Ingredion (INGR) 3 Nov 222022 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Third Quarter 2022 Ingredion Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advice that today's conference is being recorded. to Weiss, conference Relations Vice Communications. like speaker to and now Noah today, President would hand over the your Corporate I of Investor go Please ahead.

and with yet, I'm Third website, those I Zallie, Good be our I'm for look haven't ingredion.com, Relations. and part all glad Vice morning. terrific release our for you meeting results have you such a XXXX to the the and at soon. quarter and third section. to Vice today CFO. organization. Ingredion's President today's met Jim of And be Ingredion great exciting morning, Earnings in Jim presentation of I such welcome delighted are to Call. will this and It to found an Noah forward joined our Investors Investor on company, Executive press Weiss, President President to reference I'm call Gray, connect the Quarter can virtually is CEO; for time On The our issued and

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

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

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

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

Thank progress pleased strong morning, We continued building everyone. another you, good the had and we and business. quarter, are Noah, our the I'm discuss momentum and to in

third the net line For XX% sales currency we quarter, excellent achieving on performance, XX% a basis. growth, top constant up delivered

continued corn inflation other an job, input managing team costs and outstanding has as higher impacts. foreign offsetting as by do to well Our exchange

results gross Our XX% third efforts. by adjusted and year-over-year, income XX% quarter expanded which on up was these currency validated constant We our operating a margins basis. grew

a of quarter. all sales Looking at considerable net sales our markets. to our our two few the of Brazil performance regions, in Across and most achieved important Notably, four in a record businesses third name China, little net comparable detail. sales including all-time demonstrated more strength levels,

inflation, head-on cost chain Our challenges commercial continued global teams persistent foreign such addressed input exchange weakness supply pressures. and as

on customers intensely getting teams focused and and they Our them. need remained when ingredients chain our to operations where supply our

turning to Now our strategic pillars.

growth line nine grew continue texturizing growth performed pillars I with to this our All platforms Starting mid-double guide our to reduction months standouts. sugar momentum, drive well Our the top again accomplished and quarter. execution and four strong business strategic continue with the what of in digits and am business once first team the specialties, as proud during our in quarter. demonstrate and five ingredients

July to new starch and drought. come products anticipated to flex our our This greater both a sales. and us severe up European industry facility were enables are sales who XXX% plant network up we in our than to summer the Excitingly, some more production Additionally, shortages has and at year-to-date. Shandong, based leverage protein ramping China perfect are in the quarter commissioned it customers time about online and now are due strongly capacity plant also production support as concerned for

excellence. commercial to Moving

remain teams adapting Our nimble fluid environment. in a business to

in instrumental been have million excellence to of year-to-date. in increases inflationary managing almost centers pressures price in-year pricing $XXX mix deliver Our

expanded customer and them, for with customers, to engagement real-time deeper example, enabling online to shipping our Additionally, better our order tools provide and portal details. we readily access

cost through third operational competitiveness strategic excellence. Regarding pillar, our

I under in-year volatility the the believe hedging and constraints. other In the and This our we of Since for a exposure commodities. cost as mentioned costs implemented material flattened strategies to considerations excess quarter, we our have and returns managing the February expanded raw in and have to serve, conflict, our start allows to demand last we hedging cost us to to As Ukraine costs. and fluctuations, strategies both operations, supply maximize while increase optimize year. QX of supply meeting constraints. different global reduce that a have global remainder corn corn agricultural witnessed the of We capacity capability in and the digital minimize have our deployed such demand flows of model service chain or cost

the we part grain leveraging Ukraine conflict I'd achievement to they to chain weather and by related our during recognize global gaps and significant are supply disruptions of times. and procurement our This Additionally, address supply like quickly to as regional team, the these mitigating extraordinary on continuity global arise. events Ag efforts their network a supplies of is due business

ultra growth plant our meet among World selected the Plant our protein innovation needs based Lastly, during for relates sustainability line and to as to quarter, the best plant winner purpose and centric this ability the it our sustainability driven performance of in was category. and culture, based concentrates people Based product innovate nutrition team's product Expo. for a This consumers' is testament changing to highlights at tremendous

growth how sugar as from our few creating and customers. value as we're a well to reduction sustainability with of speak efforts partnership texturizers to like future creating specialty I'd momentum in Now, examples

and to capacity China capabilities our In First, our new team starches. lockdowns significantly commenced facility on and such I modified equipment challenges the to as achievement our Shandong, for numerous we emphasize delays. of our specialty which overcoming time, notable new commission production want July, China modified specialty in facility, COVID expands at

is China, which noted for starches reminder, the now demand meet the are We us to well a starch consumer capita customer per an our for significantly than of in Europe. of growth And China US or consumption modified with exciting our solutions. the texturizing is company. highly market growing this at Day, long-term Investor functional people, largest positions producer these X.X opportunity a as billion modified in as Thus, we less

