Ingredion (INGR) 9 Aug 222022 Q2 Earnings call transcript

Thank you for standing by, and welcome to the Ingredion Incorporated Second Quarter 2022 Earnings Conference Call. [Operator Instructions] As a reminder, today's program may be recorded. And now I'd like to introduce your host for today's program, Jason Payant, Vice President of Corporate Finance and Interim Vice President of Investor Relations. Please go ahead, sir.

Good morning, and welcome to Ingredion's Second Quarter 2022 Earnings Call. President Relations. Finance Vice President Interim Payant, Investor of Jason of and Corporate Vice I'm call Jim and today's Gray, On are our and and Executive Jim CEO; Vice President CFO. Zallie, our President in We issued found our ingredion.com, website, press that the section. can on Investors a in our be release today results also this the found website your and slides accompanying be for The were convenience. presentation can on posted today

the and forward-looking reminder, various Actual as statements. if from within and may expectations uncertainties These risks no forward-looking the future are comments this operations As estimated and our those regarding contain a results or assumptions Ingredion obligation to statements subject and future change. in materially the assumes circumstances include and update presentation to in statements, could company's differ performance. financial them

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

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

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

morning, good everyone. Jason, and Thank you,

delivered outstanding second performance to second the continued line Ingredion's quarter momentum. pleased top discuss We are XX% and growth We net performance of quarter. for sales business

our note, income quarter. very over with costs, second delivered second a quarter now And year's continue second higher the performance mix, is input and year's impacts. offset strongest corn strong we've just Combined to foreign Our of product operating last including to quarter grew adjusted XXXX. since quarter excellence this pricing centers X% other better exchange

X across net digits double at second more the quarter. performance, closely line top regions, in Looking all comparable our grew sales

terms foreign headwinds to teams continued Of and $XX of sales Pacific manage commercial foreign the and actions address dollar as continue note, our customer impacts to costs our to EMEA the offset offset combined. higher corn exchange successfully of exchange and strengthen. contracts million we take Asia in more than input mentioned, I to U.S. As to continue

to net Regarding I shipped ahead business the a impact and a net that industry an both on customer on demand, the the prepandemic had would same product us like specialty same last have for grown value mix. X basis, the This have important quarter over note XXXX. levels are our pandemic our in significantly ingredients comparable increased for of now time, milestone higher reflecting volumes the is that a volume has sales and as sales, and years. At of percentage given

pillars. to moving our Now strategic on

dollar increase. that against great robust shaping top growth, strategy. the make digits our leading ingredients each the net was continue progress all up performance We sugar with texturizing X exhibited strong Specialties growth growth and Global to are in line pillars sales platforms quarter. reduction, X of Specialties the once across mid-double again

now than sales in strongly more plant-based are XXX% protein Additionally, quarter were and up the year-to-date. up

commercial to Moving excellence.

address excellence, to While build best hedging America. in to demand. cost capability North chains, improvements commodity customer several With challenges across our primarily to through regard competitiveness and continue implemented remain programs risks supply we've respond process operational to have global our we to expanded

the volatility we commodity a significantly anticipate of second less in As half result, the year.

and global address published growth sustainability momentum progress challenges. culture. societal a goals purpose-driven important also against We against and environmental our Better, people-centric report pillar, our We strategic to Making Life sustainability our XXXX fourth which our sustainability accelerating maintain details XXXX

with I live and leading. would initiatives nearly Working which in our broad like X/X program representation in XX%. the example During our meet highlight quarter, that a and reduction several is of and by communities to in are gas sustainability at XXXX practices. an lasting increased greenhouse positive, One This emissions, employee of Separately, regenerative drive and carbon report, Zone our several captured the quarter, we X Argo the teaching the a to to is amount our Brazil suppliers, pilot which change to farming scope to program exited further the in we where our of adopt farmers reduce and needed X% that we inclusion X training the emissions we goal. XX% impact emissions. our such global have pilot advanced other we soil in reduction our HEINEKEN This Ingredion emissions and resulted increase plant work. across diversity, in equity to reduction Also efforts successfully published highlights is carbon coal XXXX total population. usage in delivered Illinois, carbon resulted in

and inclusiveness We to on focused a culture community are committed creating diverse partnerships. talent, growth

