Ingredion Incorporated (NYSE: INGR), a leading global provider of
ingredient solutions to the food and beverage manufacturing
industry, today reported its 2024 third quarter results.
“Texture & Healthful Solutions exhibited robust sales volume
growth in the third quarter, which supported double-digit operating
income growth for the segment," said Jim Zallie, president and CEO
of Ingredion. “Additionally, the food and industrial businesses
continued to generate significant operating profit growth. Of note,
in our Food & Industrial Ingredients LATAM segment, the
exceptional operating profit growth reflects recovery from last
year’s transition to a more sustainable energy source in Brazil as
well as continued strength in Mexico.”
"11% sales volume growth in Texture & Healthful Solutions
was fueled by solid U.S. market performance in categories such as
savory, packaged meals, and frozen prepared foods. Moreover, our
European sales volume grew double-digits from an uptick in consumer
buying behavior.”
"Operating excellence and contract management across each of our
Food and Industrial Ingredients segments were also key drivers of
exceptional profit growth. As we continued to face input and wage
cost inflation, our sales teams worked successfully with customers
to adjust multi-year contract pricing, which supported margin
recovery. Furthermore, volume recovery improved fixed cost
absorption, and our operations and procurement teams have driven
structural savings, which is complementing the savings coming from
our Cost2Compete program.”
“The strong performance across all segments enabled us to
deliver our highest-ever third quarter operating income performance
along with strong cash flow. We anticipate this momentum carrying
through quarter four and into 2025. We believe our Driving Growth
Roadmap continues to guide long-term value creation for our
shareholders as we realize the benefits of our new segmentation to
deepen our customer relationships and drive innovative solutions,”
Zallie concluded.
* Reported results are in accordance with U.S. generally
accepted accounting principles “GAAP.” Adjusted financial measures
are non-GAAP financial measures. See “II. Non-GAAP Information” in
the Supplemental Financial Information that follows the Condensed
Consolidated Financial Statements for a reconciliation of non-GAAP
financial measures to the most directly comparable GAAP
measures.
Diluted Earnings Per Share (EPS)
|
3Q23 |
3Q24 |
Reported Diluted EPS |
$2.36 |
$2.83 |
Impairment charges |
|
0.10 |
|
0.08 |
Restructuring and
resegmentation costs |
|
— |
|
0.08 |
Net gain on sale of
business |
|
— |
|
(0.21) |
Tax items and other
matters |
|
(0.13) |
|
0.27 |
Adjusted Diluted
EPS** |
$2.33 |
$3.05 |
|
|
|
Estimated factors affecting changes in Reported and
Adjusted EPS
|
Third Quarter |
Total change in
adjusted EPS** |
0.72 |
Total operating items |
0.77 |
Margin |
0.93 |
Volume |
(0.12) |
Foreign exchange |
(0.01) |
Other income |
(0.03) |
Total non-operating items |
(0.05) |
Other non-operating income |
0.01 |
Financing costs |
0.30 |
Tax rate |
(0.37) |
Shares outstanding |
0.02 |
Non-controlling interests |
(0.01) |
|
|
** Totals may not sum due to rounding
Other Financial Items
- At September 30, 2024, total debt
was $1.8 billion, and cash, including short-term investments,
was $884 million, respectively, versus $2.2 billion and
$409 million at December 31, 2023.
- In the third quarter, reported net
financing costs were $1 million, compared to $26 million for
the year-ago third quarter, driven by lower net interest expense
and benefited by $10 million of favorable foreign exchange
impacts.
- Reported and adjusted effective tax rates for the quarter were
30.8% and 26.9%, respectively, compared to 13.5% and 17.3% for the
year-ago period. The increase in the reported effective tax rate
was primarily driven by an adverse ruling that generated a
multi-year tax contingency in the third quarter of 2024, as well as
lapping a prior year retroactive law change to claim certain
multi-year foreign tax credits against U.S taxes, and the change in
value of the Mexican peso against the U.S. dollar. These impacts
were partially offset by the tax treatment on the sale of our South
Korea business during 2024.
- Net capital expenditures were $170
million year-to-date through September 30, 2024.
