Ingredion(INGR) - 2024 Q2 - Quarterly Results

Financial Performance - Second quarter 2024 reported operating income declined 4% to $240 million, while adjusted operating income increased 8% to$ 270 million compared to the prior year[1][10]. - Reported diluted EPS for Q2 2024 was $2.22, an 8% decrease year-over-year, while adjusted diluted EPS increased 24% to$ 2.87[1][4]. - Net sales for Q2 2024 were $1.878 billion, a 9% decrease from$ 2.069 billion in Q2 2023, primarily due to lower raw material costs and lost sales volume from the sale of the South Korea business[1][9]. - Operating income for Food & Industrial Ingredients - U.S./Canada increased by 31% to $105 million in Q2 2024, driven by lower raw material costs[15]. - The Company's gross profit for Q2 2024 was$ 446 million, reflecting a 1% increase from $441 million in Q2 2023[30]. - Net income attributable to Ingredion for Q2 2024 was$ 148 million, a 9% decrease from $163 million in Q2 2023[30]. - The Texture & Healthful Solutions segment reported a 5% decline in net sales for Q2 2024, totaling$ 588 million compared to $618 million in Q2 2023[34]. - The Food & Industrial Ingredients - U.S./Canada segment saw an 8% decrease in net sales, totaling$ 555 million in Q2 2024[34]. - The company reported a net income of $368 million for the first six months of 2024, compared to$ 358 million for the same period in 2023[33]. Guidance and Projections - The company raised its full-year reported EPS guidance to a range of $10.20 to$ 10.70 and adjusted EPS guidance to a range of $9.70 to$ 10.20[1]. - For Q3 2024, the Company expects net sales to be flat, with reported and adjusted operating income projected to increase by high-double-digits[19]. - The full-year 2024 reported EPS is expected to be in the range of $10.20 to$ 10.70, while adjusted EPS is anticipated to be between $9.70 and$ 10.20[19]. - Full-year 2024 net sales are expected to decline by low single digits, reflecting lower corn values[19]. - Cash from operations for full-year 2024 is projected to be between $800 million and$ 950 million, with capital expenditures expected to be approximately $340 million[20]. Debt and Cash Management - Total debt as of June 30, 2024, was$ 1.9 billion, down from $2.2 billion at the end of 2023, while cash and short-term investments increased to$ 510 million[5]. - Cash provided by operating activities for the first six months of 2024 was $521 million, up from$ 279 million in the same period of 2023[33]. - Cash and cash equivalents increased to $505 million as of June 30, 2024, compared to$ 257 million at the end of June 30, 2023[33]. - Current assets decreased to $3,099 million as of June 30, 2024, down from$ 3,399 million at December 31, 2023[32]. - Total liabilities decreased to $3,442 million as of June 30, 2024, compared to$ 3,992 million at December 31, 2023[32]. - Retained earnings increased to $4,914 million as of June 30, 2024, up from$ 4,654 million at December 31, 2023[32]. Taxation - Effective tax rates for Q2 2024 were reported at 34.8% and 25.4% for reported and adjusted rates, respectively, compared to 25.1% and 28.3% in the prior year[5]. - The effective income tax rate for the three months ended June 30, 2024, was 34.8%, while the adjusted effective income tax rate was 25.4%[43]. - The effective tax rate for full-year 2024 is expected to be between 27.0% and 28.0%[19]. - Adjusted Effective Income Tax Rate is projected to be between 26.5% and 27.5% for 2024[47]. - Tax provisions related to the Mexican peso's movement against the U.S. dollar resulted in a tax provision of $10 million for the three months ended June 30, 2024[39]. - Net gain on sale of business contributes 1.3% to the Adjusted ETR[47]. - Impairment charge negatively impacts the Adjusted ETR by 1.0%[47]. - Tax item related to Mexico reduces the Adjusted ETR by 0.5%[47]. - Other tax matters decrease the Adjusted ETR by 0.2%[47]. - Restructuring and resegmentation costs are not expected to impact the Adjusted ETR[47]. - Other matters have a minimal negative effect of (0.1%) on the Adjusted ETR[47]. Strategic Initiatives - The Cost2Compete program aims for$ 50 million in run-rate savings by the end of 2025, with $18 million already realized[2]. - The company increased its ownership in PureCircle to 98% as part of its sugar reduction strategy, supporting future organic growth[2]. - The company incurred a pre-tax restructuring charge of$ 3 million for the three months ended June 30, 2024, and a total of $6 million for the six months ended June 30, 2024, related to restructuring activities[39]. - A pre-tax gain of$ 82 million was recorded on the sale of a business in South Korea, completed on February 1, 2024[39]. - Non-GAAP adjusted net income for the three months ended June 30, 2024, was $192 million, with adjusted diluted EPS of$ 2.87, compared to $156 million and$ 2.32 for the same period in 2023, indicating an increase of 23.1% in adjusted net income and 23.8% in adjusted EPS[38].