Ingredion Incorporated · NYSE:INGR
Ingredion — Investor Day (June 2022)
64 slides from Ingredion's investor day presentation, Jun 2, 2022
Slide 1: 2022 Investor Day
2022 Investor Day Expanded solutions and opportunities to deliver healthy and sustainable growth Exhibit 99
Slide 2: Today's agenda
8:55 a.m. Welcome and Safety Overview Jason Payant, Vice President, Corporate Finance and Interim Vice President, Investor Relations 9 a.m. Executive Presentations 10:10 a.m. Management Q&A Session 10:30 a.m. Introduction to R&D Headquarters and Tour Greg Aloi, Vice President, Global Customer Co-Cre
Slide 3: A brief note on safety
Dial 5100 on any phone to summon the site’s Emergency Response Team Ingredion personnel are standing by to assist and call external services A brief note on safety . . . In case of a medical emergency: The primary exit is behind you Leave the room, turn right, and exit out the lobby doors Once outsi
Slide 4: 2022 Investor Day: Jim Zallie
2022 Investor Day Jim Zallie President and Chief Executive Officer Expanded solutions and opportunities to deliver healthy and sustainable growth
Slide 5: Forward-Looking Statements
Forward-Looking Statements This presentation 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 co
Slide 6: Presenters
Jim Zallie President and Chief Executive Officer Strategic growth and transformation Jeremy Xu Chief Innovation Officer, President, Specialty Sweeteners and PureCircle CEO Innovation capabilities and sugar reduction strategy Pierre Perez y Landazuri Senior Vice President, Corporate Strategy, Special
Slide 7: Strategic growth and transformation
Jim Zallie President and CEO Strategic growth and transformation
Slide 8: A leading global, plant-based ingredient solutions provider
A leading global, plant-based ingredient solutions provider $7B 2021 Net Sales NYSE: INGR 19K Customers in >120 countries 70% 2021 Global new product launches contain ingredients that Ingredion produces1 32 Ingredion Idea Labs innovation centers >500 Global food technology R&D scientists >1,800 Pate
Slide 9: Purpose-driven, sustainable sourcing, healthy plant-based solutions
We are purpose-driven, committed to sustainable sourcing and offer great-tasting and healthy plant-based solutions We bring the potential of people, nature and technology together to make life better Sustainable and trusted sourcing Protein fortifying Pulse-based proteins enable manufacturers to for
Slide 10: Our strategic pillars to forge growth
Our strategic pillars to forge growth Continuously optimize our operations and global support functions to reduce waste and lower our costs Cost Competitiveness through Operational Excellence Unleash the potential of our people by fostering a diverse, equitable and inclusive culture and living our p
Slide 11: Innovation strategy aligned with consumer trends and customer needs
Our innovation strategy is aligned with consumer trends and customer needs Global consumer trends Customer needs Healthy living and eating Uncompromised taste and texture Progressive innovation partners Technologies and systems that support nutrition and health Broad sugar reduction portfolio Protei
Slide 12: Expanding specialties portfolio supported by stable, cash-generating core
An expanding specialties portfolio…supported by a stable, cash-generating core E $6.0 ingredients ingredients ~$8b 24% 76% 33% 67% 60% 40% Specialty ingredients and Core ingredients are defined in Form 10-K for the year ended December 31, 2021 Note: Forward outlook assumes constant raw material cost
Slide 13: Organic growth accelerated by >$700 million of investments
Organic growth will be accelerated by >$700 million of investments we’ve made over the last four years $250m In plant-based proteins Ramping-up; expanding pipeline >$250m In sugar reduction Early stage accelerating growth $100m In tapioca, rice and potato Existing and new market growth; accretive $9
Slide 14: Investments provide access to large and growing markets
These investments provide access to large and growing markets FOOD SYSTEMS STARCH-BASED TEXTURIZERS CLEAN AND SIMPLE INGREDIENTS $18B* market Starches Hydrocolloids Fibers PLANT-BASED PROTEINS Alternative proteins $10B* market SUGAR REDUCTION AND SPECIALTY SWEETENERS Sugar reduction $5B* market *Int
Slide 15: New possibilities to innovate with our customers
And have unlocked new possibilities for us to innovate with our customers Low calorie Reduced sugar Dairy and animal-free Plant- based Clean label Indulgent 11
Slide 16: Innovation capabilities and sugar reduction strategy
Jeremy Xu Chief Innovation Officer, President, Specialty Sweeteners and PureCircle CEO Innovation capabilities and sugar reduction strategy
Slide 17: Innovation agenda shaped by consumers and customers
