Ingredion Incorporated (NYSE: INGR), a leading global provider of
ingredient solutions to the food and beverage manufacturing
industry, today reported results for the first quarter of 2021. The
results, reported in accordance with U.S. generally accepted
accounting principles (“GAAP”) for 2021 and 2020, include items
that are excluded from the non-GAAP financial measures that the
Company presents.
“We delivered an outstanding first quarter with significant net
sales and adjusted operating income growth, our best quarter since
2018. Operating income grew across all four regions, and our
results reflect exceptionally strong performance in South America
and Asia-Pacific,” said Jim Zallie, Ingredion’s president and chief
executive officer.
“We continued to execute on our Driving Growth Roadmap,
delivering specialty ingredients growth that was underpinned by
double-digit growth in Asia-Pacific and South America. As a result
of our unwavering determination to expand our consumer preferred
specialty offerings, our sugar reduction sales were up over 200
percent versus prior year. Additionally, we recently broadened our
Food Systems platform with the acquisition of KaTech, an innovative
supplier of customized ingredient blends which enhance texture and
provide stabilization. KaTech adds a European hub to complement our
existing U.S. and Asia food systems’ operations,” continued
Zallie.
“We are actively engaged in new product development through our
strong customer partnerships with robust project pipelines to meet
resurging consumer demand. We remain focused on delivering consumer
preferred innovation through customer co-creation. As we re-imagine
the future of work for our employees, we are doing so with customer
centricity, speed and agility,” Zallie concluded.
*Adjusted diluted earnings per share (“adjusted EPS”), 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 “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 GAAP measures.
Diluted Earnings Per Share (EPS)
|
1Q20 |
1Q21 |
Reported EPS |
$1.11 |
$(3.66) |
Restructuring/Impairment Costs |
$0.16 |
$0.12 |
Acquisition/Integration Costs |
- |
$0.01 |
Impairment*** |
- |
$5.35 |
Tax Items |
$0.32 |
$0.05 |
Diluted share impact |
- |
$(0.02) |
Adjusted EPS** |
$1.59 |
$1.85 |
Estimated factors affecting change in reported and
adjusted EPS
|
1Q21 |
Margin |
0.33 |
Volume |
(0.02) |
Foreign exchange |
0.01 |
Other income |
0.04 |
Total operating items |
0.36 |
Other non-operating income |
- |
Financing costs |
(0.01) |
Non-controlling interests |
(0.01) |
Shares outstanding |
(0.01) |
Tax rate |
(0.07) |
Total non-operating items |
(0.10) |
Total items affecting EPS** |
0.26 |
**Totals may not foot due to rounding***
Related to the Arcor joint venture announcement, reported results
reflect a $360 million assets held for sale impairment charge,
including $311 million of cumulative translation losses.
Financial Highlights
- At March 31, 2021, total debt and cash including short-term
investments were $2.2 billion and $577 million, respectively,
versus $2.2 billion and $665 million, respectively, at December 31,
2020.
- Net financing costs were $19 million, or $1 million higher in
the first quarter than in the year-ago period. The increase
resulted primarily from a decrease in capitalized interest versus
the prior year.
- Reported and adjusted effective tax rates for the quarter were
(29.3) percent and 29.5 percent, respectively, compared to 42.6
percent and 26.0 percent, respectively, in the year-ago period. The
decrease in reported tax rate resulted primarily from the impact of
impairment charges related to the Arcor joint venture in
Argentina.
- First quarter capital expenditures were $63 million, down $35
million from the year-ago period.
Business Review
Total Ingredion
$ in millions |
2020Net Sales |
FXImpact |
Volume |
Pricemix |
2021Net Sales |
%change |
% changeexcl. FX |
First Quarter |
1,543 |
1 |
-16 |
86 |
1,614 |
5% |
5% |
Reported Operating Income
$ in millions |
2020 |
FXImpact |
BusinessDrivers |
Acquisition/Integration |
Restructuring/Impairment |
2021 |
% change |
% changeexcl. FX |
First Quarter |
153 |
- |
34 |
-1 |
-356 |
-170 |
-211% |
-211% |
Adjusted Operating Income
$ in millions |
2020 |
FXImpact |
BusinessDrivers |
2021 |
% change |
% changeexcl. FX |
First Quarter |
167 |
- |
34 |
201 |
20% |
20% |
Net Sales
- First quarter net sales were up from the year-ago period. The
increase was driven by strong price mix, including the pass through
of higher corn costs, the inclusion of PureCircle results, and
specialty volume growth in Asia-Pacific. Excluding foreign exchange
impacts, net sales were up 5 percent for the quarter.
