INGREDION INCORPORATED REPORTS SOLID THIRD QUARTER 2015 RESULTS
(Thomson Reuters ONE) -
* Third quarter 2015 reported and adjusted EPS were $1.48 and $1.64,
respectively, compared to $1.60 of reported EPS in the third quarter 2014
* Year-to-date 2015 reported and adjusted EPS were $4.09 and $4.47,
respectively, up from $3.89 of reported EPS in the year-ago period
* 2015 adjusted EPS guidance raised to $5.75-$5.90, including acquisition-
related EPS accretion and excluding associated acquisition-related costs and
restructuring costs
WESTCHESTER, Ill., October 29, 2015 - Ingredion Incorporated (NYSE: INGR), a
leading global provider of ingredient solutions to diversified industries, today
reported results for the third quarter 2015.
"Our solid third quarter results reflect the overall positive trajectory of our
business," said Ilene Gordon, chairman, president and chief executive officer.
"Higher core and specialty volumes, improved mix, good operating efficiency, and
the impact of acquisitions, more than offset foreign-exchange headwinds. Year-
over-year operating income improved in North America, South America, and Asia
Pacific.
"Our growth strategy continues to drive robust results and we remain confident
in our 2015 outlook. Volume growth, disciplined cost management, and improved
mix are expected to continue in the fourth quarter. Our Kerr acquisition, which
broadens our wholesome and clean-label ingredient portfolio, was finalized in
August and the Penford integration remains on track for at least $20 million in
annualized cost synergies. We continue to take actions to optimize our cost
structure for the future. Our expectation for adjusted EPS for the year is
raised to $5.75-$5.90, including accretion resulting from both transactions, but
excluding costs related to acquisitions and restructuring." Gordon added.
Diluted Earnings Per Share (EPS)
+--------------------------------+-------+-------+-------+-------+
| | 3Q14 | 3Q15 | YTD14 | YTD15 |
+--------------------------------+-------+-------+-------+-------+
| Reported EPS | $1.60 | $1.48 | $3.89 | $4.09 |
+--------------------------------+-------+-------+-------+-------+
| Acquisition/Integration costs | - | 0.03 | - | 0.16 |
+--------------------------------+-------+-------+-------+-------+
| Impairment/Restructuring | - | 0.13 | - | 0.22 |
+--------------------------------+-------+-------+-------+-------+
| Adjusted EPS* | $1.60 | $1.64 | $3.89 | $4.47 |
+--------------------------------+-------+-------+-------+-------+
*Totals may not foot due to rounding
Estimated factors affecting change in adjusted EPS
+----------------------------+--------+--------+
| | 3Q15 | YTD15 |
+----------------------------+--------+--------+
| Margin | 0.43 | 1.14 |
+----------------------------+--------+--------+
| Volume | 0.07 | 0.16 |
+----------------------------+--------+--------+
| Foreign exchange | (0.24) | (0.47) |
+----------------------------+--------+--------+
| Other income/(expense) | (0.11) | (0.19) |
+----------------------------+--------+--------+
| Total operating items | 0.15 | 0.64 |
+----------------------------+--------+--------+
| | | |
+----------------------------+--------+--------+
| Financing costs | 0.01 | 0.05 |
+----------------------------+--------+--------+
| Shares outstanding | 0.03 | 0.15 |
+----------------------------+--------+--------+
| Tax rate | (0.15) | (0.26) |
+----------------------------+--------+--------+
| Non-controlling interest | - | - |
+----------------------------+--------+--------+
| Total non-operating items | (0.11) | (0.06) |
+----------------------------+--------+--------+
| Total items affecting EPS | 0.04 | 0.58 |
+----------------------------+--------+--------+
Financial Highlights
* At September 30, 2015, total debt and cash and short-term investments were
$2.3 billion and $731 million, respectively, versus $1.8 billion and $614
million, respectively, at December 31, 2014.
* During the third quarter of 2015, net financing costs were $14 million, or
$1 million lower than the year-ago period due to the benefit of lower
interest rates on debt.
* The third quarter reported and adjusted effective tax rates were 31.8
percent and 31.9 percent, respectively, compared to a 26.1 percent reported
effective tax rate in the year-ago period. The higher rates were primarily
driven by greater earnings in higher tax jurisdictions as well as the
devaluation of the Mexican peso during the quarter.
* Capital expenditures, net of disposals, were $193 million for the first nine
months of 2015, $6 million higher than in the year-ago period.
* During the first nine months of the year, the Company repurchased
approximately 435,000 shares of common stock for $34 million.
Business Review
Total Ingredion
+-------------+--------------+---------+------+---------+-------------+--------+
|$ in millions|2014 Net sales|FX Impact|Volume|Price/mix| 2015 Net |% change|
| | | | | | sales | |
+-------------+--------------+---------+------+---------+-------------+--------+
|Third quarter| 1,460 | -157 | 130 | 3 | 1,437 | -2% |
+-------------+--------------+---------+------+---------+-------------+--------+
|Year-to-date | 4,300 | -345 | 282 | -21 | 4,216 | -2% |
+-------------+--------------+---------+------+---------+-------------+--------+
Net Sales
* Net sales were down for both periods as a result of changes in foreign
currency-exchange rates and the pass through of lower corn costs, partially
offset by volume growth, both organic and acquisition-related, and increased
prices in South America which partially compensated for currency headwinds.
