Slide 1: Fourth Quarter and Full Year 2022 Earnings Call
Fourth Quarter and Full Year 2022 Earnings Call Jim Zallie President and CEO James Gray Executive Vice President and CFO
Slide 2: Non-GAAP Financial Measures and Forward-Looking Statements
Non-GAAP Financial Measures This presentation provides information about adjusted diluted earnings per share (“adjusted EPS”), adjusted operating income, adjusted effective income tax rate, and other financial measures (collectively, the “non-GAAP financial measures”) which are not measurements of f
Slide 3: CEO Perspective - Resilient Performance
Jim Zallie President and CEO Fourth Quarter and Full Year 2022 Earnings Call CEO Perspective - Resilient Performance 3
Slide 4: Agenda
Agenda • CEO Perspective – Resilient Performance • CFO Financial Update • Advancing our DRIVINGROWTH Roadmap • Questions & Answers 4
Slide 5: Successfully overcame 2022 macroeconomic headwinds
Successfully overcame 2022 macroeconomic headwinds Ukraine Inflation Energy Supply Chain/Labor Extreme Weather COVID-19 Rail Disruptions FX 5
Slide 6: Q4 capped a strong 2022: top-line and operating income growth
Q4 capped a strong 2022: Exceptional top-line and operating income growth more than offset higher input costs in the quarter Q4 Net Sales Q4 Adjusted Op Income +13% +49% Absent FX impacts Absent FX impacts +17% +57% Full year +15% +18% +15% +19% 6
Slide 7: Q4 continued to demonstrate strong net sales growth across all regions
Q4 continued to demonstrate strong net sales growth across all regions North America South America Asia-Pacific EMEA +17% +13% +5% +7% Absent FX Impacts 17% 15% 14% 22% Full year +19% +23% +11% +11% Comparable* region growth Absent FX Impacts 20% 24% 19% 25% 6% reported growth, reflects Argentina JV
Slide 8: Continued execution against our strategic pillars
Continued execution against our strategic pillars Specialties Growth Commercial Excellence Cost Competitiveness through Operational Excellence • Progressed global optimization of • Significant, in-year, dynamic • Expanded commodity risk specialty food starch capacity pricing and customer and coverag
Slide 9: PureCircle momentum continues
PureCircle momentum continues • Sugar reduction and specialty sweeteners over $400M net sales, up 17% year-over-year • PureCircle customer wins driving results • 14% full-year net sales growth over comparable period • Operating income growth driven by volume growth and breakthrough product innovatio
Slide 10: Plant-based proteins: Slower sales ramp yet compelling growth opportunities remain
Plant-based proteins: Slower sales ramp yet compelling growth opportunities remain 2022 Performance Plant-based Net Sales Compelling Market Drivers ($M) 6-8% market growth for our 50-70 types of protein Doubled, Net Sales yet below expectations 38% of consumers say they regularly eat plant-based alt
Slide 11: Expanding specialty pharma capabilities
Expanding specialty pharma capabilities • Recently consolidated our global go to market approach for the products we sell into the pharmaceutical sector • In second half, acquired two small pharma specialty companies in India focused on the growing India pharmaceutical demand • Enables tablet and ca
Slide 12: Financial Update
James Gray Executive Vice President and CFO Fourth Quarter and Full Year 2022 Earnings Call Financial Update 12
Slide 13: Q4 highlights: Income statement
Q4 highlights: Income statement $ in millions, unless noted Q4 2021 Q4 2022 Change Net Sales $1,755 $1,987 +13% Gross Profit $290 $351 +21% Gross Profit Margin 16.5% 17.7% 120 bps Reported Operating Income $86 $157 +83% Reported Diluted EPS $0.99 $1.71 $0.72/share Adjusted Operating Income* $113 $16
Slide 14: Q4: Net sales bridge
Q4: Net sales bridge Strong growth demonstrating excellent price mix management +13% $ in millions $336 $1,987 $1,755 $(65) $(39) Q4 2021 FX Volume Price/Mix Q4 2022 14 Totals may not foot due to rounding
Slide 15: Q4: Net sales variance by region
Q4: Net sales variance by region Foreign Net Sales Volume Price Mix Exchange Change North America -1% -1% 19% 17% South America -2% -4% 19% 13% Asia-Pacific -9% -3% 17% 5% EMEA -15% -3% 25% 7% Ingredion -4% -2% 19% 13% 15 Totals may not foot due to rounding
Slide 16: In Q4, gross margins expanded overcoming corn cost inflation
In Q4, gross margins expanded overcoming significant corn cost inflation +120 bps Gross margin 17.7% 16.5% Q4 2021 Q4 2022 Corn cost benchmark: $5.67 $6.70 +18% increase U.S. average corn cost* Gross Profit dollars for FY2022 up 12% 16 *US futures corn strip per bushel – per CBOT average corn future
Slide 17: Q4: EPS bridge
Q4: EPS bridge Amounts are dollars/share Margin $ 0.82 2021 Reported Diluted EPS $ 0.99 Volume (0.09) Restructuring/Impairment Costs 0.28 Foreign Exchange Rates (0.10) Acquisition/Integration Costs 0.01 Other Income (0.01) Tax and other matters (0.19) Changes from Operations $ 0.62 2021 Adjusted Dil
Slide 18: Full year highlights: Income statement
Full year highlights: Income statement $ in millions, unless noted FY 2021 FY 2022 Change Net Sales $6,894 $7,946 +15% Gross Profit $1,331 $1,494 +12% Gross Profit Margin 19.3% 18.8% (50) bps Reported Operating Income $310 $762 146% Reported Diluted EPS $1.73 $7.34 $5.61/share Adjusted Operating Inc
Slide 19: Full year: Net sales bridge