Operating income
- Reported and adjusted operating (loss) income for the quarter
were $(170) million and $201 million, respectively, a decrease of
211 percent and an increase of 20 percent, respectively, from the
same period last year. The decrease in reported operating income
was primarily due to the held for sale impairment charge related to
the Arcor joint venture in Argentina. The increase in adjusted
operating income was driven by favorable price mix in South America
and lower net corn costs in North America. Excluding foreign
exchange impacts, reported and adjusted operating income were down
211 percent and up 20 percent, respectively, from the same period
last year.
- First quarter reported operating income was lower than adjusted
operating income by $371 million primarily due to the held for sale
impairment charge related to the Arcor joint venture in
Argentina.
North America
Net Sales
$ in millions |
2020Net Sales |
FXImpact |
Volume |
Pricemix |
2021Net Sales |
% change |
% changeexcl. FX |
First Quarter |
963 |
6 |
-55 |
31 |
945 |
-2% |
-3% |
- Cessation of ethanol production represents approximately a $13
million decrease in net sales to the quarter.
Segment Operating Income
$ in millions |
2020 |
FXImpact |
BusinessDrivers |
2021 |
% change |
% changeexcl. FX |
First Quarter |
125 |
1 |
8 |
134 |
7% |
6% |
- First quarter operating income was $134 million, an increase of
$9 million from the year-ago period. The increase was driven by
lower net corn costs and favorable price mix.
South America
Net Sales
$ in millions |
2020 Net Sales |
FXImpact |
Volume |
Pricemix |
2021 Net Sales |
% change |
% changeexcl. FX |
First Quarter |
237 |
-23 |
10 |
49 |
273 |
15% |
25% |
Segment Operating Income
$ in millions |
2020 |
FXImpact |
BusinessDrivers |
2021 |
% change |
% changeexcl. FX |
First Quarter |
26 |
-3 |
17 |
40 |
54% |
65% |
- First quarter operating income was $40 million, an increase of
$14 million from the year-ago period. The increase was primarily
due to strong price mix and favorable net corn. Excluding foreign
exchange impacts, segment operating income was up 65 percent.
Asia-Pacific
Net Sales
$ in millions |
2020 Net Sales |
FXImpact |
Volume |
Pricemix |
2021 Net Sales |
%change |
% changeexcl. FX |
First Quarter |
189 |
11 |
34 |
1 |
235 |
24% |
18% |
Segment Operating Income
$ in millions |
2020 |
FXImpact |
BusinessDrivers |
2021 |
% change |
% changeexcl. FX |
First Quarter |
20 |
1 |
4 |
25 |
25% |
20% |
- First quarter operating income was $25 million, up $5 million
from the year-ago period, driven by the recovery of South Korea and
China from prior year pandemic impacts.
Europe, Middle East, and Africa (EMEA)
Net Sales
$ in millions |
2020Net Sales |
FXImpact |
Volume |
Pricemix |
2021Net Sales |
% change |
% changeexcl. FX |
First Quarter |
154 |
7 |
-5 |
5 |
161 |
5% |
0% |
Segment Operating Income
$ in millions |
2020 |
FX Impact |
BusinessDrivers |
2021 |
% change |
% changeexcl. FX |
First Quarter |
27 |
1 |
3 |
31 |
15% |
10% |
- First quarter operating income was $31 million, up $4 million
from the year-ago period. The increase was largely attributable to
favorable price mix and lower raw material costs in Pakistan.
Dividend and Share Repurchases
In March 2021, the Company announced a quarterly dividend of
$0.64 per share, totaling $44 million. During the quarter, the
Company repurchased $14 million of outstanding shares of common
stock.
2021 Second Quarter Outlook and Full-Year
Perspective
For the second quarter, the Company expects net sales to
increase 20 to 30 percent and operating income growth to be
slightly better than net sales growth, when both are compared to
the prior year.