Business Review
Total Ingredion
Net Sales
$ in millions |
2023 |
FXImpact |
Volume |
S. Korea Volume* |
PriceMix |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
2,033 |
(20) |
86 |
(79) |
(150) |
1,870 |
(8%) |
(7%) |
Year-to-Date |
6,239 |
(19) |
150 |
(210) |
(530) |
5,630 |
(10%) |
(9%) |
|
|
|
|
|
|
|
|
|
*Represents loss of volume due to the sale of our South Korea
business completed on February 1, 2024
Reported Operating Income
$ in millions |
2023 |
FX Impact |
BusinessDrivers |
Restructuring/ Impairment |
Other |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
213 |
(1) |
64 |
(4) |
(4) |
268 |
26% |
26% |
Year-to-Date |
755 |
2 |
— |
(28) |
(8) |
721 |
(5%) |
(5%) |
|
|
|
|
|
|
|
|
|
Adjusted Operating Income
$ in millions |
2023 |
FX Impact |
BusinessDrivers |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
219 |
(1) |
64 |
282 |
29% |
29% |
Year-to-Date |
766 |
2 |
— |
768 |
—% |
—% |
|
|
|
|
|
|
|
Net Sales
- Third quarter net sales were down 8%
and year-to-date net sales were down 10% from a year ago. The
decreases were driven by price mix primarily from lower raw
material costs and lost sales volume from the sale of our South
Korea business, partially offset by volume increases.
Operating Income
- Third quarter reported operating
income was $268 million and adjusted operating income was $282
million. The difference in reported versus adjusted operating
income was primarily attributable to the impairment charge related
to our manufacturing facility in the United Kingdom, where we plan
to stop production in the first quarter of next year. Excluding
foreign exchange impacts, reported operating income was up 26% and
adjusted operating income was up 29% from a year ago.
- Year-to-date
reported operating income was $721 million and adjusted operating
income was $768 million. The difference in reported versus adjusted
operating income year-to-date was primarily attributable to
impairment of an equity method investment and the impairment
related to our manufacturing facility in the United Kingdom.
Excluding foreign exchange impacts, reported operating income was
down 5% and adjusted operating income was flat from a year
ago.
Texture & Healthful Solutions
Net Sales
$ in millions |
2023 |
FXImpact |
Volume |
PriceMix |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
599 |
4 |
64 |
(67) |
600 |
—% |
(1%) |
Year-to-Date |
1,882 |
(11) |
114 |
(200) |
1,785 |
(5%) |
(5%) |
|
|
|
|
|
|
|
|
Segment Operating Income
$ in millions |
2023 |
FX Impact |
BusinessDrivers |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
86 |
— |
10 |
96 |
12% |
12% |
Year-to-Date |
318 |
(2) |
(60) |
256 |
(19%) |
(19%) |
|
|
|
|
|
|
|
- Third quarter operating income for
Texture & Healthful Solutions was $96 million, an increase of
$10 million from a year ago, driven by lower input costs and
recovering volumes, partially offset by unfavorable price mix.
Year-to-date operating income was $256 million, a decrease of $62
million driven by unfavorable price mix and the carry-forward of
higher cost inventory, partially offset by improved volumes.
Excluding foreign exchange impacts, segment operating income was up
12% for the quarter and down 19% year-to-date from a year ago.
Food & Industrial Ingredients - LATAM
Net Sales
$ in millions |
2023 |
FXImpact |
Volume |
PriceMix |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
658 |
(22) |
6 |
(22) |
620 |
(6%) |
(2%) |
Year-to-Date |
1,991 |
6 |
18 |
(149) |
1,866 |
(6%) |
(7%) |
|
|
|
|
|
|
|
|
Segment Operating Income
$ in millions |
2023 |
FX Impact |
BusinessDrivers |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
104 |
(1) |
28 |
131 |
26% |
27% |
Year-to-Date |
327 |
5 |
30 |
362 |
11% |
9% |
|
|
|
|
|
|
|
- Third quarter operating income for
Food & Industrial Ingredients - LATAM was $131 million, an
increase of $27 million from a year ago, and year-to-date operating
income was $362 million, an increase of $35 million from a year
ago. The increase in both periods was primarily attributable to
lower input costs and catch-up pricing on multi-year contracts.
Excluding foreign exchange impacts, segment operating income was up
27% for the quarter and up 9% year-to-date from a year ago.
Food & Industrial Ingredients -
U.S./Canada
Net Sales
$ in millions |
2023 |
FX Impact |
Volume |
PriceMix |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
599 |
(2) |
4 |
(53) |
548 |
(9%) |
(8%) |
Year-to-Date |
1,811 |
(4) |
(9) |
(154) |
1,644 |
(9%) |
(9%) |
|
|
|
|
|
|
|
|
Segment Operating Income
$ in millions |
2023 |
FX Impact |
BusinessDrivers |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
79 |
— |
20 |
99 |
25% |
25% |
Year-to-Date |
251 |
(1) |
41 |
291 |
16% |
16% |
|
|
|
|
|
|
|
- Third quarter operating income for
Food & Industrial Ingredients - U.S./Canada was $99 million, up
$20 million from a year ago, and year-to-date operating income was
$291 million, up $40 million from a year ago. The increase in both
periods was driven by lower raw material and input costs, partially
offset by price mix. Excluding foreign exchange impacts, segment
operating income was up 25% for the quarter and up 16% year-to-date
from a year ago.