across half specialty quarter mentioned, X sales the grew I and XXXX. digits experienced all we of net the this strong growth in And very first delivered growth double As above over regions. strong

results Day. growth growth X-year sales our generated above at outlined our sugar texturizing our half growth proteins. specialty and led was are which net strong our the reduction Investor outlook, from recent first sweetener plant-based ingredients Notably, we by While portfolio, expected also specialty's net our and we sales

on let reduction, the to X PureCircle foods and sugar drove update growth the to market we we you in Now XX% our anticipate income. wins We XX% its to net grew customer increased momentum quarter further that of growing PureCircle's PureCircle sugar moment rapidly are by the quarter. a from where a specifically and in increases positive operating high natural our demonstrates spend PureCircle of have reduced for to XX% years. sales pleased over XX% market share second leadership ownership me continued sweeteners led which and ownership in intensity, beverages, for next

landscape. navigating on the challenges we business look focused As half of in we ahead the are current the second to year, the

a productivity improvements and pricing First, we operations. combination from increases continue of offsetting our to inflationary remain committed through to

demonstrated increases cost to as We half, in to do first arise. have ability an expect be this offset to they we additional the well and able

challenges chain continue impacted Ukraine by COVID conflict. restrictions labor supply and availability, the Second, be to

Our challenges supply teams to with to of customers. these ensure continuity service and operating are overcome agility to

there increasing energy elevated, the natural in concern prices around remain gas is and potential Third, supply disruptions Europe.

currently We past are in the developing a mitigate the back to possible years, exchange And foreign experiencing the dollar. foreign strengthening plans while benign we of impacts higher currently relatively contingency impacts U.S. currency been lastly, weakness over have on X are region.

well costs have we Our and foreign us pricing served through increases to continue as exchange. well, as will of price excellence raw centers material

it the for Jim? overview. me hand over to Now Gray Jim let financial

season dynamic Good X% by versus comparable the up when performance. impact up input by price fall's Thank driven in presentation operating basis, you, $XXX in-year and have In strong operating period with morning more America prior reported to pricing. income America, well sales James. The net up volume region. that versus across strong price/mix, of X% change. The includes year, million, first as would was XX% of result our a including North were the to XX% income XXXX. mix net in the QX increase On primarily primarily contracting Argentina inflationary the JV America as same last driven the been increase driven as were sales a sales was compared was which by everyone. net regional South year. prior Starting strong prior costs, year, versus up price than corn. North higher mix offset

Argentina performance by up from income South million, stronger the driven America favorability as was well contribution as Operating operating million. income in a venture. joint $X was and Brazil $XX Andean positive

Excluding in operating exchange the adjusted impacts, was up income foreign XX% quarter.

Asia Pacific, XX%. were quarter. the in to foreign net XX% exchange, up Moving sales sales were up Absent

XX%. in exchange offset income $X to increased Pakistan than input versus million Strong operating prior year. $XX was input In were for absent as $XX down sales ASEANI quarter, resilient than And region prior net net more due foreign million foreign $X million, compared to Asia Korea exchange disruptions. impacted down and year. by in Negative million performance during costs quarter. offset China the the the down related exchange higher as income well performance was the operating and sales COVID corn higher income Pacific impacts, XX% also Europe. costs in was to quarter. EMEA, the for weakness foreign in headwinds more impacts as up was EMEA EMEA in operating

Excluding $X in exchange of X% was impacts, foreign million EMEA's operating up adjusted the income quarter.

prior $X.XXX lower adjusted $XXX Gross year. XXX Moving were than was to operating restructuring in input and Pakistan mostly million. XX.X%, expenses. were Korea. basis operating to higher versus lagging gross operating income margin Reported statement. profit Net was and million for higher our the was sales dollars due price/mix year-over-year income quarter corn XX% while $XXX income primarily was income up attributable and to Reported operating down adjusted income costs, of points, billion

Our second were quarter earnings adjusted per both $X.XX for and the reported share period.

to million, sales We pricing QX in each America of change volume dynamic North The with strong the strong venture, in decrease driven the of attributable regions. achieved in increases notable increases America. related price/mix South by X our partially $XXX by $X joint in-year our of largely Turning bridge. sales Argentina to net each contracting offset and of volume million strong the impact of and to regions, the presentation was

the Of column. note, impact foreign the significant net was volume On change headwinds America EMEA X% the with the next Argentina venture the Reported in of presentation Asia joint and highlight slide, quarter, the Pacific. drivers. exchange include results we headwind of South sales within a in

on South JV. the America XX% excluding a the net volume basis, sales of XX% up comparable with grew impact Argentina

earnings to Turning our bridge.

