Ingredion Q1 2020 Earnings Report
Key Takeaways
Ingredion reported solid operational and financial results for the first quarter, experiencing solid demand for its products and continued growth in its specialties portfolio. The company is on track to achieve its 2020 savings target through the Cost Smart savings program. However, the pandemic has significantly impacted food service traffic, leading to expected reduced volumes for ingredients formulated into food service meals and beverages.
Operations are considered 'essential' to maintaining the food supply.
Experienced solid demand for products and continued to grow the specialties portfolio.
Streamlined organization to maximize operational efficiencies as part of the Cost Smart savings program.
Announced the pending acquisition of PureCircle to expand capabilities in sugar reduction.
Ingredion
Ingredion
Forward Guidance
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has determined that its previous guidance for full year 2020 EPS, cash flow from operations and net sales outlook is no longer applicable.
Positive Outlook
- Higher volumes in more traditional channels as consumers stocked their pantries.
- Expect these channels to continue to perform well.
- Anticipate strong specialty sales in Europe.
- Seeing relatively strong demand recovery in Asia-Pacific as restrictions are being lifted.
- Cost Smart savings program is on track to achieve 2020 savings target
Challenges Ahead
- Significant uncertainty exists in the food service sector.
- Anticipate significant negative impacts to the food service, brewery and confectionary sectors in South America.
- Expect reduced demand in food service volumes in North America.
- Expect depressed brewery volumes in Mexico due to government imposed COVID-19 mandates.
- Anticipate weaker volumes in Pakistan.