All Other**
Net Sales
$ in millions |
2023 |
FX Impact |
Volume |
S. Korea Volume* |
PriceMix |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
177 |
— |
12 |
(79) |
(8) |
102 |
(42%) |
(42%) |
Year-to-Date |
555 |
(10) |
27 |
(210) |
(27) |
335 |
(40%) |
(38%) |
|
|
|
|
|
|
|
|
|
* Represents loss of volume due to the sale of our South Korea
business
Segment Operating Income (Loss)
$ in millions |
2023 |
FX Impact |
BusinessDrivers |
2024 |
Change |
Changeexcl. FX |
Third Quarter |
(1) |
— |
(3) |
(4) |
N/M |
N/M |
Year-to-Date |
(6) |
— |
(12) |
(18) |
N/M |
N/M |
|
|
|
|
|
|
|
- Third quarter operating (loss) for All
Other was $4 million, up $3 million from the prior year, and
year-to-date operating (loss) was $18 million, up $12 million from
the prior year, primarily driven by the sale of our South Korea
business.
** 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
Year-to-date through September 30, 2024, the Company paid
$156 million in dividends to shareholders. On August 27, 2024, the
Company announced a quarterly dividend of $0.80 per share that was
paid on October 22, 2024 (compared to the prior quarterly dividend
of $0.78 per share), which represents the 10th consecutive annual
increase. During the quarter, the Company repurchased $21 million
of outstanding shares of common stock, bringing the year-to-date
total of repurchased shares to $87 million.
Updated Full-Year 2024 Outlook
The Company expects full-year 2024 net sales to be down
mid-single-digits, excluding the effects of the sale of our South
Korea business completed on February 1, 2024.
Reported operating income is expected to be flat and adjusted
operating income is now expected to be up high single-digits,
excluding the effects of the sale of our South Korea business.
The Company expects its full-year 2024 reported EPS to be in the
range of $10.60 to $10.90, which includes the impact of the gain on
the sale of our South Korea business. The Company now anticipates
adjusted EPS to be in the range of $10.35 to $10.65.
Corporate costs are expected to be flat to the prior year.
For full-year 2024, the Company expects a reported effective tax
rate of 28.0% to 29.0% and an adjusted effective tax rate of 26.5%
to 27.5%.
Cash from operations for full-year 2024 is expected to be in the
range of $1,100 million to $1,250 million. Capital
expenditures for the full year are expected to be approximately
$310 to $330 million.
Conference Call and Webcast Details
Ingredion will host a conference call on Tuesday,
November 5, 2024, at 8 a.m. CT/ 9 a.m. ET, hosted by Jim
Zallie, president and chief executive officer, and James 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 2023
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.
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. Ingredion 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 our expectations for full-year 2024 reported and adjusted
earnings per share, net sales, reported and adjusted operating
income, corporate costs, reported and adjusted effective tax rate,
cash from operations, and capital expenditures, and any other
statements regarding our prospects and our 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 geopolitical conflicts
and actions arising from them, including the impacts on the
availability and prices of raw materials and energy supplies,
supply chain interruptions, and volatility in foreign exchange and
interest rates; changing consumer consumption preferences that may
lessen demand for 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, animal nutrition, beverage and
brewing industries; the risks associated with pandemics; 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 cost of 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 and
hedging activities; 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, divestitures, or strategic
alliances on favorable terms as well as our ability to successfully
conduct due diligence, 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 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, 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; interruptions, security incidents,
or failures 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, 2023, and
our subsequent reports on Form 10-Q and Form 8-K filed with the
Securities and Exchange Commission.