our further we excitement we our XX% PureCircle's in sales. high-intensity agreement and grow acquired growth sugar Europe. to currently accounts produced approval stevia ownership us to approval double-digit are now growth bio-converted adds This that share for increases solutions approximately our three and our PureCircle to natural growth to XX% Europe, for reduction. delivered net for PureCircle. strong franchise the the net received with income. positive our strategies Consistent by over years. PureCircle, stake strong sales original led have operating we reduction EU and continuing we Turning We Reb we sugar our anticipate Customer about sweeteners effective pleased And when to prospects in increased recently innovative quarter which we to of our additional from see and ownership our pricing wins, are XX% next strategic growth further of our ownership for positioning to momentum, Supporting and future XX% worldwide. in M, intent

quarter, sustainability the the to XX% at sustainably progress. year. beginning now XX% achieved third inputs, from In the sourced our of Turning we up agricultural

recall, for you five sustainable may as Our XXXX. crops priority our to by is achieve sourcing XXX% goal,

personal our addition, and data ingredient be sustainable HowGood, In beverage Ingredion the is care food, for as part the with first largest pleased food to efforts, sustainability platform of major engage to company world's offerings.

sustainable customers Our We better they relationship transparency scorecards anticipate increased ingredients. critical demand that developing. around giving to help ingredients products. they sustainability for our the select the products will for transparency our ingredients targets our our for this deliver data by growing the will innovate through customers that for need to are enable will meet them Ultimately, more

environment Let the and me the macro see on some comment of now opportunities we highlight the and horizon. risks on

you've have to chain while offsetting teams headwinds, and overcoming exchange of As great today, heard job foreign done inflationary supply a growth. deliver challenges our

them. well pressures positioned to to expect manage We believe we we continue, but are these

First, sporadic to China times, to preferred of amounts elevated to three. spend shipping on and issue quarter us chain required at rail, have time. challenges modes restrictions an remain customers were in reductions deliver products while Intermittent supply to our labor with along COVID-related lockdowns less in issues,

supply Our chain environment. and dynamic commercial to continue navigate this teams

committed we remain inflation, through a pricing and offsetting regarding additional of combination from improvements to Second, costs operations. productivity

a track record a effectively demonstrated have this We priority. and price risk, remains of managing

global increasingly Third, continues companies, as be to foreign strengthens. for dollar the factor important exchange an

business model to three our a to impacts us continue has in month we're Our to quite currency and ability so. well offset confident six over period, do historically to allowed

across customers well mitigates contracts. retail With behavior are volume to important me overview. for and label, by we very other It's watching benefit both private serve that enabling foodservice. that, when we buying Lastly, risk as to price financial Jim in branded consumers remember one over as Jim? let elasticity. us and the across hand to strengthens it and diversity That closely while sector

The strong good XX%, two performance. were increase the by Starting everyone. XXXX. parts. driven up price net our morning and same Jim, North in you, was in America to with Thank achieved which regional first was period mix, QX when sales to compared

$X the operating costs. presentation volumes of million comparable First, up XX% would to to year, North inflation; than freight change. second, in sales beyond South mix income in for during net been quarter offset was the increase more adjustments of price net sales have for costs that were JV contracting in due and change excluding On pricing which prior impact versus the $XXX prior price the contribution commitments. prior the versus anticipated JV the XX%, in input million, America, The operating Argentina strong reported a in-year up year. which Argentina was by dynamic driven last basis, the includes America up In income fall, and spot year. contract

Brazil, favorability driven South up in JV. from million, $XX and the as as performance well by America $XX was stronger operating Argentina India million contribution with being positive income

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

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

$XX income versus Asia that with costs up operating input offset exchange $X impacts. mix year, higher was than prior and million favorable price more Pacific million, foreign

EMEA foreign net operating Excluding as increased up were to and higher up X% offset sales the EMEA, exchange million was up $X challenges sales corn quarter, quarter. adjusted Pakistan supply due which was net for XX%. in impacts, headwinds. and impacts, resilient chain $XX compared the to for in absent exchange foreign income foreign In income costs prior Europe, was million performance exchange XX% in quarter, the as partially well by year operating

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

income points net from year. margins the quarter dollars statement. for our Moving XX% up were Reported work our last was prior were $X.XXX adjusted basis and was Cedar operating QX income was Net to Rapids up versus facility. higher at million. operating than year-over-year, million, Reported primarily billion profit for $XXX income costs income income, operating lower to operating sales year. the $XXX XX of Gross and adjusted pertaining stoppage

continuity production to increasing Importantly, under the well and meet customers' now plant our steadily plan is operating is business needs.

