- Second quarter 2024 reported and adjusted operating income* declined 4% and grew 8%, respectively, compared to prior year
- Second quarter 2024 reported and adjusted EPS* were $2.22 and $2.87, a decrease of 8% and an increase of 24%, respectively
- Raising guidance for full-year reported EPS to be in the range of $10.20 to $10.70 and adjusted EPS to be in the range of $9.70 to $10.20
WESTCHESTER, Ill., Aug. 06, 2024 (GLOBE NEWSWIRE) - Ingredion Incorporated (NYSE: INGR), a leading global provider of ingredient solutions to the food and beverage manufacturing industry, today reported results for the second quarter of 2024. The results, reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for the second quarter of 2024 and 2023, include items that are excluded from the non-GAAP financial measures that the Company presents.
“In the second quarter, Ingredion achieved significant growth, led by Texture & Healthful Solutions, which experienced 8% sales volume growth year over year," stated Jim Zallie, president and CEO of Ingredion. “Additionally, our Food & Industrial segments were well positioned to respond to robust customer demand and delivered exceptionally strong profit growth.”
“In the quarter, we also deployed strategic capital to support future organic growth in texture solutions, and in line with our sugar reduction strategy, we further increased our ownership in PureCircle to 98%. Our organization is benefiting from our new segments as we increasingly leverage our global operating model and drive innovative ways to strengthen customer engagements for future growth. Our Driving Growth Roadmap continues to guide our strategic actions to create long-term shareholder value.”
“Last quarter marked the launch of our Cost2Compete program, aimed at achieving $50 million in run-rate savings by the end of 2025. Our initiatives to date have realized $18 million in run-rate savings, which will provide additional leverage for the remainder of the year,” Zallie concluded.
*Adjusted financial measures 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)
| 2Q23 | 2Q24 | |||||
| Reported Diluted EPS | $ | 2.42 | $ | 2.22 | ||
| Impairment charge | — | 0.33 | ||||
| Restructuring and resegmentation costs | — | 0.03 | ||||
| Net gain on sale of business | — | 0.01 | ||||
| Tax items and other matters | (0.10 | ) | 0.28 | |||
| Adjusted Diluted EPS** | $ | 2.32 | $ | 2.87 | ||
Estimated factors affecting changes in Reported and Adjusted EPS
| 2Q24 | |
| Total items affecting EPS** | 0.55 |
| Total operating items | 0.20 |
| Margin | 0.06 |
| Volume | 0.03 |
| Foreign exchange | 0.00 |
| Other income | 0.11 |
| Total non-operating items | 0.35 |
| Other non-operating income | 0.01 |
| Financing costs | 0.22 |
| Tax rate | 0.10 |
| Shares outstanding | 0.02 |
| Non-controlling interests | 0.00 |
** Totals may not sum due to rounding
Other Financial items
- At June 30, 2024, total debt and cash, including short-term investments, were $1.9 billion and $510 million, respectively, versus $2.2 billion and $409 million, respectively, at December 31, 2023.
- Reported net financing costs for the second quarter were $10 million, compared to $30 million for the year-ago period of which $10 million of the improvement is attributable to foreign exchange impacts.
- Reported and adjusted effective tax rates for the quarter were 34.8% and 25.4%, respectively, compared to 25.1% and 28.3%, respectively, in the year-ago period. The increase in the reported effective tax rate was primarily due to a change in the value of the Mexican peso against the U.S. dollar and the impairment of an equity method investment.
- Capital expenditures, net were $120 million year-to-date.
