Ingredion (INGR) 31 Oct 192019 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the Third Quarter 2019 Ingredion Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions]

to Investor conference Relations, like Corporate to now and Finance Ryan would hand over the Director, I Koller.

Jim you Good third morning our hear Executive call, Financial and Jim quarter Ingredion's President from will Officer. XXXX earnings Vice CEO; and call. On Gray, welcome and Zallie, our to Chief and President today's

be were can Investor our also on in the on be section. presentation issued slides found website hours morning this your convenience. a in and a this results website found Our press that accompanying The were release the few for ingredion.com can posted ago

As the subject presentation or may to forward-looking is under statements, reminder, from to results contain are and comments risks materially statements Actual and them as, uncertainties. Ingredion These a future, within obligation in the various could if no our in forward-looking update change. predicted this circumstances differ statements. those

actual discussed Form in and differ press company's information subsequent could to found in on filed materially concerning most or Forms on reports call, and results X-K. conference the recently those cause annual from this can today's be report that factors XX-K release, Additional XX-Q morning's during

and X financial call, information and from adjusted refer also this certain including today's non-GAAP our are reconciled tax appendix. in to which release share, presentation's measures operations, During earnings Note adjusted included adjusted GAAP per operating non-GAAP in effective we adjusted flow income, measures, rate cash U.S. press to in

to Zallie. Now to I'm call pleased the Jim turn over

our performance. you, I perspective today's us with would quarter today. and like everyone on begin to call joining Thank to my Ryan, welcome third

Absent X% foreign impacts, our prior versus global net net sales slightly. $XX of million negative up quarter, exchange For the year. were sales were the up

impacts favorability the actions in pricing the exchange ago all offsetting quarter, million of year period. the foreign of nearly versus $XX Our delivered

profit X% share and growth exchange Adjusted North America was I X% absent to to pleased for operating returned that a in income. X% up operating the increase quarter am year-over-year up adjusted impacts. and delivered foreign income translation

by During the stock and quarter, production efficiencies operational utilization in driven the of full increased as our took effect. volumes greater reliability network throughout rebalancing

of Polymer growth. We're specialty texturizers by reduce Consumer-preferred such sales all America's successful growth regions pleased and contributed grow Western to primarily led demand across our net natural delivered specialty for sweeteners starch-based sweeteners Furthermore, non-GMO integration to ingredients continues and sweeteners specialty sweeteners. as Stevia. calorie that including North

excited Mexico San of allulose further few To with natural facility. about Río, consumer a new align sweeteners, are Juan opening del our preference our at line weeks in for we the production

potato Our growth delivered by starch-based solid led specialty texturizers starches globally.

We and are include consumer starches, for proteins specialty textural formulating preferred which clean systems, solutions. labeled plant-based hydrocolloids

formulate both we're by example, with co-create for collaboration, meat on to small gums and ingredients. this potato and For texturized protein, curd and working extracts plant pea to filling Capitalizing based combining alternatives. are we starch, pipeline actively large customer closely customers innovate our protein

We Smart how our were work transforming are the results and and aggressively program deliver value. driving Cost we

make a will agile necessary operations streamline We which difficult to have business. create to had more but decisions,

move facility to scarcity. to and at Cove, to among Lane an our to decision cease For the Australia due water import persistent example, factors we made increases cost other model corn address production

organizational initiated our America restructuring decision a South business enable reduce we addition, significant In quicker of to and making. layers

cumulative delivery forward $XX year full to on the to I run million of As you rate deliver $XX our stated next updating to million look savings expect we year-end earnings previously, and at XXXX call. program's

from which prior co-product net by year during due savings and America performance versus quarter. the costs higher to offset Cost discussing North were The mix lower improved income Smart price up each region's was our to operating was program driven move year-over-year. corn benefits increase let's Now, values. by partially the

by driven program. three South foreign America year-over-year, our operating Smart impacts, pricing from volume factors, also actions, benefits Cost which currency savings and offset favorable income higher was up

done job in the has an team exceptional pricing environment. South taking aggressive America actions currency Our against fluctuating constantly