per as I some think respectively, Our reported and and a be third to story that part the like I'd this gross missed. quarter spend earnings there share easily are for $X.XX, to were performance, moment highlighting aspects period. of $X.XX our could adjusted profit

and the was have I prices. percentage and historically, by cost has gross by rising evident our previously, our when What pricing impacted. quarter. corn, lagged margin model measured impacted mentioned in cycles, corn this been rising In is has of price business percentage, gross As margin the in corn falling consequently, change our

working the changing on values layout the our of of quarterly costs. have hedging to impacts flatten and We pricing corn been strategies our

even change XX% that expanded margins see profit year-over-year by have increased in by we the benchmark. can measured corn you the though US gross costs Here the as

foreign the the net significant including increases highlight bridge. of sales in due higher of QX Reported quarter change joint headwind of exchange to decrease of Of the Argentina sales achieved South of million results corn slide America and The Asia X% Pacific. the costs. regions was $XX JV presentation by driven with and and note, volume impact the offset in million, venture. the the $XX column. Turning volume drivers. EMEA to On price/mix input by we in was change presentation our We each strong related million Argentina headwinds net within volume pass-through increase to include $XXX a XX, the sales the of

comparable a JV America the South impact net the noted grew on XX% of below. sales basis, excluding Argentina

to earnings Turning bridge. our

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

of and $X.XX increase On by foreign saw right-side, $X.XX driven by the exchange we unfavorable of operationally, per share. primarily partially operating a offset margin

tax Moving of compared having was quarter. share the to prior per and driven adjusted effective a a our non-operational items. a decrease to of decrease higher We impact $X.XX. primarily by the year $X.XX higher costs had This $X.XX in financing rate

year-to-date to income, million Now, billion was and prior of a sales primarily was $XXX $XXX costs. Year-to-date move year. let's were brief up $X Reported than almost XX% results. due adjusted was and million. income review other operating reported operating income income restructuring operating adjusted of versus to Net lower operating

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

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

our to bridge. Turning earnings

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

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

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

to $XX cash was flow. from Year-to-date operations Moving million. cash

working has increasing investment. Our net and rising operations by cash has offset from capital benefited from income been

higher are prices rising receivable our invoice in inventory balances costs and values. in increased Our reflected to reflected working accounts due our capital corn

with payment As million prior value the not to and capital spend expectations due corn. much $XXX $XX when balance does payable the short commitments. terms in With our million, for Net reminder, from due a as procuring accounts the PureCircle, the XXXX of expenditures for our our to rise respect line In first up as timing the $XXX to were inventory capital to acquired period additional Jim year, shareholders our months we as repurchased of which, takes acquisitions percentage of ownership outstanding paid million quarter, Ingredion shares common XX%. million $XX in and investments, million, shareholders minority and nine we from shares. dividends of mentioned, the of $XXX to very

previous through During we quarter, million stock for XXXX, replacing also program. repurchase a the authorized X December new shares program up our to

outlook. like Now, our to address I'd updated

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

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

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

to of and be EPS $XX impact between $XXX costs range impairment year $X.XX invested excludes in accounts specialty Cash Net rate higher We potential invoice investment from up $XXX result $XXX is Our million be a expected million, $X.XX, operations now as investments capital be to costs to $X previous corn annual will tax which values. expect drive adjusted flow anticipated prices capital of effective to as the any million of receivable in acquisition-related XX.X% $X.XX. to million are This our range is of be million, now the to well $XXX as of adjusted growth. and reflected now reflected higher expected in our restructuring to and to the XX.X%. working between inventory greater and range the XXXX reflecting commitments in full of be approximately from integration our charges.

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

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

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

income South In to sales price/mix. up up XX% by up now high also is now driven prior Asia versus to XX% digits year. the to America be expected operating favorable We be driven compared net Pacific, PureCircle we expect operating digits, the anticipate growth. double to income be to prior mid-single by year,

KaTech by driven by and to and That impacts. comments. which offset net operating now expect low sales XX%, concludes energy EMEA, expect exchange foreign my includes mix, negative digits, single XX% we to income to corn partially favorable For be we up to higher flat price and costs up be

hand Let it back to me Jim.

Thanks, Jim.

Before the Q&A, in like both how navigation map. our remarks while the growth inherent for call on of near-term driving long-term the to we open conclude macro I'd perceive reflecting the environment we by today's road pursue opportunities we

I retail, growth and earlier, of and As points. sell portfolio, CPG of product many base our as our the times customer service benefit a diversity and breadth is food road mentioned of map in multinational a asset end-use is and private core well to consumer price companies. these. large the of around and customer customers regardless the centered across our food tremendous label markets products We thousands ingredients as specialty With broad local like

Therefore, These versatility, their be growing their and that of attractive texturants and operating production formulating returns localizing it to invested as This demand we demand. to and have have the we supporting offset pleased anticipate For performance. over exceeded also functionality say we about capacity already core In support very for three Sales due ability offer and customers consumer the different execution experiences our and growth. our for global through growing ensure sweeteners to a investments uses the we X% X% was consistent quarter when and clean generally will to applies years in to example, we affordability. four our needed strong inflationary and Of market specialty affordability. ahead of more it our sales, their find headwinds particular when third for are franchise for to that all demand are relevance of our specialty most where than is label is investing our efficiencies component regions. cycles. is strong, starches economizing, is with largest I'm growth, our expectations. low our million amount $XXX to growth risk. texturizer more of underpinned our closing, economic third

As we the that let's close deliver and into for forward out to now we positioned and XXXX shareholders. company the year, confident for next And call is look are growth long-term questions. well we value open

Our line of question Instructions] Zaslow BMO. with from comes the [Operator Ken first

Good morning everyone.

