Ingredion (INGR) 8 May 242024 Q1 Earnings call transcript

Good day, and thank you for standing by. Welcome to the First Quarter 2024 Ingredion Incorporated Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to Noah Weiss, Vice President of Investor Relations.

Good morning, and welcome to Ingredion's First Quarter 2024 Earnings Call. I'm Noah Weiss, Vice President of Investor Relations.

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

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

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

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

performance. record quarter results expectations against our first exceeded a Noah, you, quarter with everyone. good and last comparison first Thank year's Ingredion's morning, strong

of on Korea the taking in and As our of anticipated, the our net weather sale the business. account sequentially volumes sales shipments South the into impacts improved in extreme cold quarter despite U.S.

X, period. prior income at growth annual of adjusted from were X operating operating operating have for highest income conducive adjusted year-over-year, consolidated the X% over we can delivered the the top Inclusive X% the XXXX current current continue compounded annual see over you guided been an on compounded As still growth the net delivered profitability years. even was environment impact at the weather same better of cold rate the trend rate to profit of X, sales for history we at while company's the lower million. for period, the delivering upward last XXXX, in U.S. on second net and shipments, our sales it income of while not the Furthermore, the least Slide and years, quarter we been extreme range, end had have would estimate growth market was first quarter the of $XX operating which our

our let you me Starting progress update our on growth against Now with X business strategic pillars. pillar.

the resulted of in completed segments, for the the which first reorganization are which business we our we sharing quarter, today. reportable new time During

Texture we volume positive as and our saw nicely noteworthy, Texture confident growth we For demand we and Healthful of the increasingly in in distributors project-related feel Healthful regarding in segment. momentum for view in leading engagements Solutions, strong X, which XX% U.S. were quarter are quarter up year-over-year. Also Solutions the indicator up customer overall as from a future volumes and April

for sugar our the to Lumpur reduction We franchise completed in facility our capacity the commissioning PureCircle product Kuala expansion of our at support stevia have growth. lines higher-value

customers overall in from starch economic strong have making industrial North terms a indicator paper positive of of in demand a for Lastly, packaging recovery growth, seen America. we and

to will be February, cost our excellence. allocation used through competitiveness closed our of In The capital proceeds the from our we this operational to priorities. second sale divestiture Korea pillar, support business. Turning South on

During the also a we quarter, are savings CostXCompete. we cost which launched program, multiyear calling

end million in of program to of minutes. a target by I'll savings our toward and more advancing few highlight already are XXXX, $XX the We deliver this

manufacturing we machine footprint have notable Some initiatives learning the AI. across and a project our by CostXCompete to applying capacity include of undertaken unlock

In in savings. network efficiencies pursuit addition, to service and of we supply continuing excellence, warehouse our and optimize distribution chain, are

by the savings wins be through local strategies, by combined big globally-led to procurement our centralized cost recorded continue we results with Lastly, procurement achieved encouraged strong has freight team, execution. on which some

purpose-driven people-centric growth I'm and the that its with teams were deep integrity as report ethics Ethical Ethisphere time our the to we XXth of prioritize for our around award one reflects Regarding culture, and lead the who world proud commitment of World's across Most XXXX organization. by our This recognized Companies.

like to of would X sources a compared XXXX done through greenhouse investments jump lowering I emissions combination achievements, and electricity This is ago. for sustainability-related biomass a in big years from of team levels from purchased gas to solar by our energy. the XX%, for share to which XX% X%, has Regarding and renewable commend increasing only been

In volume our on like fact, to bit recent completion a the the quarter. conversion boilers at now comment biomass sources. I following Brazil XX% for needs all more of energy largest Brazil, trends of two of renewable to now come our from would specifically, facilities, in our in

expected to projecting shipments. Ingredion being growth in changing we our volume we and demand and a high in to has already is also syrup This in year, averages, extreme It constrained index was U.S. in a we inventories corn line. its quarter, distributor orders business As destocked demand that quarterly significant our texture customers graph in during impacting globally product the in illustrates reaction primarily and This the shown heightened quarters, XXXX this volumes evolving of for our excluding noting of fructose dynamics. our where XXXX we response shipment on a land, have anticipate in for is legacy adjusting worth have supply notable the gradual solid seen a chains. volume and and improvement cold volume XXXX impact the XXXX, the as portfolio. In weather upon a for transforming of in previous experienced changes middle April. pickup based to slide drop market material shown, are on if not volume

was years the Stock has the for of region New prosperity in accountability for listed on the we operating adapt Ingredion's a Our company culture growth, segments local previous long-term Exchange. results. to rare more ability will of be one as further is shift and enabled model. to accountability That in structure a reasons, and York to pursuit XXX be milestone deliver instrumental many our market-focused global are approaching which to continue will customer maintaining we maturing now strategically by ensured of

Our global X reorganization currently financial in ago resegmentation without the not possible operating have and been years model place. would

look the we believe forward, and will of create natural alignment segments geographic we new As market operational more the compelling synergies.