Asia-Pacific Australia the trade northern impacted across disputes. weakness down, in operating and income by economies Asian costs increased continuing was operating by driven

increased offset Korea corn Our China costs primarily intensified driven input actions. and down, income Pakistan pricing impacts, in EMEA and which strong exchange operating and pressure. by businesses were have experienced was higher competitive costs, foreign partially by

review Now, financial let Jim who detail. Jim? Gray, over more to it in the will me turn results

costs. for operating $XXX input $X.XXX offset quarter. XX partially of higher by $XXX profit up respectively. Gross and by Thank million was points, price billion were you, were basis driven adjusted Jim. incomes higher mix margin the Net and Reported favorable sales slightly by million

operating quarter to of income and restructuring was Smart costs attributable These million, by our lower operations to reported transition due adjusted planned costs cessation Cost to operating were $XX facility. Third to the Cove related primarily income an our production program. model Lane than at import Australian of

restructuring organizational South in We also a America. significant initiated

$X.XX million adjusted valuations. and and QX primarily increase $X.XXX same billion reported from and was a mix price $X or up Unfavorable respectively. volumes was sales. of product net year. million of of $X.XX share were X% $XX FX currency for favorable weaker sales Higher per $XX earnings accounted or to attributable last increase sales were Our the slightly net quarter million of

recapture price mix up exchange foreign the X%, volume volume our and in teams sales the Colombia. up shed and facility ceased increases costs. America, as wet we've X%, milling Argentina region. across to of South volume as Price X% that been corn America, Stockton were mix the In America year-over-year, by North at experiencing mix pass impacts driven down were and Price of November. through product last our by was was higher XX% product North we some in was In driven see net took up up

primarily partially favorable foreign favorable mix Pakistan experienced was net impacts, This by specialty by driven exchange in and due and impacts were offset exchange sales to volume. APAC foreign declined only lower to by price growth. unfavorable price sales due partially X% volume that mix. EMEA net offset

the adjusted and in partially and million offset income reported $XX increased operating million and unplanned outages quarter. benefits mix, price costs. to lapping net $X corn of Cost the million by higher income program, were operating prior our Smart which North $X improved respectively. America from For year due the increased

by million, and income America aggressive actions currency the driven was by Cost volume South to from $X up higher program. benefits pricing operating offset Smart foreign savings impacts,

driven impact income down down cost $X have disputes, was income operating from intensified exchange year which period, operating Pakistan. offset increased partially pricing strong higher trade innovation million for impacts, the ago were operating pressures. costs a by were which driven to ago, input by from continued million a actions, in of by driven quarter, and primarily investments lapping competitive increased costs higher Asia-Pacific foreign was $X Australia the year the adjustments million global in prior continuing EMEA and drive corn and and by costs price optimize year processes. of by Corporate and $X

Let the third share. me turn to quarter earnings per

On you page, reconciliation adjusted. the to left see reported the can of side from the

On saw $X.XX an of side, $X.XX the operationally, and improvements margin share right per increase respectively. we by per share, and $X.XX driven volume

share per was share. an were exchange impacts a $X.XX Foreign per decline $X.XX and income of other unfavorable

average $X.XX of nonoperational Argentina's are Moving by a and initial which of contributed saw per impact the a quarter, denominated revaluation of benefit shares share. lapping cost devaluation. Financing include to hyperinflation an outstanding the of our peso lower $X.XX share increase which items. balances, and XXXX's We driven for peso

million in Moving investments by and $XXX through $XXX Western $XX Capital were reflecting down was we were year-to-date million, Polymer the to prior million. cash Acquisitions flow. other investors Year-to-date slightly and cash dividend provided payments. to investments expenditures and ventures $XXX operations returned from million, have year.