Hi, Ken

Hi, Ken

of questions couple A have. I

into you first XXXX, If talk Do XXXX? that across your about The across you it How another Will is, to opportunities go business? can one do you looks there ability? able pricing are the in pricing XXXX the think expect your that businesses. be you into take for like about XX% pricing you greater through pricing have ones to to be broadly? XX%

All right.

color a take and at commentary. then that Jim first, shot can add me Let some

US, so US being up. to are So in we're with respect to as the both some as my input well specific costs other the corn seeing inflation comments

$X.XX look if US point. which prior strip, corn comparable to the XX% is reference $X about today relates our example, a it contracting as up as you future year bushel, to approximately an from So inflation, at it's

cost into And taken but in example, and And then seeing at -- be mid-single-digit that you so costs be XXXX that we're largely for look we're inflation energy look for energy hedged consideration up XXXX. you all packaging, into pricing. and our and other will at will considerably, chemicals packaging. inflation, input if

year-on-year. through that, a that all relates those think of going about as those costs cost general it's real to it are contracting, to early pass So, I be inflation. of we price input there's and described acknowledgment I will up seeking to that And are which expected just talk will just elements that increases the

that still continue. that's, The noteworthy is And of just very other with enablement very I typically, growing in the thing when for for and our XX%, along pricing that is utilization case, that does described, at levels high again, acknowledgment that's industry, the example. environment

we're So that's describe, I has. right XXXX I how now guess, how pricing thinking would about

deliver going that you And that, Is packet were assuming a Great. strong of EMEA. repeat quantify fair I'm and not on – year? to in And it just then way? there. next Pakistan, number did leave you did I'll very assuming I'm you to Pakistan a the the able impact it's

I'm take let Gray Jim one. to that going

Sure.

modestly somewhat both we're in Pakistan. broadly flooding the September, – largely, noting and in previously, are there of rolled through and customers some Pakistan were closed. we've We think we didn't kind of think were how We really I there of We some one finishing would seen throughout major Obviously, that when QX that that, that. I and know impact has flooding through impacted. our cautious. have kind customers were closures been really and rivers of of we were significant road temporary kind worked the

not really impact, much Ken, the maybe of less quarter. your during to $X EMEA impact than to point, So, too million

but more industry are impact in see cloth sold that Pakistan, the concerned going a not availability cotton the Europe of of starches maybe to the and cotton, our we'll think exports, into some because of an materials that We're just that as gray the is a portion so textile which crop, slow to little going of had down I and about US. bit and that. flooding watch forward then on domestic to –

our is is I Pakistan, ground. that, concerned the cost – we're the look corn we're think significantly corn risen we agile about on and quite at when just team has finding costs. what The more broadly,

we're inflation overall looking of probably XX% range year, that's in food probably in even at As and maybe of this the an inflation XX%. is example, September north

costs in we in country. that pricing our sensitive terms Pakistan, need we're just that in in we watching that the recognize watching and sure So the energy our corn, of cost making of

appreciate. really you, Thank guys. I Great.

line question next Samuelson Goldman comes of the from with Sachs. Adam Your

now Your line open. is

everyone. Yes. morning, Thanks. Good

Adam. morning, Good

Adam. Hey,

outlook So – first and corn of I business the high I think made you to kind part volume as guess of first about utilization grand into said my into being can the just seeing what I and regions volumes of think said, types, I quarter flat. about – in talk if you you're different kind pieces. on But moving just you the the side know, in question, Jim, the correct. by the XX%, overall the volume heard across product the XXXX. quarter allusion were categories, fourth I there's the

– which You Cedar kind strike the can't throughput. imagine utilization have the in the Rapids, of is, helping I

you're six So, different just and in a maybe that seeing what be than sense ago? their different any some were inventories at color way in on customers categories looking months may they on