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

share of $X.XX an lower unfavorable by $X.XX. The minus side, margin volumes an of Partially quarter. $X.XX operating and driven foreign increase $X.XX. exchange primarily we for minus of the operationally, of On increase per right the increase offset was saw by

mostly costs XX% income versus EPS to primarily margin was Year-to-date driven net operating down to were $XXX million, lower shares of prior lower primarily income $XXX of was operating Gross income was points. XX.X%, Reported adjusted year was adjusted a profit operating was higher prior and our financing effective to million. nonoperational than by tax XXX up flat operating reported costs. due billion rate basis of $X.XX, income, benefit Moving restructuring items. minus year. and $X.XXX $X.XX of adjusted favorable outstanding sales Year-to-date offset $X.XX. by

earnings $X.XX earnings $X.XX. Our per per share was share and adjusted was year-to-date reported

foreign bridge. primarily million from increases year-to-date of million driven $XXX Turning sales was XX% net sales The in by related venture. has by million volume exchange headwinds from the Argentina net million led offset $XXX of been a largely the regions, growth America, change primarily These each sales increase South by to and joint were a sales half. presentation in sales of increases first negative the volume $XX decrease $XX improvement, of the of America. North price/mix offset by in our North volume to

year-to-date our to earnings Turning bridge.

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

On saw margin $X.XX $X.XX. of the right side, of operationally, and The $X.XX $X.XX an The $X.XX. by volumes per share foreign increase income of year-to-date. exchange improvement and was minus offset lower of driven minus other by we of increase

year-to-date, saw nonoperational to a We decrease minus share and rate by driven primarily tax items. $X.XX. higher Moving of costs of a minus $X.XX higher financing minus our $X.XX of per

Moving cash flow. to

$XXX Net to increased Second higher from inventory quarter flowing capital of values result capital the receivable. cash up working due versus year spend. were was operations and accounts a from essentially Cash costs of prior by as driven the expenditures through prior from $XX input million year, timing higher usage million, operations breakeven.

line $XX Ingredion we half year, to the shareholders $XX In XXXX first shares. million paid dividends are repurchased expectations million capital the commitments. our We of with common outstanding of in and for of

for acquired additional Finally, we shareholders minority PureCircle $XX from shares of million.

This full of XXXX charges. impact the our range integration costs as restructuring acquisition-related to $X.XX. $X.XX excludes to well as and any be EPS expect adjusted We in impairment of potential the year

mid-double basis. expect to net sales volume growth comparable up We a driven by and digits be on strong price/mix

net the the of reflects we expect as to operations our full reported contribution to year of to significantly sorry, be impairment the income expect up related venture. charge asset the -- prior We Argentina operating the impact joint full year year operating

reflecting year. XXXX adjusted expect last operating are to $XX to costs million, income costs. be primarily incremental We up in higher expected to $XX double million borrowing be to low range financing of the digits compared

top to Cash to tax noted rate guidance. a adjusted XX% of from previously. $XX range commitments greater invested are be which to will to as in XX%, flow I and operations million be annual $XXX specialty expected of $XXX working drive the million, expected the which Net anticipated effective the $XXX to between growth. $XXX between from is range be capital capital reflects million, Our of be in and expected is decrease million end approximately now prior investment investments, reflecting million

shares in million diluted for to average of million We the $XX the expect total weighted outstanding year. be range to $XX

be In low favorable our outlook. favorable North up to terms and to input America Operating to higher price higher offsetting than mix to expected up regional more and price mix by expected driven and digits, is XX% volumes by of higher sales XX%, are driven costs. mid-double be and volumes. product net corn income

America, the be reflecting low than for presentation change strong impact up venture. more South Argentina expect offsetting digits, For we favorable to double sales of now net joint the the price/mix,

to Asia mix. expected up be prior year. sales we also is South double America to the net XX% operating versus XX% In to price driven low up be anticipate now digits, favorable by Pacific, income

continue driven the impact by prior corn in income flat offsetting to expect Ukraine the China, We operating costs year in lockdowns to PureCircle. related conflict stronger of to and COVID be growth higher from Korea to