Our innovation agenda is shaped by consumers and customers Customers Co-creation of new products Global Food Applications Snacks and bakery Savory Meat/Dairy Alternatives Dairy Confections Beverage Specialty Growth Platforms SBT C&SI PBP SR&SS FS Consumer, industry and customer insights Functional C
Slide 18: Six science and technology platforms
Advanced biotechnology Development of novel or enhanced carbohydrates, enzymes, proteins, sweeteners and functional ingredients New and improved sustainable plant-based materials for food and industrial applications Optimized for functionality, cost, and quality Plant science Six science and technol
Slide 19: Six industry leading functional capabilities
Supported by six industry leading functional capabilities Sensory External, technology-based partnerships and investment opportunities Focused ecosystems participating to support our Growth and Technology Platforms Protect, defend and facilitate growth with intellectual property assets and risk mana
Slide 20: Co-creating with customers through global Idea Labs
Co-creating with customers through our global Idea Labs Snacks and bakery Savory Meat/Dairy alternatives Dairy Confections Beverages New ingredient design Food ingredients knowledge New food concept creation Differentiated texture delivery Food formulation expertise Food processing knowledge Custome
Slide 21: Transforming how we co-create with customers digitally
And how we are interacting with customers is transforming, to engage in ways to co-create digitally 14 Plant-based new product launches from Ingredion Idea Labs 160 Number of 24/7 technical support staff >14K Customers engaged in co-creation ~2,500** Increase in virtual engagements >30%* Increase of
Slide 22: Sugar reduction solutions represent significant growth potential
Sugar reduction solutions represent significant growth potential Total addressable sugar reduction ingredient market currently at $5b growing to ~$7b by 2026 Global leader in natural high-intensity sweeteners “The perfectly sweet trifecta” partnership Source: Internally compiled detail across variou
Slide 23: Reb M stevia cost in use becoming competitive with sugar
Nature-based Reb M stevia cost in use is becoming competitive with U.S. sugar prices with significant headroom for growth *Reb M $1,250 Source: China Sweetener News, USDA, Sosland, Ingredion market intelligence U.S. Sugar Bioconverted Stevia (Reb M) $/MT (White Sugar Equivalence) Market Size (2022)
Slide 24: PureCircle's vertically integrated value chain
Traceable Natural origin Zero calorie stevia-based ingredients Innovative solutions Great taste Clean label PureCircle’s vertically integrated value chain enables delivery of natural origin, no-calorie sweetening Agronomy research Leaf production Customers and consumer Extraction Purification Produc
Slide 25: PureCircle's leadership meets consumer demands and customer needs
PureCircle’s leadership is enabled by meeting consumer demands and customer needs Consumer demands Customer needs Great taste Calorie-free Clean label Natural origin Vertically integrated, trusted partner Broad portfolio of solutions Sustainable sourcing and traceability Solutions for regulatory, ta
Slide 26: Texture and food systems platforms, co-creating with customers
Pierre Perez y Landazuri Senior Vice President, Corporate Strategy, Specialties and President, EMEA Texture and food systems platforms, co-creating with our customers
Slide 27: What constitutes a specialty ingredient?
What constitutes a specialty ingredient? Unique value propositions Growing, on-trend demand Supported by applications research and technical service Competitively differentiated Gross profit threshold 21% % of Specialty Net Sales $1.4b ~$3.2b Specialty Net Sales Specialty ingredients are defined in
Slide 28: Specialty ingredients led by five growth platforms
Specialty ingredients are led by our five growth platforms and enhanced by nutrition and taste Protect and extend our lead STARCH-BASED TEXTURIZERS Lead and pioneer CLEAN AND SIMPLE INGREDIENTS Grow with market and differentiate PLANT-BASED PROTEINS Capture market growth SUGAR REDUCTION AND SPECIALT
Slide 29: Specialties resilient through pandemic, grew strongly 2020 and 2021
Specialties proved resilient through the pandemic and grew strongly in both 2020 and 2021 North America* Growth in starch-based texturizers and clean and simple ingredients Growth in starch-based texturizers and specialty sweeteners Growth in tapioca and rice-based starch-based texturizers and sugar
Slide 30: Broadest and deepest portfolio of specialty starches
We offer the broadest and deepest portfolio of specialty starches globally North America South America Asia-Pacific Europe, Middle East and Africa 6 plants Corn | Potato Tapioca 4 plants Corn | Tapioca 14 plants Corn | Potato Tapioca 6 plants Tapioca | Corn Rice Our worldwide starch manufacturing fo
Slide 31: Texture represents an $18 billion global market