Sure. Sure. you Adam. question, for the Thank

products of I of a three, quick finished. signs for US the US as just the some sweetener is expense Interestingly, has the demand which production private food demand as label paper-making type demand level Europe actually to right is and bifurcating it We're I work there service under needs. growing would comments steady also well be volumes been retail for operating, at certainly both impact the typical recessionary relates the say, demand X. the adjustment We're say full of expense facility, say, continues. service somewhat branded affordable robust, still increasing around with discussions there just potential at also quarter in in customer And relationship robust continued is robust themselves plant has fast demand from formulating. we're Cedar and after that to of seeing currently the those the say continued month, with began are And at corn specifically particularly environment. Rapids, is stoppage in August meet in products, our in some increasing we well in I we're now service that strong. steadily very lend Through that as and example, casual. would The certainly plan, our to in What of been your starches carefully would first, that Cedar that's resurfacing, very union. I in business for starting watching we are Rapids believe is on where and a rail November. and continuity the a August under business strong, customer the starch an active to out have and the So after now demand to strike inflation would

versatile. to good corrugated faith, we're continue will to agreement will We demand reach going I the mutually and to market hopeful continue bargain box forward, allow us in also there say market remains a making, that strong paper-making in just little we're certainly on nonetheless, again, overall where beneficial corrugated that paper uncoated free remember and to sheet important and but base, again, is XXX just that large a good private local there. coming typically, economy, to products branded, that bit many, broad the soft related different kind it's shape demand small and And moves would service famine companies our given label, such levels, any of not both based typically history at food weather world. in fees type have on going around we recessions. service our we countries through a service the CPGs, think and go customer food And multifunctional to in they're many they of to very just I back breadth

gives thinking So some about for I'm volume. color how hopefully, you that

capital or really corn capital were release in the about there's helpful help into XX year, that reason would through some Gray, cash working And just a and us prices of statement And working some another absent know actually -- step-up flow. sheet flow think was likely there the a be ops just XXXX? intensity. that trimmed maybe all, I on so balance implications on does believe Jim that's how over the to flow color. that cash then cash of and months? outlook that the kind for next from is No, follow-up And next inflation,

Yes. Sure, Adam.

we've at think at the I that time, ops I our supporting I that, look well that's it's as was at is move the the since when think AR tables, costs cash steady seen run seeing, from globally rate. of is in the kind conflict. now endpoint through, of as our What rise corn beginning XXXX. lower seeing we Ukraine we're corn in a we're taking we read both what And think,

-- at end QX, end So to in at looking the if I quarterly with QX, of QX relatively of the the accounts receivable our QX the to line look end of sales. is I'm

I'm there. encouraged so, And

the of I in so most that are And costs of recognize the inventory. done some think this harvests seeing our are we through the the hemisphere. just corn also year, type is seasonal of still northern pass a

And have markets our we so, Pakistan, our that's on much this balance so, lot of of bought in when buy some corn, corn we sheet. a like is where to and example, for have spring we

crop size down, And see beginning roll working 'XX I our that forward get then for look nine bushel, QX If of price -- of net some what in as price, demand overall is even market call, then right? months. we that's still first be the for 'XX. see we reflecting at usually the I global the invoicing, out year beneficial then the and the increases that for If carryout finish US be strip the so, US and will generally into and we experienced to corn that capital. in our coming And the feeling the capital we've much, but less kind as just or working mid-Xs to a everybody and next much assuming we'll kind Likely, of and than elevated, on be we'll post -- think just rolling through XXXX. of per there'll the stays corn

That's on. Thanks. it helpful color. I pass

Adam Thanks,

Thank you.

Moskow line the comes next Credit from Rob Suisse. with Your of question

Your line now open. is

Hi an update have guys. last can your small few you business, questions. on was off sales how a XXX% a but us I year. doing internal plant-based One versus give the targets? you I is, growth, on you're said, very that base know

to on and be drag year. know said, So operating what profit next is, think I'm it I interested year maybe then a would this you better

all? to FX do your your thought, follow-up. your So, that update year. I'll EPS you then you about a EPS if second wait but FX it, is outlook headwinds have higher Maybe for for there. an at guidance, maybe from than missed question impact My And maybe I but how does the

here, Right. I'll the which proteins, base acronym or take we Jim will take Xx use the is PBP and question. question the

as question, proceeds specifically, albeit are operating beginning relates to on that XXXX, range we direct of the trending production continue range we year, our they each the within provided to for trending we relates the your as improve revenues to the lower With end, income had but month. regards it So, provided. our plant-based to improvement, anticipated it within at the the are

improvement of complete go at fact, income on operating a facilities quarter that we much in production months the an year in had to more -- the of inventory and October, And look the salable from two a quality have probably at update we'll have of end record at standpoint In relationship the we product. in and one. forward be the providing

that that, proteins. the would to across As I portfolio it is category, remind relates pulse-based concentrates of four isolates flowers, broad would we've everybody across plant-based taken just protein approach that to protein I and a build types say entire the

just not P-protein dependent, we're goes that on isolate into meats. for example, So alternative