In light of anticipated first half performance, the Company
expects full-year net sales to be up low double-digits, driven by
the pass through of higher corn costs, strong price mix and volume
recovery. For the full-year, the Company expects adjusted operating
income to be up mid-single-digits, driven by specialty ingredients
growth, other volume recovery and Cost Smart savings, partially
offset by anticipated higher corn costs in the second half of the
year. Due to the continued uncertain environment, the Company is
not currently providing guidance for full-year 2021 EPS and cash
flow from operations.
Full year corporate costs are expected to be flat. The Company
expects the reported effective tax rate of 70 percent to 75 percent
and adjusted effective tax rate of 28.0 percent to 29.0 percent.
With the expected close of the Arcor joint venture, the Company
anticipates the South America segment performance, financing costs,
and tax rate reporting will be updated in the second half of the
year.
Capital investment commitments are expected to be between $330
million and $350 million.
Conference Call and Webcast Details
Ingredion will conduct a conference call on Tuesday, May 4,
2021, at 8 a.m. Central Time 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 can be accessed at
https://ir.ingredionincorporated.com/events-and-presentations. The
call will include a presentation accessible through the Company’s
website, which will be available to download a few hours prior to
the start of the call. A replay will be available for a limited
time at
https://ir.ingredionincorporated.com/financial-information/quarterly-results.
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 2020 annual net
sales of $6 billion, the Company turns grains, fruits, vegetables
and other plant-based materials into value-added ingredient
solutions for the food, beverage, animal nutrition, brewing and
industrial markets. With Ingredion’s Idea Labs® innovation centers
around the world and approximately 12,000 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 future prospects or financial condition,
net sales, operating income, volumes, corporate costs, tax rates,
capital expenditures, expenses or other financial items, any
statements concerning the Company’s prospects or future operations,
including management’s plans or strategies and objectives therefor,
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 news release or
referred to in or incorporated by reference into this news 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 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 these statements, based on
various factors, including the impact of COVID-19 on the demand for
our products and our financial results; changing consumption
preferences relating to high fructose corn syrup and other products
we make; 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 and our ability to
collect our receivables from customers; future financial
performance of major industries which we serve and from which we
derive a significant portion of our sales, including, without
limitation, 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 gain market acceptance; 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
along potential increases in the cost of corn or other raw
materials to customers; energy costs and availability, including
energy issues in Pakistan; our ability to contain costs, achieve
budgets, and realize expected synergies, including with respect to
our ability to complete planned maintenance and investment projects
on time and on budget and realize expected savings under our Cost
Smart program as well as with respect to freight and shipping
costs; the behavior of financial and capital markets, including
with respect to foreign currency fluctuations, fluctuations in
interest and exchange rates and market volatility and the
associated risks of hedging against such fluctuations; 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
facilities; the impact of impairment charges on our goodwill or
long-lived assets; changes in our tax rates or exposure to
additional income tax liability; our ability to maintain
satisfactory labor relations; the impact on our business of natural
disasters, war, or similar acts of hostility, threats or acts of
terrorism, the outbreak or continuation of pandemics such as
COVID-19, or the occurrence of other significant events beyond our
control; changes in government policy, law, or regulation and costs
of legal compliance, including compliance with environmental
regulation; potential effects of climate change; security breaches
with respect to information technology systems, processes, and
sites; our ability to raise funds at reasonable rates and other
factors affecting our access to sufficient funds for future growth
and expansion; volatility in the stock market and other factors
that could adversely affect our stock price; risks affecting the
continuation of our dividend policy; and our ability to remediate
in a timely manner a material weakness in our internal control over
financial reporting.
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” and other information included in our Annual
Report on Form 10-K for the year ended December 31, 2020 and
in our subsequent reports on Forms 10-Q and 8-K.
