Ingredion(INGR) - 2025 Q2 - Quarterly Results

Q2 2025 Financial Highlights Ingredion reported solid Q2 2025 results, driven by Texture & Healthful Solutions, with improved full-year EPS guidance despite some operational challenges CEO's Overview and Key Results Ingredion achieved solid Q2 2025 results, driven by Texture & Healthful Solutions, despite LATAM JV and Chicago plant fire impacts, leading to improved full-year EPS guidance - The Texture & Healthful Solutions segment was a key driver of performance, with net sales up 2% and operating income up 29%, driven by volume growth in clean label solutions and operational excellence[2] - The Food & Industrial Ingredients—U.S./Canada segment was negatively impacted by a mechanical fire at the Chicago plant, with plans to offset some of the impact in the second half of the year[2] Q2 2025 Key Financial Metrics vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Reported Operating Income | - | - | +13% | | Adjusted Operating Income | - | - | +1% | | Reported EPS ($) | $2.99 | $2.22 | +34.7% | | Adjusted EPS ($) | $2.87 | $2.87 | 0% | - Full-year 2025 guidance for reported EPS is raised to a range of $11.25 to $11.75, and adjusted EPS is raised to a range of $11.10 to $11.60[3] Earnings Per Share and Financial Position Q2 2025 Adjusted EPS remained flat at $2.87, while Reported EPS increased, with the company maintaining $1.8 billion total debt and $868 million cash Q2 2025 vs Q2 2024 EPS Reconciliation | Metric | Q2 2024 ($) | Q2 2025 ($) | | :--- | :--- | :--- | | Reported Diluted EPS | $2.22 | $2.99 | | Adjusted Diluted EPS | $2.87 | $2.87 | - The adjusted EPS was flat YoY, with margin improvements (+$0.22) and share repurchases (+$0.05) being offset by lower volume (-$0.16) and a higher tax rate (-$0.07)[5] - As of June 30, 2025, total debt was $1.8 billion and cash was $868 million, compared to $1.8 billion and $1.0 billion respectively at year-end 2024[5] - The adjusted effective tax rate for Q2 2025 was 27.2%, compared to 25.4% in the prior-year period[5] Business and Segment Review This section details Ingredion's Q2 2025 performance across its key segments, highlighting varied results in sales and operating income Total Ingredion Performance Total Ingredion's Q2 net sales decreased 2% to $1.83 billion due to price mix and lower volume, while reported operating income rose 13% to $271 million Total Ingredion Net Sales (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $1,878 | $1,833 | (2%) | (2%) | | Year-to-Date | $3,760 | $3,646 | (3%) | (2%) | Total Ingredion Operating Income (in millions) | Period | 2024 Reported ($) | 2025 Reported ($) | Change | 2024 Adjusted ($) | 2025 Adjusted ($) | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $240 | $271 | 13% | $270 | $273 | 1% | | Year-to-Date | $453 | $547 | 21% | $486 | $546 | 12% | - The 2% decrease in Q2 net sales was driven by unfavorable price mix from lower raw material costs and lower volumes in F&II segments, partially offset by volume growth in the T&HS segment[8] Texture & Healthful Solutions The Texture & Healthful Solutions segment achieved strong Q2 2025 results, with net sales up 2% to $599 million and operating income surging 29% to $111 million T&HS Net Sales (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $588 | $599 | 2% | (1%) | T&HS Segment Operating Income (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $86 | $111 | 29% | 26% | - The $25 million increase in Q2 operating income was driven by lower raw material and input costs and increased volumes, partially offset by unfavorable price mix[11] Food & Industrial Ingredients - LATAM The LATAM segment's Q2 2025 net sales decreased 5% to $596 million and operating income fell 2% to $127 million, primarily due to Argentine peso exchange rate impacts F&II LATAM Net Sales (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $630 | $596 | (5%) | (3%) | F&II LATAM Segment Operating Income (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $130 | $127 | (2%) | (1%) | - Q2 results were negatively impacted by the floating exchange rate for the Argentine peso and its corresponding impact on the Argentina joint venture results, which saw a $10 million decline[13] Food & Industrial Ingredients - U.S./Canada The U.S./Canada segment's Q2 2025 net sales declined 6% to $523 million and operating income dropped 18% to $86 million due to a mechanical fire and reduced demand F&II U.S./Canada Net Sales (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $555 | $523 | (6%) | (5%) | F&II U.S./Canada Segment Operating Income (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $105 | $86 | (18%) | (17%) | - The $19 million decrease in Q2 operating income was mainly due to downtime from a mechanical fire and reduced industrial demand[15] All Other The 'All Other' segment significantly improved in Q2 2025, with net sales up 10% to $115 million and operating loss narrowing by $9 million to $1 million All Other Net Sales (in millions) | Period | 2024 ($) | 2025 ($) | Change | Change excl. FX | | :--- | :--- | :--- | :--- | :--- | | Second Quarter | $105 | $115 | 10% | 10% | - The Q2 operating loss improved by $9 million year-over-year, from a loss of $10 million to a loss of $1 million, mainly due to higher sales in the plant-based protein business[16] Shareholder Returns & Full-Year Outlook Ingredion returned capital to shareholders through dividends and repurchases while raising its full-year 2025 EPS guidance and providing a positive segment outlook Dividends and Share Repurchases Ingredion returned capital to shareholders in Q2 2025 by paying $52 million in dividends and repurchasing $55 million of common stock year-to-date - Paid $52 million in dividends to shareholders in Q2 2025[18] - Declared a quarterly dividend of $0.80 per share on May 22, 2025[18] - Repurchased $55 million of common stock year-to-date[18] Updated 2025 Outlook Ingredion raised its full-year 2025 EPS guidance, expecting flat net sales and mid-single-digit operating income growth, with strong performance anticipated for Texture & Healthful Solutions Full-Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Reported EPS ($) | $11.25 - $11.75 | | Adjusted EPS ($) | $11.10 - $11.60 | | Net Sales | Flat | | Reported & Adjusted Operating Income | Up mid-single-digits | | Effective Tax Rate (Reported & Adjusted) | 26.0% - 27.5% | | Cash from Operations ($M) | $825M - $950M | | Capital Expenditures ($M) | $400M - $425M | - Full-Year Segment Operating Income Outlook: - Texture & Healthful Solutions: Up low double-digits - Food & Industrial Ingredients—LATAM: Up low single-digits - Food & Industrial Ingredients—U.S./CAN: Down low single-digits - All Other: Approaching breakeven[22] - For the third quarter of 2025, net sales are expected to be flat to up low single-digits, and operating income is expected to be flat to down low single-digits compared to Q3 2024[25] Condensed Consolidated Financial Statements This section presents Ingredion's Q2 2025 condensed consolidated statements of income, balance sheets, and cash flows, detailing financial performance and position Statements of Income Q2 2025 net sales decreased 2% to $1.83 billion, while gross profit grew 7% to $477 million, and diluted EPS rose 35% to $2.99 Q2 2025 Income Statement Highlights (in millions) | Metric | Q2 2025 ($M) | Q2 2024 ($M) | Change % | | :--- | :--- | :--- | :--- | | Net sales | $1,833 | $1,878 | (2%) | | Gross profit | $477 | $446 | 7% | | Operating income | $271 | $240 | 13% | | Net income attributable to Ingredion | $196 | $148 | 32% | | Diluted EPS ($) | $2.99 | $2.22 | 35% | Balance Sheets As of June 30, 2025, Ingredion's total assets increased to $7.78 billion, with total liabilities decreasing to $3.51 billion and stockholders' equity rising to $4.22 billion Balance Sheet Highlights (in millions) | Metric | June 30, 2025 ($M) | Dec 31, 2024 ($M) | | :--- | :--- | :--- | | Total current assets | $3,517 | $3,355 | | Total assets | $7,781 | $7,444 | | Total current liabilities | $1,264 | $1,281 | | Long-term debt | $1,741 | $1,787 | | Total liabilities | $3,505 | $3,554 | | Total stockholders' equity | $4,218 | $3,823 | Statements of Cash Flows For the six months ended June 30, 2025, cash from operations decreased to $262 million, with net cash decreasing by $136 million due to investing and financing activities Six Months Ended June 30 Cash Flow Highlights (in millions) | Metric | 2025 ($M) | 2024 ($M) | | :--- | :--- | :--- | | Cash provided by operating activities | $262 | $521 | | Cash (used for) provided by investing activities | ($215) | $125 | | Cash used for financing activities | ($204) | ($526) | | (Decrease) increase in cash and cash equivalents | ($136) | $104 | | Cash and cash equivalents, end of period | $861 | $505 | Supplemental Information and Non-GAAP Reconciliations This section provides detailed segment performance data and reconciliations of GAAP to non-GAAP financial measures for a clearer understanding of underlying business trends Segment Information Summary This section details Q2 2025 net sales and operating income by segment, highlighting Texture & Healthful Solutions as a key growth driver and a decline in F&II - U.S./Canada Q2 2025 Segment Operating Income (in millions) | Segment | Q2 2025 ($M) | Q2 2024 ($M) | Change % | | :--- | :--- | :--- | :--- | | Texture & Healthful Solutions | $111 | $86 | 29% | | Food & Industrial Ingredients - LATAM | $127 | $130 | (2%) | | Food & Industrial Ingredients - U.S./Canada | $86 | $105 | (18%) | | All Other | ($1) | ($10) | NM | | Adjusted Operating Income | $273 | $270 | 1% | Reconciliation of GAAP to Non-GAAP Measures Ingredion provides non-GAAP financial measures, including adjusted operating income and EPS, to offer a more consistent comparison of operating results by excluding specific items - Management uses non-GAAP financial measures to exclude certain items like restructuring costs, gains on sales, impairment charges, and other specified items to provide a more meaningful comparison of operating results and trends[42][43] Net Income and EPS Reconciliation Q2 2025 reported GAAP Net Income of $196 million ($2.99 per share) was adjusted to a non-GAAP Net Income of $188 million ($2.87 per share) after various adjustments Q2 2025 GAAP to Non-GAAP EPS Reconciliation | Metric | Amount ($) | | :--- | :--- | | Reported Diluted EPS (GAAP) | $2.99 | | Restructuring costs | +$0.03 | | Impairment charges (benefit) | -$0.02 | | Other matters (benefit) | -$0.02 | | Tax items (benefit) | -$0.11 | | Adjusted Diluted EPS (Non-GAAP) | $2.87 | Operating Income Reconciliation Q2 2025 GAAP Operating Income of $271 million is reconciled to non-GAAP Adjusted Operating Income of $273 million, primarily by adjusting for restructuring costs and other matters Q2 2025 GAAP to Non-GAAP Operating Income Reconciliation (in millions) | Metric | Amount ($M) | | :--- | :--- | | Operating income (GAAP) | $271 | | Restructuring and resegmentation costs | +$3 | | Other matters (benefit) | -$1 | | Non-GAAP adjusted operating income | $273 | Effective Tax Rate Reconciliation The Q2 2025 reported GAAP effective tax rate of 23.6% was adjusted to a non-GAAP rate of 27.2% after accounting for various tax effects Q2 2025 GAAP to Non-GAAP ETR Reconciliation | Metric | Rate (%) | | :--- | :--- | | As Reported (GAAP) | 23.6% | | Adjustments for non-GAAP items | +3.6% | | Adjusted Non-GAAP | 27.2% | Forward-Looking Guidance Reconciliation The company reconciles its full-year 2025 GAAP EPS guidance of $11.25-$11.75 to an adjusted EPS guidance of $11.10-$11.60, accounting for various adjustments Full-Year 2025 GAAP to Adjusted EPS Guidance Reconciliation | Metric | Low End ($) | High End ($) | | :--- | :--- | :--- | | GAAP EPS | $11.25 | $11.75 | | Net Adjustments | ($0.15) | ($0.15) | | Adjusted EPS | $11.10 | $11.60 |