Ingredion (INGR) Q4 2023 earnings summary

Executive summary

• FY 2023 delivered record earnings; pricing, favorable customer mix and cost savings supported gross-margin expansion and profit growth despite lower volumes and market challenges.

• Customer destocking largely ran its course, with volumes recovering through H2 and trending upward by Q4; specialty ingredients grew mid-single digits.

• FY cash from operations reached $1.057B, versus $152M in 2022; $295M was returned to shareholders.

Financial highlights

• FY net sales were $8.160B, up 3% reported and 4% excluding FX; price/mix added $943M, offsetting $648M of lower volume and $81M of FX impact.

• FY gross profit was $1.749B, up 17%, and gross margin was 21.4%, up 260 bps; adjusted operating income was $969M, up 23%.

• FY reported diluted EPS was $9.60 versus $7.34; adjusted diluted EPS was $9.42 versus $7.45, up 26%. South Korea results contributed $0.47 and $0.45, respectively.

• Q4 net sales were $1.921B, down 3%; gross profit rose 14% to $400M and gross margin increased 310 bps to 20.8%.

• Q4 reported/adjusted operating income was $202M/$203M, up 29%/21%; adjusted diluted EPS was $1.97 versus $1.65.

Outlook and guidance

• FY 2024 net sales are expected flat to up low-single digits, excluding the South Korea divestiture; adjusted operating income is expected up mid-single digits.

• FY 2024 reported EPS guidance is $10.20–$11.15, including the expected South Korea divestiture gain; adjusted EPS is $9.15–$9.85.

• FY 2024 reported and adjusted effective tax rates are expected at 24.0%–26.0% and 25.5%–26.5%; financing costs at $95M–$115M, cash from operations at $750M–$900M and capex at ~$340M.

• Q1 2024 net sales are expected down mid-single digits; reported and adjusted operating income are expected down 25%–35%, including the Argentina devaluation impact.