Texture represents an $18 billion global market 2021 Global ingredient sales ~$165b 2021 Texturants ingredient sales ~$18b Source: 2021 estimated global market; Markets and Markets, Allied Market Research, Technavio, Mordor Intelligence, LMC Global Sweetener Market, Market Research Future, Market Da
Slide 32: Texture impacts taste; we are a global leader in texturizers
Texture has important impact on taste, and we are a global leader in texturizers *Hydrocolloids included: xanthan, gellan, carrageenan, pectin, locust bean, and CMC Sources: Innova Database, 2017-2021; Ingredion internal intelligence, team analysis Product launches containing both starch and hydroco
Slide 33: Texturizer sales expected to reach $1.9B by 2025
Our Texturizer sales are expected to reach $1.9B by 2025 68% 19% E. $B ~ $1.9B >5.0% 2021 – 2025 Growth Outlook Clean & Simple 13% Note: Forward outlook assumes constant raw material costs and that future price changes can be implemented to offset changes in raw material costs 29 2021
Slide 34: Growth opportunities in emerging markets for specialty starch
Substantial growth opportunities in targeted emerging markets for specialty starch 2022 kg per capita Source: Euromonitor, World Population Review, Statista, Census, Our World in Data Modified starch consumption per capita comparably low in emerging markets, representing a strong growth opportunity
Slide 35: ~$160m capital investment into specialty starches
Announcing ~$160m of capital investment into specialty starches to expand capacity, optimize our supply chain and fuel organic growth $160m Texturizer Growth Capital 2022 – 2024 Additional modified starch finishing capacity Expanding starch-based and clean label texturizers Localizing more Asia-Paci
Slide 36: Co-creating food systems with customers
An example of co-creating food systems with customers SIMPLISTICA® PROTEIN SYSTEM Vegan Feta-type crumbles Ingredients % SIMPLISTICA® PROTEIN SYSTEM 10.00 SIMPLISTICA® TEXTURE SYSTEM 12.25 Water 57.96 Coconut oil, refined 15.00 Citric acid, 10% solution 2.24 Kosher salt 1.00 Nutritional yeast 0.80
Slide 37: Plant-based proteins investments
Jorgen Kokke Executive Vice President and President, Americas Plant-based proteins investments
Slide 38: Growth prospects for plant-based proteins
Excited about the growth prospects for plant-based proteins Global alternative protein market projected to grow >7% CAGR over next five years Over 1/3 of consumers are seeking to increase their consumption of plant-based proteins* Opportunities across four growing consumer-preferred categories Alter
Slide 39: Plant-based protein sales accelerating
Our sales in plant-based proteins are accelerating fueled by operational excellence and 14 new product launches >250% Vs Q1, '21 2022 Net Sales on track Feb 2022 Equity participation in Innovopro chickpea protein Jan 2022 Increased project pipeline by 3.5x YOY Dec 2021 Ultra Performance launch sourc
Slide 40: South Sioux City facility producing pea protein isolates
South Sioux City facility is producing a range of pea protein isolates Production up 6X vs. 2021 36
Slide 41: Vanscoy facility produces protein flours and concentrates
Vanscoy facility produces protein flours and concentrates from different pulses Production up 2X vs. 2021 Yellow pea Chickpea Yellow lentil Faba bean 37
Slide 42: Plant-based proteins complement specialty portfolio
Plant-based proteins are complementary to our specialty portfolio and enhance our value propositions PLANT-BASED PROTEINS Alternative proteins $10B* market Source: Internally compiled detail across various sources, including: Arizton Research, Mordor, Intelligence, CSO, Markets & Markets, RD Reports
Slide 43: Pursuing core ingredient opportunities
Pursuing core ingredient opportunities
Slide 44: Core ingredients provide stable cash generation and upside
Our Core ingredients portfolio provides stable cash generation and future upside to growing populations E $6.0 ingredients ingredients ~$8b 24% 76% 33% 67% 60% 40% Specialty ingredients and Core ingredients are defined in Form 10-K for the year ended December 31, 2021 Note: Forward outlook assumes c
Slide 45: Core ingredients exposed to growing populations
Majority of our core ingredients portfolio are exposed to growing populations Expect core ingredients to grow low single digits Repurposing of production toward higher-value offerings such as: Starch-based strength additives for a growing corrugated market Polyols for personal care and pharma Reduci
Slide 46: HFCS a decreasing portion of U.S. core business
Within U.S. core ingredients, HFCS represents a decreasing portion of the business 2021 Net Sales $4.6b Core product sales U.S Gross Profit – Core Ingredients Proportion of Gross Profit Dollars 2018 2021 Sweetener 46% 50% Brewing Confectionary Bakery Industrial and personal care Starches 25% 30% Pap
