Ingredion Incorporated Reports Strong Third Quarter Results and
Raises Full-Year Outlook
Ingredion Incorporated (NYSE: INGR), a leading global provider of
ingredient solutions to the food and beverage manufacturing
industry, today reported results for the third quarter of 2023. The
results, reported in accordance with U.S. generally accepted
accounting principles (“GAAP”) for the third quarter of 2023 and
2022, include items that are excluded from the non-GAAP financial
measures that the Company presents.
“We continued to successfully manage our business in the third
quarter with our approach to product pricing and customer mix,
while also driving operational excellence and productivity to
mitigate the impact of cost inflation. This enabled us to deliver
15% adjusted operating income growth for the quarter,” said Jim
Zallie, Ingredion’s president and chief executive officer.
“Our business continues to demonstrate resilience, evidenced by
the diversity of our markets and product portfolio, and the
strength of our business model. For example, our Food Systems
business in Europe demonstrated mid-single-digit volume growth from
greater penetration into private label. While lower corn costs
around the globe contributed to lower net sales growth, we were
encouraged by sequential quarterly improvement in sales volumes
despite inventory rebalancing by customers that continued to work
its way through the supply chain.”
“Our updated full-year guidance reflects our confidence to
deliver revenue and profit growth above our four-year growth
outlook. We continue to execute against our Driving Growth Roadmap
creating long-term value for shareholders, and are committed to
total shareholder return as evidenced by the increase in the
dividend rate and shares repurchased during the quarter,” Zallie
concluded.
*Adjusted diluted earnings per share (“adjusted EPS”), adjusted
operating income and adjusted effective income tax rate are
non-GAAP financial measures. See section II of the Supplemental
Financial Information entitled “Non-GAAP Information” following the
Condensed Consolidated Financial Statements included in this news
release for a reconciliation of these non-GAAP financial measures
to the most directly comparable GAAP measures.
Diluted Earnings Per Share (EPS)
|
3Q22 |
3Q23 |
Reported EPS |
$1.59 |
$2.36 |
Restructuring/Impairment costs |
- |
0.10 |
Tax items and other matters |
0.14 |
(0.13) |
Adjusted EPS** |
$1.73 |
$2.33 |
Estimated factors affecting changes in Reported and
Adjusted EPS
|
3Q23 |
Total items affecting EPS** |
0.60 |
Total operating items |
0.29 |
Margin |
0.66 |
Volume |
(0.36) |
Foreign exchange |
0.02 |
Other income |
(0.03) |
Total non-operating items |
0.31 |
Other non-operating income |
(0.04) |
Financing costs |
(0.01) |
Tax Rate |
0.36 |
Shares outstanding |
(0.01) |
Non-controlling interests |
0.01 |
**Totals may not foot due to rounding;
Financial Highlights
- At September 30, 2023, total debt and cash, including
short-term investments, were $2.4 billion and $341 million,
respectively, versus $2.5 billion and $239 million, respectively,
at December 31, 2022.
- Reported net financing costs for the third quarter were $26
million versus $24 million for the year-ago period.
- Reported and adjusted effective tax rates for the quarter were
13.5% and 17.3%, respectively, compared to 32.3% and 30.6%,
respectively, in the year-ago period. The decrease in the reported
effective tax rate was primarily driven by a recently issued IRS
Notice 2023-55 allowing the Company to claim certain foreign tax
credits against U.S. taxes, favorable country earnings mix
primarily due to Brazil tax law developments, and a related
increase in the Company’s foreign-derived intangible income
deduction.
- Capital expenditures, net were $231 million, up $35 million
from the year-ago period.
