Ingredion (INGR) 3 May 232023 Q1 Earnings call transcript

Good day and thank you for standing by. Welcome to the Ingredion First Quarter 2023 Earnings 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 advised that today's conference is being recorded.

to Weiss, conference Relations. Vice like speaker to now Noah today, President would hand over the your I of Investor go ahead. Please

Investors call. Gray, call are Good quarter Zallie, our President to welcome CEO; Jim Investor I'm and can the reference for and the the earnings Jim of our Executive The today's CFO. morning, Vice ingredion.com, we'll and section. on press release website, Noah quarter presentation On results Ingredion's Relations. be Vice President President Weiss, issued found and our today and first XXXX first in

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

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

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

Jim I will Zallie. over turn that, the to With call

increases specialty a North broad-based sales our America highest EMEA. earnings profit Noah, XX%, adjusted with the notable core both perspective, sales ingredients. morning, and performance, Thank with per each driven net grew up delivering year operating and and in growth and profit We started quarterly up XX%, in were good you, share. was in From Net everyone. region ever exceptional segment by and

inflation. cost consecutive year a manufacturing of Entering corn and we second anticipated this year,

price teams customer expiring consecutive mix management, price including sales margins increases adjustments successfully customer quarter. executed for third Our effectively expanded product mid-double-digit and and multiyear against deliver to contracts the

turning Now our pillars. to strategic

job achieved by teams four for we last were increase to against executing overall, a growth, growth. the an texturizers, Our & pillars from double-digit with up period Beginning do Simple ingredients, specialties same which driven continue up strategic and Clean XX%, were year. which XX% outstanding our

market fundamentals excellence. expiring to mix, Turning further customer able fine-tuned of remain pricing to were contracts and to We our multiyear centers renew excellence optimize strong. industry price pricing we as reflect current customer commercial to and

we sweetener core for this In where several trade-up our expanded for for U.S. addition, progressed strategy ingredients. products, Canada our seen, in time and increased core gross years. margins volumes of can the first both Evidence in example, be

and as operated specialty service over to two the quarter. selectively we cost investment well fixed also delivery cost lines absorption supply improved the have winter chain our in been competitiveness product last inventories strengthen the years. resiliency inventory provided pillar, those our for Against that improved increased throughout highest plants demand This

need order also for to team capabilities tracking in procurement In have global enhancing the provide network. how our risks in costly invested has tracking sourcing customer is significantly, parallel, supply chain Supply through responded experience. the digital investment global proud logistics anticipated premium to reducing transparency constraints eased global additional This real-time I'm agri our of routes. customers. to we particularly and

customers' grain despite effectively This has regional enabled shortages. us to demand, meet isolated

priority top our as always, remains and people-centric us. for Lastly, culture, purpose-driven a growth

Industrial President, Americas. we XX-year week, Ingredients, of this employee industry Rob the veteran, and announced Vice Food of appointment role Just Ingredion to the Ritchie, a and Senior

spanning leadership America. executive my has Rob with North South joined both responsibility team and

Most ninth to the Ethical time pleased XXXX, included the in the World's consecutive by Ethisphere are sixth in one for Companies to been Index have the Gender-Equality we Bloomberg and year. for recognized addition, have been of In as

our to highlights. turning growth specialty Now

continued their customer overall sales rebalancing double-digit growth. partially Specialty achieving which and category quarter, offset the positive net growth, During softer momentum, inventory customer Ingredients was volumes. and favorably mix by sales Better impacted net price

continued During to high-intensity the artificial win business quarter, with co-creating sweeteners. PureCircle to our using by Stevia solutions customers sweetener portfolio natural replace

number for sugar projects solutions. reduction The increase, preference natural driven customers' of continued by to high-intensity

us benefited Our of Clean in ramp-up expansion now growth & Simple which expectations, the customer from our in XXXX, and is Europe. both demand completed the capacity enabling ingredient the to commercial meet exceeding U.S. platform

quarter, wins Systems contracts year, emerging commercial KaTech business and extremely XX% last North up has are exhibit largely Food integration in Our both and to from continued the markets. new we Africa This gone by well, growth in driven over winning developed in sales and net strong Europe.

