Ingredion Incorporated · NYSE:INGR
Ingredion — Q1 2022 Earnings Presentation
33 slides from Ingredion's earnings presentation, May 5, 2022
Slide 1: First Quarter 2022 Earnings Call
First Quarter 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
Slide 3: 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 3
Slide 4: CEO Perspective
Jim Zallie President and CEO First Quarter 2022 Earnings Call CEO Perspective 4
Slide 5: Q1 2022: Outstanding top-line performance outpaced higher input costs
Q1 2022: Outstanding top-line performance outpaced higher input costs First Quarter First Quarter Net Sales Adjusted Op Income +17% +6% Absent FX impacts Absent FX impacts +19% +8% 5
Slide 6: Strong and consistent regional net sales performance in Q1
Strong and consistent regional net sales performance in Q1 Each region delivered comparable double-digit net sales growth North America South America Asia-Pacific EMEA +24% +23% +16% +20% Comparable region growth Region Net Sales $1.2B $0.2B $0.3B $0.2B - 8% reported growth, reflects Arcor JV 6 CONF
Slide 7: Pricing centers of excellence delivered strong price mix gains offsetting inflation
Pricing centers of excellence delivered strong price mix gains offsetting inflation North America South America Asia-Pacific EMEA % ∆ vs PY Price 20% 25% 7% 17% Mix Comparable* region growth Volume 4% -3% 14% 11% *South America comparable net sales growth of 23% includes price mix of 25%, Fx impact
Slide 8: Strengthening our strategic pillars in Q1 2022
Strengthening our strategic pillars in Q1 2022 Specialties Growth Commercial Excellence Cost Competitiveness through Operational Excellence • Global Specialties net sales • Coordinated closely with • Increasing production while grew 20% customers and our supply chain navigating supply chain • Net sa
Slide 9: Plant-based protein sales up sharply supported by doubling production at South Sioux City
Plant-based protein sales up sharply supported by doubling production at South Sioux City So. Sioux City Pea Protein Isolate 2022 Net Sales on Track Production Ramp-up has doubled 205% >250% 100% Vs Q1, '21 Dec. Jan. Feb. March 9
Slide 10: Our results reflect the resiliency of our teams in the face of global disruptions
Our results reflect the resiliency of our teams in the face of global disruptions Ukraine Inflation COVID • Supporting affected employees • Successfully navigating the impact • Dedication and agility by local and humanitarian efforts of energy and agri input inflation Chinese team to continue to ope
Slide 11: CFO Perspective
James Gray Executive Vice President and CFO First Quarter 2022 Earnings Call CFO Perspective 11
Slide 12: Q1: Regional performance: North America and South America
Q1: Regional performance: North America and South America North America South America Net Sales +24% Net Sales $1,174 $945 -8% $273 $252 2021 2022 2021 2022 • Strong price mix leading to 24% net sales growth • Down 8% excluding foreign currency impacts • Up 23% excluding Arcor JV volume impact Opera
Slide 13: Q1: Regional performance: Asia-Pacific and EMEA
Q1: Regional performance: Asia-Pacific and EMEA Asia-Pacific EMEA Net Sales Net Sales +16% 33% $272 +20% $235 $161 $194 2021 2022 2021 2022 • Up 21% excluding foreign currency impacts • Up 28% excluding foreign currency impacts • Includes PureCircle • Includes KaTech Operating Income Operating Incom
Slide 14: Q1 Highlights: Income statement
Q1 Highlights: Income statement $ in millions, unless noted Q1 2021 Q1 2022 Change Net Sales $1,614 $1,892 +17% Gross Profit $351 $379 +8% Gross Profit Margin 21.7% 20.0% (170)Bps Reported Operating Income $(170) $210 $380 Reported Diluted EPS $(3.66) $1.92 $5.58/share Adjusted Operating Income* $20
Slide 15: Q1: Net Sales bridge
Q1: Net Sales bridge Strong growth demonstrating excellent price management +17% $ in millions $283 $1,892 $1,614 $19 $(24) Pakistan $(7) Europe $(6) ASEANI $(6) Q1 2021 FX Volume Price/Mix Q1 2022 15 Totals may not foot due to rounding
Slide 16: Q1: Net Sales variance by region
Q1: Net Sales variance by region Foreign Net Sales Volume Price Mix Exchange Change North America 0% 4% 20% 24% South America* 0% (27)% 19% (8)%** Asia-Pacific (5)% 14% 7% 16% EMEA (8)% 11% 17% 20% Ingredion* (2)% 1% 18% 17% 16 Totals may not foot due to rounding *Reported net sales above include pr
