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Mar 31, 2023
Ingredion Q1 2023 Earnings Report
Reported record first quarter results and raised full-year outlook.
Key Takeaways
Ingredion Incorporated reported exceptional performance in Q1 2023, delivering record quarterly profit and EPS. The company effectively managed product and customer mix, including price adjustments, to rebuild margins for the third consecutive quarter. Supply chain costs moderated, contributing to higher gross margins and operating income.
First quarter 2023 reported and adjusted EPS were $2.85 and $2.80, respectively, compared to first quarter 2022 reported and adjusted EPS of $1.92 and $1.95.
First quarter gross margins increased by 280 basis points to 22.8% compared to the same quarter last year.
Specialty ingredients continued their positive momentum, achieving double-digit net sales growth across all four regions compared to last year.
The Company raised full-year 2023 adjusted EPS outlook to be in the range of $8.70-$9.40, up from $7.70-$8.40.
Ingredion
Ingredion
Forward Guidance
For the second quarter 2023, the Company expects net sales growth to be up mid-single digits and operating income to be up low double digits to mid-double digits, compared to second quarter 2022. The Company now expects its outlook for full-year 2023 reported and adjusted EPS to be in the range of $8.85 to $9.35 and $8.70 to $9.40 respectively. The Company now expects full-year 2023 net sales to be up high single-digits to low double-digits reflecting softer sales volumes and the anticipated layout of corn costs. Reported and adjusted operating income are both expected to be up high double-digits.
Positive Outlook
- North America operating income is expected to be up 20% to 25%, with price mix continuing to outpace lower volumes and increasing costs.
- Asia-Pacific operating income is expected to be up high double-digits, driven by favorable price mix and PureCircle growth, partially offset by higher input costs.
- EMEA operating income is expected to be up 40% to 50% driven by favorable price mix.
- Cash from operations for full-year 2023 is expected to be in the range of $550 million to $650 million, which reflects an anticipated increase in our working capital balances.
- Capital expenditures for the full year are expected to be approximately $300 million.
Challenges Ahead
- South America operating income is expected to be flat to down mid-single digits, with higher input costs partially offsetting favorable price mix.
- Corporate costs are expected to be up high single-digits.
- Softer sales volumes
- Anticipated layout of corn costs
- Customer demand will steadily strengthen throughout the second half following some sales volume softness in the first quarter, primarily due to slower consumer demand and customers’ rebalancing of inventories.