Finally, with strategic for investment is this Shandong highly ahead starches. starch-based China volume texturizers modified our China's pleased local is enabling expansion demand to functional, to supply growing sales solid domestic for meet I'm expectations. of say that growth preferred delivering

we continue see number exciting opportunities organic to drive invest and growth comes specialties, our it to expand when Overall, portfolio. to inorganic a both to of and

to our comment over targets. continued briefly sustainability it Jim, our let turn me I on Before progress against

be our our annual XXth We edition issuing all of report. soon life will sustainability

XXX% at preview, our crops quarter. sustainably having of As XXXX, the a by on quick XX% end meeting reached the to our our well Tier are goal having sourced way of we of X

with X gas Illinois. Scope last meaningfully conversion reducing largest the in and to our X at to year Bedford, emissions coal progressed from site commitment natural Our

With me our for review. the largest are boilers switching we that, X% year, financial thereby renewable installing COX electricity, and biomass it XXX% renewable in two let Jim in by turn to to at Brazil emissions reducing over facilities This annually Brazil.

everyone. Jim, you, to morning good and Thank

costs even highlight elevated and moment. will margin historical prior driven were has Gross sales factors the remain income our versus corn to year. for and one approximately is resemble statement. prior up $X.X XX% Moving versus further that It quarter that XX% of though gross XX%, by billion, Jim is mentioned to in encouraging of dollars combination profit grew that I Net a globally. year, above beginning averages,

Reported partially input higher and were was and operating remaining facility, operating and costs were volumes. Cedar at than $XXX income to and by primarily million Rapids in lower respectively. by income driven customer stoppage mid-February. price The work the which for offset costs lower $XXX favorable Reported increases income, the returned normal adjusted operating million, adjusted U.S.-based year-over-year related mix, to operations

first prior earnings Our respectively, up per $X.XX, significantly adjusted the and year. from were reported quarter period, $X.XX and share the for

As mix Jim mentioned, price to corn increases effectively cover deliver executed input our customer and anticipated product teams and to management cost inflation. mid-double-digit double-digit sales

ton, expected, record which mid-double quarter moderated, operating costs and As contributed lower chain economic cost still digits inflation, was income. the than to per slowed actual albeit supply growth in in the

input our This $XX strong volumes sales of was decreased $XXX million, of $XXX offset by price/mix to and including partially bridge. net Turning minus million. QX pass-through corn million foreign impacts We and the higher of achieved exchange costs. of

for next net sales drivers first We slide. to Turning highlight the the quarter.

headwind particularly Foreign with the slowdown in making X% inventory of Sales a minus as into corrugated the some Pakistan. assembly industrial quarter of our foodservice primarily as product as levels. against was food box customers, well down exchange lines rebalance sought as products we in starch and volume their impact and minus experienced the to selling some in X% the such EMEA, was most significant impacts economic paper

XXXX compared year gross growth, value-based we we To manufacturing Highlight were as second We drivers pricing would of make half to anticipate prior improved begin, price to the inflation. throughout a contracting, improving up mix. from North to sales XX% comments. was the volume demand like entering were net improve EMEA customer year. and mix to of double-digit America margin, sales steadily to levels the executing due Contributing and anticipating corn I few cost QX

margin approached in XXXX prices that we restore and and the with teams increased input to contracting sales begin XXXX as customer experienced to other Our costs objective globally. compression the corn

digits while and we As specialty our manufacturing plants benefited anticipated. cost per ran our inflation, actual progress in the significant well absorption ton, in lower made Also, cost quarter, to costs quarter availability. still than our from favorable ingredient as we mid-double was completed fixed the increase the

into from the carried first fourth quarter. lower We inventory cost also of quarter the

beginning contract one-time in we higher new experienced January, with America North in businesses. Combined pricing and Europe bump a

costs, remain last levels the from higher throughout we through We as inventory at expect progress gains corn year. hedge the work pricing to to contract QX absent year primarily and

continue and expanded ingredients we specialty business to increased structural commodity improvements core the from make contribution, up Importantly, hedging. to sales for trading markets new

These to endure improvements go not transient are strengthen our away will will that subsides, changes once but profile. margin inflation

last versus up Let line of strong operating to turn XX% when North net regional was recap increase performance. where XXXX. period the up and million, driven drove income by customer America were The mix sales to in pricing $XXX compared value-based optimization dynamic price same performance. me mix XX% was America top North QX a year.