CONTACTS:Investors: Tiffany Willis,
708-551-2592Media: Becca Hary,
708-551-2602
|
Ingredion Incorporated ("Ingredion") |
Condensed Consolidated Statements of (Loss)
Income |
(Unaudited) |
|
|
|
|
|
(in millions, except per share amounts) |
|
Three Months EndedMarch 31, |
|
Change% |
|
|
|
2021 |
|
|
2020 |
|
|
|
Net sales |
|
$ |
1,614 |
|
$ |
1,543 |
|
|
5 |
% |
Cost of sales |
|
|
1,263 |
|
|
1,220 |
|
|
|
Gross profit |
|
|
351 |
|
|
323 |
|
|
9 |
% |
|
|
|
|
|
|
Operating expenses |
|
|
153 |
|
|
154 |
|
|
(1 |
%) |
Other (income) expense, net |
|
|
(2 |
) |
|
2 |
|
|
|
Restructuring/impairment charges |
|
|
370 |
|
|
14 |
|
|
|
Operating (loss) income |
|
|
(170 |
) |
|
153 |
|
|
(211 |
%) |
Financing costs, net |
|
|
19 |
|
|
18 |
|
|
|
Other, non-operating (income), net |
|
|
(1 |
) |
|
(1 |
) |
|
|
(Loss) income before income taxes |
|
|
(188 |
) |
|
136 |
|
|
(238 |
%) |
Provision for income taxes |
|
|
55 |
|
|
58 |
|
|
|
Net (loss) income |
|
|
(243 |
) |
|
78 |
|
|
(412 |
%) |
Less: Net income attributable to non-controlling interests |
|
|
3 |
|
|
3 |
|
|
|
Net (loss) income attributable to Ingredion |
|
$ |
(246 |
) |
$ |
75 |
|
|
(428 |
%) |
|
|
|
|
|
|
Earnings per common share attributable to Ingredion |
|
|
|
|
|
common shareholders: |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
Basic |
|
|
67.3 |
|
|
67.1 |
|
|
|
Diluted |
|
|
67.3 |
|
|
67.8 |
|
|
|
|
|
|
|
|
|
Earnings per common share of Ingredion: |
|
|
|
|
|
Basic |
|
|
($3.66 |
) |
|
$1.12 |
|
|
(427 |
%) |
Diluted |
|
|
($3.66 |
) |
|
$1.11 |
|
|
(430 |
%) |
Ingredion Incorporated ("Ingredion") |
Condensed Consolidated Balance Sheets |
|
|
|
|
|
(in millions, except share and per share amounts) |
|
March 31, 2021 |
|
December 31, 2020 |
|
|
(Unaudited) |
|
|
|
|
|
|
|
Assets |
|
|
|
|
Current assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
576 |
|
|
$ |
665 |
|
Short-term investments |
|
|
1 |
|
|
|
- |
|
Accounts receivable – net |
|
|
1,025 |
|
|
|
1,011 |
|
Inventories |
|
|
950 |
|
|
|
917 |
|
Prepaid expenses |
|
|
58 |
|
|
|
54 |
|
Total current assets |
|
|
2,610 |
|
|
|
2,647 |
|
|
|
|
|
|
Property, plant and equipment – net |
|
|
2,355 |
|
|
|
2,455 |
|
Goodwill |
|
|
899 |
|
|
|
902 |
|
Other intangible assets – net |
|
|
437 |
|
|
|
444 |
|
Operating lease assets |
|
|
182 |
|
|
|
173 |
|
Deferred income tax assets |
|
|
24 |
|
|
|
23 |
|
Other assets |
|
|
296 |
|
|
|
214 |
|
Total assets |
|
$ |
6,803 |
|
|
$ |
6,858 |
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
Current liabilities |
|
|
|
|
Short-term borrowings |
|
|
448 |
|
|
$ |
438 |
|
Accounts payable and accrued liabilities |
|
|
932 |
|
|
|
1,020 |
|
Total current liabilities |
|
|
1,380 |
|
|
|
1,458 |
|
|
|
|
|
|
Non-current liabilities |
|
|
219 |
|
|
|
227 |
|
Long-term debt |
|
|
1,749 |
|
|
|
1,748 |
|
Non-current operating lease liabilities |
|
|
145 |
|
|
|
136 |
|
Deferred income tax liabilities |
|
|
219 |
|
|
|
217 |
|
Liabilities held for sale |
|
|
337 |
|
|
|
- |
|
Total liabilities |
|
|
4,049 |
|
|
|
3,786 |
|
|
|
|
|
|
Share-based payments subject to redemption |
|
|
21 |
|
|
|
30 |
|
Redeemable non-controlling interests |
|
|
70 |
|
|
|
70 |
|
|
|
|
|
|
Equity |
|
|
|
|
Ingredion stockholders' equity: |
|
|
|
|
Preferred stock – authorized 25,000,000 shares – $0.01 par value,
none issued |
|
|
- |
|
|
|
- |
|
Common stock – authorized 200,000,000 shares – $0.01 par value,
77,810,875 shares issued at March 31, 2021 and December 31,
2020 |
|
|
1 |
|
|
|
1 |
|
Additional paid-in capital |
|
|
1,155 |
|
|
|
1,150 |
|
Less: Treasury stock (common stock; 10,737,015 and 10,795,346