CONTACTS:
Investors: Noah Weiss,
773-896-5242Media: Rick Wion,
708-209-6323
Ingredion IncorporatedCondensed
Consolidated Statements of
Income(Unaudited)(dollars and shares in
millions, except per share amounts) |
|
|
|
Three Months EndedSeptember
30, |
|
Change% |
|
Nine Months EndedSeptember
30, |
|
Change% |
|
|
2024 |
|
|
|
2023 |
|
|
|
|
2024 |
|
|
|
2023 |
|
Net sales |
|
$ |
1,870 |
|
|
$ |
2,033 |
|
|
(8%) |
|
|
$ |
5,630 |
|
|
$ |
6,239 |
|
(10%) |
|
Cost of sales |
|
|
1,391 |
|
|
|
1,612 |
|
|
|
|
|
4,288 |
|
|
|
4,890 |
|
|
Gross profit |
|
|
479 |
|
|
|
421 |
|
|
14% |
|
|
|
1,342 |
|
|
|
1,349 |
|
(1%) |
|
Operating expenses |
|
|
198 |
|
|
|
203 |
|
|
(2%) |
|
|
|
578 |
|
|
|
578 |
|
—% |
|
Other operating expense (income), net |
|
|
1 |
|
|
|
(5 |
) |
|
|
|
|
5 |
|
|
|
6 |
|
|
Restructuring/impairment charges |
|
|
12 |
|
|
|
10 |
|
|
|
|
|
38 |
|
|
|
10 |
|
|
Operating income |
|
|
268 |
|
|
|
213 |
|
|
26% |
|
|
|
721 |
|
|
|
755 |
|
(5%) |
|
Financing costs |
|
|
1 |
|
|
|
26 |
|
|
|
|
|
30 |
|
|
|
88 |
|
|
Net gain on sale of business |
|
|
(8 |
) |
|
|
— |
|
|
|
|
|
(90 |
) |
|
|
— |
|
|
Other non-operating expense |
|
|
2 |
|
|
|
2 |
|
|
|
|
|
2 |
|
|
|
4 |
|
|
Income before income taxes |
|
|
273 |
|
|
|
185 |
|
|
48% |
|
|
|
779 |
|
|
|
663 |
|
17% |
|
Provision for income taxes |
|
|
84 |
|
|
|
25 |
|
|
|
|
|
222 |
|
|
|
145 |
|
|
Net income |
|
|
189 |
|
|
|
160 |
|
|
18% |
|
|
|
557 |
|
|
|
518 |
|
8% |
|
Less: Net income attributable to non-controlling interests |
|
|
1 |
|
|
|
2 |
|
|
|
|
|
5 |
|
|
|
6 |
|
|
Net income attributable to Ingredion |
|
$ |
188 |
|
|
$ |
158 |
|
|
19% |
|
|
$ |
552 |
|
|
$ |
512 |
|
8% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share attributable to Ingredion common
shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
65.3 |
|
|
|
66.0 |
|
|
|
|
|
65.6 |
|
|
|
66.1 |
|
|
Diluted |
|
|
66.5 |
|
|
|
67.0 |
|
|
|
|
|
66.6 |
|
|
|
67.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share of Ingredion: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.88 |
|
|
$ |
2.39 |
|
|
21% |
|
|
$ |
8.41 |
|
|
$ |
7.75 |
|
9% |
|
Diluted |
|
$ |
2.83 |
|
|
$ |
2.36 |
|
|
20% |
|
|
$ |
8.29 |
|
|
$ |
7.63 |
|
9% |
|
Ingredion IncorporatedCondensed
Consolidated Balance Sheets(dollars and shares in
millions, except per share amounts) |
|
|
|
September 30, 2024 |
|
December 31, 2023 |
|
|
(Unaudited) |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
877 |
|
|
$ |
401 |
|
Short-term investments |
|
|
7 |
|
|
|
8 |
|
Accounts receivable, net |
|
|
1,173 |
|
|
|
1,279 |
|
Inventories |
|
|
1,234 |
|
|
|
1,450 |
|
Prepaid expenses and assets held for sale |
|
|
60 |
|
|
|
261 |
|
Total current assets |
|
|
3,351 |
|
|
|
3,399 |
|
Property, plant and equipment, net |
|
|
2,332 |
|
|
|
2,370 |
|
Intangible assets, net |
|
|
1,295 |
|
|
|
1,303 |
|
Other non-current assets |
|
|
547 |
|
|
|
570 |
|
Total assets |
|
$ |
7,525 |
|
|
$ |
7,642 |
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Short-term borrowings |
|
$ |
99 |
|
|
$ |
448 |
|
Accounts payable, accrued liabilities and liabilities held for
sale |
|
|
1,156 |
|
|
|
1,324 |
|
Total current liabilities |
|
|
1,255 |
|
|
|
1,772 |
|
Long-term debt |
|
|
1,741 |
|
|
|
1,740 |
|