XX% comparable America, currency up sales and X% on were constant last South basis. year In a versus net up

favorable South offset up America by lower $XX X% to input was price driven and operating income mix, exchange volume. primarily with impacts foreign partially by costs, million, higher increases

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

and Asia-Pacific. a to constant Moving X% X% quarter sales up for the basis. up Net on currency were

by XX% million, mix lockdowns. partially operating year Favorable due higher Omicron impacts Asia-Pacific the lower up versus price to prior offset income volumes. costs $XX recognizing unfavorable in was was prior year, input and the

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

to million XX%. exceptional inventory lower net was from contract in and prior and year. fourth Europe, benefited were EMEA quarter, XX% favorable net absent up attributable XX% sales pricing quarter, performance compared EMEA, increased of exchange was timing the carry the cost from the income combination impacts, the foreign This of for which quarter. to new In of and sales up the $XX operating

challenges performance across and exchange region. macroeconomic partially foreign This was impacts the offset by Pakistan in

impacts, in adjusted doubled quarter. the Excluding exchange foreign income operating

our Turning bridge. to earnings

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

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

share of decrease higher minus a was favorable quarter. nonoperational Moving by We in had This minus offset costs $X.XX, by our per rate. primarily driven decrease a partially the to of tax items. $X.XX financing

Moving to cash flow.

investment year, trend current operations or the was from capital in cash $XX Net minus slightly QX, the expectations. lower flat year the and expect million quarter our relatively for this demand million. with net $XXX layout. cost working of volume $XX were remain capital and to line expenditures of Through end is the assuming corn full and balance million, we First investment

and In quarter. $X.XX the dividends million paid announced be to in second first shareholders dividend of the in $XX quarterly paid our we share to quarter, per

to to the and volume low anticipated We now to be Now our through costs. single sales I'd high of softer double layout walk up XXXX sales net reflecting expect like updated digits outlook. digits, corn

value the raw in gross portion no As customers a rate significant costs is within prices pass digits with corn up our now lower little and few usually we reported year. a tied impact of If closely changes to profit double adjusted corn decline, a or through variable operating expect revenue last of other reminder, our We our income dollars. to to corn contract to high to months compared be to materials.

be fluctuating exchange rates. XXXX reflecting to financing expected now million, are $XXX debt the to higher of million $XXX and in net costs range balances

is $XXX in Our effective million mentioned the I million, rate of tax XX.X%. investment be to in that XX% expected anticipated to and adjusted is operations capital reflects be earlier. the Cash between range to from which working annual $XXX

EPS our year of to the full expect be full be for are to in to approximately expected the expenditures adjusted range $X.XX now million. $XXX year $X.XX. XXXX Capital We

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

and X% favorable net to by of up price mix XX%, with America outpace In North income terms are be to outlook, price driven sales costs. continuing to sales is up lower volume XX% expected expected regional to now mix. our be Operating XX%, to increasing

expect now up be net to flat we to America, sales South For X%.

operating costs higher expected mid-single to America is price with South flat income being favorable digits, to mix. down partially input be by offset

double to versus digits, to driven growth. year. net the price now be by to income anticipate favorable up expect X% and PureCircle XX% operating high mix prior be Asia-Pacific, We In sales up we

price to net XX% costs and favorable expect be high greater to up sales Corporate single operating anticipate to than mix. up be XX%, up we to digits. expected we XX% income now are EMEA, be For to due

quarter up net mid-single to be to we last mid-double quarter, to Ingredion digits second digits second to the be and digits when sales income For up operating low double compared year. the expect

comments, turn to That concludes and Jim. my I'll back it

Jim. Thanks,

we the Before we business for on Q&A, to few just final go the a thoughts the see how the year. remainder outlook of

strong very start off a As in to discussed, XXXX. we're

and customer and and outlook our are updated operations efficiency supply mix year teams reflects cost teams effective chain Our commercial executed full price have management pursuing. the opportunities, that our the