shares at March 31, 2021 and December 31, 2020, respectively) at
cost |
|
|
(1,022 |
) |
|
|
(1,024 |
) |
Accumulated other comprehensive loss |
|
|
(1,164 |
) |
|
|
(1,133 |
) |
Retained earnings |
|
|
3,667 |
|
|
|
3,957 |
|
Total Ingredion stockholders' equity |
|
|
2,637 |
|
|
|
2,951 |
|
Non-redeemable non-controlling interests |
|
|
26 |
|
|
|
21 |
|
Total equity |
|
|
2,663 |
|
|
|
2,972 |
|
|
|
|
|
|
Total liabilities and equity |
|
$ |
6,803 |
|
|
$ |
6,858 |
|
Ingredion Incorporated ("Ingredion") |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited) |
|
|
|
For the Three MonthsEnded March 31, |
(in millions) |
|
|
2021 |
|
|
|
2020 |
|
|
|
|
|
|
Cash provided by operating activities: |
|
|
|
|
Net (loss) income |
|
$ |
(243 |
) |
|
$ |
78 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
Depreciation and amortization |
|
|
52 |
|
|
|
54 |
|
Mechanical stores expense |
|
|
14 |
|
|
|
13 |
|
Deferred income taxes |
|
|
(4 |
) |
|
|
- |
|
Impairment charges related to Arcor joint venture held for sale
classification |
|
|
360 |
|
|
|
- |
|
Margin accounts |
|
|
(16 |
) |
|
|
(20 |
) |
Changes in other trade working capital |
|
|
(130 |
) |
|
|
(85 |
) |
Other |
|
|
(11 |
) |
|
|
25 |
|
Cash provided by operating activities |
|
|
22 |
|
|
|
65 |
|
|
|
|
|
|
Cash used for investing activities: |
|
|
|
|
Capital expenditures and mechanical stores purchases, net proceeds
on disposals |
|
|
(63 |
) |
|
|
(98 |
) |
Short-term investments |
|
|
(1 |
) |
|
|
2 |
|
Cash used for investing activities |
|
|
(64 |
) |
|
|
(96 |
) |
|
|
|
|
|
Cash (used for) provided by financing
activities: |
|
|
|
|
Proceeds from borrowings (payments on), net |
|
|
10 |
|
|
|
102 |
|
Repurchases of common stock, net |
|
|
(14 |
) |
|
|
- |
|
Issuances of common stock for share-based compensation, net of
settlements |
|
|
7 |
|
|
|
2 |
|
Dividends paid, including to non-controlling interests |
|
|
(43 |
) |
|
|
(42 |
) |
Cash (used for) provided by financing activities |
|
|
(40 |
) |
|
|
62 |
|
|
|
|
|
|
Effect of foreign exchange rate changes on cash |
|
|
(7 |
) |
|
|
(17 |
) |
(Decrease) increase in cash and cash equivalents |
|
|
(89 |
) |
|
|
14 |
|
Cash and cash equivalents, beginning of period |
|
|
665 |
|
|
|
264 |
|
Cash and cash equivalents, end of period |
|
$ |
576 |
|
|
$ |
278 |
|
Ingredion Incorporated ("Ingredion") |
Supplemental Financial Information |
(Unaudited) |
|
|
|
|
|
|
|
|
|
I. Geographic Information of Net Sales and Operating
Income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in millions, expect for percentages) |
|
Three Months EndedMarch 31, |
|
|
|
Change |
|
|
|
2021 |
|
|
|
2020 |
|
|
Change |
|
Excl. FX |
Net Sales |
|
|
|
|
|
|
|
|
North America |
|
$ |
945 |
|
|
$ |
963 |
|
|
(2 |
%) |
|
(3 |
%) |
South America |
|
|
273 |
|
|
|
237 |
|
|
15 |
% |
|
25 |
% |
Asia-Pacific |
|
|
235 |
|
|
|
189 |
|
|
24 |
% |
|
18 |
% |
EMEA |
|
|
161 |
|
|
|
154 |
|
|
5 |
% |
|
0 |
% |
Total Net Sales |
|
$ |
1,614 |
|
|
$ |
1,543 |
|
|
5 |
% |
|
5 |
% |
|
|
|
|
|
|
|
|
|
Operating Income |
|
|
|
|
|
|
|
|
North America |
|
$ |
134 |
|
|
$ |
125 |
|
|
7 |
% |
|
6 |
% |
South America |
|
|
40 |
|
|
|
26 |
|
|
54 |
% |
|
65 |
% |
Asia-Pacific |
|
|
25 |
|
|
|
20 |
|
|
25 |
% |
|
20 |
% |
EMEA |
|
|
31 |
|
|
|
27 |
|
|
15 |
% |
|
10 |
% |
Corporate |
|
|
(29 |
) |
|
|
(31 |
) |
|
6 |
% |
|
6 |
% |
Sub-total |
|
|
201 |
|
|
|
167 |
|
|
20 |
% |
|
20 |
% |
Acquisition/integration costs |
|
|
(1 |
) |
|
|
- |
|
|
|
|
|
Restructuring/impairment charges |
|
|
(10 |
) |
|
|
(14 |
) |
|
|
|
|
Impairment charges related to Arcor joint venture held for sale