Other non-current liabilities |
|
|
499 |
|
|
|
480 |
|
Total liabilities |
|
|
3,495 |
|
|
|
3,992 |
|
|
|
|
|
|
Share-based payments subject to redemption |
|
|
54 |
|
|
|
55 |
|
Redeemable non-controlling interests |
|
|
7 |
|
|
|
43 |
|
|
|
|
|
|
Ingredion stockholders’ equity: |
|
|
|
|
Preferred stock — authorized 25.0 shares — $0.01 par value, none
issued |
|
|
— |
|
|
|
— |
|
Common stock — authorized 200.0 shares — $0.01 par value, 77.8
shares issued at September 30, 2024 and December 31,
2023 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
1,145 |
|
|
|
1,146 |
|
Less: Treasury stock (common stock: 12.7 and 12.6 shares at
September 30, 2024 and December 31, 2023) at cost |
|
|
(1,245 |
) |
|
|
(1,207 |
) |
Accumulated other comprehensive loss |
|
|
(1,000 |
) |
|
|
(1,056 |
) |
Retained earnings |
|
|
5,049 |
|
|
|
4,654 |
|
Total Ingredion stockholders’ equity |
|
|
3,950 |
|
|
|
3,538 |
|
Non-redeemable non-controlling interests |
|
|
19 |
|
|
|
14 |
|
Total stockholders’ equity |
|
|
3,969 |
|
|
|
3,552 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,525 |
|
|
$ |
7,642 |
|
Ingredion IncorporatedCondensed
Consolidated Statements of Cash
Flows(Unaudited)(dollars in
millions) |
|
|
|
Nine Months Ended September 30, |
|
|
2024 |
|
|
|
2023 |
|
Cash from operating activities: |
|
|
|
|
Net income |
|
$ |
557 |
|
|
$ |
518 |
|
Adjustments to reconcile net income to net cash provided by
operatingactivities: |
|
|
|
|
Depreciation and amortization |
|
|
160 |
|
|
|
165 |
|
Mechanical stores expense |
|
|
45 |
|
|
|
48 |
|
Net gain on sale of business |
|
|
(90 |
) |
|
|
— |
|
Deferred income taxes |
|
|
19 |
|
|
|
(7 |
) |
Margin accounts |
|
|
7 |
|
|
|
2 |
|
Changes in other trade working capital |
|
|
248 |
|
|
|
(118 |
) |
Impairment charges |
|
|
26 |
|
|
|
10 |
|
Other |
|
|
28 |
|
|
|
29 |
|
Cash provided by operating activities |
|
|
1,000 |
|
|
|
647 |
|
Cash from investing activities: |
|
|
|
|
Capital expenditures and mechanical stores purchases |
|
|
(170 |
) |
|
|
(233 |
) |
Proceeds from disposal of manufacturing facilities and
properties |
|
|
— |
|
|
|
2 |
|
Proceeds from sale of business |
|
|
255 |
|
|
|
— |
|
Other |
|
|
(6 |
) |
|
|
(11 |
) |
Cash provided by (used for) investing activities |
|
|
79 |
|
|
|
(242 |
) |
Cash from financing activities: |
|
|
|
|
Proceeds from borrowings, net |
|
|
(12 |
) |
|
|
(16 |
) |
Commercial paper borrowings, net |
|
|
(327 |
) |
|
|
(57 |
) |
Repurchases of common stock, net |
|
|
(87 |
) |
|
|
(101 |
) |
Issuances of common stock for share-based compensation, net |
|
|
21 |
|
|
|
18 |
|
Purchases of non-controlling interests |
|
|
(40 |
) |
|
|
(2 |
) |
Dividends paid, including to non-controlling interests |
|
|
(156 |
) |
|
|
(143 |
) |
Cash (used for) financing activities |
|
|
(601 |
) |
|
|
(301 |
) |
Effect of foreign exchange rate changes on cash and cash
equivalents |
|
|
(2 |
) |
|
|
(5 |
) |
Increase in cash and cash equivalents |
|
|
476 |
|
|
|
99 |
|
Cash and cash equivalents, beginning of period |
|
|
401 |
|
|
|
236 |
|
Cash and cash equivalents, end of period |
|
$ |
877 |
|
|
$ |
335 |
|
Ingredion IncorporatedSupplemental
Financial Information(Unaudited)(dollars
in millions, except for percentages) |
I.
