• First quarter 2020 reported and adjusted EPS^* were $1.11 and $1.59, respectively, compared with $1.48 and $1.53, respectively, in the first quarter 2019
• Due to the uncertainty of the effects of COVID-19, the Company has determined that its previous guidance for full year 2020 EPS, cash flow from operations and net sales outlook is no longer applicable

WESTCHESTER, Ill., May 05, 2020 (GLOBE NEWSWIRE) -- Ingredion Incorporated (NYSE: INGR), a leading global provider of ingredient solutions to the food manufacturing industry, today reported results for the first quarter 2020. The results, reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for 2020 and 2019, include items that are excluded from the non-GAAP financial measures that the Company presents.

“During these challenging times, Ingredion’s operations are considered ‘essential’ to maintaining the food supply in the countries in which we operate,” said Jim Zallie, Ingredion’s president and chief executive officer. “I’m extremely proud of our frontline employees for their commitment to ensuring we continue to deliver quality ingredients and solutions to our customers around the world. I would also like to express my deep appreciation to all of our global employees for the incredible energy and dedication they have displayed since the beginning of this crisis. In the weeks and months ahead, we will continue to focus on keeping our employees safe, serving our customers and the communities in which we operate and maintaining business continuity.”

*Adjusted diluted earnings per share (“adjusted EPS”), adjusted operating income, and adjusted effective income tax rate are non-GAAP financial measures. See section II of the Supplemental Financial Information entitled “Non-GAAP Information” following the Condensed Consolidated Financial Statements included in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures.

“We are pleased with the operational and financial results for the first quarter. Amid macroeconomic disruptions, we experienced solid demand for our products and continued to grow our specialties portfolio. We further streamlined our organization to maximize operational efficiencies as part of our Cost Smart savings program, which is on track to achieve our 2020 savings target. Following the close of the quarter, we advanced our Driving Growth Roadmap, announcing the pending acquisition of PureCircle, a global leader in the high-intensity natural stevia sweetener space that expands our capabilities in sugar reduction,” continued Zallie.

“In the second quarter, we expect strong demand for ingredients found in traditional packaged food products predominantly sold in retail grocery. However, the pandemic has significantly impacted food service traffic and we expect reduced volumes for ingredients that are formulated into food service meals and beverages consumed away-from-home,” stated Zallie.

“While we face unprecedented unknowns, I am confident in the agility of our teams to confront the unique challenges ahead and adapt quickly to best position our business for long-term growth and value creation for all stakeholders,” concluded Zallie.

Diluted Earnings Per Share (EPS)

Estimated factors affecting change in reported and adjusted EPS

**Totals may not foot due to rounding

Financial Highlights

• At March 31, 2020, total debt and cash and short-term investments were $1.9 billion and $280 million, respectively, versus $1.8 billion and $268 million, respectively, at December 31, 2019. The increase in total debt was primarily driven by timing of borrowings.
• Cash from operations at March 31, 2020 was $65 million, up $47 million from the year-ago period, driven primarily by improved change in working capital.   
• Net financing costs were $18 million or $4 million lower in the first quarter than the year-ago period, driven by lower interest expense.
• Reported and adjusted effective tax rates for the quarter were 42.6 percent and 26.0 percent, respectively, compared to 26.6 percent and 27.1 percent, respectively, in the year-ago period. The increase in the reported rate was due to a $22 million discrete tax provision driven by the 24 percent decrease in the value of the Mexican peso against the U.S. dollar during the first quarter.
• First quarter capital expenditures were $98 million, up $18 million from the year-ago period due to timing of cash payments made to support our investment in plant-based proteins and other growth projects.
• On April 9, 2020, the Company announced an agreement to acquire PureCircle, a Bermuda company traded on the London Stock Exchange. The transaction is expected to close during the third quarter of 2020 subject to regulatory, shareholder approvals and other closing conditions.

Business Review

Total Ingredion
Net Sales

Reported Operating Income

Adjusted Operating Income

Net Sales

• First quarter net sales were flat compared to the year-ago period as favorable price mix was offset by foreign exchange impact. Excluding foreign exchange impacts, net sales were up 3 percent.

