Ingredion Incorporated<\/a> (NYSE: INGR), a leading global provider of ingredient solutions to the food and beverage manufacturing industry, today reported results for the third quarter of 2022. The results, reported in accordance with U.S. generally accepted accounting principles (\u201cGAAP\u201d) for 2022 and 2021, include items that are excluded from the non-GAAP financial measures that the Company presents.<\/p>\n\u201cIngredion delivered another strong quarter with net sales up 15%,\u201d said Jim Zallie, Ingredion\u2019s president and chief executive officer. \u201cThe results were driven by solid demand across both core and specialty ingredients combined with in-year, dynamic price management in each region led by our pricing centers of excellence. We fully offset higher input costs, expanded gross margins and delivered strong operating income growth.<\/p>\n
\u201cSpecialty ingredients continued to grow double digits as we executed against our Driving Growth Roadmap, with net sales and gross profit margins higher across all four of our regions versus last year,\u201d Zallie continued. \u201cAmong the highlights in the quarter, we commissioned our new Shandong, China production facility, more than doubling our local starch production capacity to serve this large and growing market. This well-timed expansion also enables us to leverage our new network capacity to support our European customers who are concerned about anticipated industry shortages for some starch products due to the severe summer drought. Additionally, supporting our sugar reduction growth platform, we received European Union approval for our bioconverted Reb M stevia solutions which further positions us to grow our PureCircle franchise.<\/p>\n
\u201cWhile the macro environment remains uncertain, our team continues to do a great job offsetting inflationary and foreign exchange headwinds while overcoming supply chain challenges to deliver growth. As we look forward, we are closely monitoring customers\u2019 demand, and are currently working to ensure we meet their needs now and into the future,\u201d Zallie concluded.<\/p>\n
*Adjusted diluted earnings per share (\u201cadjusted EPS\u201d), adjusted operating income, adjusted effective income tax rate and adjusted diluted weighted average common shares outstanding are non-GAAP financial measures. See section II of the Supplemental Financial Information entitled \u201cNon-GAAP Information\u201d following the Condensed Consolidated Financial Statements included in this news release for a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures.<\/p>\n
Diluted Earnings Per Share (EPS)<\/u><\/strong><\/p>\n\n\n\n<\/td>\n | 3Q21<\/strong><\/td>\n3Q22<\/strong><\/td>\nYTD21<\/strong><\/td>\nYTD22<\/strong><\/td>\nReported EPS<\/em><\/strong><\/td>\n$<\/em><\/strong>1.75<\/em><\/strong><\/td>\n$<\/em><\/strong>1.59<\/em><\/strong><\/td>\n$<\/em><\/strong>0.74<\/em><\/strong><\/td>\n$<\/em><\/strong>5.63<\/em><\/strong><\/td>\nRestructuring\/Impairment costs<\/td>\n | 0.10<\/td>\n | –<\/td>\n | 0.25<\/td>\n | 0.05<\/td>\n | Acquisition\/Integration costs<\/td>\n | 0.06<\/td>\n | –<\/td>\n | 0.09<\/td>\n | 0.01<\/td>\n | Impairment***<\/td>\n | (0.30)<\/td>\n | –<\/td>\n | 5.02<\/td>\n | –<\/td>\n | Tax items and other matters<\/td>\n | 0.06<\/td>\n | 0.14<\/td>\n | (0.52)<\/td>\n | 0.11<\/td>\n | Adjusted