Business Review
Total IngredionNet Sales
$ in millions |
2022 |
FX Impact |
Volume |
Price/mix |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
2,023 |
10 |
(159) |
159 |
2,033 |
1% |
0% |
Year-to-Date |
5,959 |
(100) |
(500) |
880 |
6,239 |
5% |
6% |
Reported Operating Income
$ in millions |
2022 |
FX Impact |
Business Drivers |
Acquisition /Integration |
Restructuring / Impairment |
Other |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
182 |
1 |
27 |
- |
(10) |
13 |
213 |
17% |
16% |
Year-to-Date |
605 |
(18) |
165 |
1 |
(6) |
8 |
755 |
25% |
28% |
Adjusted Operating Income
$ in millions |
2022 |
FX Impact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
191 |
1 |
27 |
219 |
15% |
14% |
Year-to-Date |
619 |
(18) |
165 |
766 |
24% |
27% |
Net Sales
- Third quarter and year-to-date net sales were up from the
year-ago period 1% and 5%, respectively. The increases were driven
by both price mix and foreign exchange impacts, partially offset by
volume declines. Excluding foreign exchange impacts, net sales were
flat and up 6%, respectively, for the quarter and
year-to-date.
Operating Income
- Third quarter reported and adjusted operating income were $213
million and $219 million, an increase of 17% and 15%, respectively,
versus the prior year. The increases were driven by favorable price
mix, partially offset by higher input costs and lower volume.
Excluding foreign exchange impacts, reported and adjusted operating
income were up 16% and 14%, respectively, from the same periods
last year.
- Year-to-date reported and adjusted operating income were $755
million and $766 million, an increase of 25% and 24%, respectively,
versus the year-ago period. The increases in reported and adjusted
operating income were attributable to favorable price mix,
partially offset by higher raw material and input costs and lower
volume. Excluding foreign exchange impacts, reported and adjusted
operating income were up 28% and 27%, respectively, from the same
periods last year.
North AmericaNet Sales
$ in millions |
2022 |
FX Impact |
Volume |
PriceMix |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
1,262 |
(3) |
(110) |
151 |
1,300 |
3% |
3% |
Year-to-Date |
3,720 |
(18) |
(316) |
612 |
3,998 |
7% |
8% |
Segment Operating Income
$ in millions |
2022 |
FX Impact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
126 |
0 |
45 |
171 |
36% |
36% |
Year-to-Date |
443 |
(3) |
135 |
575 |
30% |
30% |
- Third quarter operating income for North America was $171
million, an increase of $45 million from the year-ago period, and
year-to-date operating income was $575 million, an increase of $132
million from the year-ago period. The increases for both periods
were driven by favorable price mix, partially offset by higher
input costs and lower volume.
South AmericaNet Sales
$ in millions |
2022 |
FX Impact |
Volume |
Pricemix |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
293 |
21 |
(14) |
(31) |
269 |
-8% |
-15% |
Year-to-Date |
835 |
(2) |
(63) |
25 |
795 |
-5% |
-5% |
Segment Operating Income
$ in millions |
2022 |
FX Impact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
48 |
3 |
(19) |
32 |
-33% |
-40% |
Year-to-Date |
125 |
(2) |
(27) |
96 |
-23% |
-22% |
- Third quarter operating income for South America was $32
million, a decrease of $16 million from the year-ago period, and
year-to-date operating income was $96 million, a decrease of $29
million from the year-ago period. The decrease in both periods was
driven primarily by lower volume and higher energy costs. Excluding
foreign exchange impacts, segment operating income was down -40%
and -22%, respectively, for the third quarter and
year-to-date.
Asia-PacificNet Sales
$ in millions |
2022 |
FX Impact |
Volume |
Pricemix |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
278 |
0 |
(11) |
5 |
272 |
-2% |
-2% |
Year-to-Date |
825 |
(21) |
(65) |
77 |
816 |
-1% |
1% |
Segment Operating Income
$ in millions |
2022 |
FX Impact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
27 |
0 |
6 |
33 |
22% |
22% |
Year-to-Date |
70 |
(2) |
20 |
88 |
26% |
29% |
- Third quarter operating income for Asia-Pacific was $33
million, up $6 million from the year-ago period, and year-to-date
operating income was $88 million, an increase of $18 million from
the year-ago period. The change in both periods was driven by
favorable price mix, partially offset by higher input costs and
lower volumes. Excluding foreign exchange impacts, segment
operating income was up 22% and 29%, respectively, for the third
quarter and year-to-date.