our in of Asian Brexit, Argentina our disputes, to we and Turning political uncertainty lowered expectations income the expected weakening the statement economy fourth the trade postponement the to of have businesses, our outlook. quarter. Due for northern impacts of

in earnings the we anticipate to of a range $X.XX. adjusted As XXXX $X.XX result, share per

adjusted income our the net FX expect increased which an negative $X.XX economic a $X.XX be per growth over Asia expected impact impact versus is of currency to continued share, $X.XX EMEA and to is businesses. prior in be down softer guidance, to last due negative year. We weakness northern a to in and operating sales

global be balances including XXXX the digital costs offset invest be accounting optimization, corporate expenses financing in as $XX Argentina process expect We year-over-year in and Cost the million by effects of savings. to partially expected year. to Smart hyperinflationary to moderately innovation, second are we half peso-denominated capabilities million the higher of range business of revaluation impacting $XX of the and

to between be adjusted tax XX%. and XX% rate Our is annual expected effective

the million weighted diluted average for of range impact to total the the considering agreement. $XX to accelerated $XX expect shares the share repurchase be in year We million of outstanding

helping is momentum mentioned, our we program, very behind we which business. to savings are As the Cost have transform with Jim Smart developed our pleased

XXXX rate to expect million savings. to We million run $XX $XX in cumulative deliver year-end

is North down a U.S. sales to the America, income greater negatively to are expected net corn net expected U.S. and crop operating been In harvest the XXXX late plantings to which impacted and cost slightly and have costs, be assuming corn later expected by in be move across higher down

the In continued arising expected from addition, imbalances to crop trade inventory U.S.-China co-product values. depress dispute are

net was expected year year. first income of of operating the the modestly. to experienced be to South from the currency to Moving are and in down. are adjusted weaknesses up expected sales impact Full be America. Most half Volumes

business. for any transition policy However, we are our changes watching that presidential closely impact Argentina may the in

won sales operating is are in income pass as to higher down, foreign their current weakness China, local Korean costs, while the trade U.S. across a well to region. slowdown. experiencing difficult The the the Japan and as net and and weakness resulted are currency due and of economy disputes transactional expected Asia-Pacific impact Korea the has through weakness between XXXX the be of currency corn -- between to which

expect down. net be to we EMEA, sales flat to In

higher expect currency region, to due materials the Brexit be We January year. cost next income the to of impacts raw postponement operating down throughout to and

as we our we Therefore, seasonal XXXX, results. conversations, summer hemisphere similar the our that bring seasonality, ingredients. in have our for reflected some business we demand northern months the past be to highlighted expect as greater complete demand In experiences in

range cash to expect be in the we $XXX $XXX of million XXXX, million. from In to operations

to invest platforms. million million significant $XXX will in specialty support growth between a our of $XXX and expenditures, expect portion We capital which

his Jim And committed we value to in opening, are to shareholders. returning stated as

of capacity balance opportunities. investments cash-generating to year our Our to fund increase specialty core reflects desire X% our growth organic, future this with business the dividend

comments my a brings to close. That

turn Zallie. Let me to it back Jim now

Thanks, Jim.

we the network efficiencies from are and progress that As today, our are us we that are strategy improving operational delivering are off. and our The paying made you on business have -- growth. moves demonstrated pleased heard optimization

regions across We team and driving growth. for roadmap sales our our specialty advance growth delivered all to net four continues

our serve customers and Our better growth. deliver even recent expanded provide to net us investments meet sales and specialty demand, position that growing the new capabilities consumer

And co-create increase enables as plant-based are solutions texturizers, their the protein offerings, doing of our leader ours. with us combined starch-based consumer-preferred, our with we and systems capabilities to broadening to clean-label our ingredient new so in to growth customers successfully drive portfolio and

questions. And now, let's the open for call

of our line Thank Credit first you comes Robert [Operator question the Moskow with from Instructions] And Suisse.

any I know falling and values for the you. I secondly, Jim if that take thank byproduct were does received? educate just then corn open Hi, mean can start again being need? I forward are going guess? help try to earlier demand they the might volatile? of will And us year it those that a to the give want Jim, corn kind you know you customers update risk progress think sweeteners. how And that pretty values risk you to byproducts in that to If rising that that of pricing customers this the Thanks. what revoked on might it does about for that's And up be you you whether open pricing on and an pricing impact

Okay.