to the are second demand customer We are quarter. normalize inventories carefully volume expecting and watching in

second steady Thereafter, a in we half. to expect see the throughout pickup volumes

up from seeing by particularly for activity are encouraged for We reduction and innovation co-creation, opportunities sugar our label solutions. formulating, the affordable and customers picking clean are

demonstrate to upgrade we our invest continues against responding with agility, on economic see and business growth And remain our opportunities focused our create and resilience, growth. teams Lastly, mix. product executing our to long-term despite We growth in value specialties road map core to our driving slowing for shareholders. are

for questions. Now let's open the call

first from line the Ross of Our will from come Instructions] UBS. [Operator question Cody

Your line is open.

great Congrats quarter. a on

from just help cadence how Can you're your you unfold on is understand looks we help for year of of understand much first half expected have Can takes us a slowdown then the results puts puts rate assuming takes gross just considerable or forward? better on like what and some It You margin, a you forward? follow-up. and up you back quarter than the And EPS. I put expect to EPS. gross us the the and margin, run and the profitability the going going

I'll Cody, talk we perspective, that. say, maybe one Jim bit quarters following this the Jim take, quarter then let how put for in one outlook the and I'll little to the about try and Zallie. is for layout a quarter see and

of operating share So quarter pleased we with course, the and in revenue, were, earnings per record X. income performance very

product, were contracting, much strong broader price, point customer our of and were so through was to And industry management mix than out we managing As teams important effective which fundamentals had extremely of thought. the 'XX market anticipated in inflation. in customer commercial we pricing, of face supported it's mentioned, that the acceptance which current remain end in

availability, well the quarter the and chain reduced costly the and cost premium throughout favorable winter, for need as made in increase ingredient our supply costs absorption ran progress constraints to eased Manufacturing we from fixed benefited plants specialty routes. shipping that

in that months, and XX has we and for So come relationships with needed about last, last service, we say, we've the calls, given earnings customers demand number of strong significantly. certain prior how through and over prioritize significant our was incurred we the down the that customers had talked example, and deep air perhaps freight how quarters, product,

quarter. contract cost in new inventory from favorable the from combination carrying performance, of Europe's benefited of particular, lower timing pricing fourth of the and

And margin soften this will go expansion remainder of in as we so, the Europe through the year.

to I And situation certain U.S. co-products given another that economic difficulty say, rate value Pakistan would co-product was of and the lack country for surprised domestic supply country. Pakistan's importing the thing pleasantly due for because favorable that the is recovery in the and in the we dollars, in of particularly were, situation the produced with products

Jim? Jim going going over forward. forward, talk to to and for far quarters the to it two, As the as now layout I'm about phasing maybe turn three going

that think some and that outlook QX. see achieved outlook, see helps and the as we to we're margin the your of we in about into sales factor bit benefits volume QX, QX, our QX into little of question, I that our guidance. starts. a to is with were industrial gross Jim to and like operating What the maybe income the sales softer unique and We think for highlighted, industrial, products that our from net sell going more QX Cody, timing some the us as of the we we

our we working we're each QX, just QX as and hedges to cost corn, work And our impact be through in as including year. the we of going of see QX, the then

high improvement not witnessed helps still may but as QX, that be we gross So each gross profit an quarter. quarter as in year's in in prior what margin guide the margins versus

dollars profit on That's the consistent had year. that gross in very throughout dollar in more future? gross And the us pass that in growing the then strong, was some you dollars gross deliver you year, And helpful. on. year? pretty last initiatives help quarter. can just mentioned, as delivery place put you Do is question it just you because XX% the of understand profit And to particularly still Last consistent profit I'll expect you this

really things, you're managing your revenue which doing profit I fantastic obviously, So how your think product So your is well it's gross the done a right? teams three one, customer, with. and and have job

our The is production do the and with expense, we as But just you COGS cognizant to thing how how manufacturing year. go of run second demand volume which what's we've out, our is, corn balance of about I is is and lays aware the that our what think highlighted. think our corn and we and manufacturing rates need through third we're

so have And we're bit, a in that outlook anticipating in fixed some our as down we we have costs absorb that that's to higher production, slow our we'd already.