Europe, Middle East, and Africa
(EMEA)Net Sales
$ in millions |
2022 |
FX Impact |
Volume |
Pricemix |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
190 |
(8) |
(24) |
34 |
192 |
1% |
5% |
Year-to-Date |
579 |
(59) |
(56) |
166 |
630 |
9% |
19% |
Segment Operating Income
$ in millions |
2022 |
FX Impact |
Business Drivers |
2023 |
Change |
Changeexcl. FX |
Third Quarter |
30 |
(2) |
4 |
32 |
7% |
13% |
Year-to-Date |
90 |
(11) |
52 |
131 |
46% |
58% |
- Third quarter operating income for EMEA was $32 million, up $2
million from the year-ago period, and year-to-date operating income
was $131 million, an increase of $41 million from the year-ago
period. The changes were driven by favorable price mix, partially
offset by lower volume, higher raw material costs and foreign
exchange impacts. Excluding foreign exchange impacts, segment
operating income was up 13% and 58%, respectively, for the third
quarter and year-to-date.
Dividends and Share RepurchasesIn the first
nine months of 2023, the Company paid $143 million in dividends to
shareholders. The Company declared a quarterly dividend of $0.78
per share that was paid on October 24, 2023, which represented a
10% increase from the prior quarterly dividend rate, for the ninth
consecutive annual increase. During the quarter, the Company
repurchased $101 million of outstanding shares of common stock. To
support total shareholder return as an important element of its
capital allocation strategy, the Company is dedicated to returning
value to shareholders through cash dividends and share
repurchases.
Updated 2023 Full-Year OutlookThe Company
expects its outlook for full-year 2023 reported and adjusted EPS to
be in the range of $9.25 to $9.65 and $9.05 to $9.45, respectively.
This expectation excludes acquisition-related integration and
restructuring costs, as well as any potential impairment costs.
The Company now expects full-year 2023 net sales to be up
mid-single-digits reflecting softer volume demand. Reported and
adjusted operating income are both expected to be up high
double-digits.
Compared to last year, the 2023 full-year outlook now assumes
the following: North America operating income is expected to be up
20% to 25%, with price mix continuing to outpace lower volume and
cost increases; South America operating income is expected to be
down mid to high-teens, with higher input costs more than
offsetting favorable price mix; Asia-Pacific operating income is
expected to be up high double-digits, driven by favorable price mix
and PureCircle growth, partially offset by higher input costs; and
EMEA operating income is expected to be up 40% to 45% driven by
favorable price mix. Corporate costs are expected to be up high
single-digits.
For full-year 2023, the Company expects a reported and adjusted
effective tax rate of 22.5% to 23.5% and 25.0% to 26.0%,
respectively.
Cash from operations for full-year 2023 is now expected to be in
the range of $650 million to $750 million. Capital expenditures for
the full year are expected to be approximately $310 million.
Conference Call and Webcast DetailsIngredion
will host a conference call on Tuesday, November 7, 2023, at 8 a.m.
CT/9 a.m. ET, hosted by Jim Zallie, president and chief executive
officer, and Jim Gray, executive vice president and chief financial
officer. The call will be webcast in real-time and can be accessed
at https://ir.ingredionincorporated.com/events-and-presentations. A
presentation containing additional financial and operating
information will be accessible through the Company’s website and
available to download a few hours prior to the start of the call. A
replay will be available for a limited time at
https://ir.ingredionincorporated.com/financial-information/quarterly-results.
About the Company
Ingredion Incorporated (NYSE: INGR) headquartered in the suburbs
of Chicago, is a leading global ingredient solutions provider
serving customers in more than 120 countries. With 2022 annual net
sales of nearly $8 billion, the Company turns grains, fruits,
vegetables and other plant-based materials into value-added
ingredient solutions for the food, beverage, animal nutrition,
brewing and industrial markets. With Ingredion’s Idea Labs®
innovation centers around the world and approximately 12,000
employees, the Company co-creates with customers and fulfills its
purpose of bringing the potential of people, nature and technology
together to make life better. Visit ingredion.com for more
information and the latest Company news.