EMEA, up costs down to flat and XX% by low XX%, negative driven single expect sales to higher we be and to expect impacts. income For foreign corn operating and exchange be energy to we digits, net

be expect to For when Jim. and the an sales the teens back growth high and concludes my in That income hand XXXX, in we up prior the both third to comments, quarter to I'll to compared be digits are operating single it year. high net increase

Thanks, Jim.

results that in have While and inflation. solid in second half, a significant expected could our playbook variables managing of are developed believe number a we the impact have we pricing there experience

second taking expanded to are is volatility support price to teams working our the through expansion prior risk margin earnings limit exposure to Additionally, the to actions all mitigate are to relative of our corn in program management our expected movements, and half period. which

carefully a possible recession. changes in monitoring also spending, impact could consumer and potential are We which behaviors volume amidst sales

different ingredients the We used are a are in many categories well positioned of occasions. beverage broad eating types food and are since of range we across produce and consumed

For advanced the and in We bottom We second inflation sales in progress results strong. to and momentum, were and our example, second despite significant half. the disruptions, Europe. In quarter and first significant strength closing, private quarter we in benefit resurgent [line] U.S. foodservice our both very label from grew the against growth -- the despite and half continued and inflation continued our strategic chain pillars. solid expect and deliver continued supply the exit we with in top we

call the questions. open let's for Now

line Goldman Instructions] comes And the Adam Samuelson [Operator our question from Sachs. from first of

Yes.

just little really guidance I So op kind of quarter, has in couple income end. kind low of question the changed. my of In above forward sense guess kind of didn't you your the at what outlook the came -- how first make the range budge is trying a a thought to performance bit

cost I'm of layout? understanding kind the just currency, on of half more to the to pieces it I'm fully on first through of doesn't be back so make kind -- And in the flowing half the Just how moving if seem year, performance kind sense of at a of is all? trying caution get of sure

Yes. Jim. shot. take Adam, is I'll first this a

and saw getting think first, the the QX we basically laying in everybody covered. remind to of the year, clearly we on and look as I layout, as just were QX corn hedges that at rising we corn QX, beginning

bit more terms in QX. in We will incur a little costs corn of QX,

about is there that your So really kind -- what's of think as to the we're more looking point, energy with somewhat that we're of our regard in kind situation and assumptions. the I supply. reflected is maybe cautious Europe we're But at changed to

call, of product to we're on the we and kind mentioned mitigate of gas now any there Jim in move if plans putting is as curtailment around. type So how would

kind both will coming -- in what that of And be be also, second.. QX, so just we're I relative beginning a cautious in very also mean we for And I then Pac, impacts mean year EBIT to over EBIT I up overall, that but we're bit up as And seem had is as than -- the will full be out in Korea. about will COVID we And weaker up forecasted. cautious we've but be our on of EBIT overall, reflected bit previously Asia lapse. obviously, us last to slightly QX, China. then strong I it think -- year's higher of in QX cost of year-over-year, corn look think in EBIT total, relatively strongly also to We the a quite the -- that's that. disruption a

at maybe then parts up, about are commodity I kind of I And any guess specialties get and supply those that. I America. and supply products in of contracting North have and tight products volumes the quite 'XX? kind hearing into your in that more love some in helpful. also of of America how to And That's of products core demand are North trends moment. the going some zeroing And in one. the we're frames growing thoughts that No. core I'd on you demand for mean view of guess about in

Yes. comment and comment of Maybe Jim syrups can on more on maybe then dextrose. I'll kind

in seeing within pull North generally continuing is seen QX, throughout what food really summer. probably a strong you've So as takeaway, America syrups we're all for both service

recovery, from you're hit out full was strong to through last kind Omicron nice came 'XX and kind seeing Mexico that seeing kind products, in was a back say we been Mexico just brewery. strong year. and then bounce You're And volume dextrose has the And of in throughout more bit add, go I most subdued. in core throughout seeing would value-added beverages, of to the year. of year pull Delta, strong crystal And and I is, also demand of regard also just of whole the recovery pull for what as Mexico, a with think, still in we're kind

Yes.