to, to our of So, in improvement. some that's really going margins I quarter. versus prior expanding impacting quarter reiterate, each their see do what's we gross think, gross be margin Again,

question. next for moment One

next comes Barclays. Theurer line of question from Our the from Ben

is open. line Your

Congrats on this quarter. very strong first

softer to So it the done you've and backdrop you've that just volume a obviously, pricing was I the down demand? understand how it then lower how that little understand pricing implemented, into the to relates the volumes? some just line do guidance. and maybe you further the Or ultimately the think bit some wanted was driving end And much of products of had

my by initially? Just on a bit aggressive being question. first to impacting was guidance much volumes? general the backdrop much and a softer the just little be versus And economic to so how as how now little being That you was the volumes understand maybe pricing sales would the lower

I'll color Okay. let commentary. add that, any Well, and let Jim me take

is mentioned volumes and to that that their paper obviously one use course, of example. thing all, volumes, usage would into that highlighting we worth corrugating specialty a for starch and Jim again larger of the first than food ship, So that's a much customer is it comes when making

papermaking just and due due to starch very you're really aware inventory of digits demand the the corrugated reduced rebalancing all to that So volumes down were I'm across economic seeing. that industry mid-double sure slowdown we're and

our noting our it's represent about And XX% total product starch worth volumes. that head volumes industrial of

beverage customers say, the obviously, softness, through volume some a to in pickup distributors, customers, that, economize. inventory an particularly When category, there's rebalancing at we're and we to So seeing that as comes see particular consumers expect is slow inventories, steady food but it half. again, and second also adjusting going

And in so we see that one. quarter

our XX I other that talk to done align As really far one management, at opportunities. well our as of throughout that most that the innovation we thing say, pricing, those a months has been of future the standpoint very partner customer with innovation we customers and last, about indicate look would have when the from mix things opportunities carefully products

is certain taken prioritize volume of some profitability cases. over to decisions we've the And that in

So answer of we of in just but in erosion. market or more I pricing, which also share economic in and softening rebalancing volume It kind was cases, would with it. inventory believe loss I That's much to decision of led don't conscious overall, how some way that believe to any is related line overall any a slowdown. our pricing, seeing we're

centers have emphasized into as beverage food and our of that that really, go that where focused would I our value Yes. our ingredient commercial for highest have what's solutions really the pricing solutions, texture, value for nutrition into emphasize ton of functionality. teams ingredients per excellence I think, and just and our we

And we and our costs, we're of do line needed that. cover were the carrying because through inflation driving doing we to to year. successful that we going in top that's needed be what through terms And to anticipated

is to margins. to think that's I going probably the in theme which biggest drive carry improvement through, gross So,

is around me? to Okay. the wanted your Perfect. opportunities other that's to some relates investments the of effect the items. my here? understand And follow-up how obviously little and risk some you for just level from the play a to as I then to on capital stretch of the out where that maybe and then bit operations And Is and really going versus it cash through of kind maybe year see also working

Maybe take I that can one.

Sure.

Yes.

asking. for thanks So

in generally, and we of the balance probably you our the of to as will look that and think inventory have I more to for working that deplete ended her the -- into most we're look importantly, turn we reduction go harvest time of stockpile, sheet, payable, and QX, that really in that's at those you just given the stockpiles as our fall through where corn paying a in some at need going as cash. year and will given accounts year capital,

better has the the think we corn. moderating and really about receivable where come when I'm of accounts the sequentially to increases in I and kind quarter-to-quarter. inventory see of the we kind a cost kind seeing think really our the balances, from of change relative in those of pricing trend in

right generate cash $XXX us up better perhaps here, better. as So to generally our each And through quarter we bit constant, bring operations we each now, $XXX call million the expectation we've staying we're progresses, million about that then that maybe capital, for from our to a said see cash working to the $XXX as to on in be we invested into and will and quarter. million roll going obviously, as

Adam line next our Sachs. and question next for from moment of question the comes Samuelson from One Goldman

guidance, not and mitigated that is of North want that network first, under like or in operating increase Jim does in the kind just or think of the to rates it market charges lower a to fixed the in outlook. So America, you? some of offset about kind it of modulate lower is little volumes I Gray, where for how quarter where kind small we of the change the I the think by maybe And if have the that? balance maybe cost bit do a of much being to deal to with end starch you're year the to I as absorption results the think and the kind have demand. result in absorption guess, kind about parse of I the And a you going of How industrial seem of cost about if