over and first Let it Jim Gray. it me turn to take then I'll

Rob for question. the thanks So

look move basis we the also co-product crop corn higher point we has higher our remain costs. ahead XXXX impacting at uncertainty As a the to three values your size to costs. the cost it corn to to which to leading lower of net of than face is One factors continue reflected corn certainly been cost historically gross structurally higher and which level is

in co-product considerations relates And And all be as specifically lower the pricing structurally it three those of corn actions. important factors will recoveries. certainly to our

how our contracting analyzing make year at those into go looking need all our with requirements customers structured. carefully of as and pricing contracts and we are we for where to next are pricing adjustments We

something share optimize looking that increase in has against And in so working of we're we're all is cost of the the increase. customers the educating three to corn particularly entire components to with But customers structurally what industry. and customers cost impacted

is what I And well. so to come happen as think we into the with take future model in might account meant up whatever

answers in that do So want you hopefully Jim, anything your to add addition? question.

add we throughout and temporal that corn it corn values think as of really more I XXXX No. depressed continued would viewed mean, was some into when all lower I experienced only I something experience for were gluten values having oil for to heading meal XXXX. co-product we've and we those that

think And traditionally to figure and to our with conversation having we corn so quite out cost can't a facing just corn the business. in have to the choice able the we're what who we we when of corn how is that would one-sided done the and they're I take structure which customers differ impact well our need that understand

in we as customers of more order to values U.S. forward soy that co-products -- out trade rebalancing but we our as well. dispute exploring said Jim ships is is what us as hopefully -- see to as with of and returns our go customers options we unwinds that for there a make different how much corn the not a very just of benefit so some the that U.S.-China and to and sure And are

Okay. very much. Thank you

Rob. Thanks,

Thank you.

Thank of Bank you. the next question Montreal. line our And Zaslow comes from Ken of with

morning, Good Hey. guys.

Hi, Ken.

much frame XXXX U.S.-China issues have Japan-Korea operating how profit? depressed the you Can trade and

For Asia-Pac?

Asia-Pac For regions?

the No, whole for no company.

APAC, think. U.S.-China I bigger company. Korea-Japan. one just the the mentioned kind For then but is of want just -- the you -- not first for I for just But And

resolution and that. what it return think what about guess the return of a Just kind would wouldn't is there to was if how framework so I on

kind of go. think that's to I where looking I'm

Yes.

it do the just that. a very everyone It's for question think your discussing I of And is here. we question. should clearly first and we are understand good actually I think Jim because I components breakdown what

imports obviously the dispute impacts China. co-products tariffs the increase on trade costs. network impact going and an And in complex equally U.S.-China on have So then soy and you into

depression a Asia. in have economies related Northern to the You

You have seeing China. And as as U.S. well some trade there. Korea and disputes between impacts and Japan the between macro economic we're

I'm Jim you around quantify perimeters over to I'll to to going So help that. the to try turn

passed business look Ken we to mean, I that excess the XXXX from $XX that's through XXXX the think think Yes. in to been the of in Yes. into in not I as probably million of co-product America values impact terms we North have impact region.

seeing when we Asia-Pac price you and On local raising and business lots try clearly China have the at customers the in tariff China flip we're is competitive a our options. as side of it's need our that's market what on look couple in higher to a imported of goods

price transactional corn difficult there. increases the to through, off of And Korea world And for the very the that showing weakness. impact us economy Korea. so The pressure cost really I then putting isn't has That Korea probably the is slow, buy say with on the corn. producers China. in an Korea of And of that And some that with -- market. would it's been the more some demand won

mean, I combined. if that struggling impact, I probably kind I of million it's excess would of year-over-year Asia-Pac So look right $XX say

Yes.

it just how there. Great. where the pricing And then XXXX? then where your now? had up. into my second Can they you I'll is, you leave rates U.S. question -- said that's And were, gone talk utilization they about impacting are in

intense XXXX part capacity they I put on operational focus on levels in certainly the on would higher significantly And were of just year. -- based up and say the that that reliability at they the -- utilization and earlier they have operating improvements have in than are focus improved of efficiencies. the we

to that justified think that contributing positions are with for relates as that into we we increases well cost understood as us some it the very possible as are And specifically, three the we're it factors doing pricing and again customers along contracting and best educating with so, go XXXX. with to as

Okay. Thank you.

Thank you.

