Slide 1: Third Quarter 2022 Earnings Call
Third Quarter 2022 Earnings Call Jim Zallie President and CEO James Gray Executive Vice President and CFO Opening ceremony for the Company’s new state-of-the-art specialty starch facility in Shandong, China
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
Slide 3: CEO Perspective
Jim Zallie President and CEO Third Quarter 2022 Earnings Call CEO Perspective 3
Slide 4: Agenda
Agenda • CEO Perspective • CFO Financial Update • Advancing the DRIVINGROWTH Roadmap • Questions & Answers Specialty Growth Platforms STARCH-BASED CLEAN AND SIMPLE PLANT-BASED SUGAR REDUCTION FOOD TEXTURIZERS INGREDIENTS PROTEINS AND SPECIALTY SYSTEMS SWEETENERS 4
Slide 5: Q3 2022: Excellent top-line performance once again outpaced higher input costs
Q3 2022: Excellent top-line performance once again outpaced higher input costs Third Quarter Third Quarter Net Sales Adjusted Op Income +15% +17% Absent FX impacts Absent FX impacts +19% +23% 5
Slide 6: Strong, consistent net sales performance across all regions in Q3
Strong, consistent net sales performance across all regions in Q3 North America South America Asia-Pacific EMEA +17% +21% +13% +9% Comparable* region growth Absent FX Impacts 17% 25% 23% 27% 13% reported growth, reflects Argentina JV volume impact *South America comparable net sales excludes Argenti
Slide 7: Continued execution against our strategic pillars in Q3 2022
Continued execution against our strategic pillars in Q3 2022 Specialties Growth Commercial Excellence Cost Competitiveness through Operational Excellence • YTD global specialties net sales • Significant, in-year, dynamic • Expanded commodity risk grew mid-double-digits pricing supporting ~$950M of c
Slide 8: New Shandong facility makes Ingredion the largest producer of modified starch in China
New Shandong facility makes Ingredion the largest producer of modified starch in China – well-positioned to meet growing customer demand Modified starch consumption per capita 2022 kg per capita Significant 2.6 headroom 0.7 for growth China US Population 1.5B 0.3B (2022) Projected pop. growth Flat <
Slide 9: PureCircle momentum continues
PureCircle momentum continues • Sugar reduction and specialty sweeteners up strong double-digits • PureCircle customer wins driving results • 19% Q3 net sales growth over prior year • Positive operating income • EU approval of Ingredion REB M stevia solutions • Increased ownership to 85% during the
Slide 10: Our commitment to sustainable sourcing is helping customers meet their own sustainability goals
Our commitment to sustainable sourcing is helping customers meet their own sustainability goals Sourcing Production • Ingredion is on a path to • Achieve a 25% reduction in sustainably source 100% First major food absolute GHG emissions by of corn, tapioca, potato, stevia the end of 2030 ingredient
Slide 11: Navigating the macro environment with continued agility
Navigating the macro environment with continued agility Pandemic Recovery Global Economic Uncertainty Supply chain Inflation FX Consumer price and labor sensitivity 11
Slide 12: Financial Update
James Gray Executive Vice President and CFO Third Quarter 2022 Earnings Call Financial Update 12
Slide 13: Q3: Regional performance: North America and South America
Q3: Regional performance: North America and South America North America South America Net Sales +17% Net Sales $1,262 $1,083 +13% $260 293 2021 2022 2021 2022 • Strong price mix leading to 17% net sales growth • Up 21% excluding Argentina JV volume impact Operating Income Operating Income • $126 mil
Slide 14: Q3: Regional performance: Asia-Pacific and EMEA
Q3: Regional performance: Asia-Pacific and EMEA Asia-Pacific EMEA Net Sales Net Sales +13% 33% $278 +9% $245 $175 $190 2021 2022 2021 2022 • Up 23% excluding foreign currency impacts • Up 27% excluding foreign currency impacts Operating Income Operating Income • $27 million, up $6 million • $30 mill
