Slide 1: Second Quarter 2024 Earnings Call
Second Quarter 2024 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: Agenda
Agenda CEO comments Financial performance Closing remarks Q&A 3
Slide 4: CEO Perspective
Jim Zallie President and CEO Q2 2024 Earnings Call CEO Perspective 4
Slide 5: Record second quarter profitability driven by volume growth, cost absorption and operating excellence
Record second quarter profitability driven by volume growth, cost absorption and operating excellence Q2 Net Sales Q2 Adjusted Operating Income* $ in millions $ in millions -9% $2,069 $1,878 +8% $251 $270 Q2 2023 Q2 2024 Q2 2023 Q2 2024 YTD Net $4,206 $3,760 YTD $547 $486 Sales Adjusted Op Income *S
Slide 6: Second quarter net sales volume recovery
Second quarter net sales volume recovery Net Sales Key drivers Volume • US/CAN distributors, batters & breading, savory Texture & Healthful Solutions +8% • Middle East and Africa market back to 2019 levels • New APAC customers • Mexico demand for sweeteners Food & Industrial Ingredients - +4% • Braz
Slide 7: Quarterly highlights against our strategic pillars
Quarterly highlights against our strategic pillars Business Growth Cost Competitiveness Purpose and People through Operational Excellence • Record Q2 profitability • Cost2Compete to drive $50M in • Ingredion engagement in the top • Texture & Healthful Solutions run-rate savings by 2025 quartile of G
Slide 8: Gross margin improvement on volume increases and productivity initiatives
Gross margin improvement on volume increases and productivity initiatives Gross margin +240 bps 23.7% 21.3% • Volume recovery, partially offset by price/mix • Multi-year contract adjustments • Disciplined approach to raw material procurement • Managed well through volatile ocean freight environment
Slide 9: Highlights from our 2023 Sustainability Report
Highlights from our 2023 Sustainability Report • Achieved 22% absolute reduction globally in Scopes 1 and 2 emissions • Increased to 25% purchased renewable electricity globally • Reached 66.8% sustainable sourcing of Tier 1 priority crops • 100% of global waxy corn and stevia supply is sustainably
Slide 10: Financial Update
James Gray Executive Vice President and CFO Q2 2024 Earnings Call Financial Update 10
Slide 11: Q2 2024: Income statement highlights
Q2 2024: Income statement highlights $ in millions, unless noted Q2 2023 Q2 2024 Change Net Sales $2,069 $1,878 -9% Gross Profit $441 $446 1% Gross Profit Margin 21.3% 23.7% 240 bps Reported Operating Income $251 $240 -4% Reported Diluted EPS $2.42 $2.22 $(0.20)/share Adjusted Operating Income* $251
Slide 12: Q2: Net sales bridge
Q2: Net sales bridge $ in millions -9% $104 $2,069 $(11) $(80) $1,878 $(204) Q2 2023 FX Volume South Korea Price/Mix Q2 2024 Volume Totals may not sum due to rounding 12
Slide 13: Q2: Net sales variance by segment
Q2: Net sales variance by segment Foreign Net Sales Volume Price Mix Exchange Change Texture & Healthful Solutions -2% 8% -11% -5% Food & Industrial Ingredients - 1% 4% -10% -5% LATAM Food & Industrial Ingredients - 0% 2% -10% -8% US/CAN Ingredion 0% 1% -10% -9% Excluding South Korea -1% 5% -10% -6%
Slide 14: Texture & Healthful Solutions; Food & Industrial Ingredients - LATAM
Texture & Healthful Food & Industrial Solutions Ingredients - LATAM Absent FX Absent FX Q2 Net Sales impacts Q2 Net Sales impacts -3% -6% $ in millions -5% -5% $666 $630 $618 $588 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 Op Income $ $105 $86 Q2 Op Income $ $101 $130 Q2 Op Inc Margin 17.0% 14.6% Q2 Op Inc
Slide 15: Food & Industrial Ingredients - US/CAN; All Other
Food & Industrial Ingredients - US/CAN All Other Absent FX Absent S. Korea Q2 Net Sales impacts Q2 Net Sales and FX Impacts $ in millions -8% $ in millions +6% -8% $604 $555 -42% $181 $105 Q2 2023 Q2 2024 Q2 2023 Q2 2024 Q2 Op Income $ $80 $105 Q2 Op Income $ $3 $(10) Q2 Op Inc Margin 13.2% 18.9% Q2
Slide 16: Q2: EPS bridge
Q2: EPS bridge Amounts are dollars/share 2023 Reported Diluted EPS $ 2.42 Margin $ 0.06 Restructuring/impairment costs 0.00 Volume 0.03 Foreign exchange rates 0.00 Tax and other matters (0.10) Other income 0.11 2023 Adjusted Diluted EPS* $ 2.32 Changes from operations $ 0.20 2024 Adjusted Diluted EP
Slide 17: YTD 2024: Income statement highlights
YTD 2024: Income statement highlights $ in millions, unless noted YTD 2023 YTD 2024 Change Net Sales $4,206 $3,760 -11% Gross Profit $928 $863 -7% Gross Profit Margin 22.1% 23.0% 90 bps Reported Operating Income $542 $453 -16% Reported Diluted EPS $5.27 $5.46 $0.19/share Adjusted Operating Income* $