Segment Information of Net Sales and Operating Income |
|
|
Three Months EndedSeptember
30, |
|
Change % |
|
ChangeExcl. FX % |
|
Nine Months EndedSeptember
30, |
|
Change % |
|
ChangeExcl. FX % |
|
2024 |
|
|
|
2023 |
|
|
|
|
|
2024 |
|
|
|
2023 |
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texture & Healthful Solutions (a) |
$ |
600 |
|
|
$ |
599 |
|
|
—% |
|
(1%) |
|
$ |
1,785 |
|
|
$ |
1,882 |
|
|
(5%) |
|
|
(5%) |
|
Food & Industrial Ingredients - LATAM (b) |
|
620 |
|
|
|
658 |
|
|
(6%) |
|
(2%) |
|
|
1,866 |
|
|
|
1,991 |
|
|
(6%) |
|
|
(7%) |
|
Food & Industrial Ingredients - U.S./Canada (c) |
|
548 |
|
|
|
599 |
|
|
(9%) |
|
(8%) |
|
|
1,644 |
|
|
|
1,811 |
|
|
(9%) |
|
|
(9%) |
|
All Other (d) |
|
102 |
|
|
|
177 |
|
|
(42%) |
|
(42%) |
|
|
335 |
|
|
|
555 |
|
|
(40%) |
|
|
(38%) |
|
Total Net Sales |
$ |
1,870 |
|
|
$ |
2,033 |
|
|
(8%) |
|
(7%) |
|
$ |
5,630 |
|
|
$ |
6,239 |
|
|
(10%) |
|
|
(9%) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texture & Healthful Solutions |
$ |
96 |
|
|
$ |
86 |
|
|
12% |
|
12% |
|
$ |
256 |
|
|
$ |
318 |
|
|
(19%) |
|
|
(19%) |
|
Food & Industrial Ingredients - LATAM |
|
131 |
|
|
|
104 |
|
|
26% |
|
27% |
|
|
362 |
|
|
|
327 |
|
|
11% |
|
|
9% |
|
Food & Industrial Ingredients - U.S./Canada |
|
99 |
|
|
|
79 |
|
|
25% |
|
25% |
|
|
291 |
|
|
|
251 |
|
|
16% |
|
|
16% |
|
All Other |
|
(4 |
) |
|
|
(1 |
) |
|
N/M |
|
N/M |
|
|
(18 |
) |
|
|
(6 |
) |
|
N/M |
|
N/M |
Corporate |
|
(40 |
) |
|
|
(49 |
) |
|
18% |
|
18% |
|
|
(123 |
) |
|
|
(124 |
) |
|
1% |
|
|
1% |
|
Sub-total |
|
282 |
|
|
|
219 |
|
|
29% |
|
29% |
|
|
768 |
|
|
|
766 |
|
|
—% |
|
|
—% |
|
Restructuring and resegmentation costs |
|
(6 |
) |
|
|
— |
|
|
|
|
|
|
|
(12 |
) |
|
|
— |
|
|
|
|
|
Other matters |
|
– |
|
|
|
4 |
|
|
|
|
|
|
|
(9 |
) |
|
|
(1 |
) |
|
|
|
|
Impairment charges |
|
(8 |
) |
|
|
(10 |
) |
|
|
|
|
|
|
(26 |
) |
|
|
(10 |
) |
|
|
|
|
Total Operating Income |
$ |
268 |
|
|
$ |
213 |
|
|
26% |
|
26% |
|
$ |
721 |
|
|
$ |
755 |
|
|
(5%) |
|
|
(5%) |
|
(a) Net of intersegment sales of $11 million and
$26 million for the third quarter of 2024 and 2023, and $42 million
and $84 million year-to-date through September 30, 2024 and
2023
(b) Net of intersegment sales of $13 million and $7
million for the third quarter of 2024 and 2023, and $33 million and
$26 million year-to-date through September 30, 2024 and
2023
(c) Net of intersegment sales of $19 million and
$22 million for the third quarter of 2024 and 2023, and $70 million
and $72 million year-to-date through September 30, 2024 and
2023
(d) Net of intersegment sales of $4 million and $1
million for the third quarter of 2024 and 2023, and $11 million and
$8 million year-to-date through September 30, 2024 and
2023
II. Non-GAAP Information
To supplement the consolidated financial results
prepared in accordance with U.S. generally accepted accounting
principles (“GAAP”), non-GAAP historical financial measures are
used, which exclude certain GAAP items such as restructuring and
resegmentation costs, net gain on sale of business, impairment
charges, Mexico tax item, and other specified items. The term
“adjusted” is generally used when referring to these non-GAAP
financial measures.