We Yes. Adam, go and is QX. on starches, industrial our thank you mentioned, of down in some will be that, the that we anticipating it. that, year. volume that volume the guidance, be pickup. we steadily to are see for, remainder I think, -- through we that highlighting as going see think, We're we will as of economic that picking do up improving, challenged see our We I it as

economic you we economic So, see And that the pickup, can know running pickup. slower. we see plants a can yet, we're little when that, we do be to going

of And cost into anticipated has so, balance the the some outlook our been costs, our part we've fixed that year. of absorption and that for of

the -- our for while it doesn't layout We, have I line. corn top in a costs. overwhelm fairly So, again, think, improvement the good

leading are versus began costs we are yet, -- think, in improved kind to We we fixed of year, gross to anticipating higher still, the margins due are our where guidance. we absorption maybe the each And I already manufacturing cost quarter. in

we to served would inflation I implemented pricing. say dynamic beyond supplement teams throughout go that updated as said I you if in-year weekly XXXX, XXXX what with thus, dynamic What Jim what and to And the extremely XXXX. Yes. by was pricing we even that think monitored as needed to we well contract input what being the of do us and cost just pricing a back we is was enter tracker end that,

of XXXX, move dynamic forecasts all environment, to entered a tracker. likely given in of the soften, a and recessionary were four As begin that to volumes we implemented progressive already we relationship potentially anticipated volume into a we quarter to

operations, twice they're monitoring looking is to on And updated and we specifically, being did by why certain bimonthly possible. certain with are maintenance basis, wisely month, a and so plan optimize that ops trying and at preventative they situation that to carefully -- as that, volumes as outages, that finance best was and extremely a it's using

happening quarter is factored absorption modeled As inventory that volumes go and anticipate much the the rebalancing Jim in that as on kind logical we how into we based one, the our factored using view we fixed remainder have is into impact cost and factored of is year, said, just of a of outlook. an where could to for in, guidance

think Yes. the within part net Adam, up, think as that year of it sales able the of we're we North agility that seeing -- lowered full guidance, what we're be I are demonstrating and large and responding part demand. And that to is you Company America. I picked that a And know to balance driven production right, But we've Company that that you with well. is is schedule

the If Okay. really first outlook that just little the rewind came the of in modeling. off and first I helpful. pivot obviously quarter on you framed volume pricing for kind dynamic And the maybe all 'XX guys your of can fiscal make a if and little the a No, in that's and kind to of significantly dynamic February quarter. bit, that where bit to quarter, I expectations you I above to were in early when performance you sure point understand the gave ties

a pieces of it big were on was the out pricing? to three and quarter that kind it kind of the the of is the were the Is quarter, price bigger terms in understand chunk particularly in upside, the But cost upside the responded just months and think pieces the I'm upside different EMEA the try your to in laid spread, just pricing like And so corn if I the America quarter parse the seems big between environment? beneficial. of certainly, own in of co-products of North when sources trying costs outlook I Pakistan where timing about the that the versus it way way in the ago?

mix customers end say, we say in would of I because which budgets down. how say, specifically, anticipated, contracting that had contracting say, Typically, XX% get America, than relationship start you this North In forecasts, remaining internal later to prices to there'll erosion forward that we the we with -- anticipate customer our, go, anticipated some, industry would as year, anticipating contracting. of our strong through fundamentals management come remain price let's the was be into went product better put contracting XX%, and or typical will is very when than

did market of throughout pricing for end show prevailed fundamentals industry The the us. that. not contracting And

And so that was, say, a pleasant surprise.