Business Review
Total Ingredion
Net Sales
| $ in millions | 2023 | FX Impact |
Volume | S. Korea Volume* |
Price mix | 2024 | Change | Change excl. FX |
|||||||||||||
| Second Quarter | 2,069 | (11 | ) | 104 | (80 | ) | (204 | ) | 1,878 | (9 | %) | (9 | %) | ||||||||
| Year-to-Date | 4,206 | 1 | 64 | (131 | ) | (380 | ) | 3,760 | (11 | %) | (11 | %) | |||||||||
* Represents loss of volume due to the sale of the South Korea business completed on February 1, 2024
Reported Operating Income
| $ in millions | 2023 | FX Impact |
Business Drivers |
Restructuring / Impairment |
Other | 2024 | Change | Change excl. FX |
|||||||||||||
| Second Quarter | 251 | 0 | 19 | (21 | ) | (9 | ) | 240 | (4 | %) | (4 | %) | |||||||||
| Year-to-Date | 542 | 3 | (64 | ) | (24 | ) | (4 | ) | 453 | (16 | %) | (17 | %) | ||||||||
Adjusted Operating Income
| $ in millions | 2023 | FX Impact |
Business Drivers |
2024 | Change | Change excl. FX |
|||||||||
| Second Quarter | 251 | 0 | 19 | 270 | 8 | % | 8 | % | |||||||
| Year-to-Date | 547 | 3 | (64 | ) | 486 | (11 | %) | (12 | %) | ||||||
Net Sales
- Second quarter and year-to-date net sales were down from the year-ago period 9% and 11%, respectively. The decreases were driven by price mix primarily from lower raw material costs and lost sales volume from the sale of South Korea, partially offset by volume increases.
Operating Income
- Second quarter reported and adjusted operating income were $240 million and $270 million. The difference in reported operating income versus adjusted in the period was primarily attributable to the impairment of an equity method investment and the impact of tornado damage to a U.S. warehouse. Adjusted operating income increased 8% versus the prior year driven by lower raw material and input costs and higher volume, partially offset by price mix. Excluding foreign exchange impacts, reported and adjusted operating income were down 4% and up 8%, respectively, from the same periods last year.
- Year-to-date reported and adjusted operating income were $453 million and $486 million, a decrease of 16% and 11%, respectively, versus the year-ago period. The decreases were due to price mix partially offset by lower raw material and input costs. Excluding foreign exchange impacts, reported and adjusted operating income were down 17% and 12%, respectively, from the same periods last year.
Texture & Healthful Solutions
Net Sales
| $ in millions | 2023 | FX Impact |
Volume | Price mix | 2024 | Change | Change excl. FX |
|||||||||||
| Second Quarter | 618 | (9 | ) | 51 | (72 | ) | 588 | (5 | %) | (3 | %) | |||||||
| Year-to-Date | 1,283 | (15 | ) | 50 | (133 | ) | 1,185 | (8 | %) | (6 | %) | |||||||
Segment Operating Income
| $ in millions | 2023 | FX Impact |
Business Drivers |
2024 | Change | Change excl. FX |
||||||||||
| Second Quarter | 105 | (1 | ) | (18 | ) | 86 | (18 | %) | (17 | %) | ||||||
| Year-to-Date | 232 | (2 | ) | (70 | ) | 160 | (31 | %) | (30 | %) | ||||||
- Second quarter operating income for Texture & Healthful Solutions was $86 million, a decrease of $19 million from the year-ago period, driven by unfavorable price mix, partially offset by recovering volumes and lower input costs. Year-to-date operating income was $160 million, a decrease of $72 million driven by unfavorable price mix and higher input costs, partially offset by improved volume. Excluding foreign exchange impacts, segment operating income was down 17% and 30%, respectively, for the second quarter and year-to-date.
Food & Industrial Ingredients – LATAM
Net Sales
| $ in millions | 2023 | FX Impact |
Volume | Price mix | 2024 | Change | Change excl. FX |
||||||||||
| Second Quarter | 666 | 2 | 28 | (66 | ) | 630 | (5 | %) | (6 | %) | |||||||
| Year-to-Date | 1,333 | 28 | 12 | (127 | ) | 1,246 | (7 | %) | (9 | %) | |||||||
Segment Operating Income
| $ in millions | 2023 | FX Impact |
Business Drivers |
2024 | Change | Change excl. FX |
||||||||
| Second Quarter | 101 | 1 | 28 | 130 | 29 | % | 28 | % | ||||||
| Year-to-Date | 223 | 6 | 2 | 231 | 4 | % | 1 | % | ||||||
- Second quarter operating income for Food & Industrial Ingredients - LATAM was $130 million, an increase of $29 million from the year-ago period, and year-to-date operating income was $231 million, an increase of $8 million from the year-ago period. The increase in both periods was primarily attributable to lower input costs and improved volume, partially offset by price mix. Excluding foreign exchange impacts, segment operating income was up 28% and 1%, respectively, for the second quarter and year-to-date.