classification |
|
|
(360 |
) |
|
|
- |
|
|
|
|
|
Total Operating (Loss) Income |
|
$ |
(170 |
) |
|
$ |
153 |
|
|
(211 |
%) |
|
(211 |
%) |
II. 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 impairment cost, Mexico tax provision, and
certain other special items. We generally use the term “adjusted”
when referring to these non-GAAP amounts. |
|
Management uses non-GAAP financial measures internally for
strategic decision making, forecasting future results and
evaluating current performance. By disclosing non-GAAP financial
measures, management intends to provide investors with a more
meaningful, consistent comparison of our operating results and
trends for the periods presented. These non-GAAP financial measures
are used in addition to and in conjunction with results presented
in accordance with GAAP and reflect an additional way of viewing
aspects of our operations that, when viewed with our GAAP results,
provide a more complete understanding of factors and trends
affecting our business. These non-GAAP measures should be
considered as a supplement to, and not as a substitute for, or
superior to, the corresponding measures calculated in accordance
with GAAP. |
|
Non-GAAP financial measures are not prepared in accordance with
GAAP; therefore, the information is not necessarily comparable to
other companies. A reconciliation of each non-GAAP historical
financial measure to the most comparable GAAP measure is provided
in the tables below. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion Incorporated ("Ingredion") |
Reconciliation of GAAP Net (Loss) Income attributable to
Ingredion and Diluted Earnings Per Share ("EPS") to |
Non-GAAP Adjusted Net Income attributable to Ingredion and
Adjusted Diluted EPS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
|
March 31, 2021 |
|
March 31, 2020 |
|
|
(in millions) |
Diluted EPS |
|
(in millions) |
Diluted EPS |
|
|
|
|
|
|
|
Net (loss) income attributable to Ingredion |
|
$ |
(246 |
) |
$ |
(3.66 |
) |
|
$ |
75 |
|
$ |
1.11 |
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs, net of $ - million of income tax
benefit for three months ended March 31, 2021 and 2020 (i) |
|
|
1 |
|
|
0.01 |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Restructuring/impairment charges, net of income tax benefit of $2
million and $3 million for the three months ended March 31, 2021
and 2020, respectively (ii) |
|
|
8 |
|
|
0.12 |
|
|
|
11 |
|
|
0.16 |
|
|
|
|
|
|
|
|
Impairment charges related to Arcor joint venture held for sale
classification, net of $ - million of income tax benefit for the
three months ended March 31, 2021 (iii) |
|
|
360 |
|
|
5.35 |
|
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Tax provision - Mexico (iv) |
|
|
3 |
|
|
0.05 |
|
|
|
22 |
|
|
0.32 |
|
|
|
|
|
|
|
|
Diluted share impact (v) |
|
|
- |
|
|
(0.02 |
) |
|
|
- |
|
|
- |
|
|
|
|
|
|
|
|
Non-GAAP adjusted net income attributable to Ingredion |
|
$ |
126 |
|
$ |
1.85 |
|
|
$ |
108 |
|
$ |
1.59 |
|
|
|
|
|
|
|
|
Net income, EPS and tax rates may not foot or recalculate due to
rounding. |
|
|
|
|
|
|
|
Notes |
|
|
|
|
|
|
|
|
|
|
|
|
|
(i) The 2021 period primarily includes costs related to the
acquisition and integration of the business acquired from
PureCircle Limited. Acquisition and integration costs presented in
the "reconciliation of adjusted net income attributable to
Ingredion" table are net of costs attributable to non-controlling
interest. |
|
|
|
|
|
|
|
(ii) During the three months ended March 31, 2021, the Company
recorded $10 million of pre-tax restructuring/impairment charges,
consisting of $5 million of employee-related and other costs,