The went the That's got a never he's thing, this the global And I'll never his third entering in and the operations. Global first around arms recordable of my is give as with quarter injuries. just in the little Operations happened no we anecdote, you Company's other his again, year, history really of Ingredion. to Head history

doing ran well, is believe, really, very month. throughout and the our I well And team winter our so very operations plants

And along the very between so impact think commercial business, it's fixed that tough coordinating job we're When assets but until doing you we we've now. we're with done we helped, the how up heavy good the balance and teams best can, that a to seeing. that, volume has communication and are dynamic the ops very run again,

the that, will think currency course, that's helped saying co-product of unique again, Adam. hard We the that's you of anticipate. the is not the in that's carry of from highlighted lower that I through surprise is as we and contract for Pakistan, And that example, And some inventory. expansion then, again, soften did of what And we benefiting again recoveries, well, benefited talked where as timing country margin in go pricing remainder cost we're of about something Europe's upside and preserving year.

One moment next question. for

Stevens. of question Bienvenu from Our from comes line next Ben the

open. is line Your

of makes the want some the everything full I in albeit and I discussion. into, recovery want to you well. through volumes, like balance as this but the think have outlook feel the volume sense degree recovery a XQ revisit I ask said you year. So, that you in of visibility to not And

You already getting inventory little back just better the half. and building then orders rebalancing, visibility? into forward that? how you looking cited And Are far you volume XQ a inbound have on do

in It's really first What up March after would interesting January. in Mexico, which they country say, in Europe the where as globe. in I Yes. will were all, decided dynamics flat and in they immunity in seeing volumes certainly first surprisingly, opened I pursue positive. quarter, flattish, across to to were a we herd is say were February different, of took relationship the and also for the China volume obviously that as some up They we're

were those some there, So positives.

that, much steadily most label, food in business and pockets for in the But than into soft. volumes, actually profitable quarter. for across which And pretty a up cuts is say I seeing the out remain depress but up revenue-generating I And will sector, throughout branded. in our think that anticipating bit, that places some QX into overall, line, that we're that pick could softened which private again, product doing most better watch volumes which QX, first is we're will would the but

are perhaps talked example, at very United seeing We're restaurants. structural States, the though for in the this even switching up, which both about to that's office, retail has dynamic are different food as more a done home service in well changes so for getting service, but related at service, at picked work is products, quick consumption of they CAGNY, is channels into and as label, some food go home private our the for and the at as versatile branded, many retail applications, to food opposed and office in in both changes there and structural we some way

the ongoing everybody thing behavior in seeing the being crimped But same consumer buying relationship is inflation. to by

a norm think after what QX. That's the pickup the and naturally inflation settle inventories into factored the modest we're half, on in counting That's modest we're counting rebalancing and I volumes So, pick up. for a second of guidance. our more will steadily watchout on into is

And of supply well off optimize what shelf they're outlets. few inventories ingredients into food sometimes in that and it. in just would what see because as is as the the what trying a do therefore herein are and foodservice upwards a steps that comments we of Ben, consumer in our traffic And It's that's demand to foodservice It in foodservice and really to really we referenced to in beverage solutions. rings cash volumes our to I happening adjusting our our are. some customer that generally and of easier as XX% distributors more was what's harder see has really in probably chain characterize see because little maybe gets takes

track the be what's industrial to particularly is, down Jim I'm customers a But and more segments what tend as little that bit a for and those our economy more with GDP. watching hey, demand bit mentioned little up to and

So of which manufacturing we're for, ingredients, that say, very is pull a steady starches our But demand. from various and go and generally, GDP be food going as to coming is beverage corrugated. of majority watching kind indicators index paper and into far, by revenue the

diversified. And

Yes.

Yes.

related is question second all-time My bumping sugar up good. to Very We're highs. prices. Okay. on

to quantitative qualitative you qualitative is, you that more relative I to the to it for a to just think that? market? that benefits the and we that the just can bridge all. be price differential a it in understand helps benefit your your us it business? Is competitiveness is a But Or help degree positive benefit

let me can it, a you Yes, take the to then well, and shot at commentary. add

that say equally, as background, supply caloric think of are is as prices we up the certainly standpoint you Given reduction. your sugar a towards CPG favorable about the well it But to to helpful volume long-term sugar going obviously, I sweeteners would prices pricing that very sugar when doesn't from trend that hurt being

further what a prices when sweeteners is also, certainly, sweeteners, but as preference sugar artificial just obviously, high, replace to strong seeing that natural we're are a high-intensity tailwind. for And

for sweeteners for So both improve the during what margins years. well core in pricing fact and as several out I think the volumes improve called script time is we the we first quarter, that, saw for this as

sugar to prices with up, but have certainly going something has believe I industry that do also to strong fundamentals.

for moment next question. One

from Markets. BMO of Capital the line Our Strelzik question from next Andrew comes

is Your line open.