Dr. drive our Leonard be markets recognized to Healthful to taste go-to as on make aspiration, Texture winning President, will As Michael healthy we better, provider execute Senior Ingredion deliver as and our to announce the strategy for and join pleased Vice industry Chief that brings asset be growth I'm that Solutions both customers. which emerging Innovation Head Fortification Officer to and well Ingredion our developed and experience both and ingredient of broad and leadership May as companies, a multinationals tremendous XX, start-up in CPG high-growth Protein will XXXX. Mike with effective as

by at profitable as to $XX cost of As CAGNY, deliver efficiencies CostXCompete are consistent, growth. continuous to rate committed driving we million XXXX. will a savings maintain run means we mentioned recently

to Ingredion Vice come will have strong a pleased we announce also We up SG&A, will on continuous are change drive savings, built management. services as opportunity will that come over Bordeaux role, see from And Vanessa To continue to leverage focus a of our the positively President, internal effort, pursuing standardization, lead margin. We joined to which risk Services. and impact reported X $XX from which her continue in Shared that global years. past sold process savings In infrastructure in and cost we reduction show areas. with million gross million will our our improvement another expenses. operating that are goods controls two she shared significant Global will $XX to

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

and everyone. Thank morning, good you, Jim,

of to by when carryforward Net income million, in and but in and Argentina QX profit extreme weather in this cold slightly down of million the were down dollars prior XX% decrease XX%, $XXX income the sales Moving lap $XXX to for inventory versus cost driven than $X.X of The greater were the and resilient, year. XX% quarter of first decreased margins hyperinflation were operating gross the compared income higher and Gross the year. impacts Reported quarter U.S., billion, again our adjusted approximately remaining strong last the quarter. the was operating respectively. into statement.

in million decrease by positive lower price/mix $XX impact by Turning foreign net to $XX volume, partially sales in our million $XXX bridge. offset The QX million. and was net sales XX% in of a lower exchange driven

a South million $XX impact Additionally, from the exit had on sales volume. Korea

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

Solutions year, excluding corn of impact higher when from indicative was returning gas the come total was reflecting price/mix. was which sales X% balance texture Ingredion's volume the LATAM demand XX%, the flat results. company, in in last sales costs back is the net year-over-year prior year. pull by demand volume to U.S. Food X% South down Colombia, the the down impacted down Industrial the Price/mix double-digit and were which as Sales down partly through anticipate inflation net sales customer Texture XX%. and net XX% from year in and ingredients. for businesses primarily being was pricing Korea's sales by quarter, which for price the natural driven these the to volume for and reflected specialty of were Healthful Of primarily primarily were of of For corn timing sales note, we lower and during net Europe

U.S. Ingredients contracts. down to reflecting on XX%. and lower down U.S./CAN customer pass-through impacted volume was Sales reduced net production of variable sales weather. slowed due were was corn and The by Food Industrial Lastly, cold costs Price/mix X%, shipments rate

a favorable by Solutions the and were million, year constant to and of demonstrating Let our and mentioned a compared to currency Texture recap price/mix, an X% XX.X%, prior basis. and cost as QX operating income previously driven Texture $XX me segment down was performance. net higher of the turn margin on Healthful less Healthful I XX% down OI of carryforward sales inventory.

the to for constant impact be Argentine and from driven as Industrial venture LATAM and well on improve down of down the operating year were million OI higher net was year, last full XX%, on and and year last XX% the slightly XX% costs. of an primarily by Industrial Food basis. joint margins sales a devaluation to currency LATAM, peso utility OI X% our $XXX XX%. In income as the expect Food Ingredients between We down margin with of versus

We margins XX%. XX% be full the for and expect between year OI to

and was up XX%, of $XX slightly costs, down material XX% costs Food and largely of was Moving U.S./CAN, to by ingredients operating renewal quarter. The to U.S./CAN last OI million, downtime versus quarter. and Industrial Industrial sales higher margin weather with tight U.S. the multiyear an for Food net management income fixed were offset raw cold due with driven extreme in improvement contracts by the customer of associated year's

We full be margins this segment XX% to between OI and year XX%. for expect

For was other operating improvement fortification was operating driven All the our driven better all XX% for quarter, $X by ago The other by the other, largely net loss $X from sales South exit the the of lower period. million and of business. for factors. overlap Korea protein by decreased loss minus million, year a

loss Our for to reduce operating other full by year is X/X. outlook all the

Turning to bridge. earnings our

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

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

an Moving to financing per of share, $X.XX increase We $X.XX had items. lower share. driven per of by nonoperational primarily our costs

cash Moving to flow.

pace for income working was from and million. expected. from First $XX Cash pulled slightly consistent the greater than expenditures year. operations were we capital lower-than-expected in million, investment in from our capital $XXX below expected net benefited inventories operations investment U.S. quarter cash Net as from the of

the paid quarter, in shares. dividends and out common $XX repurchase we first During began outstanding to million

forward, our As be: priorities allocation investment. organic we capital first, look continue to

our of M&A shareholders cash share dividend; strategic to repurchases. third, deployment into a and Second, through and return

outlook Let XXXX. to our turn me for

through layout, the to quarterly the for impact that is full which a we that Before costs is normal will a means through as model customers. XXXX will should we and raw worth fee-based guidance, the of for see to the in go business we it few witnessed material the expectation lower shift items supporting lower factor gross go we pass a price/mix businesses. be XXXX This Last year as a updates remainder our the margins we cost along through noting corn year, to year. our cadence

in gross in reduction XXXX, ton the continuous and a growth, we sales margins. For volume balance COGS of anticipate improvement per

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

cost range $XXX are now to to of We reduction debt with the levels financing outlook of decreasing our the and in million. see it million overall $XX align

Korea $XX For XXXX, full year now to reported its the to an an $XX.XX range to million gain effective and year expects South from of the business. sale tax to reported EPS we $XX, adjusted now of in of of the XX.X%. effective And full expect XX.X% rate XX.X%. The our tax includes rate company XX.X% which be

in of $X.XX. now year, full be the the For range to adjusted to EPS $X.XX anticipate we

weighted outstanding between not of year to diluted be balance million million shares, shares does We share repurchases. XX expect which XX reflect average and

$XXX in seeking $XXX are line and able been for costs and cash be balance mid-single to are second expected to million, to be have We of $XXX year. million buy buy capital in shares expected up the XXXX range to to million. Corporate be in guidance. to from to expenditures operations the XXXX's the digits, previous anticipated back with is comparable shares approximately of the quarter are repurchases

on to to have to to Jim. second year-over-year appendix, XXXX and For my I'll we a mid-single comparable and and full XXXX, estimated the digits included outlook the concludes our anticipate comments, of low be quarter In up basis. XXXX. That income net single segment low back we to sales digits flat, be operating year hand down a to

Jim. favorable to distributors believe Volumes with throughout along now momentum we we of behind with These you, than in of with for replenishing destocking Thank the improvement their are seen Based have months. us. inventories of and our market revised well our increased innovation the evidence along fully continue remain outlook, engagements positioned another continuing performance, we more on quarter drive growth headwind first customer trends, with to XX last show year XXXX. conditions

led the working from start We strong flow benefit with years. impact of we demand cost in to see lower During see the costs in corn quarter the improves as this in starting improvements quarter, of quarter operations. to continuing to cash the of X. another meet gradually our capital Also, margins and financial CostXCompete profitability. $XX next meaningful provides at X another This positively long-term overall us least lever with delivery million commitments will savings and over

continue of we cash will highest to ahead, in well offer that shareholders. invest Looking use as to strong return capital areas growth position as our the to returns

Our the aspiration, are that strategic about initiatives winning excited our opportunities with aligned we and lie ahead. are

call open Now for the let's questions.

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

million were remarks, not so. I or first strength given year, the it'd the So door, with share prepared heard of get I in guess from looks flow, clarity proceeds tracking point. the end think Jim the repurchases capital the trying by $XXX to why Xx level last closer better this maybe like a the which cash the are company's your the of consistent in Korea, just year question higher free on to Gray, allocation be divestiture the which for leverage, I I'm net kind year. of on which

why outlook? in step -- where that. Or frame of down us the help phrase implied leverage by Just that kind kind us of help

Yes, sure.

when cash it's the Korea some look at And of strong. position and balance, always looks QX, proceeds company from the of right? think of obviously, end I the a now, the we with

term we're they're position the always It to prioritize going those. to Healthful year. sense. in we're we've accelerates to that Texture medium- make just of million as I seek has investment then our So and that capital than for necessarily share going to been play our going But to where the be look through returning some up shareholders rates or solidifies are those the therefore, either confident markets to organic if we think at attractive does repurchases $XXX and or solutions returns that stated shares back long competitive say today, higher being that least solutions priority. And buying always a for M&A

balance, close I back to and pick $XXX say, come now, million of a we to pretty think, but it's confident we to really like So Adam, right as repurchases we're up XXXX. share finish

Yes.

investment I solidified. think, the our M&A across repurchase is -- with between in this obviously that what growth we on organic time, being it the the capital at based dividend for opportunity see Adam, view current and point opportunities, balance share

have. if we moment So the share those there we And that this I that's value changes, in be are same believe currently, not be in And view go of it's year. intrinsic repurchases at the as forward evidence year. amount updating the viewing the insignificant we're company amount the that we time. we of to throughout it it's last as think an with certainly But opportunistic in how will any

just could trend And on the follow-up a maybe ask side. I volume

strength commented kind of out? return want to framing I to clear, that kind is of or of areas that on category just any be You the call reporting could now units to region continuing customer three you April by growth. or particular kind of to trends across

is in down generally trends. April. starch view corrugating. category, with a activity. we starch for food as strong, sign industrial certainly on historic see That's and volumes line again, specialty starch economic the Sweetener throughout been -- the commented was increased think the exceptionally gradually a XXXX. but modified were We in That volume I papermaking hopeful starch improving we, category, solid of which bit,

quarter sales much. And for were XXXX pleased volume in uptick prior does mid-single-digit when early herd to January but China say China volumes compare anticipating double-digit pretty 'XX, we're it was in large, with year's in also immunity also to of that recognizing 'XX into New noteworthy at in this we year. the December ingredient growth China Chinese it's went demand for that Year so And with for of quarter,

So down volume of significantly in then -- were that. to price well. China, should And also see going the as be but encouraged come very corn forward growth has of which we supportive

right we're at I guess, how now. world across volume that's the So looking,

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

you I guess, said the of And exceeded quarter The guidance. put ask first about just comments first wanted one, couple to the I if a expectations. your together, I your

You're the you and then more texture have cost volumes confident also saves. the now in

I'm you're there how you why up about year. guidance dynamics. bit. the approach think given a Are it's I the curious But curious and of just guess taking only So recognize other load guidance in the to the little early bit offsets any a those

I appreciate in Well, year. Yes. early the it's that appreciate you that

lapse I think as earlier, have what the pretty of beginning we year, look from volume the that easy we at announced seeing in QX. was at the last that CAGNY and both year, we businesses the is, are depth of particularly some

So volume Jim we're confident mentioned, absorption. fixed cost our does pretty as help I around think just coming that back,

that's what customers volume they're of caution And think, customers, I op between key we that European the income in and really just watching terms they're growth, managing underpinning the through positive demand. would I of innovation and price, particularly think on in how impact U.S. how so so really, unit that side be an less the would managing maybe of have has terms

is still what low probably the And say the digits. would so end seeing in the gate, in of U.S. of digits, I'm I single maybe mid-single the out of pricing in they're that change high kind

not basket. really going little in on the bit so just be demand grocery cautious doesn't just And consumer a accelerate whether I'm that or to

So see we to want through. come that

think you some for example, seeing quarter an it unit the see be would are the pockets, wouldn't in necessarily we like, scan volume. fast-moving of we kind really condiments good was in of first think some that data give improvement you the healthy from a year-over-year. example, of for But I I'll the condiments that

here. signs are there green definitely think of I shoots So

can "hey, that Andrew, though in -- chains are terms X-month have still our freight, you business on have other prices? cautions is, we is some third I period. that it Those turmoil, availability. I natural of there. And you would global can some political radar. do think gas, any two impact that oil over does the our ocean always any supply an -- what of Even in in always and energy impact have those have on just changes think kind we warfare" our hedge disruption cause can freight disruptions are a of to kind what's And X- then -- have

on And guess digging bit helpful cadence I'm really I plan. coming That's just question cost that savings little get next does fall that the the should most to just over color. my And of reinvested? curious think X that through on how is in bottom second a more the the where Or Okay. color course a the And then comes years? about of into little of of Maybe exactly line? we it assume from? any

a Let pick me take And up have a And framing just a on a this. shot comments. then the you on track you of just good program Jim, we it. can Obviously, pretty delivering takeout. cost record at like initiate reminder, when

we million, a the back a million. million target program, it at of up $XXX sun Going set inception little set originally which ended $XXX in $XXX which raised delivering Smart to X-year was of call it XXXX. in XXXX, We and Cost to what that north

CostXCompete So million. And those and hiatus programs, couple ramp with at now savings. up a years, they with $XX for typically, of

to able over XXXX as real opportunities look that, opposed we so So but delivered our But 'XX. in the savings. be related of will And share meaningful at will accrue of there'll the come SG&A as there a savings XXXX substantive cost as more more will to area. that the to across will have of that we'll footprint also more more in million savings well. And be 'XX COGS information time $XX amount into so be

aspiration and we want Now winning what is healthful do texture our solutions solutions. clearly, be provider the fulfill for to to go-to

us the promise capabilities to to data example. measurement for enable And to comes investing like customers that capabilities to so on when be science, for management, in we strategically deliver texture sophisticated are you and things going need sensory that it going formulation that are

So those invest we are will some of in. the things that

is that of some you some However, color year well. Jim, as to our process factored starting want into budgeting already on of this that? some do add

your think is savings the look our net manufacturing able So we're this trying wage will where -- regions. And will dampen actions we event-driven called inflation then X us effectiveness, increase chasing have to kind want wage I can to have to the that right? that year-over-year get company on say from I right? And be obviously, after having expense and segments to is SG&A COGS, incur that our make this think various overall are the inflation to rates inflation always kind Andrew, reinvest. select do just some But you'll to within and just -- year. program pay already the do things rate. company, every which Yes, as of of then of an get be after we at some that -- network. in we allow stop always choices you a now where annual do to So see change dampening we global dampen structural where manufacturing greater to But trying and we of CostXCompete doing of of organization you efficiencies change, what need now is we're -- has X to market year-over-year rate tightening that what we we're X versus because that, also every and

our So goal. that's

Our with next the question Stephens. of Bienvenu from comes line Ben

maybe first or Wondering get guidance, take, tailwinds. year? or that Jim And piggybacking start question into kind Gray, impact how the the you that of the the shipment think another of million Or kind of you the Does posture that into as guidance. on put quarter comment lost as the is with you Is on Jim to made the figured took EPS. a that $X.XX, in sales? Zallie, that $X.XX $XX on in deferred $XX year, solid from around Andrew's about volumes. quarter million just second weather and later about that some

Yes.

make me So let a comment. quick

segment, we've what due we we support -- Texture impact impact was and of cost our of the was plants But the now And did the also well and our of we we It again, we alone, to but onetime to of quantified lost of opportunities Kansas to quarter. we and very and it, that some felt hard quantified plants obviously, there, the the India Jim. Industrial cold a degree very experienced Ingredients how of, did also so during greater predominantly plants rail because those and we've estimated was The absorption And had were -- Healthful plants that of that there. impacted idle larger -- the this we're runability production in $XX due under impact the fixed as and were of X that not were extremely impact in catch lost demand in and deliveries X/X running than X/X but million sales. about trying in period. are few were U.S./Canada, and impact. And Food Just frozen and comprised at But at City challenges and and for kind it January, to segment. was there, weather a opportunities many truck that's was which its were the our Midwestern that and we've those demand that impact weeks up. that's how impacted said

Yes.

of up. be from But impact little kind we the will QX, order help of that at look to QX absorption in a will the caught rebuild as we of due to of some and not lost in run of sales X/X the in our levels, some to continue fixed the QX in fixed some cost then So under as cost inventory QX. bit absorption terms

various segments. is your just there's tell to these segments Recognizing of your relates some to I do historical kind you data. limited of next as My the One, expect question related what Very Okay. it business new good. kind of kind to questions. reclassification and story have your two focused way of segments? monitoring And you versus performance And of be geographies? historically why how you did, two, -- on thinking guess? the did and think kind strategy segment as being long-term I the of segments them should new we these about you then

Well, It where take for I it's from context a an -- overall of organization. shot headed you of strategically a and know standpoint robust. yes, very as then very helpful the Yes, question let is me why thank question, a we're of

It all framework. of you company-wide first basically what maybe starts enabling very throughout your talked win, it's must-have XXXX, haven't play, have? undertook a with management simple to execute. need So And is your strategy where about to a to of are we something how all, we lot do understand. capabilities refresh, the a winning aspiration, play-to-win leveraging systems what that And is to what to framework enterprise-wide, then

is in of are for et more our and our can fortification global these looked there mega the segment. -- texture framework. And when in fiber well that obviously, the then us will solutions example, the our And sugar to of play-to-win. depth terminologies terms, a very and could organization, of category in leadership to customer that the became global to with talk protein solutions, in given trends and China descriptions solutions a as trend felt health, then So comprised relevance. identify that about, and in that we in that reduction be areas it simplicity market us really provider Japan, we XXX And platform comes wellness for be customers, for quickly texture global healthful afforded many are complete much with at XXX a expand texture and of continue upon it when to areas very it that specialty solutions. And and how the cetera. to whole of starches fortification clear are breadth in there we We base, precise position

so bulk form, So the the that wisdom sold liquid there that products was in behind transport typically logic sell with also, we they that. And or or then in internationally. -- liquid not are

to that to plants customer most a comes it supply of network lend key global the so of more organizational trade-offs to we when making accounts global And on friendly. behalf be structure themselves

business, to about talent that Food was having them, and and we also X% quarter Brazil with position businesses we joint America LATAM And to just management felt made our Mexico course, call delivered now, the opportunities -- Canada, we a despite which typically from and in to grow. a of tremendously part before. the different we natural again, was And that HFCS, Industrial our growth USMCA to have in venture capital gross one for compelling similarities some across platform, And sales where our Argentina, organizationally remember, and that we related a Ingredients this alignment. Similarly, is comes but decisions and in excellence, frame. it the U.S., support Hispanic slower that, leadership our market that what only and in because profits. operational slower sense. When record solid take way, position felt wanted strong a of businesses there growth lot the a percentage capital by of leadership that just quarter. facilities language industrial between change position was a strategic India make made we identified, continues cultural another similarities lower our natural to of of North And the very will cultural geographic some reliability are past us Mexico, that you're and categories then more that the starch more driving Mexico we've to that market of now being decisions and of that So those

improvement point also was which operating the is to million Industrial margin contracts, quarter, last really by associated, about -- income up talked XX%, driven The largely and of this NOI we've management from was higher was weather. and raw U.S./Canada out, what's Food material again, offset $XX customer that this multiyear to costs this by though, extreme before, an with interesting I for quarter. the tight fixed year's do with business slightly have of Now and costs,

and quarter Food would not been the operating weather Industrial sales to close for business So have if been for segment, Ingredients, that income point out it's had interesting impacted have that unit. to volumes that been it up would and the flat extremely U.S./Canada for cold that

appreciate we generator, executing as we and attractive growth the margin Texture which that, a cash stability fully it, don't unit excellence the really has a that business for in segment. using obviously Healthful health a really really profile, Solutions operational is the again, will it investors very if to there and and our So which be know fuel of running

Sorry, play-to-win it's a the gives framework. some things of little of that we bit long-winded, strategically out the genesis it, which you about but hopefully, context on came thought in how

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

to one I'll be up, going but my here. tough That best to do is follow

is first flat The sales net clarification single just guide, the digits. actually the have low a question to XQ down on I

was there. that So business. the 'XX? remind the business Just we've with right you in XQ us comp SK is can what us that help SK excluding got And

excluding but it we'll up be that. think Yes, you the Korea clarification let a I business. that's to me on that. that, follow say around $XX with going want million, that is I put to And out South on the

Okay. Perfect.

KPIs to but then about whether ask ton. So track, ASPs granular per those or of a did we sort want I should follow-up it's what revenue about previous the resegmentation, are, think how or more to

core Just be are helpful for higher and would to higher cash business. that sort how specialty of us guys reorientation of through for the you're these the that margins, paying of to we're to? about growth this count proxy getting the with watching areas nature you KPI But the think value be what's the as some watching appreciate uplift attention that

Yes.

With three in intention that our new XXXX. segments we the of primary be required be segments, an part that for have to will gross also reporting right? I margins, think the So disclosing

a to changing. work historical, how going our perspective we're we lap margins are XXXX through the have of better the and gross As

is So midst work nearly team right appreciate of us working historic and all think the doing XXXX look I that my we're that Healthful XXs well see well to as going the XXs. margins you'll lines product in Texture in there's as into there are gross the that Solutions high the have of we But as is the in to that and there. get forward,