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 the Company’s 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 the Company’s operations that, when
viewed with its GAAP results, provide a more complete understanding
of factors and trends affecting its business. Expected financial
measures 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. Non-GAAP adjustments
are generally made to adjusted financial measures, which increases
management’s confidence in its ability to forecast adjusted
financial measures than in its ability to forecast GAAP financial
measures. These non-GAAP measures, including non-GAAP expected
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; therefore, the Company’s 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 IncorporatedReconciliation of
GAAP Net Income attributable to Ingredion and Diluted Earnings Per
Share (“EPS”)
toNon-GAAP Adjusted Net Income attributable to
Ingredion and Adjusted Diluted
EPS(Unaudited) |
|
|
Three Months EndedSeptember 30,
2024 |
|
Three Months EndedSeptember 30,
2023 |
|
Nine Months EndedSeptember 30,
2024 |
|
Nine Months EndedSeptember 30,
2023 |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
Net income attributable to Ingredion |
$ |
188 |
|
|
$ |
2.83 |
|
|
$ |
158 |
|
|
$ |
2.36 |
|
|
$ |
552 |
|
|
$ |
8.29 |
|
|
$ |
512 |
|
|
$ |
7.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and resegmentation costs (i) |
|
5 |
|
|
|
0.08 |
|
|
|
— |
|
|
|
— |
|
|
|
9 |
|
|
|
0.14 |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on sale of business (ii) |
|
(14 |
) |
|
|
(0.21 |
) |
|
|
— |
|
|
|
— |
|
|
|
(86 |
) |
|
|
(1.29 |
) |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
— |
|
|
|
— |
|
|
|
(3 |
) |
|
|
(0.05 |
) |
|
|
7 |
|
|
|
0.11 |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges (iv) |
|
6 |
|
|
|
0.08 |
|
|
|
7 |
|
|
|
0.10 |
|
|
|
28 |
|
|
|
0.41 |
|
|
|
7 |
|
|
|
0.10 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (v) |
|
8 |
|
|
|
0.12 |
|
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
12 |
|
|
|
0.18 |
|
|
|
(15 |
) |
|
|
(0.22 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (vi) |
|
10 |
|
|
|
0.15 |
|
|
|
(5 |
) |
|
|
(0.07 |
) |
|
|
12 |
|
|
|
0.18 |
|
|
|
(5 |
) |
|
|
(0.07 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income attributable to Ingredion |
$ |
203 |
|
|
$ |
3.05 |
|
|
$ |
156 |
|
|
$ |
2.33 |
|
|
$ |
534 |
|
|
$ |
8.02 |
|
|
$ |
500 |
|
|
$ |
7.45 |
|
|
Net income and EPS may not sum or recalculate due
to rounding.
Notes
(i) During the three and nine
months ended September 30, 2024, there were pre-tax
restructuring charges of $6 million and $12 million primarily
related to organization restructuring activities and the
resegmentation of the business effective January 1, 2024.
(ii) During the three and nine
months ended September 30, 2024, there were pre-tax gains of
$8 million and $90 million on the sale of the business in
South Korea.
(iii) During the nine months ended
September 30, 2024, there was a pre-tax charge of $9 million
for tornado damage incurred at a U.S. warehouse. During the nine
months ended September 30, 2023, there were pre-tax charges of
$5 million primarily related to the impacts of a U.S.-based work
stoppage, which was partially offset by $4 million of insurance
recoveries recorded during the three months ended
September 30, 2023.
(iv) During the nine months ended
September 30, 2024, we recorded $26 million of pre-tax
impairment charges, which included pre-tax impairment charges of $8
million related to property, plant and equipment associated with
manufacturing operations in the United Kingdom in the three months
ended September 30, 2024, and $18 million primarily for equity
method investments in the second quarter of 2024. During the three
and nine months ended September 30, 2023, there was a $10
million pre-tax impairment charge on equity method investments.
(v) Tax provisions of
$8 million and $12 million for the three and nine months ended
September 30, 2024, and tax benefits of $1 million and $15
million for the three and nine months ended September 30,
2023, were recorded as a result of the movement of the Mexican peso
against the U.S. dollar and its impact on the remeasurement of the
Mexico financial statements during the periods.
(vi) During the three months ended
September 30, 2024, we recognized prior year tax contingencies
and tax impacts of the above non-GAAP adjustments. These were
partially offset by interest on previously recognized tax benefits
for certain Brazilian local incentives that were taxable and the
reversal of U.S. tax recapture. During the nine months ended
September 30, 2024, we recognized prior year tax
contingencies, the impact from the U.S. tax recapture, and tax
impacts of the above non-GAAP adjustments, partially offset by
interest on previously recognized tax benefits for certain
Brazilian local incentives that were taxable.
Ingredion IncorporatedReconciliation of
GAAP Operating Income to Non-GAAP Adjusted Operating
Income(Unaudited)(dollars in millions,
pre-tax) |
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
Operating income |
$ |
268 |
|
$ |
213 |
|
|
$ |
721 |
|
$ |
755 |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and resegmentation costs (i) |
|
6 |
|
|
— |
|
|
|
12 |
|
|
— |
|
|
|
|
|
|
|
|
Other matters (iii) |
|
— |
|
|
(4 |
) |
|
|
9 |
|
|
1 |
|
|
|
|
|
|
|
|
Impairment charges (iv) |
|
8 |
|
|
10 |
|
|
|
26 |
|
|
10 |
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating income |
$ |
282 |
|
$ |
219 |
|
|
$ |
768 |
|
$ |
766 |
|
For notes (i) through (iv), see notes (i) through
(iv) 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.