I baseline, question, the lot back there's corn obviously, a cost as was first moving But hoping in I a know of was I parts to side. my outlook. to go So the here,

the so you the versus guess half, hedges, back into corn the first you given half when brought think about low-cost outlay particular, frame inventories particularly the the And you that I XQ? outlook in cost can

a And for you in just are from that North of America America, corn that how pricing you'd lag rest quarter typical of actions the there? by realize offset to expect year, South the outside in the the given then headwind much of to related realizing or you did

you the take do prices? corn want Jim, to

Yes.

particularly going of expanded we're year, now U.S./Canada, what see cost hedging between and what we're in bit are in to layout, seeing the XX%. quarter, on essentially, of I an the as of each Andrew, the favorability anywhere had we year corn our co-products. in would practices we XX% our increase at Last beginning corn year, a our of So second say, terms within

net kind lowered So of our that corn.

you place, increase. into that we last the Russia, corn of year, of in because and of got QX remember, some as then of had jumped And so and Ukraine, dampened and as QX hedges nominal cost of that kind the really we offset but

out maybe so, you started a year corn just it as We now, the the at lay relatively little had we QX, And softness bit look as elevated. futures we QX. with of in

just we're we year, But our same away in change through basically type cost the take all each have QX. this way of that for the about quarter, corn QX

So Okay. all that's

rest pricing how expect the of offset you with you'd just to Is the anything for side, could lag? much there share the South year through America that on

Yes.

with been now, of which between corn? in that out have is anticipated on and this agree, do implied So of by customers, kind came to months kind teams want right in you should looking -- then repricing are they're And South customers with as in we're is that they're really the America is pricing, three of to cost. hey, some already customers What aligning of this what corn. anywhere as one-month you doing comfortable locking see the that we'll cost with pricing

corn and kind conversations of generally between are one relative So type those pricing the and occurring change frames. active of time months always to in three

expanded price. hey, as be South us see we've to forward to some much with intermediaries can or lock go shouldn't in we the the to that a of are can because as America farmers we more, sell really long to as say, bit corn able in conversations at So willing the of a customers lag we the

And so, type three month-ish that should to of be lag. one

Got it.

Okay.

business sense. any Okay. last a piece these the way of of real the then impact multiyear that just turn as frame you I guess, go did well, lower margin the talked Is maybe as what well? about quick, point some trying contracts. my That was? environment is, into does potentially, just of big to resetting opportunity a as they there how one makes expansion corn renew nice I cost at guess? think some we to a at I'm multi-years into that And

Yes.

obviously, the adjusted contracts. market XXXX. that at pleasantly contracts protected full of customers renewed multiyear were contracts us surprising those pricing very percentage I was think in our that insignificant are because, not an And for fact those

and inflationary then renewed, three rare typically, cases formulaic in perhaps XXXX for some those clauses in have large to And related contract as a contracts degree, two, there. onward, there are year but

many they've multiyear looking and important an secure to they supply strategically based mix through commitments the are contracts with cetera, So, at endured serve overall what supply. as customer and more we on of part that assure have customers chain pandemic shortage the

of seed of grow the nature have And in not our of lot because the to dynamics you we of also to only corn case the products. contract the the us the favorably corn many so a but contract in helped those businesses, to have specialty

that. they if with and understand them, of are us risk obviously some partner period. a customers over understand They they very these And multiyear to strategic, sophisticated the don't

And us. and -- again, for then, so those contracts they when renewed, renewed favorably

would So how I answer that. that's

I'm Zallie over call further Thank moment. not to in closing the any you. remarks. queue questions this at I'd like Jim for And any showing the turn to back

interest I Ingredion. to thank I your of us you at look upcoming to want Well, you forward to morning. events, and of our all this want for thank many investor in continued everyone joining for We seeing

participating. conference today's Thank this with And concludes that, you for call.

may disconnect. Everyone, great You day. have now a