Brett Hundley from Global. comes line our the Seaport you. question next And of Thank with

or challenges how is this I region? from guys. added wanted quarter. a your think from a you standpoint countries performance coming either on you just sustainable all the across South in the in across is volume America just place this morning, the on as do pricing then headline in some dig region? give the And where good first you Hey color take given during us to product Can

make I'll Yes. over and just a quick turn comment it to Jim.

digits I things were the us think that our mid about that Brazil single volumes adjunct to -- of the we high pleased in for one were quarter. was that for up

I the sector we think brewing weaker But a had quarter. did...

on it. feel positive We

volumes. We did on pretty well

but exceptional not have one. related incredible team was what volume, American significant we've ForEx Argentina obviously I the ForEx in that So Brazil. is necessarily would we're And South an offset say just to of have through we've been really to done by put light and job And impact well. impacted in specifically and there that And to Columbia pricing headwinds has even in mitigate that ForEx devaluations. doing

to comments? you want Jim make additional some So

it obviously we I be the saw in step just think Andean. -- in devaluation and shellshocked to you the really consumer wage was QX of to post -- XXXX into in kind QX the only surprising increases. the by in wasn't that It growth have may back What Argentina in the national planned, expected. traditional and and the was wasn't of maybe peso, it Brazil was the that

characterize really really into actually QX think grocery here that And the store consumers book. even tight some occurring cart, in uncertainty seeing products, peso their of volume consumer a increase and consumer it better of Argentina. still in that's to and what the though on return are now in we of of some of somewhat volume what food return grocery think seen QX And to because might I so normal the in beverage as and the the is Argentina types pocket I left I we've the the

add is, the it now other that is I'm relates in outlook, pension to to The thing as one just will reform Brazil that just it sure I that would the the you and all things become pass progress that did of law. saw

And fiscal that's pension now so to of leading to reform. top government reform on look the

an little to from Brazil. would that of neutral because has the in progress positive a upward of so bit say I put And trajectory

last that into which economic So for the we're stimulate higher the or more will year as something head range bit but has we volume not stimulates that that in next year. And X been a hopeful growth little growth. X%

would I what to I add that. that's So just would --

I appreciate on those comments. stated And environment, toward M&A plant on so goal obviously etcetera. of allulose specialty by have developing then strategy just you're actually certainly capabilities is second mixing question over time and my that internally your affecting protein you the guys

the But of business and technologies new that on effort faster my and derisk be need obviously in sizable a M&A part conversation least does acquiring a expertise. line also while grow time at to an in opinion to

meaningful market in order a of one On go with asking become has specialty, guys One for topic had do targets. too the has the it and M&A, other the in going private challenged acting of hard to think in I'm companies private to future recent reasons of moving my the help a they're appears M&A more strategy time toward is deal maybe compete better more equity you similar main of time? that ingredient now

there, like activity. for perspective they're market you. out to wanted it deal a So companies on there but also is ingredient your now. of seems like void It get right Thank I specialty seems the

the acquisition we're one that And platforms on we those that very Yeah. to of to much I technology that or identified growth trend. capabilities on think very that with for add each out business looking value that we've underpin growth either through propositions I adding. M&A focused those us are five mean building platforms remain on we're

number going sure that to challenging relates the sure to math assets last make and work it more have get making get you're multiples that I of return. it that to think to at as large, standpoint a wisely And that shareholders market the over certainly years you're makes from to a increased deploying to the

on being have think pipeline is us are a active we that all said, very about I what -- So but platforms would say very that for still trend. five when you M&A growth

active one to make we the the any opportunities, would conditions are terms And and the have that us. evaluating sure we time a at and so same at of discussions beneficial and be and so to number value but time meetings, always want

So, that's it. how I answer would

back that really and I to market kind mean, ingredients distributors would Brett, U.S. just connections around or and of lot sometimes and of leads for Western companies. different the with other focus I to with on But our with add a footprint the world our us it's market customers Europe other competitors the easy opportunities.

are at at So rest the looking at Asia-Package, EMEA. region the we looking of America, absolutely through looking we're South we're

very various And so in we existing our active we're can about at think discussions to where geographies looking those pipeline, when add our we in business.

us I and think really actually as being of that growth with coming helped also go or with with. about partner someone Ingredion to look align the clear ultimately very want companies then collaborate at the may has up driving other strategic a roadmap where benefit really to we

a we the we Japanese great mean that Yeah. with that allulose and and is company companies partnered other technology specifically I partners had enter market. us to area that in that also looking to of are with the thing enabled

think variety inorganically. So us opportunities of to I and there's to grow organically to a both continue open

you. Thank

Brett. Thanks,

you. Thank

Our the next line comes question Jones. Heather from Jones Heather with of

is now open. line Your

the taking question. Good morning. for you Thank

morning. Good Sure.

