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Ingredion Incorporated Reports Fourth Quarter and Full-Year 2020 Results
WESTCHESTER, Ill., Feb. 03, 2021 (GLOBE NEWSWIRE) -- Ingredion Incorporated (NYSE: INGR), a leading global provider of ingredient solutions to the food and beverage manufacturing industry, today reported results for the fourth quarter and full-year 2020. The results, reported in accordance with U.S. generally accepted accounting principles (“GAAP”) for 2020 and 2019, include items that are excluded from the non-GAAP financial measures that the Company presents.
“We met the challenges of 2020 head-on and delivered strong performance, while advancing our Driving Growth Roadmap across all five of our Specialty platforms. Our teams demonstrated agility throughout the year, efficiently operated our factories, stayed close to customers, anticipated their needs, and enabled us to continue to be a supplier of choice. Pivoting to new ways of working resulted in over 1,300 virtual engagements with customers to co-create and deliver innovative ideas and solutions from our virtual interactive Idea Labs.”
“We delivered outstanding performance in the fourth quarter, with year-over-year 3% net sales growth, with each region contributing to the net sales growth. Three of the four regions saw volume demand recover from COVID-19 impacts, a highly encouraging sign. In addition, we had exceptional performance in South America, led by strong pricing gains that enabled us to keep pace with inflation and changing market conditions,” said Jim Zallie, Ingredion's president and chief executive officer.
“In the quarter, we also completed our strategic acquisition of 100% ownership in Verdient Foods, Inc., mobilized the integration team, and advanced construction on our Specialty plant-based protein production line. Additionally, we earned recommended food grade certification status for our South Sioux City pea protein isolate facility. Specialty ingredients net sales, excluding foreign exchange impacts, grew in all four regions for the quarter and full year, and now represents 32 percent of our annual net sales,” continued Zallie.
“Operating with an owner's mindset, our teams made great progress with the redesign and restructuring of our organization across all four regions, resulting in $103 million of run-rate savings, in excess of our 2020 Cost Smart target. We are on track to meet our three-year target of $170 million by year-end 2021.”
“As we enter 2021 with increasing momentum, we are well-positioned to continue advancing our growth strategy and deliver value at every touchpoint of the customer experience. We remain committed to our mission to be a reliable and trusted supplier, as well as innovation partner to our customers. We believe that our focused approach will serve to create long-term value for all of our stakeholders,” Zallie concluded.
*Adjusted diluted earnings per share (“adjusted EPS”), adjusted operating income, adjusted effective income tax rate and adjusted cash flow from operations 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 U.S. GAAP measures.
Diluted Earnings Per Share (EPS)
Estimated factors affecting change in reported and adjusted EPS
** Totals may not foot due to rounding
Financial Highlights
Business Review
Total Ingredion
Reported Operating Income
Adjusted Operating Income
Net Sales
Operating income
North America
Net Sales
Segment Operating Income
Operating income
South America
Net Sales
Segment Operating Income
Operating income
Asia-Pacific
Net Sales
Segment Operating Income
Operating income
Europe, Middle East, and Africa (EMEA)
Net Sales
Segment Operating Income
Operating income
Dividends
In December 2020, the Company paid a quarterly dividend of $46 million ($0.64 per share). The Company paid $178 million of dividends in 2020.
2021 Outlook
For the first quarter of 2021, the Company anticipates total net sales to be slightly up and operating income to be modestly up depending on the impact of COVID-19 resurgence trends, as well as the pace and effectiveness of vaccines. Net sales volume during the pandemic has generally correlated with increases in consumer activity and away from home food and beverage consumption.
For the full year, the Company anticipates net sales and region operating income to be modestly up, driven by specialty ingredients growth, other volume recovery and Cost Smart savings. Due to the 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 with a reported and adjusted effective tax rate of 26.5 percent to 28 percent, respectively.
Capital investment commitments are anticipated to be between $330 million and $350 million, of which more than $100 million is being invested to drive Specialty growth.
Conference Call and Webcast Details
Ingredion will conduct a conference call on Wednesday, February 3, 2021 at 8:00 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 will include a presentation accessible through the Company's website at www.ingredion.com. The presentation 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 www.ingredion.com.
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 29 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 expectations regarding the impacts of COVID-19, and the Company's net sales, regional operating income, corporate costs, effective tax rates and capital expenditures for 2021 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 release or referred to in this 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 are 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 our forward looking statements as a result of the following risks and uncertainties, among others: the continuing impacts of COVID-19; changing consumption preferences and perceptions, including those relating to high fructose corn syrup; 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, our access to credit markets and our ability to collect our receivables from customers; adverse changes in investment returns earned on our pension assets; future financial performance of major industries which we serve and from which we derive a significant portion of our sales, including 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 meet expectations; changes in U.S. and foreign government policy, laws or regulations and costs of legal compliance; 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 on potential increases in the cost of corn or other raw materials to customers; raw material and energy costs and availability; our ability to contain costs, achieve budgets and to realize expected synergies, including with respect to our ability to complete planned maintenance and investment projects on time and on budget, and to achieve expected savings under our Cost Smart program as well as with respect to freight and shipping costs; the impact of financial and capital markets on our borrowing costs, including as a result of foreign currency fluctuations, fluctuations in interest and exchange rates and market volatility and the associated risks of hedging against such fluctuations; the potential effects of climate change; 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 plants or with respect to boiler reliability; risks related to product safety and quality and compliance with environmental, health and safety, and food safety laws and regulations; economic, political and other risks inherent in operating in foreign countries with foreign currencies and shipping products between countries, including with respect to tariffs, quotas and duties; interruptions, security breaches or failures that might affect our information technology systems, processes and sites; our ability to maintain satisfactory labor relations; the impact that weather, natural disasters, war or similar acts of hostility, acts and threats of terrorism, the outbreak or continuation of pandemics such as COVID-19 and other significant events could have on our business; the potential recognition of impairment charges on goodwill or long-lived assets; changes in our tax rates or exposure to additional income tax liabilities; and our ability to raise funds at reasonable rates to grow and expand our operations.
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” included in our Annual Report on Form 10-K for the year ended December 31, 2019 and Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020 and in our subsequent reports on Form 10-Q and Form 8-K.
CONTACT:
Investors: Tiffany Willis, 708-551-2592
Media: Becca Hary, 708-551-2602
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