Slide 17: Q1: EPS bridge
Q1: EPS bridge Amounts are dollars/share Margin $ 0.19 2021 Reported Diluted EPS $ (3.66) Volume (0.03) Restructuring/Impairment Costs 0.12 Foreign Exchange Rates (0.04) Acquisition/Integration Costs 0.01 Other Income 0.00 Impairment** 5.35 Changes from Operations $ 0.12 Tax and other matters 0.05 D
Slide 18: Q1: Cash used for operations and cash deployment
Q1: Cash used for operations and cash deployment $ millions Net Income $133 Depreciation and amortization $53 Working capital $(290) Other $52 Cash used for operations $(52) Cash deployment Capital expenditures $(85) Dividend payments to Ingredion shareholders $(43) Share repurchase, net $(39) 18 To
Slide 19: Maintaining Full Year 2022 adjusted EPS expectations
Maintaining Full Year 2022 adjusted EPS expectations 2022 • Anticipated 2022 adjusted EPS* $6.85 to $7.45; excluding acquisition-related integration Full and restructuring costs, as well as any potential impairment costs year • Expect net sales to be up low double-digits • Expect adjusted operating
Slide 20: 2022 Full year regional outlook and Q2 preview
2022 Full year regional outlook and Q2 preview North • Expect net sales to be up 10% - 15% 2022 vs. America • Expect operating income to be up low to mid-double-digits 2021 • Expect net sales to be down low to mid-single-digits South • Expect operating income to be up low single-digits America • Ref
Slide 21: 2021 Sustainability report
2021 Sustainability report Available May 11, 2022 https://www.ingredion.com/na/ https://ir.ingredionincorpo en-us/company/meet- rated.com/static- ingredion/sustainability.html files/2a60ec11-5eb1-4fb6- 2021 Annual Report released April 7, 2022 9db7-8779a5e5ecaf 21
Slide 22: 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 23: Q&A
We bring the potential of people, nature and technology together to make life better. Q&A
Slide 24: Ingredion Investor Day Upcoming Investor Activities
Ingredion Investor Day Upcoming Investor Activities Expanded solutions and opportunities that deliver healthy and sustainable growth Thursday, June 2, 2022 9 a.m. ET Global R&D Headquarters BMO Farm-to-Market Conference Bridgewater, NJ May 18, 2022 To register for the webcast and preview the investo
Slide 25: Appendix
Appendix vo Ingredion Be what's next.
Slide 26: 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 27: 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 March 31, 2022 March 31, 2021 (in millions) Diluted EPS (in millions) Diluted EPS Net income (loss) attributable to Ingredion $ 130 $
Slide 28: 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 first quarter of 2022, the Company recorded pre-tax acquisition and integration charges of $1 million for our acquisition and integration o
Slide 29: 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 March 31, (in millions, pre-tax) 2022 2021 Operating income (loss) $ 210 $ (170) Add back: Acquisition/integration costs (i) 1 1 Restructuring/impairment charges (ii) 2 10 Impairment on assets held for s
Slide 30: 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 March 31, 2022 Income before Provision for Effective Income (in millions) Income Taxes (a) Income Taxes (b) Tax Rate (b / a) As Reported $ 187 $ 54 28.9% Add back: Acquisition/integrati
Slide 31: Reconciliation of GAAP effective income tax rate, cont'd
Reconciliation of GAAP effective income tax rate to non-GAAP adjusted effective income tax rate, cont’d Three Months Ended March 31, 2021 Income (Loss) before Provision for Effective Income (in millions) Income Taxes (a) Income Taxes (b) Tax Rate (b / a) As Reported $ (188) $ 55 (29.3%) Add back: Ac
Slide 32: Reconciliation of anticipated GAAP diluted EPS to non-GAAP adjusted
Reconciliation of anticipated GAAP diluted earnings per share to anticipated non-GAAP adjusted diluted earnings per share Anticipated EPS Range for Full Year 2022 Low End High End GAAP EPS $ 6.80 $ 7.40 Add: Acquisition/integration costs (i) 0.02 0.02 Restructuring/impairment charges (ii) 0.04 0.04
Slide 33: Reconciliation of reported GAAP effective tax rate to anticipated non-GAAP rate
Reconciliation of reported GAAP effective tax rate to anticipated non-GAAP adjusted effective income tax rate Totals may not foot due to rounding