Full year: Net sales bridge $ in millions +15% $1,282 $7,946 $6,894 $117 $(201) $(146) FY 2021 FX Argentina INGR Volume* Price/Mix FY 2022 JV Volume* 19 Totals may not foot due to rounding *Related to the 2021 Argentina JV announcement, represents 2021 reported results from Q1, Q2 and Q3 2021. “INGR
Slide 20: Full year: Net sales variance by region
Full year: Net sales variance by region Foreign Net Sales Volume Price Mix Exchange Change North America -1% 1% 19% 19% South America* -1% -12% 19% 6%** Asia-Pacific -8% 5% 14% 11% EMEA -14% 2% 23% 11% Ingredion* -3% -1% 19% 15%** Totals may not foot due to rounding 20 *Figures presented represent t
Slide 21: Full year regional performance: North America and South America
Full year regional performance: North America and South America North America South America* Net Sales Net Sales +19% +23% $4,934 $1,124 $4,137 $911 2021 2022 2021* 2022 Specialty Specialty Ingredients % 27% 28% Ingredients % 22% 24% of Net Sales of Net Sales Vs PY Vs PY Op Income $ $487 $565 16% Op
Slide 22: Full year regional performance: Asia-Pacific and EMEA
Full year regional performance: Asia-Pacific and EMEA Asia-Pacific EMEA Net Sales Absent FX Net Sales Absent FX +11% impacts +11% impacts $1,107 +19% $781 +25% $997 33% $703 2021 2022 2021 2022 Specialty Specialty Ingredients % 57% 57% Ingredients % 55% 55% of Net Sales of Net Sales Vs PY Vs PY Op I
Slide 23: Full year: EPS bridge
Full year: EPS bridge Amounts are dollars/share Margin $ 1.70 2021 Reported Diluted EPS $ 1.73 Volume (0.23) Acquisition/Integration Costs 0.10 Foreign Exchange Rates (0.33) Restructuring/Impairment Costs 0.53 Other Income (0.02) Impairment* 5.01 Changes from Operations $ 1.12 Tax items and other ma
Slide 24: Cash from operations and capital allocation
Cash from operations and capital allocation $ millions Net Income $502 Depreciation and amortization $215 Working capital $(620) Other $55 Cash from operations $152 Capital allocation Capital expenditures, net $(293) Acquisitions and purchase of non-controlling interests* $(75) To Shareholders Divid
Slide 25: Full year 2023 outlook
Full year 2023 outlook 2023 Net Sales Up mid-double-digits Full year Adjusted Operating Income* Up high single-digits to low double-digits Financing costs $106 – $122 million Adjusted effective tax rate* 26.5% – 28.5% Cash flow from operations $550 – $650 million CAPEX Approximately $300 million Adj
Slide 26: 2023 Full year regional outlook
2023 Full year regional outlook 2023 vs. 2022 • Expect net sales to be up 15% – 20% North America • Expect operating income to be up low double-digits • Expect net sales to be up 5% – 10% South America • Expect operating income to be up low single-digits • Expect net sales to be up 10% – 15% Asia-Pa
Slide 27: Remain well-positioned to deliver against our strategic pillars for growth
Remain well-positioned to deliver against our strategic pillars for growth • Agile navigation of macro challenges led to strong performance for the year • Well-positioned to execute against 2023 strategic pillars for growth: Focusing on growing our specialty ingredients portfolio Increasing plan
Slide 28: Q&A
We bring the potential of people, nature and technology together to make life better. Q&A
Slide 29: Upcoming investor activities
Upcoming investor activities CAGNY 2023 February 22, 2023 London non-deal roadshow March 15, 2023 2023 Exane BNP Paribas conference March 16, 2023 29
Slide 30: Appendix
Appendix NN Ingredion Be what's next
Slide 31: Non-GAAP Information
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 impai
Slide 32: Reconciliation of GAAP net income and diluted EPS to non-GAAP
Reconciliation of GAAP net income and diluted earnings per share (EPS) to non-GAAP adjusted net income and adjusted diluted EPS Totals may not foot due to rounding
Slide 33: Reconciliation of GAAP net income and diluted EPS (continued)
Reconciliation of GAAP net income and diluted earnings per share (EPS) to non-GAAP adjusted net income and adjusted diluted EPS (continued) Notes (i) During the three and twelve months ended December 31, 2022, we recorded $4 million and $5 million, respectively, of pre-tax acquisition and integratio
Slide 34: Reconciliation of GAAP operating income to non-GAAP adjusted operating income
Reconciliation of GAAP operating income to non-GAAP adjusted operating income Three Months Ended Twelve Months Ended December 31, December 31, (in millions, pre-tax) 2022 2021 2022 2021 Operating income $ 157 $ 86 $ 762 $ 310 Add back: Acquisition/integration costs (i) - 2 1 3 Restructuring/impairme
Slide 35: Reconciliation of GAAP effective income tax rate to non-GAAP
Reconciliation of GAAP effective income tax rate to non-GAAP adjusted effective income tax rate Three Months Ended December 31, 2022 Twelve Months Ended December 31, 2022 Income before Provision for Effective Income before Provision for Effective Income Taxes Income Taxes Income Income Taxes Income
Slide 36: Reconciliation of GAAP effective income tax rate to non-GAAP, cont'd
Reconciliation of GAAP effective income tax rate to non-GAAP adjusted effective income tax rate, cont’d Three Months Ended December 31, 2021 Twelve months ended December 31, 2021 Income Effective Income Effective before Provision for Income before Provision for Income Income Taxes Income Taxes Tax R