Food & Industrial Ingredients - U.S./Canada
Net Sales
| $ in millions | 2023 | FX Impact |
Volume | Price mix | 2024 | Change | Change excl. FX |
||||||||||||
| Second Quarter | 604 | (2 | ) | 11 | (58 | ) | 555 | (8 | %) | (8 | %) | ||||||||
| Year-to-Date | 1,212 | (2 | ) | (13 | ) | (101 | ) | 1,096 | (10 | %) | (9 | %) | |||||||
Segment Operating Income
| $ in millions | 2023 | FX Impact |
Business Drivers |
2024 | Change | Change excl. FX |
|||||||||
| Second Quarter | 80 | (1 | ) | 26 | 105 | 31 | % | 33 | % | ||||||
| Year-to-Date | 172 | (1 | ) | 21 | 192 | 12 | % | 12 | % | ||||||
- Second quarter operating income for Food & Industrial Ingredients - U.S./Canada was $105 million, up $25 million from the year-ago period, and year-to-date operating income was $192 million, an increase of $20 million from the year-ago period. The change 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 33% and 12%, respectively, for the second quarter and year-to-date.
All Other**
Net Sales
| $ in millions | 2023 | FX Impact |
Volume | S. Korea Volume* |
Price mix | 2024 | Change | Change excl. FX |
|||||||||||||
| Second Quarter | 181 | (2 | ) | 14 | (80 | ) | (8 | ) | 105 | (42 | %) | (41 | %) | ||||||||
| Year-to-Date | 378 | (10 | ) | 15 | (131 | ) | (19 | ) | 233 | (38 | %) | (36 | %) | ||||||||
* Represents loss of volume due to the sale of the South Korea business
Segment Operating Income (Loss)
| $ in millions | 2023 | FX Impact |
Business Drivers |
2024 | Change | Change excl. FX |
|||||||||||
| Second Quarter | 3 | 1 | (14 | ) | (10 | ) | (433 | %) | (467 | %) | |||||||
| Year-to-Date | (5 | ) | 0 | (9 | ) | (14 | ) | (180 | %) | (180 | %) | ||||||
- Second quarter operating loss for All Other was $10 million, down $13 million from the prior year, and year-to-date operating loss was $14 million, down $9 million from the prior year, primarily driven by the sale of the 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
In the first half of 2024, the Company paid $104 million in dividends to shareholders and announced a quarterly dividend of $0.78 per share that was paid on July 23, 2024. During the quarter, the Company repurchased $65 million of outstanding shares of common stock.
Updated Third Quarter and Full-Year 2024 Outlook
For the third quarter of 2024, excluding the effects of the sale of the South Korea business, the Company expects net sales to be flat, and reported and adjusted operating income to be up high double-digits.
The Company now expects its full-year 2024 reported EPS to be in the range of $10.20 to $10.70, which includes the impact of the gain on the sale of the South Korea business completed on February 1, 2024.
The Company anticipates adjusted EPS to be in the range of $9.70 to $10.20. Excluding the effects of the sale of the South Korea business, the Company expects full-year 2024 net sales to be down low single-digits, reflecting the pass-through of lower corn values. Reported and adjusted operating income is expected to be up mid-single-digits.
Corporate costs are expected to be up low single-digits.
For full-year 2024, the Company now expects a reported and adjusted effective tax rate of 27.0% to 28.0%, and 26.5% to 27.5%, respectively.
Cash from operations for full-year 2024 is now expected to be in the range of $800 million to $950 million. Capital expenditures for the full year are still expected to be approximately $340 million.
Conference Call and Webcast Details
Ingredion will host a conference call on Tuesday, August 6, 2024, at 8 a.m. CT/ 9 a.m. ET, hosted by Jim Zallie, president and chief executive officer, and Jim Gray, executive vice president and chief financial officer. The call will be webcast in real-time and can be accessed at https://ir.ingredionincorporated.com/events-and-presentations. A presentation containing additional financial and operating information will be accessible through the Company’s website 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, our expectations for third quarter 2024 net sales and reported and adjusted operating income, 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, 773-896-5242
Media: Rick Wion, 708-209-6323