Slide 47: Financial outlook and shareholder value creation
Jim Gray Executive Vice President and Chief Financial Officer Financial outlook and shareholder value creation while managing volatility
Slide 48: Four-year performance outlook
Four-year performance outlook assumes profit growth and increasing cash flow available for strategic value creation - 2021 2022-2025 Growth goal Net Sales $6.9b 2% to 4% Adjusted Operating Income Margin $685m 10% 7% to 9% +30 to 50 bps p.a. Normalized Cash From Operations $611m 2020-21 Average >10%
Slide 49: Specialty portfolio drives four-year net sales growth outlook
Operating income margin Op income 10% 11% to 12% Plus 30 to 50 bps per year Net sales growth objective assumes constant currency and corn/raw material costs equivalent to 2021. 67% ingredients $6.9b 33% ingredients >40% <60% ~$8B $0.7b Specialty portfolio drives four-year net sales growth outlook 20
Slide 50: Sources of volatility across regions
Heightened awareness as sources of volatility across all regions are impacted by global disruptions and rising regional costs Logistics Global logistical disruptions and rising regional freight costs Agri Input Tightening global supply Energy Strong post-pandemic global recovery, with uncertain supp
Slide 51: Driving continuous efficiency
Driving continuous efficiency Overcoming cost inflation through continuous improvement Investing in digital capability solutions to drive efficiency Leveraging low-cost shared services to enable growth and efficiency Cost competitiveness to mitigate inflation 47
Slide 52: Releasing capacity and reducing volatility
Releasing capacity and reducing volatility Continuous debottlenecking to drive uptime Improving forward visibility of customer demand to ensure service Increasing reliability throughout the supply chain Progressing pricing excellence, contract terms and hedging practices Actions we are taking to att
Slide 53: Valuation attractive relative to ROIC and FCF yield
Valuation is attractive relative to ROIC and FCF yield 7.2% Four-year average FCF yield* E. 12.0% - 13.0% Adjusted ROIC* Delivering improving ROIC Attractive FCF contribution to fuel growth *Return on invested capital (ROIC); See the appendix on the calculation of these non-GAAP measures Note: Forwa
Slide 54: Improving TSR through balance sheet, dividends and repurchases
We are committed to improving TSR through purposeful use of our strong balance sheet, dividend growth and share repurchase 1 Investment in the business Investment in organic growth projects with attractive ROIC* Value enhancing M&A to accelerate specialties growth 2 Dividends Attractive dividend yie
Slide 55: Closing comments
® Ingredion. Be what's next. Closing comments
Slide 56: Our roadmap for value creation
Our roadmap for value creation STARCH-BASED TEXTURIZERS CLEAN AND SIMPLE INGREDIENTS PLANT-BASED PROTEINS SUGAR REDUCTION AND SPECIALTY SWEETENERS FOOD SYSTEMS Customer Co-Creation and Consumer Preferred Innovation Purpose and Performance Driven Culture Customer Co-Creation and Consumer Preferred In
Slide 57: Our ESG commitments will shape how we grow
Our ESG commitments will shape how we grow https://www.ingredion.com/na/en-us/company/meet-ingredion/sustainability.html 2021 DEI Report released May 24, 2022 https://www.ingredion.com/content/dam/ingredion/2022/documents/corporate/ing-dei-2021-final.pdf 2021 Sustainability Report released May 16, 2
Slide 58: Investments provide ~$0.9b in sales growth over four years
Our investments in texturizers, sugar reduction, and plant-based proteins provide ~$0.9b in sales growth over the next four years 70% 33% $2.3B 67% 67% 33% $2.3b < 60% Net sales growth objective assumes constant currency and corn/raw material costs equivalent to 2021. May not foot due to rounding 20
Slide 59: Value-creating M&A role in our transformation
Value-creating M&A has been and will continue to play an important role in our transformation *ASTRAEA® is trademark of Matsutani Chemical Industry Co., Ltd. Used with permission. 2015 2019 M&A/Ventures Strategic capital China modified starch 2021 2017 Mexico capacity 2020 Shandong capacity 2018 Pla
Slide 60: Q&A
Q&A We bring the potential of people, nature and technology together to make life better.
Slide 61: Thank you for attending
2022 Investor Day Thank you for attending 57
Slide 62: Introduction to tour
Greg Aloi, Vice President, Global Customer Co-Creation and Applications Introduction to tour
Slide 63: Digitally connected global Ingredion Idea Labs
32 Digitally connected global Ingredion Idea Labs Invite customer co-creation using consumer insights and science-based problem solving 59
Slide 64: Tour leads
Hazel Fromm-Tatosian Senior Director, Global Applications Innovation tour leads Dennis Sawchuk Vice President, Research Leaslie Carr Senior Director, Customer Solutions and Product Innovation US/Canada 1 2 3 60