Heather. Hey,

Hi.

market into -- guess It's you I the your had U.S. your what your trends if you corn -- just don't in could thoughts based upon And going start XXXX? analysis know but… did you a and So footprints give I your I region finalize -- all about basis for wanted had of us are the two thoughts region of to sense questions. I I -- I was with --

We that. answer Yeah. can

snowing of outside sitting it here we're and think I five get today. and some may Chicago this is snow in inches Halloween morning parts on

significant the pretty part a storm in second early is the this snow fall. of and -- So here

added now has worried the and harvest, was So being about late and corn. corn which to transport it's about able to everyone move that

an So basis Jim, contracting towards in actually add we're increasing to XXXX. head trend actually you into do something? want seen as we

Yeah. I I belt late eastern the given think was across that the early think little summer. there it's of -- it's part move a broader, some corn to corn plantings kind in the right? of I mean, spread And on, issues maybe

for But obviously, field as higher that the on to corn. it to desire and moisture the What that to it you absorb fro is is need have of it is a dry field corn corn. not the fall content off and to to and any dry type leave need bit on that and lovely dry of necessarily and farmers pull also some that, weather you out discount

got you've the blizzard plain states. so And upper in a

now corn part mid belt. Chicago the the of broader of having across kind a You're

And that so up bit improve in little immediate think I anything are drive setting that's don't just availability necessarily going for things lower. a basis corn of

if how I deal you to there basis your that? the of purchase how have so do mean, And corn? specialty well? remind for with is And you as me outlook basis

Jim. Do want to comment? you

Yeah.

corn, growing we proximity So varietals and generally they're specialty us. that acres that we're is a plants. prearranging for that specialty to planting that farmers get just close sure to very plants small with that different dedicated to we're with those typically they are to commitment make -- the – premium of corn And our

yes. transportation bit So in a regard cost be that can little lower

about challenges recovery far customers comments byproduct the for conversations your XXXX and contracting to the on season as back as side. going then the your And with Okay.

of – So because are is I this talking are is more about that in tolling towards essentially higher you sharing discussing price shifting more Ingredion towards and all less – some would mean, other moving I Or about burden that think been mix? the challenge But mix what talking Are you more tolling. has tolling? be you Ingredion's with historically arrangements? this of this fixed kind

Yeah.

business co-product we're those of what business. the And is versus what we half the ways toll Canada input our in decoupling about seeing Historically, of and some cost corn. to U.S., call or correct fixed unprecedented cost is we've is is that said industry kind in what one I the from to seeing of said Just of fee relationship of assumptions. is increases the in values

discussions And us sense and segmentation so either entire across does we're cost cost having that require is at look customers in where that based makes of the clearly or our those in we recoveries into or and have the to what with cost on of any XXXX relates to share we especially the gross those most understood. fixed toll to customers increase, as the bases and it as look corn exploratory co-product educational head whereas well discussions increases

say changed it I a see and think that do we that, So and approach since I would those taking just to with to us we're really something very structurally forward. analytical customers our segmentation methodical have has requires and discussions customers going

able earnings the stabilized do weakness XXXX constantly what on for is to playing --- not could catch have ForEx catch you estimate much but that if if but just any add dollar to or to stabilized EBIT? price just to up question that and be How to not up? add big, you XXXX this And could not final a my you assume Okay. is –

Yeah.

and to me to over Let opening going Jim. comment an I'm make it turn

$XX our want $XX in just year-to-date remind increase I priced offset to we've look had everyone if that, So million we've we quarter, ForEx. In headwinds year-to-date you price through XX%. price, of at of million had the ForEx that to against

increases get So, we getting are the through to through. need we that pricing

forward? say don't Jim to us. significant with that's going headwind something in stronger certainly better, – If been know regards muscles I and to for we've dealing So but such stabilize, a gotten, that were

the going on in different dollar is the not point what do guess you it in choose say I territories time depends which in okay of Well, variety move business. currencies we to to versus

of European headwinds, that some have weakness going half we're XXXX. a of more the at Let's in more here it you bit half to little additional currencies if just in first Asian and those had you say currencies of terms though the really if have kind here some are held northern second still where look than