Operating income

• Reported and adjusted operating incomes for the quarter were $153 million and $167 million, respectively, a decrease of 5 percent and an increase of 1 percent, respectively, from the same period last year. The decrease in reported operating income was primarily due to asset closures and restructuring costs related to Cost Smart that were partially offset by improved price mix. The increase in adjusted operating income was driven by improved price mix. Excluding foreign exchange impacts, adjusted operating income was up 4 percent from the same period last year.
• First quarter reported operating income was lower than adjusted operating income by $14 million, driven by asset closures and restructuring costs related to Cost Smart.

North America
Net Sales

Segment Operating Income

Operating income

• First quarter operating income was $125 million, flat compared to a year ago. Improved price mix and higher specialty volumes were offset by higher corn costs due to timing of hedge mark-to-market.

South America
Net Sales

Segment Operating Income

Operating income

• First quarter operating income was $26 million, an increase of $8 million from a year ago. Favorable price mix and volume more than offset higher raw material costs and foreign currency impacts.  Excluding foreign currency impacts, segment operating income was up 61 percent from the same period last year. NOTE: Argentina accounted for in USD under hyper-inflationary accounting.

Asia-Pacific
Net Sales

Segment Operating Income

Operating income

• First quarter operating income was $20 million, flat compared to a year ago.  The negative impact of COVID-19 disruptions on volume were offset by lower operating costs.

Europe, Middle East, and Africa (EMEA)

Net Sales

Segment Operating Income

Operating income

• First quarter operating income was $27 million, up $3 million from a year ago as favorable price mix more than offset foreign currency impacts. Excluding foreign currency impacts, segment operating income was up 21 percent from the same period last year.

Dividends

• In March 2020, the Company maintained the quarterly dividend at $0.63 per share and paid dividends of $42 million in the first quarter.

2020 Outlook

Due to the uncertainty of the effects of COVID-19, the Company has determined that its previous guidance for full year 2020 EPS, cash flow from operations and net sales outlook is no longer applicable. The impact of COVID-19 in the first quarter was relatively modest. We saw higher volumes in more traditional channels as consumers stocked their pantries in anticipation of stay-at-home restrictions, and we expect these channels to continue to perform well. However, significant uncertainty exists in the food service sector as to when and at what pace consumer traffic begins to return. 

In South America, the pandemic is at an earlier stage and we anticipate significant negative impacts to the food service, brewery and confectionary sectors. In North America, we expect reduced demand in food service volumes, and specifically in Mexico, depressed brewery volumes due to government imposed
COVID-19 mandates.

In EMEA, we anticipate strong specialty sales in Europe, but weaker volumes in Pakistan. In Asia-Pacific, as restrictions are being lifted, we are seeing relatively strong demand recovery. However, it is too early to determine if that recovery will be sustained.

For the full year, we expect a reported tax rate of 28.5 percent to 32 percent and an adjusted effective tax rate range of approximately 26 percent to 27 percent.

Committed capital investments are anticipated to be between $285 million to $305 million, assuming that equipment orders, access to our sites, and contractor safety can be maintained.

Conference Call and Webcast Details
Ingredion will conduct a conference call today at 9 a.m. ET (8 a.m. CT) hosted by Jim Zallie, president and chief executive officer, and James Gray, executive vice president and chief financial officer. The call will be webcast in real time and will include a visual presentation accessible through the Ingredion website at https://ir.ingredionincorporated.com/, in the "Events and Presentations" section, under "News and Events.” The presentation will be available to download a few hours prior to the start of the call. A replay of the webcast will be available for a limited time at https://ir.ingredionincorporated.com/.

Upcoming Communications
Jim Zallie and James Gray will participate virtually in the BMO Farm-to-Market conference on May 13, 2020 at 11:20 a.m. ET.  The presentation will be available on the Company’s website, https://ir.ingredionincorporated.com/, in the "Events and Presentations" section, under "News and Events.”  Additionally, Ingredion will host its’ annual meeting of stockholders virtually on Wednesday, May 20, 2020 at 9:00 a.m. CT. The annual meeting can be accessed by visiting www.virtualshareholdermeeting.com/INGR2020.

