Three Months Ended June 30, 2022 |
|
Six months ended June 30, 2022 |
|
Income beforeIncome Taxes
(a) |
|
Provision forIncome Taxes
(b) |
|
Effective IncomeTax Rate
(b/a) |
|
Income beforeIncome Taxes
(a) |
|
Provision forIncome Taxes
(b) |
|
Effective IncomeTax Rate
(b/a) |
As Reported |
|
$ |
196 |
|
$ |
51 |
|
26.0 |
% |
|
$ |
383 |
|
$ |
105 |
|
27.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
|
- |
|
|
- |
|
|
|
|
1 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
2 |
|
|
1 |
|
|
|
|
4 |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
- |
|
|
- |
|
|
|
|
- |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (v) |
|
|
- |
|
|
1 |
|
|
|
|
- |
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
198 |
|
$ |
53 |
|
26.8 |
% |
|
$ |
388 |
|
$ |
108 |
|
27.8 |
% |
For notes (i) through (v), see notes (i) through (v) included in
the Reconciliation of GAAP Net Income attributable to Ingredion and
Diluted EPS to Non-GAAP Adjusted Net Income attributable to
Ingredion and Adjusted Diluted EPS.
II. Non-GAAP Information
(continued)
Ingredion Incorporated |
Reconciliation of Expected GAAP Diluted Earnings per Share
("GAAP EPS") |
to Expected Adjusted Diluted Earnings per Share ("Adjusted
EPS") |
(Unaudited) |
|
|
Expected EPS Rangefor Full-Year
2023 |
Low End ofGuidance |
|
High End ofGuidance |
GAAP EPS |
$ |
8.95 |
|
|
$ |
9.55 |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
Other matters (i) |
|
0.06 |
|
|
|
0.06 |
|
|
|
|
|
Tax item - Mexico (ii) |
|
(0.21 |
) |
|
|
(0.21 |
) |
|
|
|
|
Adjusted EPS |
$ |
8.80 |
|
|
$ |
9.40 |
|
Above is a reconciliation of our expected full-year 2023 diluted
EPS to our expected full-year 2023 adjusted diluted EPS. The
amounts above may not reflect certain future charges, costs and/or
gains that are inherently difficult to predict and estimate due to
their unknown timing, effect and/or significance. These amounts
include, but are not limited to, adjustments to GAAP EPS for
acquisition and integration costs, impairment and restructuring
costs, and certain other items. We generally exclude these
adjustments from our adjusted EPS guidance. For these reasons, we
are more confident in our ability to forecast adjusted EPS than we
are in our ability to forecast GAAP EPS.
These adjustments to GAAP EPS for 2023 include the
following:
- Charges primarily related to the
impacts of a U.S.-based work stoppage.
- Tax benefit as a
result of the movement of the Mexican peso against the U.S. dollar
and its impact on the remeasurement of the Company's Mexico
financial statements during the period.
II. Non-GAAP Information
(continued)
Ingredion Incorporated |
Reconciliation of Expected GAAP Effective Tax Rate ("GAAP
ETR") |
to Expected Adjusted Effective Tax Rate ("Adjusted
ETR") |
(Unaudited) |
|
|
Expected Effective Tax Rate Rangefor
Full-Year 2023 |
Low End ofGuidance |
|
High End ofGuidance |
GAAP ETR |
25.5 |
% |
|
27.0 |
% |
|
|
|
|
Add: |
|
|
|
|
|
|
|
Other matters (i) |
— |
% |
|
— |
% |
|
|
|
|
Tax item - Mexico (ii) |
1.5 |
% |
|
1.5 |
% |
|
|
|
|
Adjusted ETR |
27.0 |
% |
|
28.5 |
% |
Above is a reconciliation of our expected full-year 2023 GAAP
ETR to our expected full-year 2023 adjusted ETR. The amounts above
may not reflect certain future charges, costs and/or gains that are
inherently difficult to predict and estimate due to their unknown
timing, effect and/or significance. These amounts include, but are
not limited to, adjustments to GAAP ETR for other matters and
certain other tax items. We generally exclude these adjustments
from our adjusted ETR guidance. For these reasons, we are more
confident in our ability to forecast adjusted ETR than we are in
our ability to forecast GAAP ETR.
These adjustments to GAAP ETR for 2023 include the
following:
- Tax impact primarily on charges
related to the impacts of a U.S.-based work stoppage.
- Tax benefit as a result of the
movement of the Mexican peso against the U.S. dollar and its impact
to the remeasurement of our Mexico financial statements during the
period.
CONTACTS:Investors: Noah
Weiss, 773-896-5242Media: Becca Hary,
708-551-2602
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