including professional services, associated with its Cost Smart
SG&A program, $3 million of restructuring-related expenses as
part of its Cost Smart cost of sales program, primarily in North
America, and $2 million of employee-related and other costs related
to the Arcor joint venture transaction expected to close in the
third quarter of 2021. |
|
During the three months ended March 31, 2020, the Company recorded
$14 million of pre-tax restructuring/impairment charges, consisting
of $9 million of restructuring related expenses as part of its Cost
Smart cost of sales program and $5 million of employee-related and
other costs, including professional services, associated with its
Cost Smart SG&A program. |
|
|
|
|
|
|
|
(iii) During the three months ended March 31, 2021, the Company
recorded a $360 million held for sale impairment charge related to
the Arcor joint venture. The impairment charge reflects write-down
to fair value of the contribution of certain Argentina, Chile and
Uruguay assets and liabilities that will be contributed to the
Arcor joint venture. The impairment charge reflects a $49 million
write-down of the contributed net assets to the agreed upon fair
value and a $311 million valuation allowance for the cumulative
translation losses related to these net assets that will be
released from Accumulated Other Comprehensive Loss on the balance
sheet at the close of the transaction. |
|
|
|
|
|
|
|
(iv) The tax item represents the impact of the Company’s use of the
U.S. dollar as the functional currency for its subsidiaries in
Mexico. Mexico’s effective tax rate is strongly influenced by the
remeasurement of the Mexican peso financial statements into U.S.
dollars. The company recorded a discrete tax provision of $3
million and $22 million for the three months ended March 31, 2021
and 2020, respectively, as a result of the movement of the Mexican
peso against the U.S. dollar during the periods. |
|
|
|
|
|
|
|
(v) If GAAP net income is negative and Non-GAAP Adjusted Net Income
is positive, adjusted diluted weighted average common shares
outstanding will include any options, restricted share units, or
performance shares that would be otherwise dilutive instruments
using the treasury stock method, until the effect of these
adjustments is anti-dilutive. During the three months ended March
31, 2021 the incremental dilutive share impact of these instruments
was 0.6 million shares of common stock equivalents. The diluted
weighted average shares outstanding of 67.3 million would increase
to an adjusted diluted weighted average common shares outstanding
of 67.9 million for the three months ended March 31, 2021. There is
no impact to the three months ended March 31, 2020. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion Incorporated ("Ingredion") |
|
|
|
Reconciliation of GAAP Operating (Loss) Income to Non-GAAP
Adjusted Operating Income |
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
March 31, |
|
|
|
(in millions, pre-tax) |
|
|
2021 |
|
|
2020 |
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income |
|
$ |
(170 |
) |
$ |
153 |
|
|
|
|
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
|
1 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
10 |
|
|
14 |
|
|
|
|
|
|
|
|
|
|
|
Impairment charges related to Arcor joint venture held for sale
classification (iii) |
|
|
360 |
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP adjusted operating income |
|
$ |
201 |
|
$ |
167 |
|
|
|
|
|
For notes (i) through (iii), see notes (i) through (iii) included
in the Reconciliation of GAAP Net Income attributable to Ingredion