Ingredion IncorporatedReconciliation of
GAAP Effective Income Tax Rate to Non-GAAP Adjusted Effective
Income Tax Rate(Unaudited)(dollars in
millions, except for percentages) |
|
|
|
Three Months Ended September 30, 2024 |
|
Nine Months Ended September 30, 2024 |
|
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 |
|
$ |
273 |
|
|
$ |
84 |
|
|
30.8 |
% |
|
$ |
779 |
|
|
$ |
222 |
|
|
28.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring and resegmentation costs (i) |
|
|
6 |
|
|
|
1 |
|
|
|
|
|
12 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net gain on sale of business (ii) |
|
|
(8 |
) |
|
|
6 |
|
|
|
|
|
(90 |
) |
|
|
(4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
— |
|
|
|
— |
|
|
|
|
|
9 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges (iv) |
|
|
8 |
|
|
|
2 |
|
|
|
|
|
26 |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (v) |
|
|
— |
|
|
|
(8 |
) |
|
|
|
|
— |
|
|
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (vi) |
|
|
— |
|
|
|
(10 |
) |
|
|
|
|
— |
|
|
|
(12 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
279 |
|
|
$ |
75 |
|
|
26.9 |
% |
|
$ |
736 |
|
|
$ |
197 |
|
|
26.8 |
% |
|
|
Three Months Ended September 30, 2023 |
|
Nine Months Ended September 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 |
|
$ |
185 |
|
|
$ |
25 |
|
|
13.5 |
% |
|
$ |
663 |
|
$ |
145 |
|
21.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
|
|
1 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Impairment charges (iv) |
|
|
10 |
|
|
|
3 |
|
|
|
|
|
10 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (v) |
|
|
— |
|
|
|
1 |
|
|
|
|
|
— |
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (vi) |
|
|
— |
|
|
|
5 |
|
|
|
|
|
— |
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
191 |
|
|
$ |
33 |
|
|
17.3 |
% |
|
$ |
674 |
|
$ |
168 |
|
24.9 |
% |
|
For notes (i) through (vi), see notes (i) through
(vi) 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.
Ingredion IncorporatedReconciliation of
Expected GAAP Diluted Earnings per Share (“GAAP
EPS”)to Expected Adjusted Diluted
Earnings per Share (“Adjusted
EPS”)(Unaudited) |
|
|
Expected EPS Rangefor
Full-Year2024 |
Low End ofGuidance |
|
High End ofGuidance |
GAAP EPS |
$ |
10.60 |
|
|
$ |
10.90 |
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Restructuring and resegmentation costs (i) |
|
0.15 |
|
|
|
0.15 |
|
|
|
|
|
Net gain on sale of business (ii) |
|
(1.29 |
) |
|
|
(1.29 |
) |
|
|
|
|
Other matters (iii) |
|
0.12 |
|
|
|
0.12 |
|
|
|
|
|
Impairment charges (iv) |
|
0.41 |
|
|
|
0.41 |
|
|
|
|
|
Tax item - Mexico (v) |
|
0.18 |
|
|
|
0.18 |
|
|
|
|
|
Other tax matters (vi) |
|
0.18 |
|
|
|
0.18 |
|
|
|
|
|
Adjusted EPS |
$ |
10.35 |
|
|
$ |
10.65 |
|
|
For notes (i) through (vi), see notes (i) through
(vi) 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.
Ingredion IncorporatedReconciliation of
Expected GAAP Effective Income Tax Rate (“GAAP
ETR”)to Expected Adjusted
Effective Income Tax Rate (“Adjusted
ETR”)(Unaudited) |
|
|
Expected Effective Income Tax Rate
Rangefor
Full-Year2024 |
Low End ofGuidance |
|
High End ofGuidance |
GAAP ETR |
28.0 |
% |
|
29.0 |
% |
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Restructuring and resegmentation costs (i) |
— |
% |
|
— |
% |
|
|
|
|
Net gain on sale of business (ii) |
2.2 |
% |
|
2.2 |
% |
|
|
|
|
Other matters (iii) |
(0.1 |
%) |
|
(0.1 |
%) |
|
|
|
|
Impairment charges (iv) |
(1.0 |
%) |
|
(1.0 |
%) |
|
|
|
|
Tax item - Mexico (v) |
(1.3 |
%) |
|
(1.3 |
%) |
|
|
|
|
Other tax matters (vi) |
(1.3 |
%) |
|
(1.3 |
%) |
|
|
|
|
Adjusted ETR |
26.5 |
% |
|
27.5 |
% |
|
For notes (i) through (vi), see notes (i) through
(vi) 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.
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