EPS**<\/em><\/strong><\/td>\n$<\/em><\/strong>1.67<\/em><\/strong><\/td>\n$<\/em><\/strong>1.73<\/em><\/strong><\/td>\n$<\/em><\/strong>5.58<\/em><\/strong><\/td>\n$<\/em><\/strong>5.80<\/em><\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Estimated factors affecting changes in Reported and Adjusted EPS<\/u><\/strong><\/p>\n\n\n\n<\/td>\n | 3Q22<\/strong><\/td>\nYTD22<\/strong><\/td>\n<\/tr>\n\nTotal items affecting EPS**<\/em><\/strong><\/td>\n0.06<\/em><\/strong><\/td>\n0.22<\/em><\/strong><\/td>\n<\/tr>\n\nTotal operating items<\/em><\/strong><\/td>\n0.33<\/em><\/td>\n0.51<\/em><\/td>\n<\/tr>\n\nMargin<\/td>\n | 0.47<\/td>\n | 0.89<\/td>\n<\/tr>\n | \nVolume<\/td>\n | 0.01<\/td>\n | (0.14)<\/td>\n<\/tr>\n | \nForeign exchange<\/td>\n | (0.12)<\/td>\n | (0.23)<\/td>\n<\/tr>\n | \nOther income<\/td>\n | (0.03)<\/td>\n | (0.01)<\/td>\n<\/tr>\n | \nTotal non-operating items<\/em><\/strong><\/td>\n(0.27<\/em>)<\/em><\/td>\n(0.29<\/em>)<\/em><\/td>\n<\/tr>\n\nOther non-operating income<\/td>\n | –<\/td>\n | –<\/td>\n<\/tr>\n | \nFinancing costs<\/td>\n | (0.04)<\/td>\n | (0.07)<\/td>\n<\/tr>\n | \nShares outstanding<\/td>\n | 0.03<\/td>\n | 0.06<\/td>\n<\/tr>\n | \nNon-controlling interests<\/td>\n | (0.03)<\/td>\n | (0.03)<\/td>\n<\/tr>\n | \nTax rate<\/td>\n | (0.23)<\/td>\n | (0.25)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n **Totals may not foot due to rounding; ***Related to the Argentina joint venture announcement, 2021 reported results reflect a $340 million assets held for sale impairment charge, net of a $20 million favorable adjustment made in the third quarter of 2021, including $311 million of cumulative translation losses.<\/p>\n Financial Highlights<\/u><\/strong><\/p>\n\n- At September 30, 2022, total debt and cash including short-term investments were $2.4 billion and $298 million, respectively, versus $2.0 billion and $332 million, respectively, at December 31, 2021.<\/li>\n
- Net financing costs for the third quarter were $24 million versus $20 million for the year-ago period.<\/li>\n
- Reported and adjusted effective tax rates for the third quarter were 32.3 percent and 30.6 percent, respectively, compared to 22.2 percent and 21.5 percent, respectively, for the year-ago period. The increase in the reported effective income tax rate was primarily driven by U.S. international tax implications including foreign tax credits and an impairment charge adjustment in the third quarter of 2021.<\/li>\n
- Year-to-date net capital expenditures were $196 million, up $10 million from the year-ago period.<\/li>\n<\/ul>\n
Business Review <\/u><\/strong><\/p>\nTotal Ingredion<\/strong> \nNet Sales<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>\n2021<\/strong><\/td>\nFX \nImpact<\/strong><\/td>\nVolume<\/strong><\/td>\nArgentina JV \nVolume*<\/strong><\/td>\nPrice mix<\/strong><\/td>\n2022<\/strong><\/td>\nChange<\/strong><\/td>\nChange \n<\/strong>excl. FX<\/strong><\/td>\n<\/tr>\n\nThird Quarter<\/strong><\/td>\n1,763<\/td>\n | (71)<\/td>\n | 14<\/td>\n | (18)<\/td>\n | 335<\/td>\n | 2,023<\/td>\n | 15%<\/td>\n | 19%<\/td>\n<\/tr>\n | \nYear-to-Date<\/strong><\/td>\n5,139<\/td>\n | (136)<\/td>\n | 156<\/td>\n | (146)<\/td>\n | 946<\/td>\n | 5,959<\/td>\n | 16%<\/td>\n | 19%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n *<\/strong> Related to the Argentina joint venture announcement, 2021 reported results were part of the transferred business<\/p>\nReported Operating Income<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>\n2021<\/strong><\/td>\nFX \nImpact<\/strong><\/td>\nBusiness \nDrivers<\/strong><\/td>\nAcquisition \/<\/strong> \nIntegration<\/strong><\/td>\nRestructuring \n\/ Impairment<\/strong><\/td>\nOther<\/strong><\/td>\n2022<\/strong><\/td>\nChange<\/strong><\/td>\nChange<\/strong> \nexcl. FX<\/strong><\/td>\n<\/tr>\n\nThird Quarter<\/strong><\/td>\n172<\/td>\n | (10)<\/td>\n | 38<\/td>\n | 3<\/td>\n | 8<\/td>\n | (29)<\/td>\n | 182<\/td>\n | 6%<\/td>\n | 12%<\/td>\n<\/tr>\n | \nYear-to-Date<\/strong><\/td>\n224<\/td>\n | (21)<\/td>\n | 68<\/td>\n | 0<\/td>\n | 18<\/td>\n | 316<\/td>\n | 605<\/td>\n | 170%<\/td>\n | 179%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Adjusted Operating Income<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>\n2021<\/strong><\/td>\nFX Impact<\/strong><\/td>\nBusiness \nDrivers<\/strong><\/td>\n2022<\/strong><\/td>\nChange<\/strong><\/td>\nChange<\/strong> \nexcl. FX<\/strong><\/td>\n<\/tr>\n\nThird Quarter<\/strong><\/td>\n163<\/td>\n | (10)<\/td>\n | 38<\/td>\n | 191<\/td>\n | 17%<\/td>\n | 23%<\/td>\n<\/tr>\n | \nYear-to-Date<\/strong><\/td>\n572<\/td>\n | (21)<\/td>\n | 68<\/td>\n | 619<\/td>\n | 8%<\/td>\n | 12%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Net Sales<\/strong><\/p>\n\n- Third quarter and year-to-date net sales were up from the year-ago period. These increases were driven by strong price mix and volume, partially offset by lapping of prior year consolidated Argentina net sales volume. Excluding foreign exchange impacts, net sales were up 19% for the quarter and year-to-date.<\/li>\n<\/ul>\n
Operating Income<\/strong><\/p>\n\n- Third quarter reported and adjusted operating income were $182 million and $191 million, respectively, an increase of 6% and 17%, respectively, from the same period last year. The increase in reported operating income was driven by favorable price mix partially offset by the prior year favorable adjustment to the Argentina held for sale impairment. The increase in adjusted operating income was driven by strong price mix that more than offset higher corn and input costs. Excluding foreign exchange impacts, reported and adjusted operating income were up 12% and 23%, respectively, from the same period last year.<\/li>\n
- Year-to-date reported and adjusted operating income were $605 million and $619 million, respectively, an increase of 170% and 8%, respectively, from the year-ago period. The increase in reported operating income was attributable to the prior year\u2019s held for sale impairment charge related to the Argentina joint venture. The increase in adjusted operating income was driven by strong price mix that more than offset higher corn and input costs. Excluding foreign exchange impacts, reported and adjusted operating income were up 179% and 12%, respectively, from the same period last year.<\/li>\n<\/ul>\n
North America<\/strong> \nNet Sales<\/u><\/strong><\/p>\n\n\n\n$ in millions<\/strong><\/td>\n2021<\/strong><\/td>\nFX \nImpact<\/strong><\/td>\nVolume<\/strong><\/td>\nPrice<\/strong> \nmix<\/strong><\/td>\n2022<\/strong><\/td>\nChange<\/strong><\/td>\nChange<\/strong> \nexcl. FX<\/strong><\/td>\n<\/tr>\n\nThird Quarter<\/strong><\/td>\n1,083<\/td>\n | (6)<\/td>\n | (4)<\/td>\n | 189<\/td>\n | 1,262<\/td>\n | 17%<\/td>\n | 17%<\/td>\n<\/tr>\n | \nYear-to-Date<\/strong><\/td>\n3,096<\/td>\n | (10)<\/td>\n | 48<\/td>\n | 586<\/td>\n | 3,720<\/td>\n | 20%<\/td>\n | 20%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Segment Operating Income<\/u><\/strong><\/p>\n | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |