Ingredion (INGR) 6 Feb 242023 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the Ingredion Incorporated Fourth Quarter 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your host today, Noah Weiss, Vice President of Investor Relations. Please go ahead.

to Quarter welcome XXXX Full and Call. Earnings morning, Ingredion's and Fourth Year Good Vice Investor President Weiss, Noah I'm of Relations.

section. President in Gray, Joining results on me President Executive release Jim Vice will today presentation year as for Jim are the The well website, Vice we our our as issued today on full and our found today's CEO; fourth can call and and Investors be press CFO. ingredion.com, we the Zallie, reference and quarter

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

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

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

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

Thank you, Noah, good and morning, everyone.

as outstanding performance in delivery. and strong and records solid environmental, very with performed as importantly, profitability exceptionally financial company well flow cash net Our surpassing XXXX, safety, service key several business across robust sales, well

XX% proactive year, income our raw measures. our adjusted and full and actions and took by X% net cost-saving the sales we increased volatility material manage operating pricing we as For

better on align our financial results we are will ahead positioned capabilities and with new confident and our to are that look XXXX's realize growth to deliver XXXX, strong to of growth segmentation customers' top needs opportunities. well As further we resources remarkably further

on with our now specialty you At by Full update gross XX% Beginning net X% progress XXXX, Systems, me Food year strategic pillars. to represented of X end driven contributed Specialty Ingredients. expansion. against highlights of margin Care, strong trends, and strong growth Personal Let the net sales and Performance grew label top sales. by demand line XXXX. and Ingredients for consolidated continued Pharma included growth each private by driven Specialty demonstrating wellness

person for provide excellence. year, engaged service ingredient best to solutions XX% Throughout We their our through innovate both Labs were at increase with our pleased see growth. studios. to the to the technical demonstrates our their We virtually teams co-create to by but recognition also digital need believe our Idea regularly and customer volume our this Turning of capabilities, in application. and customers connect commercial drive customers to only engagements not a in a

our XXXX, investment time, teams global fiber We quarter including and as Net can and consumer that our reduction. confidence to labeling each help Adding By around continually fortification, progressed that delivery have need giving support customers chain the our also on supply something we real on-time customers improve in been capabilities improved regularly trends they this, Scores, to chain our have focus business, in tools selling clean Promoter demand. to and we a giving with track. systems just-in-time our our our drive we go-to-market advanced able that protein through consultative through supply these trends sugar and information innovate training

implementing redesign in of best leveraging job have an the scale The In capabilities, Ingredion's outstanding provided in the of area procurement invested globally and training done team of cost our competitiveness, management. and a category we has practices. team completed

real through year-over-year We collaborations. are creation beginning reduction savings, significant and improved supplier risk to see value

to and this done employees performance, Ingredion has of reducing this lost of to I ensure achieved improvement have our has the year. the work year, also we number notable safety team safety want leader outstanding in but contractors in a time operations our recordable always the that emphasize and been a incidents.

we customer As demand. XXXX developed, experienced softer

production supply Our responded with quickly by teams well-balanced operations and chain to inventory which year a end adjusting enabled us schedules, the level.

lower costs recover are we fixed feel XXXX to greater our volumes obtain operations absorbed that we we leverage as positioned in and As in manufacturing well costs. from XXXX,

our in growth Corporate We that the perfect Foundation's Admired Companies earned happy culture. people-centric once of XXXX. ranking a top recognized Equality that list, announce purpose-driven category. we I'm for the are food and production proud also were to on Fortune's X again Index Human in Finally, Campaign to acknowledging score Rights report the we Most

our sourced. a our progress against In XXXX, sustainability of priority we being sustainably milestone new Regarding crops XX% agenda. reached X with

our an mechanisms track in resulting acreage. the We supply the program on continue increase in seen regenerative carbon Scope chain on-farm are of expand commitment XXX% customers, footprint. for to sustainable XXXX XX% is we to food with meet to of companies sourcing. X promising Regenerative reduce most all in agriculture reductions their agriculture to Also, one currently our as year-over-year help

Turning gross now margins. to

and was resulting basis last actions actions consecutive During of the our quarter noting absorbed is improvement customer have costs. despite that margins which cost to achieved gross worth this XXXX, gross teams pricing the profit initiatives gross XX.X%, The fixed points by demand of It's we XXX years. improved proactive profit margin our in to margin inflation savings higher X sixth that production, declining slow necessary growth. the by operations demonstrates and

for has company like of a financial the XXXX a number important year to metrics. that highlight record across been And I'd

which our $X.XX and is an adjusted the of XX%, EPS record $X.X grew million a all-time high We billion, income, have is XX% also to last sales We $XXX is increased which high. delivered most to than which up operating and higher year. ever

positive we with shareholders shareholder from XX% favorable, cash results These delivered investments operations return of turn delivered for billion. $X total capital working return. in changes over As a combined

Now I outlook. the financial over Jim to Jim? XXXX Gray will review hand it for and

morning Jim, everyone. you, to Thank and good

statement. income Moving to our

X% of XX% billion sales this operating volumes. million for quarter gross were Gross and mix, million, costs $XXX down prior year. $X lower by net by dollars and offset were quarter. income versus again were with XX% approximately $XXX Reported lower and price While than respectively. input favorable margins adjusted grew driven greater profit increases the The partially

driven is quarter, lagged financial in JV primarily our X fourth worth South Argentina growth results impacts For favorable our JV. the strong by America performance QX was and said, month that exchange foreign That noting it reporting. in

I quarter outlook, peso on which will later. X XXXX will our comment So the devaluation of the impact

and per reported $X.XX than XX% quarter fourth year. share prior Our more each for up adjusted the earnings were the period. from

The with in foreign $XX net impact bridge. in $XXX driven million, the a would X% lower on Turning exchange to QX our $XX in million sales volumes, of partially quarter. million. offset positive by comment of net along decrease was to trends like by sales I price/mix volume

XXXX primarily a extraordinary our drop and middle changes we shipment quarters and based in corn constrained high XXXX in upon the fructose the excludes XXXX. which portfolio graph our volume inventories, in products. Here, averages, supply illustrates XXXX, a globally. texture drew In quarterly down demand experienced show of This orders we to since in volume as for in index customers chains syrup reaction the adjust XXXX

have slowed, X/X and decline order improvement in the sales January quarter's customers contracts through volumes a volumes this In already representing November. beginning strong demand order seen prices have in December, gradual of We year anticipated anticipate fourth in as in gradual January. increase lower in We their volumes volume a deliveries. seen

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

exchange impact through in the a finished as down Sales real sequentially in inventory. than quarter EMEA, the offsetting mainly customers of as Foreign Pakistan. third again volume strengthening and saw was FX-related X% Brazilian peso, But quarter America destocking Colombian was the partially this the X%. working tailwind again, South better of

highlighted to lower customer prices harvest. X% Price/mix from optimization fourth contracts South previously, levels mix EMEA sales the orders new lower decrease driven quarter December for compared fourth volume corn XX% pause the Brazil's headwinds evident was and quarter I in larger in Both experiencing as to in and effective January. and of America were was America. XXXX. of became by up due most a regions North The pricing As resulting price

Turning our earnings bridge slide. to

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

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

X% $X.XX operating We year lap XXXX. items. nonoperational billion rates were decrease the quarter, net $XXX due our to a impairments reported year versus Full operating profit lower per was by $XXX income margin than a basis and year. was operating was was investments. primarily share Full points. $X.X from to adjusted QX minority up driven tax XX.X%, Reported million, of venture was which prior income had primarily of income, adjusted of sales XXX up or Moving lower in equity income Gross operating of million.

the EPS due valuation share EPS, against per $X.XX primarily earnings benefits peso U.S. than and higher reported was of the Our year $X.XX. earnings was the adjusted per Mexican was full share tax Reported from to adjusted dollar. the

million, X% partially Turning by driven exchange sales along of lower sales full offset net million mix, $XX to our a foreign increase of by bridge. in $XXX The million. price of year impact net was $XXX sales with negative volumes

sales net the highlight drivers full year. for We slide. next the to Turning

Foreign volume built and were several in America. headwind offset XXXX. to the Price/mix year Sales as EMEA, Asia full for customers in as mix exchange in XX% was by various slower minus the in optimization mainly Pakistan, compared full year destocked was up only up order inventories price partially currencies impact last to the a due X% was X% over volume down as was South Pacific of the customer years.

Turning earnings to our year full bridge.

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

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

per per Moving of the to of a $X.XX $X.XX per full tax financing minus share share decrease share, our $X.XX partially higher costs benefit. due of nonoperational nonoperating year a items. income We $X.XX and for saw to offset other share by per

$X.XX and February note, $XXX of follow-on completed business the $X.XX South and respectively. to results adjusted Korea our on contributed a business we Korea reported for As EPS, million. sale X,

considering We impact. have adjusted XXXX outlook this our

over Moving from operations cash cash flow. billion. was to Year-to-date just $X

a million through roll favorably, raw with contributed from our peaked and size in will change we material crop, working U.S. and our of eventually declining inventory lower recovery our This the lower XXXX, to started to which a costs through in costs which progress operations. our pricing net accounts $XXX decline and receivable cash clear understanding expenditures drive balances. input of values As the Net capital capital expectations. impacted to resulting with balance year line ending were full sheet positively of

our to capital continue to We of return in capital choices. allocation shareholders prioritize

share XXXX, we we rate million increased the repurchased year, per During dividend ninth of the for and outstanding common shares. $XXX consecutive

and priorities our growth forward, manufacturing our look shares. shareholders continue we repurchase be: return reliability our of our As second, into or organic third, investments accelerate strategy first, a deployment to into to strategic through to dividend; ingredient capital solution allocation opportunistically network; cash and M&A global

to outlook. me Let of our It might helpful I XXXX for to our our speak note before specifically financial to performance XXXX. X turn drivers outlook be

with in raw the so First, inflation rising the in In our carried price of XXXX. anticipated pricing XXXX, cost costs, up we is other into coming layout areas we strong year. mix and we're and prior energy year's material catching anticipatory

lower we through During costs will layout, cost to a material price corn which This expectation our for our raw XXXX fee-based as we that lower a mix the witnessed customers. we shift see business some model. along pass in is normal XXXX, more implies

hedge change each cost Second, how and the impacts corn begin with co-product values. we the values in of year

expectation hedge approximately This Going practices. the approximately million X hedge a the that into realized carried corn carrying from value into we follows swing we realized hedge $XX hedge first losses value quarter and our of This XXXX, $XX value XXXX. costs declining million with of was of into year, quarter gains. seeing are

impacts expectation ultimately, and volume plant our our Third, our manufacturing costs. utilization

year, through lower For gross managing demand we our as through layout quarter work cost are volume dollars as corn of XXXX, first the XXXX to to anticipation be as in will an highlighted year QX X work continue that the continue margin by to costs cost higher lower higher in goal The grow COGS. into set corn per carrying for and prices through way layout our corn anticipate for have we across quarter realized QX full We profit is expect dollars in margins value hedges will improve. net improvement gross manufactured profit per change ton. greater of ton. margin total by In

to Excluding the that in material to digits up Korea QX. growth price by partially flat impact demand in lower adjusted digits, up outlook, expect from our year-over-year through offset raw decline of sales income improved will we divestiture be single be net with operating the mix by prices. reflecting volume low We mid-single anticipate driven a QX

full to the expect full we including the range and be year gain reported adjusted anticipated a XX% XX.X%, XX.X% tax respectively. rates year the to company expects Korea XXXX, business. XX% to net of EPS reported sale to and effective from the in The and For of $XX.XX, $XX.XX its the of

of range Korea the $X.XX $X.XX, year, to expect divestiture. the EPS to the of excluding the in we For full effects adjusted be

be outstanding of the and operations We up be same to in from million to for capital is Corporate expect approximately $XXX shares expected to expenditures weighted million, digits. million million single low to XX million. are XXXX diluted costs range the expected expected be to cash are and the between XX be $XXX average shares. $XXX period

of input energy expect year quarter as as lap to with modestly to relatively in quarter costs the extraordinary as down net be well inflation. XXXX, XXXX, a pricing passed with a EMEA mid-single-digit are the from up versus pricing first of through to prior For lower decline the corn which due we challenging cost and catch reflects sales first

of minus driven to XX%, minus income, operating factors. anticipate XX% decline we by X a double-digit adjusted For

quarter we less first running year. volume last with First, production than and are

expect to QX and We beyond. volume in demand improve

balance a margin impact the $XX corn of the presents January. support the and of present and The official devaluation profit the Second, exchange expansion third, rate margin carry hedge peso a swing corn And in million year. of corn layout costs the hyperinflation costs values have will for quarter-over-quarter. in $XX lower Argentina year million of the through will in

historic can you in quarter for page, of relatively XXXX. in see be expectation excluding very QX from the trend, As the profit with our this would set X unique circumstances line

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

value a gross record invested growth XXXX customer quarter Jim. margin with opportunities targets believe We operations we are strategic run greater continued strong to correction its demand generated with year-over-year backdrop with excellence. that entered to well with has on growth record We positioned this they and Thanks, capture incremental and XXXX year $X back in priorities. profit reflecting and is from in prudently create we profit and our expansion, confident XXXX the that a and cost shareholders. focus volume along of inventory We cash of as our arise remain operational long-term billion, view to course, in XXXX. in our delivered and we largely first growth, It a ability for over that savings volume we in started the

has highlight the moment take me a transformational been to journey closing, let on. Before that Ingredion

solutions we long-term changing more As been century, than throughout know, to adapted conditions change. we has is This success and conditions have for trends successfully position and providing history, and Ingredion ourselves time a consumer and our ingredients no for may as different. with customers you continually market market

long mandate, segments. As solutions Texture and our a and businesses a business regional ingredients change operations, local reportable our to we of reorganize and of will commercial customers in global insight business conditions step product move which last to outgrowth while will greater our believe November into shareholders. capabilities, history focus. and changing a food in to plans The will better have announced a natural teams this result the industrial have in aligns transformation, a structure creates growth. serve We market adapting to healthful next to the new long-term to our logical is pursuit our our greater transparency provides

open let's questions. the Now call for

[Operator from Bienvenu Instructions] line with come of question first will Our the Ben Stephens.

thoughts divestiture, the of to curious, potential be considered you that guidance year. I'm seem Korea it to As the doesn't business any provide on this South for can proceeds relates in use

putting So proceeds returns work business. dilution, sale not obviously, the in but with to we're associated potential that the capturing the

maybe framing helpful. you around So would can offer any that be

is Jim Gray. Ben, Sure. this

in challenging our if the First, we middle forward view back There's where as where have look part our some mind, always we it's what as our we refresh for always mind also of can way the companies, continuing the and do our shares not at value in have of monies though been equity, the look risk-free obviously, buyer, bit been, a at a strategic our strategy, at fragrance at you and look also valued, look at little rose. of believe our globally intrinsic with least say for Ingredient share and are of landscape And there that one where that XXXX, ingredients repurchase is accelerates we think, just company. at opportunities -- maybe highlight come I'd private M&A multiples M&A been a rates XXXX, last has in the but deploy of to following least where are are companies, Solutions. a and we kind strategy in when prudently so I down.

kind is still pursue. can we're guarantee that the a to -- pipeline deal going to done, so, we but never continue And have we you get of

in organic so efficiently. reliability assets, our always mean capital they and obviously with our to is I and priority with first run for capital invest maintain planned growth

for integrated those our for And about, business acquisitions case. delivered the as healthful focus always would talked that our always very but we businesses. would disciplined. over pipeline, have Ingredion active do, second the and very M&A Jim and the we we've third made, well be And dividend, solutions remained them a on And our has time M&A have grow use texture we to on As dividend. be to

noteworthy also, got business, which to corn where, Korea the it's think business high-fructose primarily syrup X/X a that Jim, was of volume is that price trading our that multiple and -- standpoint. a for dedicated we PE I core from above So the about was

and we portfolio, for our think right and it's very do So about good proceeds feel use the we thing to it, the we'll wisely.

Okay. second year year? co-products, gross us exposure the in are this for hedged you Help the to how question XXXX? year? your costs, the Very Should outlay and similar we around I'm of particular, on corn. outlay material is year My you you And corn your this a on on raw wondering year cost were in were understand the as this hedged for uniform you last cost then expect throughout hedge framework XXXX. similar hedging are good.

of Sure, sure. corn, expectation the Yes, are sale hedging XXXX. or that purchase that and more co-product of look a towards our almost I co-products say expect business just we XX% of you you to the same and U.S./Canada regard upwards kind discipline our we with that from in our of market futures gross of corn declining hedging at following layout had values the corn our when would XX% of

placing bit the little that the going any in less -- reflecting we're a hedges to be the of So obviously year towards corn. cost of we're end terms of

you the of As in a quarter-over-quarter somewhat comparison. you now XXXX, look have forward still into decline

to so QX it's of QX better than cetera. is the QX of cost, along corn be slightly even in co-product as more lower XXXX that et XXXX. going of So with QX hedged though versus show will XXXX up values,

layout to my the goes of corn. kind on the that comment of So

were with us with margins COGS we QX, You get should QX. deflation, corn as cost, helping see helping into us QX, corn

question Strelzik Our comes Markets. Capital Andrew from with BMO next

would you a than that seeing where shift volume a a what And The you -- you was maybe kind stronger then or you there if frame through of you was of some the would And markets bit about. is your anticipated? just thought back are that kind could broadly, December, elaborate you kind seeing out from of across elaborate could hoping is Jan you're be? that? have hoping guess perspective. volume you little dynamics way Or quantify I to of could on end I talked of more that are you walk you to I

they're of said, little Yes. QX Andrew, listening. to would everyone the going contributes question, about potential do a that price CFOs in us. flow. to your I end better some I nuance the because cash for the their did it in you're a your of a out you're price the bit appreciate asked at as year see of and the probably year. to for And cost in was I you're you slightly January starch, be company I negotiating end in probably came procurement, inventories a well, And operating our managing for are I carrying XXXX XXXX in at sweetener. if of always risk when smart what for brand your say looking it's corn what than folks, of the you're with lower XXXX,

pause And EMEA procurement. I'm up so impacted to was in up that the we and to America, volume of just QX, some smart number going really volume volume shows I because -- in you're for that what so the that number. shows pause, orders sales on it impacted do saw and if sales the call think North in that's Europe,

we strong. of the So pretty natural things volumes ends, are seeing January year play as

are There's in -- that's changing order very January. So confident December it's pause. say it's demand that, we that through if volume our guidance know still but don't I coming underlying necessarily customer that would I and an

Yes.

factor inventory customer its as that on think played of also I the new with but run into capital indicated want year for a we was and that they affected -- head don't that in very emphasize largely call, we rational this a down price the part were it adjust that of year. ago behavior decreases the contracts would last January. anticipating starting be has course, as and -- had in do we some a But we started out certainly customers it that as correction earnings to thought exactly in to the contracted we wait see working

because up we had kind to sales digits. parts a has it to carry of it. forward single guidance But Andrew, just low can, of X if I just net

X I as XXXX. see so anticipated by And think then some to corn demand on to what's for price maybe what ask pass offset partially through. due demand that's Jim the just is underlying we comment part volume lower volume we and But in mix

Yes.

increase I unit private brand think the that X lap an volume unit packaged as with years. volumes expect in and very label occurred to respect over food the demand, last guess, we high prices I

So I we the retailers traffic. grocery anticipate bring support think to And see that to to back stores. want going to will we're consumers support them more promotions to

We more indicator for also volume the for drive need interactions. innovation customer we that highlighted space. a increasing engagements CPG the within is the projects seeing innovation-related We're many think for also growth leading brand to

sales So the XXXX through on corn overall, will costs And anticipating mid-single-digit Jim variable passed with expect uptick geographies that net we as being become lower growth be first quarter. and except XXXX, demand evident we in said, pricing perhaps in some up in through guided we're a mix should for sales volume contracts. Europe as for price flat low digits as headwinds to our single all

Or know be if That's I timing on not Great. you unpredictable. these Is -- does that. buybacks? to time the the helpful these how can otherwise. there about I to you whether about South deployment if which then the capital of this? very at -- M&A to and would X, could kind line a or it's that M&A pivot things Korea appreciate you point materialize ask color. the there element side buybacks of deal a proceeds and super think just the And a Is I

about So I guess I'm needed. at curious you how the between some timing think just point X if

make let make a comment, I'll go. and comment I'll a you

an everybody, right are executing give M&A. we our repurchase, us position, pause to for on share either/or, for don't the then sheet, can not and Andrew I on now, think given what So it that be is cash I doing we're that's and balance absolutely if value, our we on right? given think believe going shares

deal look may prospect year remain of the now some for will at and know, But of strategy course, critically refresh is play-to-win Yes. lengthy a through happened has mean, we full synergies. I you the using year every this framework. we disciplined, past what went always

about M&A some very aspiration. very our And pretty we're well. that the have have clear where We're we to want big as And organic organic about winning supporting will with and so I be we're excited we to will and investments well. say, play do and that to we clear win, strategy investments we -- how as do pursue about

Our next question will of Barclays. the come Theurer with line Ben from

operational examples how it my wanted new in about the pointed maybe to order as solutions from texture is reorganization managed way segment is be would the it with What structure? a first you going the global Can of I new and ask healthful drive you hope be to out. share out is customers particularly to that the you this globally, a what you and structure That in and you've benefits in to potentially play operating few question. your of this going volume profitability? or the help

Yes.

texture towards that a Ben, pivot the on think I and focus more healthful solutions. global

how work all, our customers with to understanding really collective preference and is exciting for Ingredion believe for we to impacts that an of liking analogous understanding but influence believe their to flavors. And we've texture a we that. consumer been and while, of First ahead opportunity saying there overall that

and fortification. sugar and with protein value science global total texture large solutions. services very think invested We us just been regionally time real regional market, longest is And and Those by from global has it for driven globally. our measurement for which lends correlate results. of is So We universal a very with capabilities so organization, insights It healthful have business delivering have propositions accountability a have for say, effectiveness itself platforms is consumer approach. addressable for and Ingredion years, focus reduction, believe organized that we finance. well now stood efficiency have served X standpoint P&Ls solutions on a side, we on the our for that that the are a what that all to has we are that fiber trends purposes, and purposes, where services focus, customers in which shared for that healthful done for and the up clear. also in capabilities sensory can we've example, global last,

the move way, Our the of of operations. on build service, to important of by some back to we've We have done had Promoter the now operations. globalizing that globalized global tell our in are what support couldn't operations standpoint the relationship to we because about but office, can moving the global and built muscles business the in we global safety things some you most that our procurement getting, enhancements, functions is we're we're the you're embark business service are well. And in from talked what model. benefits X HR model those the that of ago years global and about capabilities, seeing shared results -- was a of in excellence more functions serving of us Scores, that marketing practice a on made very to results. our basis benchmarking focus a we operational Net benefits I with best And

partner. and to and solutions and it the really as commercial to for allows healthful us they time understand So intimate brands more what co-creation organization texture need much more focus their from with a be customers much in

with we in a the serve change So to we right change. also is behavior more very consumer much and drive lot likely to with will are us that where how to align we of being about key well are global are actively looking global is the industry intimate consumer be on kind at behavior a the now. incentive organized things There's share food And KPIs think customers, of going buying customers. to lot but very with way to moving adjusting behavior going questions buying schemes of

related Very clear. And then guidance. just X question the to

the maybe a the from our top you to the is the as If us EPS. divestiture we frame of could help impact what income exercises. more frame side better and impact understand potentially line could well, got in or can on quantify We top bottom. on on little operating But the you that that modeling impact bit kind obviously Korea of just less

sure. Yes, Yes.

South XXXX, the And at the more op of $XXX -- the of about effective looking of year probably if then kind approximation income delivered an in the unaudited, the full the but was sales, the rate, adjusted about range. net it's tax effective teens. Korea for you're million net For it so

our if look the I'd take to XXs you an op XXXX contributions. get low terms adjusted adjusted what the income, to range was to times of shares of at terms of and in trying kind op in EPS, you're outstanding So that in say income

of Owen next Our with comes Oppenheimer. from question the line Kristen

a I to also to modeling wanted up start. follow question with

revaluation the Can for hyperinflation this of of us Is understand of the the on and starting is for help how peso, assumption First, mechanics adjustment work? XXXX, the just sort that adjustment. onetime there the what the XXXX of you just all there? true-up mechanics a

Yes.

onetime have sheet dollars, exchange we when look values. that JV at to So have an into -- you hit change we those the a just items our whatever balance are take rate, core the our whenever and to in translate on official you

is that quarter. in we'll under million, $XX that impact hyperinflation kind GAAP to that be the the just sheet recognizing first the due treatment of balance so the And

relatively so good. says, beverage The Corn in the now look fructose Sugar syrup great high is prices to very is you still that forward attractiveness high. cheap. then of XXXX, So makers to are very, Argentina market. fundamentals

perform XXXX. So the in probably should JV well Argentina continue to

see -- we'll we the to official won't underlying was do to need they XXX. What with just is, witnessed is But how have peso in you we something the OI. new you look rate peso. December, where official probably go at like government, of a that peso what watch XXXs the the rate in good had So

of into some, you'll further the an here unlikely it's be There may but that have we in additional have it onetime witnessing that XXXX. impact be will degree hyperinflation January. unlikely magnitude take that to So we're

helpful, super Jim. That's Okay.

X% in So operating very taking XXXX CAGR, through that outlook result. a 'XX income, that the the account income should of to for the then wondering XXXX. 'XX the pieces, thinking the growth guide X% 'XX. framework growth think just you operating in look XXXX, I'm strong context about to for off just how coming outlined and we moving your in to we all that mid-single-digit into 'XX at When guide

But our Obviously, year, kind Obviously, not reissuing at year. taxes. take working sure. it's we're kind of I election changes to necessarily some there -- crack of risks to Yes, are XXXX, a X-year the out within outlook. could here X-year outlook. within of an If kind look, that. see a We're may still impact there's we on the

have support maybe store the a other will other up back But of those on that's grocers risks to market starboard talking on baskets enticed excite opportunity which of happens, sales. around well, us. we're some to the the our plant-based little proteins. promotions That's maintain that for on are think shelf. just I in that your promotions a consumer grocery our about, or loss impact stimulus within hand, those shape or the volume demand, note is would concerned and unit or I bring XXXX that thing, If basket. some volumes companies for ingredients what's peers supply to still on of unit inflation absorbing on to we by to branded use share bit customers, retailers good one fill always grocery an the and be we're brand results, consumer on

over operating loss was million. that And so just $XX

did the upwards as addition, million $XX market mark-to-market slowed of for plant-based had inventory In down. of We value about proteins. plant-based protein on our recognize

that's for XXXX. in numbers So our

there. advantage put growth and capacity we solid opportunity upon additional the we'll to good as go take we're still Further, we improve we that for XXXX, facility and drive as in to a we'll And reduction. going XXXX. of into So upon have that, year XXXX, to in improve Qualalampur the into forward our that XXXX, look sugar

in So that going forward. there builders I that that organically as continue work are doing our things to go to be think we we're are we some operating income

I in a year. increase do that low clarified about fortification that, loss we improvements where loss, And operating last think, this total inventory has you into income protein heading believe adjustment. million we're helpful operating seeing That the that XX% the in Jim, is and to point year. it $XX was been taken

something are that's well. about that So as encouraged we

UBS. will with the next Instructions] line [Operator Spector Our question Josh of from come

one to and guide follow. clarification question quick a on A the

Just side. around the operating income

it's point in excluding digit the Korea. South that operating reported the 'XX? number? Or sales up asset-based impact that Is excluding income mid-single on Korea made guide the is You South

No, it excludes it.

Okay.

then, up talking guess, more then a growth of about I you're to volumes So single. organically low high income single-digit-ish relative operating

So just gets else between guide how the is the rest good the the price should offs movement anything volume that be we Is can of is leverage and or bridge you pieces quarter So for first maybe kind of about? the that level? year to you and in much EBIT thinking of year? there a bad that that and

Yes. we've Well, I way a XXXX, be reading pieces maybe that's might don't pull that complete the looked guide it. sold our and effectively because in Josh, if XXXX. you interpreted in apart the early maybe at year. know Korea We've We

Korea in look we at, won't to contribution So what contribute XXXX. well, XXXX that did be there

So baseline. guidance that's outlook, off And our baseline. our issued kind of our that we then new of

of what lower bit and income but return see some offset the raw to operating up on costs pass-through mid-single input due we to essentially price digits, we're going be in on little when is a seeing so lower we're a volume, by materials, dramatically corn And it's adjusted actual counting costs.

And will to our gross manage the change volume to pretty our provides OpEx costs. our healthy and income. additional us. all contribute to COGS of to The a tightly, profit. us is op helping us so on going leverage manufacturing come that help We're And lower those in

Is And Okay. introduction, guys maybe there business in that was could math understand products trends on anything considering maybe coming give gain did is reformulation on helping about any you Any of interpretation saying a now. I No, yes, wrong so leading comment indicator guess any more your product also I insights new you're trends to what that regard? I around kind in you you understood. you're wondering new if there could share I customer of optimism share? out. mix that or seeing

a see think a -- me, -- seeing the lot food still pardon innovation strong because of just I -- we got... on you're focus lot and consumer service on spending focus I'v of

our economic also that's a focus feeling that's XXXX, I carrying trend, perspective, You hey, like, U.S. about and the think outcome, XXXX. consumers support the we you're -- the grab some then from and customers with of XXXX, right? an going where now actually at that trends behind our dire XXXX, little I'll to up, have soft what we some seeing that the going And has of and just some maybe of going bit of back emerge on their we can to that can still start around affordability, hey, so into I I with for that's a take since customers. obviously, -- front choices design think, but more a of maybe ingredients been landing piece, not With -- into affordability so and see in a said, of is it looked brand even in right? speaking wellness obviously, cost XXXX X So pack, always think

Yes.

focus into just the debt think where related may see shrink spending of offerings an a emphasized increasing and type from affordability lot solutions. again, clearly think dynamic to overall you're there. on on increasing Jim activity very to don't going ideation, see mobility of return consumer more affordability. of much and a consumer I A naturally, experiences focus you're we're lunch connected focus We're focus trade. standpoint innovation to healthful related seeing continued I on be And to going lot flation. that for continued just think on of food trade lot I service restaurant those a service a office, and quick to

there's think customers run been we're that's lot seeing its the what But course that working do and of overall I on. think briefs with recipe is formulation backlash. I we're a

with everything on our there's some make so we the from just world say, business, when natural, look, has around say, I always stevia it, been is And plants. is to to from we of nature customers that the would always underlying appeal ingredients. the -- authenticity work And on in a think Internet and right? always with ingredients consumers towards today's there's move I'd blogs undercurrent to and an Josh, always theme about

And still think trend is so us. overall supports that I that an

mega a and that's trend, a long-term trend. So that's

Yes.

For sure.

the a of last of the lot For well. news as is high-intensity seeing some something the studies attention lot that the and end based in with artificials sweetener a on high-intensity came the of natural out sure, the middle year that towards about space we're of

will question Adam Sachs. of from Our next the come Goldman Samuelson with line

cost manage is, and I trying just guys I and had make absorption and 'XX as destocking negative in about the volumes. first some fixed color, in very to 'XX, volumes, a I'm guess how So impact you sure that of decline to as given through kind what I'm high helpful you of organic single-digit thinking have bridge but think impact about the

get that's single-digit low cost well would And have a about still is off in there still just to ago. couple I'm Obviously, 'XX. increase trying fixed talking volumes a you in make absorption You're where of years charges been production in this in sure, -- year last absorption so your year, were Or the to outlook? your production 'XX so you're you in embedded you to ship place? the can right the capacity actually undershipping own planning that

It's Yes. latter, Adam. the

XXXX. think really our the to orders. looking I in ending point. volume tried manage at inventory goods the shipped nice really decline finished We order planning So in a did job team

on cost see part do are of order fixed cost think saw in improvement some for is think start So but that it, you guide which I like volume a think poised is absorbing our XXXX XXXX I look production cost a in huge that gradual volume we see to improvement, This bounce I our and lows, you volume absorption order we it, an as I versus at is the XXXX, order anticipate for this we not and XXXX. we like being is and characterized up. fixed and And back. we think -- nailed fixed that appropriately

guess what trying a to we thinking just make be buyback in the I the would then would proceeds divestiture it flow year be should plan excess juncture? that cash M&A at And not this average sense And you're by helpful. much which this that Or on wouldn't proceeds It if capital and just and the is condition count? That's minimum deploying of like really use there's not on back against? kind to this for cash to that, of might with into you why Korea. share question any be based I'm be kind coming placeholder buyback assumed a Okay. the the of year? at there seem ties allocate balancing hey, of

Well, that there we number Yes. of is at worked in I healthy terms on earlier of items M&A obviously, a as proceeds. are about kind in mentioned a as balance had and as, where our thinking we of ended the are though, cash There looking pipeline year. well is cash

years couple meaningful repurchases. execute our we that that's we going it And But proven to because shareholders. our able trade, we've always necessarily to we thinking. open when so as are we something have absolutely we to relationship don't very opportunistic, overall if will of right. they're That's look at capital the the to I last and that's repurchases in be be part making shares know And share and of return to accretive. time be committed to over and in will be going windows where share will that know we're don't when be on

Yes.

we strategy approach, and in in like textural our do solutions. But will those allocation would so. refresh, and the toolbox should done been solutions I you continue expand capital follow of what we've offerings say areas because we've So capabilities very and targeted purposeful we would to past healthful to clear think the for for our to about with I clearly, continue

I think continue emphasize, good earlier, be to the Adam, is So stewards will just we capital. said it's as but and I disciplined be other to thing act, balancing always a of

And in of mean dependent matter expanding you it on a as attractive help we we and have do on at have and as us to I healthful assets in and right, with either more years. And of -- rates to what terms point, say between buyer, Windows. after it's we ingredient X accelerate that It a X is probably to capabilities, necessarily focused opportunities I Yes. can maybe disciplined that solutions. that somewhat multiples our not are strategic to both I last been valuations right? in solutions strategy, our look or, Yes. opportunity look in do think want both. overall risk-free Jim's are now are textures the really they getting M&A -- that that's at upon than And in

today's to question-and-answer closing call That turn for session. remarks. Zallie to I'd concludes back like Jim the

next morning. joining to I our XX, us on the interest look in this thank to upcoming Ingredion. significant We seeing events investor [indiscernible] engagement want for you many I continued for CAGNY with your forward being of at February thank you in and everybody

conference today's call. you concludes participating. This Thank for

now may You disconnect.