– would Argentina. always then, of given bigger choice mark. you with stable and and say towards But a the happens is And within IMF country's of monetary still movers, the are is have what I always more which happens Pakistan Argentina, question their two that, Pakistan I kind our view what little policy. towards think their a

very think hold But year up hey, and XXXX much minds I'm in I to follow some due amazing be in start early on going of appreciate flatten to I I the to a to when seen – terms to or just strength FX. calling the quantify off still does weigh that investors' sentiment other developed that impacts, and do can relative the does little it economy. to trying in an we this it emerging So because dollar probably we've it's

Yeah, yeah.

Okay. That I appreciate much. it. so

you. Thank Okay.

Thank you, Heather.

our you. Stephens. from comes Thank next And Ben the Bienvenu of line question with

guys. morning, Good

Ben. Hey,

Good morning, Ben. Welcome.

want on helpful Any I or on give you. follow-up some would provide to color you if business. there? Thank of otherwise can adjustments us comments going the elaboration your capacity be to to understanding on a ask South America's around restructuring sense could of you that tends provide what's whether

Yes.

consolidations restructurings reminder taken South in we've some over in America. a Just years, the some relationship asset last few to

closures... market. does remember. led years that -- and operations I consolidations two sweeping to back both to go or a million if across fact, to In that ago any closed of million involve three comprehensive It not and is savings we about $X $X asset view facilities laid This more

Organizational.

also one around America of as South more clarifying reducing have do largest because largest agility lines region, and organizational country, operating would one much we subregions, spans and accountability layers, the subregion. Brazil, be three It's

region. then and have Andean You corn you the the southern have

and manufacturing, direct not operations, head excellence we And met chain positive consolidated. to to a be major reporting a procurement one and the manufacturing into with And supply chain drive it's also that operate streamlining And so as share done supply have for be have we operating very deliver really and us example. but efficiencies. example lines would to that's for to for just driver lot of going we've around best what receptivity. of drive savings, been XXXX one as operations is function management now An practice system

capital on allocation. juxtaposed buyback is weighing valuation still thought to balance generation challenging in and about sheet. aggressive pretty relates We've a embracing with strategy of question light second process M&A, a your cash My fundamentals I'm talked Thanks. helpful. but Very good current more curious solid Great. what on

that? to do take Jim, want you

Sure. Yes.

that So to but that capital think investors necessary what time growth we're opportunity. also we capital to towards of where line and a area least because when with is investments putting And it's lot adding. growth existing capabilities Those very both cash kind team yourself plants, organic operations we look They're the described some year. relative payback our maintain are to our our also capacities and tend first at the from familiarity our I usually the attractive we're have overall I've and investment risky, organic opportunities returns to target -- to of has trying an each

more of going remainder the to operations. Second, is to we about we XX% very the much from that's think dividends. have of the kind cash And cash And typically strategic then which XX% flow. our

is M&A a higher repurchase going return that WACC. strategy, also how appropriate the if it and in and we'll returns, But at and attractive to conversations our share pursue payback we the total the because enhance to shareholders. fits available cash approach flow synergies that's think about our be with than total look we'll return that Board, and an in our it an has So and

to opportunities we're generally, in But organic platforms. growth accelerating and growth that's going attractive M&A against the prioritize five

of are to way company better overall First, dividend cash to generative the of attuned the of five be a sure valuation our as consecutive with repurchase. capabilities of that stock at about the we're that very for looking And our tends row make we'll always share increase. in and We're then, and are thinking years quite one return proud a the shareholders. -- now dividend reflecting we

Hey, fair enough, the Thanks color. understood. for

you. Okay. Thank

our Thank the next Samuelson And comes you. of with Adam Goldman line from Sachs. question

everyone. morning Good Thanks. Yes.