About the Company
Ingredion Incorporated (NYSE: INGR) headquartered in the suburbs of Chicago, is a leading global ingredient solutions provider serving customers in more than 120 countries. With 2019 annual net sales over $6 billion, the Company turns grains, fruits, vegetables and other plant-based materials into value-added ingredients solutions for the food, beverage, animal nutrition, brewing and industrial markets. With Ingredion Idea Labs^® innovation centers around the world and more than 11,000 employees, the Company co-creates with customers and fulfills its purpose of bringing the potential of people, nature and technology together to make life better. Visit ingredion.com for more information and the latest Company news.

Forward-Looking Statements
This news release 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. The Company intends these forward-looking statements to be covered by the safe harbor provisions for such statements.

Forward-looking statements include, among others, any statements regarding the Company's expectations regarding its effective tax rates and committed capital investments for 2020 and any assumptions, expectations or beliefs underlying the foregoing. These statements can sometimes be identified by the use of forward looking words such as "may," "will," "should," "anticipate," "assume," "believe," "plan," "project," "estimate," "expect," "intend," "continue," "pro forma," "forecast," "outlook," "propels," "opportunities," "potential," "provisional," or other similar expressions or the negative thereof. All statements other than statements of historical facts in this release or referred to in this release are "forward-looking statements."

These statements are based on current circumstances or expectations, but are subject to certain inherent risks and uncertainties, many of which are difficult to predict and are beyond our control. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, investors are cautioned that no assurance can be given that our expectations will prove correct.

Actual results and developments may differ materially from the expectations expressed in or implied by our forward looking statements as a result of the following risks and uncertainties, among others:  changing consumption preferences and perceptions, including those relating to high fructose corn syrup; the effects of global economic conditions and the general political, economic, business, and market conditions that affect customers and consumers in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products, including, particularly, economic, currency and political conditions in South America and economic and political conditions in Europe, and the impact these factors may have on our sales volumes, the pricing of our products, our access to credit markets and our ability to collect our receivables from customers; adverse changes in investment returns earned on our pension assets; future financial performance of major industries which we serve and from which we derive a significant portion of our sales, including the food, beverage, animal nutrition, and brewing industries; the uncertainty of acceptance of products developed through genetic modification and biotechnology; our ability to develop or acquire new products and services at rates or of qualities sufficient to meet expectations; changes in U.S. and foreign government policy, laws or regulations and costs of legal compliance; increased competitive and/or customer pressure in the corn-refining industry and related industries, including with respect to the markets and prices for our primary products and our co-products, particularly corn oil; the availability of raw materials, including potato starch, tapioca, gum Arabic and the specific varieties of corn upon which some of our products are based, and our ability to pass on potential increases in the cost of corn or other raw materials to customers; raw material and energy costs and availability; our ability to contain costs, achieve budgets and to realize expected synergies, including with respect to our ability to complete planned maintenance and investment projects on time and on budget, and to achieve expected savings under our Cost Smart program as well as with respect to freight and shipping costs; the impact of financial and capital markets on our borrowing costs, including as a result of foreign currency fluctuations, fluctuations in interest and exchange rates and market volatility and the associated risks of hedging against such fluctuations; the potential effects of climate change; our ability to successfully identify and complete acquisitions or strategic alliances on favorable terms as well as our ability to successfully integrate acquired businesses or implement and maintain strategic alliances and achieve anticipated synergies with respect to all of the foregoing; operating difficulties at our manufacturing plants or with respect to boiler reliability; risks related to product safety and quality and compliance with environmental, health and safety, and food safety laws and regulations; economic, political and other risks inherent in operating in foreign countries with foreign currencies and shipping products between countries, including with respect to tariffs, quotas and duties; interruptions, security breaches or failures that might affect our information technology systems, processes and sites; our ability to maintain satisfactory labor relations; the impact that weather, natural disasters, war or similar acts of hostility, acts and threats of terrorism, the outbreak or continuation of pandemics such as COVID 19 and other significant events could have on our business; the potential recognition of impairment charges on goodwill or long lived assets; changes in our tax rates or exposure to additional income tax liabilities; and our ability to raise funds at reasonable rates to grow and expand our operations.

Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement as a result of new information or future events or developments. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of these and other risks, see "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2019 and our subsequent reports on Form 10-Q and Form 8-K.

CONTACTS:
Investors:  Tiffany Willis, 708-551-2592
Media:  Becca Hary, 708-551-2602