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 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
IncorporatedCondensed Consolidated Statements of
Income(Unaudited)
(in
millions, except per share amounts) |
|
Three Months EndedSeptember
30, |
|
Change% |
|
Nine Months EndedSeptember
30, |
|
Change% |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
2023 |
|
|
|
2022 |
|
|
Net sales |
|
$ |
2,033 |
|
|
$ |
2,023 |
|
|
1 |
% |
|
$ |
6,239 |
|
|
$ |
5,959 |
|
|
5 |
% |
Cost of sales |
|
|
1,612 |
|
|
|
1,649 |
|
|
|
|
|
4,890 |
|
|
|
4,816 |
|
|
|
Gross profit |
|
|
421 |
|
|
|
374 |
|
|
13 |
% |
|
|
1,349 |
|
|
|
1,143 |
|
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
203 |
|
|
|
180 |
|
|
13 |
% |
|
|
578 |
|
|
|
528 |
|
|
9 |
% |
Other operating (income)
expense |
|
|
(5 |
) |
|
|
10 |
|
|
|
|
|
6 |
|
|
|
4 |
|
|
|
Restructuring/impairment
charges |
|
|
10 |
|
|
|
2 |
|
|
|
|
|
10 |
|
|
|
6 |
|
|
|
Operating income |
|
|
213 |
|
|
|
182 |
|
|
17 |
% |
|
|
755 |
|
|
|
605 |
|
|
25 |
% |
Financing costs |
|
|
26 |
|
|
|
24 |
|
|
|
|
|
88 |
|
|
|
65 |
|
|
|
Other non-operating expense
(income) |
|
|
2 |
|
|
|
(3 |
) |
|
|
|
|
4 |
|
|
|
(4 |
) |
|
|
Income before income
taxes |
|
|
185 |
|
|
|
161 |
|
|
15 |
% |
|
|
663 |
|
|
|
544 |
|
|
22 |
% |
Provision for income
taxes |
|
|
25 |
|
|
|
52 |
|
|
|
|
|
145 |
|
|
|
157 |
|
|
|
Net income |
|
|
160 |
|
|
|
109 |
|
|
47 |
% |
|
|
518 |
|
|
|
387 |
|
|
34 |
% |
Less: Net income attributable
to non-controlling interests |
|
|
2 |
|
|
|
3 |
|
|
|
|
|
6 |
|
|
|
9 |
|
|
|
Net income attributable to
Ingredion |
|
$ |
158 |
|
|
$ |
106 |
|
|
49 |
% |
|
$ |
512 |
|
|
$ |
378 |
|
|
35 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
attributable to Ingredion common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
66.0 |
|
|
|
65.8 |
|
|
|
|
|
66.1 |
|
|
|
66.4 |
|
|
|
Diluted |
|
|
67.0 |
|
|
|
66.6 |
|
|
|
|
|
67.1 |
|
|
|
67.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share of
Ingredion: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
2.39 |
|
|
$ |
1.61 |
|
|
49 |
% |
|
$ |
7.75 |
|
|
$ |
5.69 |
|
|
36 |
% |
Diluted |
|
$ |
2.36 |
|
|
$ |
1.59 |
|
|
48 |
% |
|
$ |
7.63 |
|
|
$ |
5.63 |
|
|
36 |
% |
Ingredion
IncorporatedCondensed Consolidated Balance
Sheets
(in
millions, except share and per share amounts) |
|
September 30, 2023 |
|
December 31, 2022 |
|
|
(Unaudited) |
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
335 |
|
|
$ |
236 |
|
Short-term investments |
|
|
6 |
|
|
|
3 |
|
Accounts receivable, net |
|
|
1,380 |
|
|
|
1,411 |
|
Inventories |
|
|
1,502 |
|
|
|
1,597 |
|
Prepaid expenses |
|
|
66 |
|
|
|
62 |
|
Total current assets |
|
|
3,289 |
|
|
|
3,309 |
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
2,401 |
|
|
|
2,407 |
|
Intangible assets, net |
|
|
1,296 |
|
|
|
1,301 |
|
Other assets |
|
|
563 |
|
|
|
544 |
|
Total
assets |
|
$ |
7,549 |
|
|
$ |
7,561 |
|
|
|
|
|
|
Liabilities and
equity |
|
|
|
|
Current liabilities |
|
|
|
|
Short-term borrowings |
|
$ |
466 |
|
|
$ |
543 |
|
Accounts payable and accrued liabilities |
|
|
1,202 |
|
|
|
1,339 |
|
Total current liabilities |
|
|
1,668 |
|
|
|
1,882 |
|
|
|
|
|
|
Long-term debt |
|
|
1,940 |
|
|
|
1,940 |
|
Other non-current liabilities |
|
|
474 |
|
|
|
477 |
|
Total liabilities |
|
|
4,082 |
|
|
|
4,299 |
|
|
|
|
|
|
Share-based payments subject to redemption |
|
|
49 |
|
|
|
48 |
|
Redeemable non-controlling interests |
|
|
41 |
|
|
|
51 |
|
|
|
|
|
|
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 September 30, 2023 and December 31, 2022 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
1,143 |
|
|
|
1,132 |
|
Less: Treasury stock (common stock: 12,623,174 and 12,116,920
shares at September 30, 2023 and December 31, 2022,
respectively) at cost |
|
|
(1,211 |
) |
|
|
(1,148 |
) |
Accumulated other comprehensive loss |
|
|
(1,144 |
) |
|
|
(1,048 |
) |
Retained earnings |
|
|
4,575 |
|
|
|
4,210 |
|
Total Ingredion stockholders' equity |
|
|
3,364 |
|
|
|
3,147 |
|
Non-redeemable non-controlling interests |
|
|
13 |
|
|
|
16 |
|
Total equity |
|
|
3,377 |
|
|
|
3,163 |
|
Total liabilities and
equity |
|
$ |
7,549 |
|
|
$ |
7,561 |
|
Ingredion
IncorporatedCondensed Consolidated Statements of
Cash Flows(Unaudited)
(in
millions) |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
Cash provided by operating activities: |
|
|
|
|
Net income |
|
$ |
518 |
|
|
$ |
387 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
165 |
|
|
|
160 |
|
Mechanical stores expense |
|
|
48 |
|
|
|
42 |
|
Deferred income taxes |
|
|
(7 |
) |
|
|
(3 |
) |
Margin accounts |
|
|
2 |
|
|
|
(11 |
) |
Changes in other trade working capital |
|
|
(118 |
) |
|
|
(578 |
) |
Other |
|
|
39 |
|
|
|
83 |
|
Cash provided by operating activities |
|
|
647 |
|
|
|
80 |
|
|
|
|
|
|
Cash used for
investing activities: |
|
|
|
|
Capital expenditures and mechanical stores purchases |
|
|
(233 |
) |
|
|
(203 |
) |
Proceeds from disposal of manufacturing facilities and
properties |
|
|
2 |
|
|
|
7 |
|
Payments for acquisitions, net of cash acquired |
|
|
— |
|
|
|
(7 |
) |
Other |
|
|
(11 |
) |
|
|
1 |
|
Cash used for investing activities |
|
|
(242 |
) |
|
|
(202 |
) |
|
|
|
|
|
Cash (used for)
provided by financing activities: |
|
|
|
|
Proceeds from borrowings, net |
|
|
(16 |
) |
|
|
34 |
|
Commercial paper borrowings, net |
|
|
(57 |
) |
|
|
372 |
|
Repurchases of common stock, net |
|
|
(101 |
) |
|
|
(112 |
) |
Issuances of common stock for share-based compensation, net |
|
|
18 |
|
|
|
1 |
|
Purchases of non-controlling interests |
|
|
(2 |
) |
|
|
(40 |
) |
Dividends paid, including to non-controlling interests |
|
|
(143 |
) |
|
|
(133 |
) |