gross we've reflective We growing think we But price CAGNY at strategy, $XX look terms well digits. the paid. are to margins those spoken make market ton in for the low texture really part least talked then So and mid-single the occasion And of customer to the it's we the value pull. talked grocery play at at that of about as billion. of maybe eating our and single urbanization, convenience the about demand as shopping the digits, almost pull we've experience the also, easier, we've in higher globally, per

for based. may world always to sales sources those we're in either that from how when Food Healthful at, going pull as we to things have our we feedstock, to should will volume but important Ingredients the have, that us inputs So us this you either and and the KPI infrastructure "hey, but about think is itself, supporting highlight syrups," the some for glucose the positions that's to wonderful think like, think, all also look volume or sustainable business we on a of have see talk I already previously product have the we solutions. categories. And think looks petroleum very because do while think And we to and That something I look chemical confectionery is also growth Texture then I sustainability Industrial that we some been built. us. And competitive be broader

output, how the maybe our that think I stabilizing in then wet and step of growth. at opportunities slightly revenue but growth for changing some some we revenue might trajectory there's direct in change us a looks mill way to take

-- be disclosing gross much with we'll we well level very clear margin. start will we the terms margin we'll go within on profitability that Kristen, want years. on top ranges, really segment. as and in as of through OI the through focused volume, to be we're as of So line work we're growth That the Today,

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

Not there's asked, volume better. a understand lot on to regions. much And the has that a but wanted bit I bit a just left, the things of follow little up been wanted to different one in little the

food out just of strong. Mexico decent mean, volume we've reporting seen companies I obviously beverage being And You in called and very the performance region. some the very

corporates of very had. coming from Brazil some doesn't results We strong. align kind X% It through volume had you that with also minus

I just guys. to engagement negative from understand wanted customers America seeing is to to buy you sequentially And you're product as that of destocking with much So that Latin what in impact? overhang, that the your how again still

Yes, for the None. Ben, question. thanks

in So a literally, Colombia. had we significant customer

had volume every some a such The them obligation We to have for management. they full throughout There's it's was channel. volume. just for And an kind kind them the contractual take it exclusive volume load to the budget/demand They arrangement a of how that needs unexpected absolutely customer year. is on The kind an take the with their it. them. of intention of

Jim, entire the customer X% historically obligation met in the for decline. calendar full of years, but they that never in not always And contractual their volume, a But we've have did in seen unique year not prior but if the that, and seen this it past obligation. have year LATAM in quarter there was any all is pull that

have just been volume down. would Sales slightly

Yes.

very to -- for very out, it. there's pick that a observation unique it's and astute So a on part a good it's your explanation

were and Healthful flat and to ultimately Texture And good. reported as Very that expectations that within range it Was that Or be the what's then just your for volume. by during expecting it Fantastic. of a to like in expectation quarter already like bit happened relates you been these situations quarter? better impacted little solutions weather maybe had then related. XQ, that you adverse got some but the the in

Yes.

a then color Let it some little commentary. and at Jim me let take shot add bit a

the necessary. corn costs we the specialty at happening levels call in that XXXX, were pricing as them gas And a types these, as run-up was some the the of And strong very what inflation on of to now all, you, segment to double-digit exceptionally prices is X extraordinary time pricing defined of moderated performance reaction natural quarter first Texture really and that and we was for to Healthful achieve So in I natural Europe. really able reset just XXXX. strong in enter there was Solutions, newly were remind because exceptional to would that in was

to X for absorbing year still in corn make-to-inventory specialty were X it to the that's inventory the costs value some items due is from margins months work XXXX, new into through for costs the impact, newer changes investments lower is carried capacity the typically we recent and quarter growth fixed inventory, to inventory segment we business, early expansion addition takes in however, stage lower just will noteworthy years. other typically the as higher this that move costs. And pricing which thing in carrying compressed these a of segment through XXXX to the is made over and of because this X the In cost reflect normalize the as

capacity specialty For capacity specialty example for China starches and our starch Mexico. more than and expanded Thailand in doubled we in

to that very So we perspective that it's put a of obviously, are and of the Healthful we helps combination of the Texture health that support but to have this position really winning customer aspiration, bullish, all in around on growth. the the strategy that, Solutions assets world quarter, and and hopefully the

Yes.