Good morning, Adam.

and think financing, much it's how corn But whether of you it sure many tax what on kind seems you line financing of if was between year? about of XXXX Seems and the look maybe as of those kind most tempered pressured FX costs in the biggest we should could first that's America earnings North -- in into the corn hoping little key we're are bit next costs kind expand it's drivers kind how on below quantify continuing just like And laying could of how of business and the into of mix whether it became of like a components they're and kind if bucket amongst FX. to baked the just divers. higher And more components like XQ. outlook of and really I bucket follow-up. make full into a then of clear those year the

think Adam, to this I happy is because important. Yes,

guidance finish by impacted we as full year, to in earnings the order. we expect this three our year So factors be and really

our reported or impact P&L. the the item, now of gains hyperinflation. where you This where hyperinflation losses. also impacts hedge, line Those changes balance within sheets, balance particularly financing in in that's in higher And it the changes Argentina is impacts P&L. So were accounting cost under the sheet get

going all impacts P&L. of to instead So other the income, it comprehensive

reminder, is hyperinflation pesos the really, first we've to Argentina that that of balance Argentina a dollars. So revalued as in sheet back impact

that's the will -- a impact so but in really be felt bit QX. And that in in QX first little

between is then of earnings due mix to our tax the two and is effective just XX% just really really XX%. rate Number

just generation So than a I that's think higher -- And income that's we the guided. net across the businesses. how different earning where it's just little previously is

gross due down northern businesses the Australia. driven our across is And expected Australia. a weaker to this our for flat raw It's really to costs. Asia-Pacific, And due crop costs in adjusted expectations margins slightly be to year really then higher finally, to Asian lower income input in expensive very higher by corn operating material

of approximately the EPS each So, one-third those change guidance. drivers in of our contributing are

North to Okay. then. clear be And just in America

America of that sure you're I'm not delayed is So worse that the cost just of that previously contemplated? of the absorbing, clear corn impact you'd making higher cost and point. on than dramatically saying North freight the I'm basis you're harvest

correct. That's

higher we're in I correct. really might for the QX. be kind really considering America updated talked about That's -- anticipating particularly mean where really and we income was a our both corn net but we to were outlook North What QX QX in of to cost Yeah. down. in just we finish stronger operating the year

we've that. think I kind previously of So, to had guided

year on and price And Faster of say follow-up, there's And slower on wanted do your on end on kind co-product some we're how been would That's covered are then just by characterize that's just received mean contracting Things progression normal? contracting but and of receptivity feel I customers? impact October, that Okay. how schedule? helpful. ground of normal? the would to we already, characterize a basis as kind lot make date? about how kind just of it's than -- to the these think you that of changes than next you being the has to you sure, you the that would of

weather bases relief being understand I I comments they're contracting the more on as around the some slowly like or in which Yeah. What make I'll way Typically related in uncertainty year. levels, in educated crop, corn that of of in mean make we would because comment that to the they would you're relationship don't best for that input the maybe seeing would think situation moving break they forward to some relationship the hope a themselves. do commitments that costs elevated the to make say relationship the there to and customers can. to I I is

maybe then I in slower time that contracting it's only period. we'll get so think flurry supply complete historical that say to the towards is say a will in catalyzed compressed five-year gets allocate, have a of this by, done year. the contracting year, than much done the it to companies but would norm. I will end But think a and So, -- need I it typically against slower be it But more

it's but than little out slower, for think I -- just -- those reasons of described. gate I a that So bit the

They for is mean Maybe choose of strip at generally year. change growth they lot the across the year-to-year might say iterate, moment. this just forward I corn might forward customers U.S., a what just higher of wait to opportune do the customers, the an corn. in the think just strip just and look cost on I understand And can

So, bit... worried it. we're it's a not We about little think just

little and net standpoint nature components. customers a corn from to bit are in all behave way the of a human just on the slower, It's given increased of has part the they corn way it's its the

Yeah.

color. I’ll it that I Okay. pass Thanks. on. appreciate

Thank you. Thanks, Adam.

turn will remarks. closing President I Zallie further for back Jim And CEO, call I'm questions now over you. Thank the showing no this at time. to and

all Thank again hope near to you. like today for you in and time, very everyone we see the travels. I would our their thank to in just future

So, thank you so much.

participating. conference Ladies for and today's Thank call. you gentlemen, this concludes

may now You disconnect.