Slide 15: Q3 Highlights: Income statement
Q3 Highlights: Income statement $ in millions, unless noted Q3 2021 Q3 2022 Change Net Sales $1,763 $2,023 +15% Gross Profit $323 $374 +16% Gross Profit Margin 18.3% 18.5% 20 bps Reported Operating Income $172 $182 +6% Reported Diluted EPS $1.75 $1.59 $(0.16)/share Adjusted Operating Income* $163 $1
Slide 16: Expanding gross margins, overcoming double-digit corn cost inflation
Expanding gross margins, overcoming double-digit corn cost inflation +20 bps 18.3% 18.5% Gross Margin Q3 2021 Q3 2022 Corn cost benchmark: Quarterly US Average Corn Cost* $5.47 $6.36 +16% increase 16 *US futures corn strip per bushel – per CBOT average corn futures daily closing price
Slide 17: Q3: Net Sales bridge
Q3: Net Sales bridge Strong growth demonstrating excellent price/mix management +15% $ in millions $335 $2,023 $1,763 $14 $(71) $(18) Q3 2021 FX Argentina * INGR Volume * Price/Mix Q3 2022 JV Volume 17 Totals may not foot due to rounding *Related to the 2021 Argentina JV announcement, represents 202
Slide 18: Q3: Net Sales variance by region
Q3: Net Sales variance by region Foreign Net Sales Volume Price Mix Exchange Change North America 0% 0% 17% 17% South America* (3%) (4%) 20% 13%** Asia-Pacific (10%) 6% 17% 13% EMEA (18%) (2%) 29% 9% Ingredion* (4%) 0% 19% 15% 18 Totals may not foot due to rounding *Reported net sales above include
Slide 19: Q3: EPS bridge
Q3: EPS bridge Amounts are dollars/share Margin $ 0.47 2021 Reported Diluted EPS $ 1.75 Volume 0.01 Restructuring/Impairment Costs 0.10 Foreign Exchange Rates (0.12) Acquisition/Integration Costs 0.06 Other Income (0.03) Impairment* (0.30) Changes from Operations $ 0.33 Tax and other matters 0.06 20
Slide 20: YTD highlights: Income statement
YTD highlights: Income statement $ in millions, unless noted YTD 2021 YTD 2022 Change Net Sales $5,139 $5,959 +16% Gross Profit $1,041 $1,143 +10% Gross Profit Margin 20.3% 19.2% (110) bps Reported Operating Income $224 $605 170% Reported Diluted EPS $0.74 $5.63 $4.89/share Adjusted Operating Income
Slide 21: YTD: Net Sales bridge
YTD: Net Sales bridge $ in millions +16% $946 $5,959 $5,139 $156 $(136) $(146) YTD 2021 FX Argentina INGR Volume * Price/Mix YTD 2022 JV Volume * 21 Totals may not foot due to rounding *Related to the 2021 Argentina JV announcement, represents 2021 reported results. “INGR Volume” as presented above
Slide 22: YTD: EPS bridge
YTD: EPS bridge Amounts are dollars/share Margin $ 0.89 2021 Reported Diluted EPS $ 0.74 Volume (0.14) Acquisition/Integration Costs 0.09 Restructuring/Impairment Costs 0.25 Foreign Exchange Rates (0.23) Impairment* 5.02 Other Income (0.01) Tax items and other matters (0.52) Changes from Operations
Slide 23: Cash from operations and capital allocation
Cash from operations and capital allocation $ millions Net Income $387 Depreciation and amortization $160 Working capital $(578) Other $111 Cash from operations $80 Capital allocation Capital expenditures, net $(196) Acquisitions and purchase of PureCircle shares* $(47) To Shareholders Dividend paym
Slide 24: Updating Full year 2022 Outlook
Updating Full year 2022 Outlook 2022 Net Sales Up mid-double-digits Full year Adjusted Operating Income* Up low double-digits Financing costs $88 – $93 million Adjusted effective tax rate* 28.5% – 29.5% Cash flow from operations $225 – $275 million CAPEX $290 – $320 million Adjusted EPS* $7.00 to $7
Slide 25: 2022 Full year regional outlook
2022 Full year regional outlook 2022 vs. 2021 • Expect net sales to be up 15% – 20% North America • Expect operating income to be up low to mid-double-digits • Expect net sales to be up 10% – 15% South America • Expect operating income to be up high double-digits • Reflects reported impact of Argent
Slide 26: Our roadmap for value creation