I think demand quarter, and the orders robust now. second continued to continue to be right strong remain in

strong typically just holiday imply We strong Our will a continuing visibility visibility, pipeline quarter, this to forward have that quarter soften. is indicates through That's point, quarter don't that X meant to far demand at for X, which not offerings. yet. Adam, just tied customers' filling

all seen, it So customer still across our is the different reminder, label, And orders private food will food as a sure. X, demand foodservice and strong strong summer strength it grocery, end a through And whether appears private is we have the be base categories, strong from distributor as continue. what really label, branded with say certainly we we how be quarter see service around the very the well as to robust broad quarter service, remains through network and X would for obviously, of world. sales

in So standpoint. time that's all this at visibility a as about as have from that's point we demand and much positive forecasting

Instructions] [Operator Robert the next Credit And line Moskow Suisse. our from comes of question from

little I you was think, expect follow-up. to complex. about hoping you anecdotally, your because where them some And for starch And fill now? the Do -- customers in stronger? could expect keep be heard are we've those shortages, a specific then service I more on you rates getting issues a do your

back to make at we're made to levels the large capacity from say the investments we the And rebound we've texturizers the issues. industry to period, supply a worked issues, this are and relationship receiving, chain products, on address volumes a shipping China indicated, for And also in back that our a the world. standpoint we demand. has X this is Rob. done Thanks, accelerated overcome to for have quarter demand, delivery which have of many operating high noteworthy capacity it's the clean increased to of really automation confirmation, of with most that to these basically case online, capacity customers in of now cetera starch that investments XXXX closely depths and expansion presentation, of -- customers from that And strong be and sales we're I number been timely diligently customers products now supply the the meet is to that demand of X. very of for efficient tightness What as optimize the And we to expansion to our right at of specialty allocation, us order we're our strained what addition how products around Through XXXX. during of Indianapolis continued availability. strategic for COVID and has in at standpoint experienced significant the and supply we that to a example, since to some And quarter shipping disruptions global has in from the we've et sure high teams of supply, focused label certain of product that's to commissioning levels, and help working is going production Yes. the in order has would been digital the utilization. product the those facility, product. pre-pandemic to are now products -- We've

So the as in tightness been all chains in some issues well have say, chemical the we impact standpoint of the look been normalize has forward the whether the from been supply There's year. that force impacted about. it I have see just for remainder declared shortages as that we of industry, of overall know over various supplies year, with the labor, truck be cetera, would second at remainder the a But majeures number steadily half drivers, the of service chemical the or improving tight. across as et a large, that the of situation industry

And plant-based expansion, orders. Okay. update an your maybe protein capacity customer on

profit there? on think, impact, detail last some quarter. I update Any gave You very specific

quarter, sales of from flowers, We've concentrates portfolio, are. say, example. X as This challenging and got actually across across of isolates, time. second targets internal X ingredients. standpoint of on it point doesn't a make well has track types product strong our us breadth very into Yes. such very the our given had meats this of comparable positioned from standpoint half us dependent a growth a different just at alternative But which isolates what We a remains product category protein our on with, really and pulse portfolio for for in

with and have project across very plant-based really bakery great product relationships trend a snacks we've running we We really what long-term really and and those in developed, robust texture and have to And with We of well strongly edge and we're from alternative consumer high-quality fundamentals. content focused on protein is again, sustainable with products we the as facilities along labeling. long-term recipe on customers leading think the this We we've and that's categories a many players are of leading each our taste And portfolio the strong delivering such taste alternative delivering as that pipeline nutrition products the believe categories that are that as are built multiple and focused simple clean them. well category for now. believe success innovation dairy, in is built on standpoint.

our So the deliver a quarter, and second interest and is great, in second half. to the hard a is running team solid good products real just we had

specific. Jim, just to more be

I opportunity year rebound 'XX? or for think profit mean kind Does in it's breakeven an there's growth below year. of that a that strong comparisons operating this

of end running of plant that target growth track $XX we're Yes, a is everybody, you're standpoint sales deliver we from right commissioned a those year. facilities. operating from absolutely the plus income towards the million to what as we improvement on that just right. year-on-year -- I a breakeven our have And improvement the last referred now, to. to operating And We're because remind

this loaded. any So with until as costs new start-up, the comments? you in fully other are incur any Jim, plants obviously case operating

