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Jun 30, 2020
Ingredion Q2 2020 Earnings Report
Ingredion's financial performance declined due to the impact of COVID-19, but showed sequential improvement towards the end of the quarter.
Key Takeaways
Ingredion Incorporated reported a decline in financial performance for Q2 2020, primarily due to the impact of COVID-19 on away-from-home consumption. However, the company saw sequential improvement in June and July and is focused on optimizing for the new reality, including raising its Cost Smart savings target and completing the acquisition of PureCircle.
Adapted to meet changing customer needs due to COVID-19 related fluctuations in consumer demand.
Experienced a significant decline in away-from-home consumption impacting global demand for ingredients.
Raised Cost Smart savings target from $150 million to $170 million by 2021.
Completed the acquisition of PureCircle and commenced an $85 million expansion investment in China.
Forward Guidance
Due to the continued uncertainty of COVID-19 impacts, the Company cannot reasonably estimate full-year results at this time and guidance remains withdrawn. The Company anticipates continued adverse impacts from COVID-19 on net sales across our operating segments during the second half, with recovery in sales generally correlated with easing of restrictions and increased consumer mobility.
Positive Outlook
- Recovery in sales generally correlated with easing of restrictions and increased consumer mobility.
- Demand for food consumed in home to remain elevated, increasing volumes for ingredients that are part of the recipes for these meals.
- Expect a reported tax rate of 29 percent to 32.7 percent
- Expect an adjusted effective tax rate range of approximately 26 percent to 27 percent, excluding PureCircle.
- Capital expenditures for the full year are anticipated to be between $290 million to $310 million, of which more than $100 million is being invested to drive growth.
Challenges Ahead
- Continued uncertainty of COVID-19 impacts, the Company cannot reasonably estimate full-year results at this time and guidance remains withdrawn.
Historical Earnings Impact
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