INGREDION INCORPORATED REPORTS SOLID SECOND QUARTER 2015 RESULTS
(Thomson Reuters ONE) -
* Second quarter 2015 reported and adjusted EPS were $1.47 and $1.53,
respectively, up from $1.35 reported in the second quarter 2014
* Year-to-date 2015 reported and adjusted EPS were $2.62 and $2.83,
respectively, up from $2.31 reported in the year-ago period
* 2015 adjusted EPS guidance narrowed to $5.60-$5.90, including acquisition
EPS accretion and excluding associated acquisition-related costs
WESTCHESTER, Ill., July 30, 2015 - Ingredion Incorporated (NYSE: INGR), a
leading global provider of ingredient solutions to diversified industries, today
reported results for the second quarter 2015.
"We are pleased with the second quarter results which were highlighted by higher
specialty volumes, good operating efficiency, and strong earnings per share
growth," said Ilene Gordon, chairman, president and chief executive officer.
"Although we experienced foreign-exchange headwinds across all four regions, our
business model continues to work. In fact, operating income improved in North
America, South America, and Asia Pacific.
"We remain confident in our 2015 outlook. Strong specialty volumes, improved
product mix, disciplined cost management, and the impacts of the first quarter
acquisition of Penford Corporation are expected to drive bottom-line growth.
"As we continue to execute our strategic blueprint, we are well positioned for
further growth, especially in our higher-value ingredients that address key
consumer trends. Our pending acquisition of Kerr Concentrates, Inc., a producer
of natural fruit and vegetable concentrates, purees and essences, is another
step to broaden our portfolio of wholesome, clean-label ingredient solutions,
which consumers are increasingly demanding. The Penford integration remains on
track for at least $20 million in annualized cost synergies and the underlying
business is performing well. Our expectation for adjusted EPS for the year,
including accretion resulting from both transactions, is narrowed to $5.60-
$5.90, excluding the associated acquisition-related costs," Gordon added.
Diluted Earnings Per Share (EPS)
+--------------------------------+-------+-------+-------+-------+
| | 2Q14 | 2Q15 | 1H14 | 1H15 |
+--------------------------------+-------+-------+-------+-------+
| Reported EPS | $1.35 | $1.47 | $2.31 | $2.62 |
+--------------------------------+-------+-------+-------+-------+
| Acquisition/Integration costs | - | 0.07 | - | 0.22 |
+--------------------------------+-------+-------+-------+-------+
| Adjusted EPS* | $1.35 | $1.53 | $2.31 | $2.83 |
+--------------------------------+-------+-------+-------+-------+
*Totals may not foot due to rounding
Estimated factors affecting change in adjusted EPS
+----------------------------+--------+--------+
| | 2Q15 | 1H15 |
+----------------------------+--------+--------+
| Margin | 0.32 | 0.72 |
+----------------------------+--------+--------+
| Volume | 0.03 | 0.08 |
+----------------------------+--------+--------+
| Foreign exchange | (0.14) | (0.24) |
+----------------------------+--------+--------+
| Other income/(expense) | (0.06) | (0.09) |
+----------------------------+--------+--------+
| Total operating items | 0.15 | 0.47 |
+----------------------------+--------+--------+
| | | |
+----------------------------+--------+--------+
| Financing costs | 0.01 | 0.03 |
+----------------------------+--------+--------+
| Shares outstanding | 0.07 | 0.12 |
+----------------------------+--------+--------+
| Tax rate | (0.05) | (0.11) |
+----------------------------+--------+--------+
| Non-controlling interest | - | 0.01 |
+----------------------------+--------+--------+
| Total non-operating items | 0.03 | 0.05 |
+----------------------------+--------+--------+
| Total items affecting EPS | 0.18 | 0.52 |
+----------------------------+--------+--------+
Financial Highlights
* At June 30, 2015, total debt and cash and short-term investments were $2.2
billion and $677 million, respectively, versus $1.8 billion and $614
million, respectively, at December 31, 2014.
* During the second quarter of 2015, net financing costs were $16 million, or
$1 million lower than the year-ago period due to the benefit of interest
rate swaps.
* The second quarter reported and adjusted effective tax rates were 30.3
percent and 30.5 percent, respectively, compared to a 28.1 percent reported
effective tax rate in the year-ago period.
* Capital expenditures, net of disposals, were $128 million in the first half
of 2015, $12 million higher than in the year-ago period.
* During the first half of the year, the Company repurchased approximately
364,000 shares of common stock for $29 million.