of formulation supplier So beginning, demand the has dependent there a for it's large one example, the portions for into we're on one alternative to not alternative a meat approach, we category market, from not, and systems certain a were any producers. large in weakness product of meats, sales it's And approach. exclusively, been the while

whole significant and great approach around monitoring texture, is approach sustainability still by drivers And we very meats other this isolates still the cetera, end across trend, fad what But think pipeline category ultimately et which we going the a that and in and believe to at a fifth project clearly, not nutritious with is it's highly we're have of food the us that just category. the demand have our products. great tasting, dampened is everybody flowers, with we about this And else price platform, formulating for So will a and like systems, that our serve points growth that's along questions clean formulating, alternative there. robust perhaps well concentrates, formulation supported label, customers. be many day, is,

leader we're another a plant-based a development support of optimistic. product more us haul, customers. they opportunities complete in does for the about in make in still it it and innovative, for And a us a you proteins, we're leader standpoint being So think when reduction from supplier leader all one new sugar and long a texturizing, in

dependent And some and alternative snacks of our opposed in dairy are alternative upon fortified seeing wins right alternative and as now that protein we're needs. example, to, snacks, for bakery say, or

on over FX turn how And the fulsome answer would in I'll on quarter So financials. but again, that. update exact Jim to that's question. one I Rob, it more the

Yeah.

on had you plant-based follow-up proteins? a Rob,

please. No, go ahead,

Okay.

other So think absorbing our obviously, that dollar outlook dollar the pretty headwinds, to It's clear globally strengthen seen consistently as tables. dollars. updated and the key impact, currencies markets. where is relative foreign at really include impacts year our have to would and because we're in our does the foreign it on I we've and that of FX, able on traded we our today full corn, try model, in I foreign that of are exchange say is, is which business been part exchange cost offset we're

weakness margins. going up which it's our in South of it's And well-understood think EMEA, our foreign changes somewhat looking noteworthy amount models base. just a as by show so at both corn, that's gross we're value expanding highlight, of And America to I to pretty that local maybe in had fair customer and exchange the pricing had

I on that materials, impact trying we're corn, is around through. seeing lags, resilient some to We're still raw our what either -- in execution seeing FX our and just agile pretty really is we and so on have become So tight roll that. be Rob, have change, energy do, on going that to that then able to built which or muscles think passing being

my follow-up. Actually, Okay.

at the that Is the now protein you're meat because softened? that said for target. You your has category alternative plant lower your of end revenue range

the described customer base. because again, applications of across and that specifically, our projections entire I Not platform were

product up products and and just every you product month space beginning demonstrated has I not one at strategy. just So entirely bullet to magic quality. that supply the year, we've each we bit for had new if but improvements again think ability the we a the be at our entering remember, of were never for approach one or category. been That category an challenges for ramping into a the our in our of little to food-grade production make highest us,

timing monitor to so is evolving changes. to look, think and we'll related And I And a that. continue issue the category it. going But through it's

long-term, category. we're protein plant-based the optimistic about the for still So

you. Thank it. Got

Thank you, Rob.

Rob. Thanks,

with line question Your of next Benjamin the Barclays. Theurer from comes

now Your line is open.

Thank Jim Congrats very Good much. on morning, you and Jim.

Good morning, Ben.

Good morning.

So two questions.

be So one with your Germany, and this XQ, to XQ, is the would was electricity into that outlook on energy out, industries risks France And risks to some my government potential be within in specific feeling and of -- play bit to this bit into try of efforts how support? we've on just shortages Europe, countries, could the think you into give the ago that? when your of on an little EMEA some getting just bring developments weeks and et expectations going side comfortable first as seen within cetera. maybe a given consumers, the down, That Europe, it of about particularly you and actually not couple of associated that and question. running a talked do Are if preview, some little support a be you to to more so and in it you supply and prices more us

Okay.

is Let that. three say me And pleased in in for quarter what very obviously total. EMEA with would performance our we're that take I

the As Europe, in optimistic relationship specifically are it relates to situation. to we cautiously energy

go impacted impacted, well well specialty not leveraging made we've plans our we And we, be they gas X peak. for in of that that we and from example. from global drought, the contingency At of network. the presentation crop one as to of customers standpoint corn as it as built still to the flexing been the corn for is continues by times of natural What also business X point, and has US X new higher believe our costs XXX%, in it the just at capacity now continuity long and they think is though positions XXXX to not prices. than in times gas that everybody the support seeing, to the sharply on network And our of situation and As you gas of in government have noteworthy and able tough are highlighted, the beginning through levels you wheat the that EU level at crop, and to the know, genuinely that is as will since is to approaching to manage Germany declined Ukraine conflict the the has also as that develop. decisions but comments that has we to this energy including were the compared in a we winter that positions, US the the foresee the Europe XX% prior we and China. by peak summer encouraged our that as given though, Europe some And corn they are our they crop summer of and any still the looked we took we're say, storage anticipating fact curtailment Germany. plans to solidarity and I do Europe, a