Yes.

you where build in look will 'XX plant-based we 'XX and XXXX. the expected to that finish fixed and to margin the the kind costs versus XXXX's proteins of Just versus operating say we're facility. anticipate foundation XXXX, think, the we'll heading laid right of XXXX direction, to of yet us Rob, improvement operating the improvement on in the seeing in what we're That XXXX. we sales from net kind be, that more we've helps in year in more amortize as I but And from notable have loss our in even

And next the line comes question Zaslow Ken of BMO. from our from

it starting Just online. for to set going you more curious, as seems XXXX, up capacity like you're have

little have that You XXXX? you with looking demand -- seems your be but pretty comfortable know does just year? up outlook about seems year doable -- you you tight play demand some utilization algorithm do also better. it's then that? growth to the rates. give it? even for not pretty how out parameters XXXX, does I just How for have Are for into greater if next like you Can to going It early, and you how or very a this seem think set

seeing we're you demand What think, derivative-based. being take pricing, I right good point very this a then we're cost about then year-to-date if me utilization we just able and is in strong. we've be job, let Well, industry inflation navigate at costs Jim. would input that pricing, for other to ingredients done And say is And corn continuing a going The shot forward. first now, offsetting and I'll I capacity that the turn navigating are that And over starch-based think able to do to anticipating exchange. and forward. continuing to going tight time, see foreign it

is to really in today's And tracking of corn I early, any levels think outlook But today's be think but an was one say our what pricing, futures any at those everybody would looking increased certainly anticipate really on XXXX I Ken, that is prices. XXXX. put So XXXX. kind the I pricing strip thing level, required much required that and we that would actions increase it's outlook versus corn would less than would an imply

as it's of that think hurdle been severe as to at in from able to required pricing as it be So don't else, has standpoint a Jim? it what to going through, I that Anything get was be 'XX.

portfolio mix. and as greater has in And specialty Ken, its towards our then when made, what and is entire that average look high at towards the looking have carries the is customers recipe, we've in fructose value I syrup, team shift that at and of functionality in I we've gross think specialty core that, head we've prices in corn that you the terms 'XX. I products that working demand we of margins addition towards it That really glucose our think working own we always greater this more seen kind really in other that higher some here And Investor Day. highlighted a do dextrose. just with higher our that our value add into moved would is ingredients is of ingredients, really we

Yes. end but North it up steady talking And about demand we the that these calls I noteworthy oftentimes say in anticipate is second know, really predominantly, Ken, to also on we America half last and those of especially World well the Mexico done years. such Cup events South businesses from few with Both have extremely for the as in us year. America, later over the

XXXX. that from we this strong into half head so And of as the remain then look vantage second point, in volumes year to

you'll get what where is I'd leave And do just would that, capacity think here And much follow-up on and return capacity that XXXX? my coming a do have it. you extent how question additional you on to -- in be

make. to squeeze situation our sell very quite OEE, while, focused because a has team effectiveness, pound this the on-stream way right for can improving pounds out operations plants we been of every and Well, we on is now, our more

has FBR on been a expanded investment has texturizing Indianapolis, expansion has made excellence. our really portfolio. product very did label of remarkable phenomenal facility to clean on from that the and our a actually operational in in standpoint its China which focused we've came the customers. in first shipped So team job been record time, That in We've

and for plant on opportunities into requirements capacity freeing which so And with within that that up export capacity. regions coming significant some some as stream is Asia, export that other local market relieves well potentially from region,

that's as Investor of to also texturizers And valued $XXX the for of assets across mentioned taken pregelatinized clean I'll volume the back label well. a highly of And announcement That's capital pre So bases we a specialty well the I to Day an ingredients. just water variety And we more texturizers growth. announced, as investments, and/or you and at draw expand of in downstream cold that's across that specifically as we've across million different texturizing category. number steps. swelling refining made

or have be seen it So growth. potato-based we whether strong rice-based,

expanding in capacity but not in we're downstream realm. finishing capacity necessarily the the channels grind So there, Jim?