Operating income
* Third quarter reported and adjusted operating income were $175 million and
$192 million, respectively. These were a two percent decrease and eight
percent increase, respectively, compared to $178 million of reported
operating income in the third quarter of 2014. The increase in adjusted
operating income was primarily due to: organic volume growth in core and
specialty ingredients; acquisition-related volume growth; margin expansion
in North America; and improved price/mix 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 $487 million
and $529 million, respectively. These were five percent and 14 percent
increases, respectively, compared to $463 million of year-to-date 2014
reported operating income. The increases in operating income were primarily
due to: organic volume growth in core and specialty ingredients;
acquisition-related volume growth; margin expansion in North America; and
improved price/mix in South America. These positives were partially offset
by the negative effect of foreign exchange.
* Third quarter reported operating income was lower than adjusted operating
income by $17 million. Of this, $12 million is related to Brazil
restructuring; $2 million is related to severance-related charges for the
sale of our plant in Port Colborne, Canada expected to close in the fourth
quarter of 2015; and $3 million is for acquisition-related costs for Penford
and Kerr.
North America
+-------------+--------------+---------+------+---------+-------------+--------+
|$ in millions|2014 Net sales|FX Impact|Volume|Price/mix| 2015 Net |% change|
| | | | | | sales | |
+-------------+--------------+---------+------+---------+-------------+--------+
|Third quarter| 806 | -22 | 118 | -22 | 880 | 9% |
+-------------+--------------+---------+------+---------+-------------+--------+
|Year-to-date | 2,362 | -48 | 267 | -78 | 2,503 | 6% |
+-------------+--------------+---------+------+---------+-------------+--------+
Operating income
* Third quarter operating income increased from $113 million to $133 million.
Higher organic 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 $289 million to $362 million.
Higher organic and acquisition-related volumes, lower corn costs, lower
manufacturing expenses due to operational efficiencies, and nonrecurrence of
costs attributable to the adverse weather effects in the first quarter of
last year drove the increase.
South America
+-------------+--------------+---------+------+---------+-------------+--------+
|$ in millions|2014 Net sales|FX Impact|Volume|Price/mix| 2015 Net |% change|
| | | | | | sales | |
+-------------+--------------+---------+------+---------+-------------+--------+
|Third quarter| 308 | -102 | 22 | 28 | 256 | -17% |
+-------------+--------------+---------+------+---------+-------------+--------+
|Year-to-date | 906 | -216 | -1 | 76 | 765 | -16% |
+-------------+--------------+---------+------+---------+-------------+--------+
Operating income
* Operating income in the third quarter was $28 million, up four percent, or
$1 million, largely as a result of improved price/mix and good cost
discipline, partially offset by the foreign-exchange impact and higher input
costs.
* Year-to-date operating income was $73 million, down $1 million, largely as a
result of the negative effect of foreign-exchange and higher input costs
resulting from inflation. This was partially mitigated by improved
price/mix.
Asia Pacific
+-------------+--------------+---------+------+---------+-------------+--------+
|$ in millions|2014 Net sales|FX Impact|Volume|Price/mix| 2015 Net |% change|
| | | | | | sales | |
+-------------+--------------+---------+------+---------+-------------+--------+
|Third quarter| 206 | -22 | -6 | -4 | 174 | -15% |
+-------------+--------------+---------+------+---------+-------------+--------+
|Year-to-date | 594 | -42 | 17 | -16 | 553 | -7% |
+-------------+--------------+---------+------+---------+-------------+--------+
Operating income
* Third quarter operating income was $28 million, up slightly from a year ago.
Margin expansion was partially offset by foreign-exchange impacts.
* Year-to-date operating income was $81 million, up slightly from a year ago.
Increased volume and margin expansion were partially offset by foreign-
exchange impacts.
Europe, Middle East, Africa (EMEA)
+-------------+--------------+---------+------+---------+-------------+--------+
|$ in millions|2014 Net sales|FX Impact|Volume|Price/mix| 2015 Net |% change|
| | | | | | sales | |
+-------------+--------------+---------+------+---------+-------------+--------+
|Third quarter| 141 | -12 | -4 | 1 | 126 | -11% |
+-------------+--------------+---------+------+---------+-------------+--------+
|Year-to-date | 438 | -39 | -1 | -3 | 395 | -10% |
+-------------+--------------+---------+------+---------+-------------+--------+
Operating income
* Third quarter operating income was $22 million, down less than $1 million
from a year ago. Year-to-date operating income was $67 million, down $2
million from a year ago. In both periods, good cost management was offset by
foreign-exchange impacts and lower volumes.
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 and restructuring costs, is expected to be in the range of $5.75 to
$5.90 compared to adjusted EPS of $5.20 in 2014. The full-year guidance
assumes, compared to last year: overall improvement in North America, modest
improvement in Asia Pacific, South America in line, and EMEA down given
anticipated unfavorable changes in currency rates; an effective tax rate of
approximately 32 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
Q3 2015 PR Tables:
http://hugin.info/147221/R/1962214/715619.pdf
This announcement is distributed by GlobeNewswire on behalf of
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#1962214]
Unternehmensinformation / Kurzprofil:
Datum: 29.10.2015 - 11:30 Uhr
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News-ID 430370
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