Slide 18: YTD: EPS bridge
YTD: EPS bridge Amounts are dollars/share 2023 Reported Diluted EPS $ 5.27 Margin $ (0.41) Restructuring/impairment costs 0.00 Volume (0.31) Foreign exchange rates 0.04 Tax and other matters (0.15) Other income 0.02 2023 Adjusted Diluted EPS* $ 5.12 Changes from operations $ (0.66) 2024 Adjusted Dil
Slide 19: Year to date cash from operations and capital allocation
Year to date cash from operations and capital allocation $ millions Net income $368 Depreciation and amortization $107 Working capital $65 Other $(19) Cash from operations $521 Capital allocation Capital expenditures, net $(120) To shareholders Dividend payments to INGR shareholders $(104) Repurchas
Slide 20: Full year 2024 outlook
Full year 2024 outlook Net sales Down low single-digits Adjusted operating income* Up mid-single-digits Financing costs $65 – $85 million Corporate costs Up low single-digits Adjusted effective tax rate* 26.5% – 27.5% Adjusted EPS* $9.70 to $10.20 Diluted weighted avg. shares outstanding 66.0 – 67.0
Slide 21: Q2 momentum sets up strong second half growth
Q2 momentum sets up strong second half growth • Continued year-over-year volume growth anticipated in H2 • Distributors restocking • Customer project engagements continue to expand • Better fixed cost absorption vs prior year • Cost2Compete savings ahead of plan • Strong cash flow from operations in
Slide 22: Save the date! Texture Innovation Day
Save the date! • Texture Innovation Day • November 14, 2024 | Bridgewater, NJ • More details to come soon Be recognized as the go-to provider for texture and healthful solutions that make healthy taste better 22
Slide 23: Appendix
Appendix NN Ingredion Be what's next.
Slide 24: 2024 Full year segment operating income outlook
2024 Full year segment operating income outlook Texture & Healthful Solutions Food & Industrial Ingredients - LATAM 2023 Net Sales (unaudited) $2.4 - $2.5B 2023 Net Sales (unaudited) $2.5 - $2.6B Flat to up low 2024 Net Sales Outlook Flat 2024 Net Sales Outlook single-digits 2023 Segment Operating I
Slide 25: Non-GAAP Information
Non-GAAP Information To supplement the consolidated financial results prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), non-GAAP historical financial measures are used, which exclude certain GAAP items such as restructuring and resegmentation costs, net gain on sale
Slide 26: 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 Six Months Ended Six Months Ended June 30, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (in millions) Diluted EPS (in millions) Dilu
Slide 27: 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 six months ended June 30, 2024, there were pre-tax restructuring charges of $3 million and $6 million, respectively, primarily rel
Slide 28: 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 Six Months Ended June 30, June 30, (in millions, pre-tax) 2024 2023 2024 2023 Operating income $ 240 $ 251 $ 453 $ 542 Adjustments: Restructuring and resegmentation costs (i) 3 — 6 — Other matters (iii)
Slide 29: 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 June 30, 2024 Six Months Ended June 30, 2024 Income before Provision for Effective Income before Provision for Effective Income Taxes Income Taxes Income Income Taxes Income Taxes Incom
Slide 30: Reconciliation of GAAP effective income tax rate (continued)
Reconciliation of GAAP effective income tax rate to non-GAAP adjusted effective income tax rate (continued) Three Months Ended June 30, 2023 Six Months Ended June 30, 2023 Income before Provision for Effective Income before Provision for Effective Income Taxes Income Taxes Income Income Taxes Income
Slide 31: Reconciliation of expected GAAP diluted EPS to non-GAAP adjusted
Reconciliation of expected GAAP diluted earnings per share to expected non-GAAP adjusted diluted earnings per share Expected EPS Range for Full-Year 2024 Low End of High End of Guidance Guidance GAAP EPS $ 10.20 $ 10.70 Adjustments: Restructuring and resegmentation costs (i) 0.06 0.06 Net gain on sa
Slide 32: Reconciliation of expected GAAP effective tax rate to non-GAAP
Reconciliation of expected reported GAAP effective tax rate to expected non-GAAP adjusted effective income tax rate Expected Effective Income Tax Rate Range for Full-Year 2024 Low End of High End of Guidance Guidance GAAP ETR 27.0 % 28.0 % Adjustments: Restructuring and resegmentation costs (i) —% —