Ken, our outlined to in growth us to really digits. that's the we mid-single be at for volume as we outlook, need our going X-year to texturizers, look for in plan

as we're that forward highlights that to have to And planning accommodate the year to of a after that a as year sure texturizers so pretty planning areas, customer comprehensive we growth. Jim while the looking that really number our that, demand ahead and next we're capital make we anticipate in

And Morningstar. our [Operator Seth Goldstein Instructions] from comes next question of the line from

the a scenario able some new the contract you particularly structures pass-through How higher prices? be to maintain commodity would of declines. in reflect do where were work a commodity to sort and be fall to in price there would prices Or specialty,

to of with come all, in degree at happen. down specialty those example, inputs the those ingredients prices if don't that they're or products, a more corn value-added sweeteners, the a delivering more doesn't And fall in cost the application. ingredients, typically core of are a And or same for for necessarily from that basis. performance standpoint on bulk associated the comparison typically core for say, sold Well, to

remember, so And in GP margins, are ingredient Xx ,the core those minimum margins.

is Asia different those different that's So a America and the a Pacific, how depending example. EMEA, is for it's little on typically little than also with products. America pricing South different North And region. works than which

Okay. EMEA gas sales Just potential mitigate be percentage trying you're should risk up that to to the size the Germany? facilities there what in from of trying X And natural shortages? the come really helpful. That's

So the X facilities.

We is have one which facility of consequence, Germany. Hamburg, in

XX%, We XX% little the smaller half from sales related the of most have comes it a recently approximately And sales, KaTech or than maybe a year. half last from itself. operations, German that is of entire EMEA's facility Europe of we facility, that which Out facility. to acquired more from

question our Ben Theurer from from And Barclays. line next comes the of

essentially up follow just put you I amongst Have the environment? needs on call your pricing a do mean momentum general it, talked pricing little the you've outlook given any into feel and flat. very we've the X QX. half. you about to Obviously, elasticity, to any how But pricing wanted into customers, seen about through the seen order bit the plus/minus pushback? inflationary ability the volumes half, Just strong being, in book second and

Yes.

I the think remainder for for outlook. demand through confident based have this the calendar remain in the we year on the this we year, ability pass pricing to of visibility through

than structures incremental year. actions able we've as And been the inflationary has that which dynamic put we goes typical point, because even back able pretty visibility visibility we put we to those demonstrated, incurred. to across into period, what this insignificant it's through from of in-year forward. price typical typical but and our increases through our we've say, related far year, time through an we in we cost we feel -- offset this more related not January XXXX been say, pricing that pricing pricing of year, multiple contracting price at comment total because have increases can't have But this had last at when don't have we had contracting contracting for multiple headed dynamic not to to into, regions, obviously is the cost to increases as XXXX in-year really to which we've that calendar to, period, And related obtained proportion comparison this to fall only confident Beyond we've XXXX. been put come the through we

in what But watching spending usage this consumers' don't channels. supply, moment see ingredients closely, and So I very multiple given we're for across that's we like closely. very and we would behavior of At the we diversified monitoring, the everyone time, those say. else, ingredients softness believe are monitoring we

down the just COVID away food label there, we of home, products. the those the increases, sell mentioning, diversified nature and the as that's was benefit from and equally benefit I and of as enjoying and So equally summer foodservice from we products holidays private rebound, obviously consumers is everybody foodservice we trade out reach nature of the

look Can made few started following to how a flat needs Okay. obviously it back And for some obviously Asia you if -- be the have the the Because good into then guidance rates. about share we to the because of things be half recover? you at operating acceleration growth lockdowns. maybe year, just a to in some there take anecdotes comments of some with impacted of income terms being Pacific, up, of

just to how your that are view from on what you? anything seeing ground confident are confirms here that minus positive that And get half was the just first XX% you So flat? to XX%,

Yes.