Business Review
Total Ingredion
+--------------+-------------+---------+------+---------+-------------+--------+
|$ in millions | 2014 Net |FX Impact|Volume|Price/mix| 2015 Net |% change|
| | sales | | | | sales | |
+--------------+-------------+---------+------+---------+-------------+--------+
|Second quarter| 1,483 | -111 | 95 | -18 | 1,449 | -2% |
+--------------+-------------+---------+------+---------+-------------+--------+
|Year-to-date | 2,840 | -188 | 152 | -25 | 2,779 | -2% |
+--------------+-------------+---------+------+---------+-------------+--------+
Net Sales
* Net sales were down in the second quarter as a result of changes in foreign
currency-exchange rates and the pass through of lower corn costs, partially
offset by pricing in South America and acquisition-related volume growth.
* Year-to-date net sales were down as a result of changes in foreign currency-
exchange rates and the pass through of lower corn costs, partially offset by
pricing in South America to compensate for currency headwinds and volume
growth, both organic and acquisition-related.
Operating income
* Second quarter reported and adjusted operating income were $173 million and
$180 million, respectively. These were six percent and 11 percent
increases, respectively, compared to $163 million of reported operating
income in the second quarter of 2014. The increases in operating income
were primarily due to: Penford-related and strong specialty volumes; margin
expansion in North America; and pricing actions in South America. These
positives were partially offset by the negative effect of foreign exchange.
* Year-to-date 2015 reported and adjusted operating income were $312 million
and $336 million, respectively. These were 10 percent and 18 percent
increases, respectively, compared to $285 million of year-to-date 2014
reported operating income. The increases in operating income were primarily
due to Penford-related and strong specialty volumes and margin expansion in
North America.
North America
+--------------+-------------+---------+------+---------+-------------+--------+
|$ in millions | 2014 Net |FX Impact|Volume|Price/mix| 2015 Net |% change|
| | sales | | | | sales | |
+--------------+-------------+---------+------+---------+-------------+--------+
|Second quarter| 820 | -14 | 98 | -35 | 869 | 6% |
+--------------+-------------+---------+------+---------+-------------+--------+
|Year-to-date | 1,556 | -27 | 149 | -55 | 1,623 | 4% |
+--------------+-------------+---------+------+---------+-------------+--------+
Operating income
* Second quarter operating income increased from $110 million to $127 million.
Higher specialty and acquisition-related volumes, lower corn costs, and
lower manufacturing expenses due to operational efficiencies accounted for
the increase.
* Year-to-date operating income increased from $176 million to $229 million.
Higher organic and acquisition-related volumes, lower corn costs, lower
manufacturing expenses due to operational efficiencies, and nonrecurrence of
costs attributable to the adverse weather effects in the first quarter of
last year drove the increase.
South America
+--------------+-------------+---------+------+---------+-------------+--------+
|$ in millions | 2014 Net |FX Impact|Volume|Price/mix| 2015 Net |% change|
| | sales | | | | sales | |
+--------------+-------------+---------+------+---------+-------------+--------+
|Second quarter| 305 | -68 | -11 | 24 | 250 | -18% |
+--------------+-------------+---------+------+---------+-------------+--------+
|Year-to-date | 599 | -115 | -23 | 47 | 508 | -15% |
+--------------+-------------+---------+------+---------+-------------+--------+
Operating income
* Operating income in the second quarter was $20 million, up 22 percent, or $4
million, largely as a result of increased pricing and good cost discipline,
offset by the foreign-exchange impact, higher input costs, and weaker
demand.
* Year-to-date operating income was $45 million, down $2 million, largely as a
result of weaker demand. Increased pricing mitigated both the foreign-
exchange impact and higher input costs resulting from inflationary effects.
Asia Pacific
+--------------+-------------+---------+------+---------+-------------+--------+
|$ in millions | 2014 Net |FX Impact|Volume|Price/mix| 2015 Net |% change|
| | sales | | | | sales | |
+--------------+-------------+---------+------+---------+-------------+--------+
|Second quarter| 203 | -13 | 7 | -5 | 192 | -6% |
+--------------+-------------+---------+------+---------+-------------+--------+
|Year-to-date | 389 | -20 | 23 | -13 | 379 | -3% |
+--------------+-------------+---------+------+---------+-------------+--------+
Operating income
* Second quarter operating income was $28 million, up slightly from a year
ago. Year-to-date operating income was $54 million, also up slightly from a
year ago. In both periods, foreign-exchange impacts were offset by increased
volume and margin expansion.
Europe, Middle East, Africa (EMEA)
+--------------+-------------+---------+------+---------+-------------+--------+
|$ in millions | 2014 Net |FX Impact|Volume|Price/mix| 2015 Net |% change|
| | sales | | | | sales | |
+--------------+-------------+---------+------+---------+-------------+--------+
|Second quarter| 155 | -16 | 1 | -2 | 138 | -11% |
+--------------+-------------+---------+------+---------+-------------+--------+
|Year-to-date | 296 | -26 | 3 | -4 | 269 | -9% |
+--------------+-------------+---------+------+---------+-------------+--------+
Operating income
* Second quarter operating income was $23 million, down from $25 million a
year ago. Year-to-date operating income was $45 million, down $1 million
from a year ago. In both periods, higher volumes and good cost management
were offset by foreign-exchange impacts.