and Diluted EPS to Non-GAAP Adjusted Net Income attributable to
Ingredion and Adjusted Diluted EPS. |
|
|
|
II. Non-GAAP Information (continued) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Ingredion Incorporated ("Ingredion") |
Reconciliation of GAAP Effective Income Tax Rate to
Non-GAAP Adjusted Effective Income Tax Rate |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2021 |
|
|
(Loss) income 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: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
|
1 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
10 |
|
|
|
2 |
|
|
|
|
|
|
|
|
|
|
Impairment charges related to Arcor joint venture held for sale
classification (iii) |
|
|
360 |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
- |
|
|
|
(3 |
) |
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
183 |
|
|
$ |
54 |
|
|
29.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2020 |
|
|
Income before |
|
Provision for |
|
Effective Income |
(in millions) |
|
Income Taxes (a) |
|
Income Taxes (b) |
|
Tax Rate (b/a) |
|
|
|
|
|
|
|
As Reported |
|
$ |
136 |
|
|
$ |
58 |
|
|
42.6 |
% |
|
|
|
|
|
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
|
14 |
|
|
|
3 |
|
|
|
|
|
|
|
|
|
|
Tax item - Mexico (iv) |
|
|
- |
|
|
|
(22 |
) |
|
|
|
|
|
|
|
|
|
Adjusted Non-GAAP |
|
$ |
150 |
|
|
$ |
39 |
|
|
26.0 |
% |
|
|
|
|
|
|
|
For notes (i) through (iv), see notes (i) through (iv) included in
the Reconciliation of GAAP Net Income attributable to Ingredion and
Diluted EPS to Non-GAAP Adjusted Net Income attributable to
Ingredion and Adjusted Diluted EPS. |
II. Non-GAAP Information (continued) |
|
|
|
|
|
|
|
|
|
Ingredion Incorporated ("Ingredion") |
Reconciliation of Reported U.S. GAAP Effective Tax Rate
("GAAP ETR") |
to Anticipated Adjusted Effective Tax Rate ("Adjusted
ETR") |
(Unaudited) |
|
|
|
|
|
|
|
Anticipated Effective Tax Rate Range |
|
|
for Full Year 2021 |
|
|
Low End |
|
High End |
GAAP ETR |
|
70.5 |
% |
|
75.6 |
% |
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
Acquisition/integration costs (i) |
|
0.0 |
% |
|
0.0 |
% |
|
|
|
|
|
Restructuring/impairment charges (ii) |
|
0.6 |
% |
|
0.6 |
% |
|
|
|
|
|
Impairment charges related to Arcor joint venture held for sale
classification (iii) |
|
0.0 |
% |
|
0.0 |
% |
|
|
|
|
|
Tax provision - Mexico (iv) |
|
0.3 |
% |
|
-1.3 |
% |
|
|
|
|
|
Other tax matters (vi) |
|
-0.2 |
% |
|
-0.2 |
% |
|
|
|
|
|
Impact of adjustment on Effective Tax Rate (vii) |
|
-43.2 |
% |
|
-45.7 |
% |
|
|
|
|
|
Adjusted ETR |
|
28.0 |
% |
|
29.0 |
% |
|
|
|
|
|
Above is a reconciliation of our anticipated full year 2021 GAAP
ETR to our anticipated full year 2021 adjusted ETR. The amounts
above may not reflect certain future charges, costs and/or gains
that are inherently difficult to predict and estimate due to their
unknown timing, effect and/or significance. These amounts include,
but are not limited to, acquisition and integration costs,
impairment and restructuring costs, and certain other special
items. We generally exclude these items from our adjusted ETR
guidance. For these reasons, we are more confident in our ability
to predict adjusted ETR than we are in our ability to predict GAAP
ETR. |
|
|
|
|
|
For items (i) through (iv), see footnotes included in the
Reconciliation of GAAP Net (Loss) Income attributable to Ingredion
and Diluted EPS to Non-GAAP Adjusted Net Income attributable to
Ingredion and Adjusted Diluted EPS. |
|
|
|
|
|
(vi) This relates to other tax settlements. |
|
|
|
|
|
(vii) Indirect impact of tax rate after items (i) through
(vi). |
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