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Jun 30, 2023
Ingredion Q2 2023 Earnings Report
Ingredion reported strong results, driven by favorable price mix and effective adaptation to market dynamics.
Key Takeaways
Ingredion Incorporated reported a 1% increase in net sales for the second quarter of 2023, driven by price and product mix, which offset volume declines. Reported and adjusted operating income increased by 18% and 17%, respectively, due to favorable price mix. The company raised its full-year adjusted EPS outlook to $8.80-$9.40.
Second quarter reported and adjusted operating income grew 18% and 17%, respectively, compared to the prior year.
Second quarter reported and adjusted EPS were $2.42 and $2.32, an increase of 14% and 9%, respectively.
Net sales growth of specialty ingredients was driven by price and customer mix.
The company raised its full-year adjusted EPS outlook to be in the range of $8.80-$9.40, up from $8.70-$9.40.
Ingredion
Ingredion
Forward Guidance
The Company expects net sales growth to be up mid-single digits and operating income to be up high-single digits to low double-digits compared to the third quarter of 2022. The Company expects its outlook for full-year 2023 reported and adjusted EPS to be in the range of $8.95 to $9.55 and $8.80 to $9.40, respectively. The Company now expects full-year 2023 net sales to be up mid to high single digits reflecting softer volume demand. 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 now expected to be in the range of $600 million to $700 million.
- Capital expenditures for the full year are expected to be approximately $300 million.
Challenges Ahead
- South America operating income is expected to be down mid to high-single digits, with higher input costs more than offsetting favorable price mix.
- Corporate costs are expected to be up high single digits.
- Full-year 2023 net sales to be up mid to high single digits reflecting softer volume demand.
- Volumes continued to be impacted by inventory rebalancing throughout the food supply chain and shifts in consumer spending behavior.
- Higher raw material and input costs.