look within at basis, unit -- retail, down down. question volumes X% were at the seeing unit near And 'XX texture lap mean, of if volumes got the we look, grocery I think least not for in I into a Ben, really, It -- heart of type obviously, that last is stepped mean on the QX really volumes. and of products as then I X%, well, your we U.S. are uptick. scan volume is from you QX year

customer Korea think are to that we net Kristen's want for of QX, do seeing X% year segment that -- we're million. about I on that pretty And kind $XX question just last takeaway. Can so good. definitely the was solid I respond pretty we seeing we're advertised broad to that so sales sales is feeling volume And

everybody. record to just for on So that the put one

Spector next comes line Our Josh with from UBS. question the of

diverge you you're time of any of of to driven kind about to as of kind sort the to business? SG&A kind being And Lucas texture the Health of Beaumont so was pricing there? of sort allocating and that the is Josh. I across scale benefits This sort Food transfer why get to the would Is back I by in below curious expect just over of how you Industrial. Texture resegmentation. or are that of further that on margins for the wanted go segment sort expectations

Lucas, of that dead kind on. is

it alluded XXX costs, able need, the and And looking to XXX margins SG&A marketing does than a capabilities people and Healthful the as solutions And gets as a basis to has segment, Solutions gross higher higher sales customers carry we for. those Texture least the by the it that proportion be to. of So capabilities, solution are are businesses other that insights the lead the Jim to selling, points. at global scientists, technologists, with food our really also those

or so like to kind that may carry the and of in you to similar a reflect do capabilities in And see the a a the do that business that's And that's much some as competitors line and support Healthful the of Europe we fragrance need that operating and get expect model business Texture that. that business, grows, of to type flavor we top the our leverage operating solutions. competencies out percentage like house in model of sales this expense expense have as may SG&A people more

that getting as early which allocated on of And are business. obviously to investments far made as the I innings highlighted that also, Jim, capacity we've -- we the are returns investments, early-stage we in that the the cost-wise expansion those

bit one and when just amortization acquisitions, I Yes. acquisitions in. We we keep do And know we any -- then little note, tuck-in that the a But maybe, newer. of team intangibles. since those is Lucas,

out call adjust or those So we out. don't

we've well amortization Solutions segment. into that fall past really so the now some is that against of the there some and have as And Healthful done acquisitions Texture

Right. secondly, I just to cash ask of wanted then year. kind about during the the phasing flow free just And you

the minor a first of is year XQ your got XX% target a full sort quarter. typically, in of contribution, So or use but you already

progression here mean great. how the moving in I just you But the being through working be as factor. the a capital called us you through if see out that walk would year, kind you of So parts

out January, we inventory and things out of that think I And pull sure. cold had Yes, we the more sell in inventory. because that out weather called one of to that of the was of really

we're some I that we to should going building of be So that back be see -- QX, do in QX. inventory

balance a kind So in payable. accounts raw generating a shift full then QX, kind between QX, working ops well bit more where watching of in how our cash investment I'm capital. just of with of as think is have what working broadly, bit smaller our that through might timing working receivable traditionally, QX. And really seeing materials the QX a of you balance accounts terms for in from capital seen I a more year, as sheet, we're are the

globe. of so where bit accounts from so leverage rates And still we not our financing With suppliers some may payable our different some in think we've advantage right now, had that. a of and -- traditionally, see types the short-term programs of nice taking around elevated, farmer I partners

So little I'm QX. between But might a bit just a thoughtful year-over-year. the think, I that's QX, -- accounts thing, timing about primarily leverage what payable it's QX, be

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

but So I to make hate correctly. understanding the Korea question, this I I'm belabor to just sure South want

mentioned billion. QX $X.XX in 'XX so South adjusted of you So base roughly $XX Jim, of with million that Korea an revenue,

the $X.XX so low to it's And single flat digits, the off that billion? of down base of

yes. Approximately,

And adjusted be OI if that it Korea? base, mid-single that digits. about QX talk to low of be off using? you when excluding the what's up then we the base should And for Okay. to Is is,

Correct.

that be to $X million Korea of between is of were they depends year. of OI. going on each kind in that's kind probably for that -- approximately, terms It I So at prior would Korea $X million say be to where anywhere to would quarter the of

we follow So on up at can OI where I from about that's can we But an we're basis. do, approximately, what that. think

then going into you carryforward to is understand that lingering QX? cost some the the my if high QX wondering And second Or that question that. completely about on texturants But back through could Okay. in behind going worked is dynamics the and question is inventory there business? into -- effects

through worked X. be will quarter that amount small in Very

now, by higher most through are the inventories system. the cost the for part, So

say Jim? You so, would

Yes.

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

for all continued you morning. right. thank the Well, on forward upcoming joining All you conference York New We look I Ingredion. in BMO everyone XX. want May to thank seeing in interest of this your for And us many to at

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

disconnect. now may You