Asia standpoint bottom for a operating that's modified income there the and year. -- improvement we've year-on-year Pacific be So from new for operating flat got Remember, are the income, in relatively a incurring to China we also PureCircle related start-up full of expecting And to we're plant. the line. starch costs significant for

would which in in and energy we going a now, So the higher putting watermark and through are significantly for Asia the was, say, impact through in the the quarter exchange us, COVID see right the costs demand half, X in-year number Pacific quarter right is to also But for foreign pricing, the business related the now corn as is Korea. as I second second those But strong. the we the in team low enduring well of currencies. of severity of weakness the of incurring lockdowns

it's China extremely it up products And ASEANI to from better and outlook shipping going is picking again, or doing Tapioca for it in half what improve a ramping plant so is just Yes. -- Our in get business plant half. well. first think, the -- customers. the and is quarter outlook And new the the with believe franchise for getting we is to just That and currently watermark, doing the the have we to exceptionally not, second phased specifically half X brighter endured up in our we're we've nicely. second comparison well. was The low year, and

only And the the for is I'd half team what their plan Ben, said and the Korea. increases. corn a conflict a quarter shock Jim and second corn on for to while that secure note add pricing created It Ukraine for took availability to then

offset and second of And the cost corn so impact now see increases half higher pricing Korea. we'll the in the that

anticipated And in Pac, the Asia so second improvement the that with that's that's other things Jim really mentioned. really in -- the half along

line our from Instructions] from question comes And [Operator Ben of next Stephens. Bienvenu the

M&A, it repurchase on to the the looks considerable progress specific have I what just to made not going a the the about is you've and on continued buyback. capital of In be cash PureCircle updated like, to your but progress today, you'll sheet positioning, appetite want obviously, PureCircle. What of incremental there's the really integration is ask continue for your to allocation integration activity strong your balance business? payment, given dividend generation on that guidance

the out? maybe Jim, do year how playing the talk you take I just then to in want see about and cash you And can that question. last

sales increases make and to corn -- our paying market, going that we as our it's going higher X an a values to sure. that all. inflation of at at more of inventory for we Ben, pieces capital. the on invoices. prices our to in market up It's Yes, rising wind And we're customers, overall be kind going to or be corn. a working When look for reflected

of We've in the reversal this revenue investing kind as a 'XX seen benefit We our we've We're in working working that well past. 'XX. actually in is invested of billion. capital significant XXXX. capital in above in $X So had in

that deployment it run get that's returning of cash and be much We kind cash M&A. then, for strong out the 'XX. to and of organic that for dollars business. And And do leaves We million to of and very so therefore, our level. somewhat expect over putting on projects. from we from do we capital, expect from investment we And into as flatten working dividend, $XXX 'XX strategic we capital growth that won't operations prioritized as rate left prioritize kind kind normal into to us be

this to well we think that's we active sort No, situation next believe And go through and pipeline. I continue obviously year. we work said, M&A will that as itself out an

Yes.

cost source pressure the cited come you it seen quarter. you’re question of second currency the Pakistan, pressure and as Obviously, My is more under trends Okay. a seeing segments specifically, in the in considerable we’ve there. related to EMEA

there in be you implications trends, helpful. business and what’s the talk about that the would could guys, If broader for on just going economy you

you increases the which EMEA experiencing don’t region. corn talk well as that else, is Yes. often top like as about as business, devalued the for are exchange. is prices No, that rupee thank half Summer of And the to everywhere this of against prices dollar has We The year. Pakistan XX% first the up over in inflation and prior for on the you corn cost energy additional an more mentioned in increase, XX% than crop business you to Pakistan, us versus the continuing said, significant foreign significant question. XXXX. of in indicating rupee. particularly year increase unfavorable may a XX%

working So is hard. team the very

to capture of We I’m adjust to very I’m the in increases – in position say. in and should sorry, have a Korea. Pakistan, team price year, I has The half sorry, second in significant higher The costs the solid first we’ll market realized pricing half. continue team the

to a way required But us. to I extraordinary to working have But half. is in very magnitude increases else, It’s having talked but to it’s a and same that watch half. market the the are first is keep price in impact, to I offset magnitude given what cost far required about. think they solid increases energy a for of hard are emerging second muted price agricultural to on of that we’re good the whether the time, And cost inflation be these market team watch then or the circumstances that is inputs that over that so impact, everywhere so it’s just the impact inflation an the we’re the due has going degree, input that to have and to going those consumers. and like an just

of any program does conclude this session And remarks. hand program. like I'd today's the Jim for question-and-answer you. Thank to Zallie further back to the

I to Ingredion. you continued just seeing We this saying by to thank just this upcoming investor joining forward everyone would look I of our you And to fall. for like your in interest many us want to thank at everyone events morning. for conclude listening

does This Thank you, in gentlemen, ladies program. for the participation today's and conclude your conference.

disconnect. now may You