Cash (used for) provided by financing activities |
|
|
(301 |
) |
|
|
122 |
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash |
|
|
(5 |
) |
|
|
(34 |
) |
Increase (decrease) in cash and cash equivalents |
|
|
99 |
|
|
|
(34 |
) |
Cash and cash equivalents, beginning of period |
|
|
236 |
|
|
|
328 |
|
Cash and cash equivalents, end of period |
|
$ |
335 |
|
|
$ |
294 |
|
Ingredion
IncorporatedSupplemental Financial
Information(Unaudited)
I. Geographic Information of Net Sales and Operating
Income
(in
millions, except for percentages) |
|
Three Months EndedSeptember
30, |
|
Change |
|
ChangeExcl. FX |
|
Nine Months EndedSeptember
30, |
|
Change |
|
ChangeExcl. FX |
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
|
|
Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
1,300 |
|
|
$ |
1,262 |
|
|
3 |
% |
|
3 |
% |
|
$ |
3,998 |
|
|
$ |
3,720 |
|
|
7 |
% |
|
8 |
% |
South America |
|
|
269 |
|
|
|
293 |
|
|
(8 |
%) |
|
(15 |
%) |
|
|
795 |
|
|
|
835 |
|
|
(5 |
%) |
|
(5 |
%) |
Asia-Pacific |
|
|
272 |
|
|
|
278 |
|
|
(2 |
%) |
|
(2 |
%) |
|
|
816 |
|
|
|
825 |
|
|
(1 |
%) |
|
1 |
% |
EMEA |
|
|
192 |
|
|
|
190 |
|
|
1 |
% |
|
5 |
% |
|
|
630 |
|
|
|
579 |
|
|
9 |
% |
|
19 |
% |
Total Net Sales |
|
$ |
2,033 |
|
|
$ |
2,023 |
|
|
1 |
% |
|
— |
% |
|
$ |
6,239 |
|
|
$ |
5,959 |
|
|
5 |
% |
|
6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America |
|
$ |
171 |
|
|
$ |
126 |
|
|
36 |
% |
|
36 |
% |
|
$ |
575 |
|
|
$ |
443 |
|
|
30 |
% |
|
30 |
% |
South America |
|
|
32 |
|
|
|
48 |
|
|
(33 |
%) |
|
(40 |
%) |
|
|
96 |
|
|
|
125 |
|
|
(23 |
%) |
|
(22 |
%) |
Asia-Pacific |
|
|
33 |
|
|
|
27 |
|
|
22 |
% |
|
22 |
% |
|
|
88 |
|
|
|
70 |
|
|
26 |
% |
|
29 |
% |
EMEA |
|
|
32 |
|
|
|
30 |
|
|
7 |
% |
|
13 |
% |
|
|
131 |
|
|
|
90 |
|
|
46 |
% |
|
58 |
% |
Corporate |
|
|
(49 |
) |
|
|
(40 |
) |
|
(23 |
%) |
|
(23 |
%) |
|
|
(124 |
) |
|
|
(109 |
) |
|
(14 |
%) |
|
(14 |
%) |
Sub-total |
|
|
219 |
|
|
|
191 |
|
|
15 |
% |
|
14 |
% |
|
|
766 |
|
|
|
619 |
|
|
24 |
% |
|
27 |
% |
Acquisition/integration costs |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
— |
|
|
|
(1 |
) |
|
|
|
|
Restructuring/impairment charges |
|
|
(10 |
) |
|
|
— |
|
|
|
|
|
|
|
(10 |
) |
|
|
(4 |
) |
|
|
|
|
Other matters |
|
|
4 |
|
|
|
(9 |
) |
|
|
|
|
|
|
(1 |
) |
|
|
(9 |
) |
|
|
|
|
Total Operating Income |
|
$ |
213 |
|
|
$ |
182 |
|
|
17 |
% |
|
16 |
% |
|
$ |
755 |
|
|
$ |
605 |
|
|
25 |
% |
|
28 |
% |
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 charges, Mexico tax items, 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
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,
2023 |
|
Three Months EndedSeptember 30,
2022 |
|
Nine Months EndedSeptember 30,
2023 |
|
Nine Months EndedSeptember 30,
2022 |
|
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
|
(in millions) |
|