of allows all the it believe consumer And at the UK are, are industry. except based can how leverage us again, time, the going forward. the actually to end customers past leveraging how that to shortages What are kind that's say, we increases that of XX% on to on our all the inflationary that much at All network All say the for impacting food and to to We flex go needs predict in of that products just we've I diversity diversified European concerned consumer weathered behavior? XX% global the turned to consumption. again that today, month. potential into affects the about was of are that be recessions into that buying different our reading about at that just is we're them, I their announced our think, grain in what that of, ultimately? starch And of we're in believe elements the we're concerned that about month be support at that going being do behalf said, this network. to of EU that's food is going this of how hard point day, the And inflation able

if on out side. -- kind interesting so America, we've of Okay. on a look we to volume that the to brings into think a me there's question. was positive the side, from It of see second within US, of it heard nicely volume, I've some And EMEA also cetera. was growth we APAC And actually if South definitely perfect. other my about lot LatAm, negative the seen the companies in while and the take et

Just talking longer, I lived for Argentina, if they've in right? about much your the about. operation with what inflation is they mean, how inflation know

APAC can pass your the price end been actually just how price markets, question benefit even through given you've on a developed between pushed through? And in is, elasticities, the emerging increases customers in markets. seen sensitive really price lower think maybe in America is to has the do some And little your of being emerging consumers markets? all by global in you increases, a resilient accept in and So, been have significant how and just you that given that differences down look to less actually increases it footprint how the you consumer this South

a it, or comment. I'll I'll take color let at shot add and Jim Jim? any

more particularly an inflation. and seen -- add Pakistan ongoing like it also American think think about the and/or you've presence noted I we economies, looks and of economies we've various Yes. kind emerging -- you where inflation Ben, And countries, developing when as daily of know, to is have that, South in I life. we some

those as our of well, raw our commercial price kind seeing part think what And much base is work and have to and we're you unless I'll going you Historically absorption true excellence cost forward? looking of centers have pricing the that. to do growth. becoming I now lower And in that contributed going higher definitely accepting to economy our you and have When those through that growth material, one populous in well explain work do change. disparity excellence cost that the them big introduce the more agile acceptance more as that open our success those price our these maybe more a see year. more Northern slower that's pricing customer of get as advertising some customers cost for and why from at, well, agile costing both this of we how to You -- COGS, putting in think to the extent resilience centers economic has about economies, work to like in economies the in US, Ingredion lower generally pricing kind think yes, customer move in Clearly, change of call, ingredient therefore, raw how we So, materials. on is and to changes the in with my of maybe of of the seeing pricing we more that, you're of why what changes. I customers underlying then and real the to our consumer in get of into We're our of pricing. changing, need changed well developing to our the that inflation and that's through see the as our develop energy. teams And my ingredients can more I Asia, base. of does And kind you I the the change to and extent are

Jim. Yes. you Thank very Perfect. much,

Your from last question of comes Stephens. Ben line Bienvenu the with

Your now is line open.

morning, Thanks. Good Hey. guys.

and Ben Hey, morning. good

wide. the in implied particular, is the for ask want about for guys -- quite narrow recognizing to the quarter I the and It's still did So still the little fourth range guidance, a you range year. bit that

prompted of ultimately as range, bit you of obviously it And narrow so, unpack I kind what a the want still wide but the that see leave of ahead little and variability as it is? to elements to you all

that, deserve beat I'll for Ben, that and one. be to take up Sure. I

is I come We we the the business, layout our of Hemisphere, the Northern in spring through look which is when the manifested crops corn. and can largely we and think the going look of what at at harvest can the We be. at kind anticipate look year. to

as been, historically, at better, particularly seen in as get the I with focus what's happens QX into least our that Traditionally base their if we calendar with business what customer they're we've finish we year, in to year, of terms firms poll. their CPG QX consistency the the view coincide out has inventory So levels and in year. fiscal on think, their closing for the multinationals, or

And so, specialty particularly ingredients, stocking in behavior. some what's our of their

previously, moving there either levels asked to I into some think carried see ingredients, or end inventory are you that going chain the of because one a has higher oceans. and/or either little I country think a be do bit been of just the around continent I year various across supply disruptions in

little we a we're well, levels. so, so inventory bit a -- of see And somewhat elevated

a last officers a smart. post little procurement what in I drawdown prudent. bit five number. seen inventory more or a against think yes, try lower sense. customers usually where bit we've to It's maybe saying, that little It's It's the years our of makes some of of kind seen a and are six of we've on that probably our a

carry So, downside. could that through, be we're but that will inventories anticipating a

be XX resolved. is but or there to and importantly, to I November say, midterm in that still they rail the And of in US there the particularly think get the is agree. most that either US, rails is don't elections, union We're -- is chain is labor agree through issues. supply the Ben, the going probably issues some more still a number they to for deadline in

So truck Coast. issue on then a disruption. West all you and have causes potential of that sorts And the still you're and port intermodal

also look in you to that helpful they're those. think understand And it's saying, -- and for all looking are But things, we're so We able not yes, have the think like at our get those range, I that just some to at could I think, guidance. through center are us cut you of an that if be going impact. to

Yes.