2015 Guidance
2015 adjusted EPS, including anticipated $0.08-$0.12 per share accretion
resulting from the Penford and Kerr acquisitions but excluding acquisition-
related costs, is expected to be in the range of $5.60 to $5.90 compared to
adjusted EPS of $5.20 in 2014. The guidance assumes: overall improvement in
North America, modest improvement in Asia Pacific, South America in line, and
EMEA down slightly given anticipated unfavorable changes in currency rates; an
effective tax rate of 29 - 31 percent; and earnings per share accretion
attributable to the 2014 accelerated share repurchase program. Sales of higher-
value specialty ingredients are expected to continue to contribute to margin
expansion.
In 2015, cash generated by operations and capital expenditures are expected to
be approximately $650-$700 million and $300 million, respectively.
Conference Call and Webcast
Ingredion will conduct a conference call today at 9:00 a.m. Eastern Time (8:00
a.m. Central Time) to be hosted by Ilene Gordon, chairman, president and chief
executive officer, and Jack Fortnum, chief financial officer.
The call will be webcast in real time, and will include a visual presentation
accessible through the Ingredion website at www.ingredion.com. The presentation
will be available to download approximately 60 minutes prior to the start of the
call. A replay of the webcast will be available at www.ingredion.com.
ABOUT THE COMPANY
Ingredion Incorporated (NYSE:INGR) is a leading global ingredients solutions
provider specializing in nature-based sweeteners, starches and nutrition
ingredients and biomaterial solutions. With customers in more than 100
countries, Ingredion serves approximately 60 diverse sectors in food, beverage,
brewing, pharmaceuticals and other industries. For more information, visit
ingredion.com.
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 other things, any statements regarding
the Company's prospects or future financial condition, earnings, revenues, tax
rates, capital expenditures, expenses or other financial items, any statements
concerning the Company's prospects or future operations, including management's
plans or strategies and objectives therefor 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" 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, stockholders 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 these statements, based on various factors, including
the effects of global economic conditions, including, particularly, continuation
or worsening of the current economic, currency and political conditions in South
America and economic conditions in Europe, and their impact on our sales volumes
and pricing of our products, our ability to collect our receivables from
customers and our ability to raise funds at reasonable rates; fluctuations in
worldwide markets for corn and other commodities, and the associated risks of
hedging against such fluctuations; fluctuations in the markets and prices for
our co-products, particularly corn oil; fluctuations in aggregate industry
supply and market demand; the behavior of financial markets, including foreign
currency fluctuations and fluctuations in interest and exchange rates;
volatility and turmoil in the capital markets; the commercial and consumer
credit environment; general political, economic, business, market and weather
conditions in the various geographic regions and countries in which we buy our
raw materials or manufacture or sell our products; future financial performance
of major industries which we serve, including, without limitation, the food and
beverage, pharmaceuticals, paper, corrugated, textile and brewing industries;
energy costs and availability, freight and shipping costs, and changes in
regulatory controls regarding quotas, tariffs, duties, taxes and income tax
rates; operating difficulties; availability of raw materials, including potato
starch, tapioca and the specific varieties of corn upon which our products are
based; energy issues in Pakistan; boiler reliability; our ability to effectively
integrate and operate acquired businesses, including the Penford business; our
ability to achieve budgets and to realize expected synergies; our ability to
complete planned maintenance and investment projects successfully and on budget;
labor disputes; genetic and biotechnology issues; changing consumption
preferences including those relating to high fructose corn syrup; increased
competitive and/or customer pressure in the corn-refining industry; and the
outbreak or continuation of serious communicable disease or hostilities
including acts of terrorism. Factors relating to the acquisition of Penford
Corporation that could cause actual results and developments to differ from
expectations include that the anticipated benefits of the acquisition, including
synergies, may not be realized; and that the integration of Penford's operations
with our operations may be materially delayed or may be more costly or difficult
than expected.
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, 2014 and subsequent reports on Forms 10-Q
and 8-K.
CONTACT:
Investors: Heather Kos, 708-551-2592
Media: Claire Regan, 708-551-2602
PR Tables:
http://hugin.info/147221/R/1942318/702572.pdf
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GlobeNewswire clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Ingredion Incorporated via GlobeNewswire
[HUG#1942318]
Unternehmensinformation / Kurzprofil:
Datum: 30.07.2015 - 12:30 Uhr
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News-ID 410435
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