Diluted EPS |
Net income attributable to Ingredion |
|
$ |
158 |
|
|
$ |
2.36 |
|
|
$ |
106 |
|
|
$ |
1.59 |
|
|
$ |
512 |
|
|
$ |
7.63 |
|
|
$ |
378 |
|
|
$ |
5.63 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
7 |
|
|
|
0.10 |
|
|
|
— |
|
|
|
— |
|
|
|
7 |
|
|
|
0.10 |
|
|
|
3 |
|
|
|
0.05 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
(3 |
) |
|
|
(0.05 |
) |
|
|
7 |
|
|
|
0.11 |
|
|
|
1 |
|
|
|
0.01 |
|
|
|
7 |
|
|
|
0.11 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
(1 |
) |
|
|
(0.01 |
) |
|
|
(1 |
) |
|
|
(0.02 |
) |
|
|
(15 |
) |
|
|
(0.22 |
) |
|
|
(2 |
) |
|
|
(0.03 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (v) |
|
|
(5 |
) |
|
|
(0.07 |
) |
|
|
3 |
|
|
|
0.05 |
|
|
|
(5 |
) |
|
|
(0.07 |
) |
|
|
2 |
|
|
|
0.03 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income
attributable to Ingredion |
|
$ |
156 |
|
|
$ |
2.33 |
|
|
$ |
115 |
|
|
$ |
1.73 |
|
|
$ |
500 |
|
|
$ |
7.45 |
|
|
$ |
389 |
|
|
$ |
5.80 |
|
Net income and EPS may not foot or recalculate due to
rounding.
Notes(i) During the nine months ended September 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 months ended September 30, 2023, we
recorded a $10 million pre-tax other-than-temporary impairment
charge on our equity method investments. During the nine months
ended September 30, 2022, we recorded $4 million of remaining
pre-tax restructuring-related charges for the Cost Smart
program.
(iii) During the nine months ended September 30, 2023, we
recorded pre-tax charges of $5 million primarily related to the
impacts of a U.S.-based work stoppage. This was partially offset by
$4 million of insurance recoveries recorded during the three months
ended September 30, 2023.
During the three months ended September 30, 2022, we recorded
pre-tax charges of $9 million primarily related to the impacts of a
U.S.-based work stoppage.
(iv) We recorded tax benefits of $1 million and $15 million
for the three and nine months ended September 30, 2023,
respectively, and tax benefits of $1 million and $2 million for the
three and nine months ended September 30, 2022, respectively, 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, IRS Notice
2023-55, 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
IncorporatedReconciliation of GAAP Operating
Income to Non-GAAP Adjusted Operating
Income(Unaudited)
(in
millions, pre-tax) |
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
Operating income |
|
$ |
213 |
|
|
$ |
182 |
|
|
$ |
755 |
|
|
$ |
605 |
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
10 |
|
|
|
— |
|
|
|
10 |
|
|
|
4 |
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
(4 |
) |
|
|
9 |
|
|
|
1 |
|
|
|
9 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating
income |
|
$ |
219 |
|
|
$ |
191 |
|
|
$ |
766 |
|
|
$ |
619 |
|
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.