So

Low an probability, but it impact. could have

still in a I 'XX slowdown like date. avoid that We'll rail I there's is a a Hopefully, exactly would there we if situation. strike. to is either and again would taking say. And just cautious towards Yes. say something the that's that relationship intervene uncertainty what a or that. government November Again, the big are view potentially see

Xx continues the timing, right, say, to X Let's Jim, we X say remain months or to very dollar strong.

to related in, common their think, reasons I well. timing just, that that's Jim to adjustments for kind So think, that. probably assume factored we'll And companies positions, some as a be inventory making of just said, into year-end working I sensical it's issue as capital

of into And go-forward of all that so the kind the that we've factor here guidance reflected year. and full on for

is in fourth the And can as to year, margin margin to operating -- you quarter, in still I compression perfect the Great. trend next progress move expansion there Okay. margin material account be that My think -- the year-over-year, just margins. midpoint expansion. but year-over-year. a would making sense. continue into would on Makes roughly sequential into be is we of second implied The question taking guidance related

or you to So talk XXXX you look that the that there? can margins you can about have, the talk about the XXXX on get and things you the path when back how and visibility out you horizon,

team Jim on from that. So you go that to I and Do can tag want

Yes.

it have a how and about great how in a of Previously, on the of and number with you about kind impacts which a started hedging may question, a think, quarter. rise QX, each we little in when the strategy, had think up. touched on think Ben, which I've of or talked I XXXX what is a we conversation we end you felt bit corn to lapped exposed more QX particularly corn I layout us

higher levels I our ingredients of the be as of conflict get really think the what our of of some Here hedging we're new But have I of efficiencies. is we're a to Jim margin, that to that gross where we've operating is of on lot mean, the us the impact of of smoother, Canada as respect still do Jim not you to gross and QX, can largely, $X.XX over a to right? is Ag focused hedging consistent of into US, of value operating bushel going impacted, There's and is a $X we and see. probably with what get contracting, really of – uses core trying forward, on really Ben, you that mentioned, up further specialty corn business in for the of turn either into base be that the but for profit of either exactly coverage the that strategies bit And all or layout the kind quarters kind kind compression and a we and that and all Ukraine getting to so is year-over-year. between corn little we're upgrading it's So XXXX, mature then focus net as to level particularly mitigated as expanding moving to all on to dial some evenness as our it in well value in the impact XXXX, largely, ingredients OI relative even really can focused movement even into

very side. a and about typically Systems to Food with we we for come more that systems a of team. in focus solutions its intense And that believe business, have lot strongly Yeah, would indicator a our as in is favor of say, focus grow I threshold. from the have offer that's enhancement mix a And customers to key margins our an integrated specialty has leadership things margin standpoint we performance which higher going to on

see the in are the core point of that in historical is, and capitalizing upgrades move opportunities our at standpoint for in our And that don't, ForEx we as and up about two-thirds addition other that, to last lived the think, we've not I the of say that's, norms is up certainly, to already utilization, from margins you of can't do upgrades x would for a we think it way. also and operating for just we specialties significant specialties well. count all specialties, opportunities, there our we've moderate business, the in and thing hard And the our my again, So grind on I margins in because in, on also years, of higher moderate does dollar And work of pursuing a the very point, but levels at in since to will I've which some help put emphasize that will been on in with our when significant industry. that margins. strength. But dollar and trading the role, core number

on all improvements going working modest our in reasons, forward. it. it. I for think So very that margins we see, on we We're We're will that those think focused certainly, very,

seen right? other some and to years, higher And the price as we've us. grow and better that in we we price going of right, a get past, witnessing that's at Ben, as relative highest then said I corn ag the crop we've get the we're Yes. corn So corn to and of sense as hopefully costs farmers that And mean, height to carryout maybe in help sizes, cycle, right? inputs we're

gross we've that I think to then do cost our is also then that decrease margin we're and per expensive. gross because, one, generally, ton, seen holding corn attractive that -- as profit on it But our of we makes through it's makes it more products some when pass dollars occurs.

you and for quarter. luck good Thank fourth good. the Very so much

Ben. Thank you,

Thanks, Ben.

now at will remarks. There turn are over queue. back to the no Zallie for Jim I closing further the questions call

seeing continued in to many this and look Ingredion. everyone upcoming morning. I on for investor us -- events Thank want just forward We you. I thank right. to All interest you joining of our agreed at And

This concludes for conference participation. your you Thank today's call.

now may You disconnect.