Our roadmap for value creation DRIVINGROWTH Customer CustomerCo-Creation Co-Creation and Consumer ConsumerPreferred Preferred Innovation Innovation Specialty Growth Platforms VALUE CREATION VALUE CREATION STARCH-BASED CLEAN AND SIMPLE PLANT-BASED SUGAR REDUCTION FOOD TEXTURIZERS INGREDIENTS PROTEINS
Slide 27: Investing in texturizers for long-term growth
Investing in texturizers for long-term growth Texturants ingredient volume Texturizer growth capital growth expected to be 3% to 5% 2022 – 2024 (3-5%) $7B $7B 3% to 4% $160M 2% to 3% $4B 5-year CAGR 3% to 5% • Additional modified starch finishing capacity • Expanding starch-based and clean label tex
Slide 28: Remain well-positioned to deliver against our Driving Growth Roadmap
Remain well-positioned to deliver against our Driving Growth Roadmap • Strong performance in the third quarter • Fully offset higher input costs • Expanded gross margins • Delivered strong operating income growth • Agile navigation of current macro challenges • Working with customers to deliver valu
Slide 29: Q&A
We bring the potential of people, nature and technology together to make life better. Q&A
Slide 30: Upcoming investor activities
Upcoming investor activities Baird Global Industrial Conference November 8, 2022 Stephens Annual Investment Conference November 15, 2022 New York non-deal roadshow December 1, 2022 30
Slide 31: Appendix
Appendix vo Ingredion Be what's next.
Slide 32: 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 33: Reconciliation of GAAP net income and diluted EPS to non-GAAP adjusted
Reconciliation of GAAP net income and diluted earnings per share (EPS) to non-GAAP adjusted net income and adjusted diluted EPS Three Months Ended Three Months Ended Nine Months Ended Nine Months Ended September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 (in millions) Diluted
Slide 34: Reconciliation of GAAP net income and diluted EPS to non-GAAP adjusted (continued)
Reconciliation of GAAP net income and diluted earnings per share (EPS) to non-GAAP adjusted net income and adjusted diluted EPS (continued)
Slide 35: 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 Nine Months Ended September 30, September 30, (in millions, pre-tax) 2022 2021 2022 2021 Operating income $ 182 $ 172 $ 605 $ 224 Add back: Acquisition/integration costs (i) - 3 1 1 Restructuring/impairm
Slide 36: Reconciliation of GAAP effective income tax rate to non-GAAP adjusted rate
Reconciliation of GAAP effective income tax rate to non-GAAP adjusted effective income tax rate Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Income before Provision for Effective Income Income before Provision for Effective Income (in millions) Income Taxes (a) Income T
Slide 37: Reconciliation of GAAP effective income tax rate to non-GAAP adjusted rate, cont'd
Reconciliation of GAAP effective income tax rate to non-GAAP adjusted effective income tax rate, cont’d Three Months Ended September 30, 2021 Nine Months Ended September 30, 2021 Income before Provision for Effective Income Income before Provision for Effective Income (in millions) Income Taxes (a)
Slide 38: Reconciliation of anticipated GAAP diluted EPS to anticipated non-GAAP adjusted EPS
Reconciliation of anticipated GAAP diluted earnings per share to anticipated non-GAAP adjusted diluted earnings per share Expected EPS Range for Full-Year 2022 Low End of High End of Guidance Guidance GAAP EPS $ 6.90 $ 7.20 Add: Acquisition/integration costs (i) 0.01 0.01 Restructuring/impairment ch
Slide 39: Reconciliation of reported GAAP effective tax rate to anticipated non-GAAP adjusted rate
Reconciliation of reported GAAP effective tax rate to anticipated non-GAAP adjusted effective income tax rate Low End of High End of Guidance Guidance GAAP ETR 28.0 % 31.5 % Add: Acquisition/integration costs (i) - % - % Restructuring/impairment charges (ii) 0.2 % 0.2 % Other matters (iii) 0.3 % 0.3