Ingredion
IncorporatedReconciliation of GAAP Effective
Income Tax Rate to Non-GAAP Adjusted Effective Income Tax
Rate(Unaudited)
(in
millions) |
|
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 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
10 |
|
|
|
3 |
|
|
|
|
|
10 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
(4 |
) |
|
|
(1 |
) |
|
|
|
|
1 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
— |
|
|
|
1 |
|
|
|
|
|
— |
|
|
|
15 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (v) |
|
|
— |
|
|
|
5 |
|
|
|
|
|
— |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
191 |
|
|
$ |
33 |
|
|
17.3 |
% |
|
$ |
674 |
|
|
$ |
168 |
|
|
24.9 |
% |
(in
millions) |
|
Three Months Ended September 30, 2022 |
|
Nine months ended September 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 |
|
$ |
161 |
|
|
$ |
52 |
|
|
32.3 |
% |
|
$ |
544 |
|
|
$ |
157 |
|
|
28.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
|
— |
|
|
|
— |
|
|
|
|
|
1 |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
— |
|
|
|
— |
|
|
|
|
|
4 |
|
|
|
1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other matters (iii) |
|
|
9 |
|
|
|
2 |
|
|
|
|
|
9 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
— |
|
|
|
1 |
|
|
|
|
|
— |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other tax matters (v) |
|
|
— |
|
|
|
(3 |
) |
|
|
|
|
— |
|
|
|
(2 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
170 |
|
|
$ |
52 |
|
|
30.6 |
% |
|
$ |
558 |
|
|
$ |
160 |
|
|
28.7 |
% |
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.
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-Year
2023 |
|
Low End ofGuidance |
|
High End ofGuidance |
GAAP EPS |
|
$ |
9.25 |
|
|
$ |
9.65 |
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Impairment/restructuring charges (i) |
|
|
0.10 |
|
|
|
0.10 |
|
|
|
|
|
|
Other matters (ii) |
|
|
0.01 |
|
|
|
0.01 |
|
|
|
|
|
|
Tax item - Mexico (iii) |
|
|
(0.23 |
) |
|
|
(0.23 |
) |
|
|
|
|
|
Other tax matters (iv) |
|
|
(0.08 |
) |
|
|
(0.08 |
) |
|
|
|
|
|
Adjusted EPS |
|
$ |
9.05 |
|
|
$ |
9.45 |
|
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
impairment and restructuring charges, other matters and certain
other tax 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:
(i) |
Other-than-temporary impairment charge on our equity method
investments. |
|
|
(ii) |
Charges primarily related to the
impacts of a U.S.-based work stoppage and partially offset by
insurance recoveries. |
|
|
(iii) |
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. |
|
|
(iv) |
Tax items relating to net prior
year tax liabilities and contingencies, impacts from the Pakistan
Super Tax, IRS Notice 2023-55, 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
IncorporatedReconciliation 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 |
|
22.5 |
% |
|
23.5 |
% |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (i) |
|
0.1 |
% |
|
0.1 |
% |
|
|
|
|
|
Other matters (ii) |
|
— |
% |
|
— |
% |
|
|
|
|
|
Tax item - Mexico (iii) |
|
1.8 |
% |
|
1.8 |
% |
|
|
|
|
|
Other tax matters (iv) |
|
0.6 |
% |
|
0.6 |
% |
|
|
|
|
|
Adjusted ETR |
|
25.0 |
% |
|
26.0 |
% |
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
restructuring/impairment charges, 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:
(i) |
Tax impact from other-than-temporary impairment charges on our
equity method investments. |
|
|
(ii) |
Tax impact primarily on charges
related to the impacts of a U.S.-based work stoppage, partially
offset by tax impact from insurance recoveries. |
|
|
(iii) |
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. |
|
|
(iv) |
Tax impact from net prior year
tax liabilities and contingencies, impacts from the Pakistan Super
Tax, IRS Notice 2023-55, 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. |
CONTACTS: Investors: Noah Weiss, 773-896-5242
Media: Becca Hary, 708-551-2602
Grafico Azioni Ingredion (TG:CNP)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Ingredion (TG:CNP)
Storico
Da Lug 2023 a Lug 2024