Ingredion : INCORPORATED REPORTS FIRST QUARTER 2018 RESULTS

• First quarter 2018 reported and adjusted EPS^* were $1.90 and $1.94, up from first quarter 2017 reported and adjusted EPS of $1.68 and $1.88, respectively
• 2018 adjusted EPS now expected to be in the range of $7.90-$8.20

WESTCHESTER, Ill., May 3, 2018 - Ingredion Incorporated (NYSE: INGR), a leading global provider of ingredient solutions to diversified industries, today reported results for the first quarter 2018. The results reported in accordance with U.S. generally accepted accounting principles ("GAAP") for 2018 and 2017 include items which are excluded from the non-GAAP financial measures which we present.

"While we're pleased with how we grew specialties and EPS, North America performance was negatively impacted by a sharp increase in freight costs and fell short of our expectations," said Ingredion's president and chief executive officer, Jim Zallie. "As expected, EMEA and South America posted strong operating income growth while Asia-Pacific operating income was lower year-over-year due to extraordinary tapioca cost increases.  We have begun mitigating inflationary pressures through pricing actions, customer contract management and accelerating our network optimization and cost reduction initiatives."

"We expect continued growth in our specialty portfolio aligned with consumer trends and we are making capital investments to support margin expansion. Additionally, we continue to explore potential M&A opportunities to drive specialty growth. We remain committed to our long-term earnings growth algorithm to create additional shareholder value," added Zallie.

Diluted Earnings Per Share (EPS)

      **Totals may not foot due to rounding
       
*Adjusted diluted earnings per share ("adjusted EPS"), adjusted operating income and adjusted effective income tax rate are non-GAAP financial measures.  See section II of the Supplemental Financial Information entitled "Non-GAAP Information" following the Condensed Consolidated Financial Statements included in this press release for a reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP measures.

       
       
Estimated factors affecting change in reported and adjusted EPS

Financial Highlights

• At March 31, 2018, total debt and cash and short-term investments were $1.65 billion and $407 million, versus $1.86 billion and $604 million, respectively, at December 31, 2017. Cash and short-term investments reductions were primarily driven by the pay down of debt.
• During the first quarter of 2018, net financing costs were $16 million, or $5 million lower than the year-ago period, primarily driven by foreign-exchange gains and lower outstanding debt.
• For the first quarter of 2018, reported and adjusted effective tax rates were 21.4 percent and 21.1 percent, compared to reported and adjusted effective tax rates of 27.0 percent and 25.7 percent, respectively, in the year-ago period. The lower rates were driven predominantly by U.S. tax reform.
• First quarter 2018 capital expenditures were $95 million, up $23 million from the year-ago period, driven by increased investments in specialty growth initiatives.

Business Review

Total Ingredion

Net Sales

• First quarter net sales were up slightly compared to the year-ago period. Core and specialty volume growth as well as changes in foreign currency exchange rates were partially offset by less favorable price/mix primarily due to higher freight costs in North America and the pass through of lower raw material costs in Brazil.

       
Operating income

• First quarter reported and adjusted operating income were $197 million and $200 million, respectively.  This was a two percent increase and a five percent decrease, respectively, compared to $193 million of reported operating income and $210 million of adjusted operating income in the first quarter of 2017. The increase in reported operating income was primarily due to lower restructuring, acquisition and integration costs as well as operating income growth in South America and EMEA. These increases were partially offset by higher freight and production costs in North America and higher tapioca costs in Asia-Pacific. For adjusted operating income, the decrease was largely attributable to higher freight and production costs in North America and higher tapioca costs in Asia-Pacific partially offset by operating income growth in South America and EMEA.
• First quarter reported operating income was lower than adjusted operating income by $3 million.  Restructuring costs related to our finance transformation were $2 million while Brazil leaf extraction was $1 million.

North America

Operating income

• First quarter operating income was $143 million, a decrease of $15 million from a year ago.  The decrease was driven by higher-than-anticipated freight costs, higher production costs caused by inconsistent demand in the Northeast and Canada during the winter, and commodity pricing pressures.

South America

Operating income

• Operating income in the first quarter was $26 million, an increase of $11 million, or 73%, from a year ago. Volume growth, operational efficiencies, and a generally improving macroeconomic environment accounted for the increase.

Asia Pacific

Operating income

• First quarter operating income was $23 million down $7 million from a year ago. A lag in the pass through of higher tapioca costs could not be offset by foreign exchange improvement and specialty volume growth.

Europe, Middle East, Africa (EMEA)

Operating income

• First quarter operating income was a record $31 million, up $3 million from a year ago. The increase was driven primarily by specialty volume growth.

2018 Guidance

2018 adjusted EPS is expected to be in the range of $7.90-$8.20 compared to adjusted EPS of $7.70 in 2017. This expectation excludes acquisition-related, integration, and restructuring costs as well as any potential impairment costs. The full-year guidance assumes, compared to last year: North America operating income down due to higher freight and production costs; Asia Pacific operating income flat to down due to prolonged higher tapioca costs; South America and EMEA operating income up; an adjusted effective tax rate range of approximately 26.5-28.0 percent; and continued higher-value specialty ingredients growth. 

Excluding one-time cash receipts benefits from tax reform, we expect cash from operations in 2018 to be in the range of $830 million to $880 million. Capital expenditures are anticipated to be between $330 million and $360 million with the increase over 2017 expected to result from additional U.S. based investments.

Conference Call and Webcast
Ingredion will conduct a conference call today at 9:00 a.m. Eastern Time (8:00 a.m. Central Time) to be hosted by Jim Zallie, president and chief executive officer, and James Gray, executive vice president and chief financial officer.The call will be webcast in real time, and will include a visual presentation accessible through the Ingredion website at www.ingredion.com. The presentation will be available to download a few hours prior to the start of the call. A replay of the webcast will be available for a limited time thereafter at www.ingredion.com.

ABOUT THE COMPANY
Ingredion Incorporated (NYSE: INGR), headquartered in the suburbs of Chicago, is a leading global ingredient solutions provider serving customers in more than 120 countries.  With annual net sales of nearly $6 billion, the company turns grains, fruits, vegetables and other plant materials into value-added ingredients and biomaterial solutions for the food, beverage, paper and corrugating, brewing and other industries. With 27 Ingredion Idea Labs® innovation centers around the world and more than 11,000 employees, the Company develops ingredient solutions to meet consumers' evolving needs by making crackers crunchy, yogurt creamy, candy sweet, paper stronger, and adding fiber to nutrition bars.  For more information, visit ingredion.com.

Forward-Looking Statements
This news release contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends these forward-looking statements to be covered by the safe harbor provisions for such statements.

Forward-looking statements include, among other things, any statements regarding the Company's prospects or future financial condition, earnings, revenues, tax rates, capital expenditures, expenses or other financial items, any statements concerning the Company's prospects or future operations, including management's plans or strategies and objectives therefor and any assumptions, expectations or beliefs underlying the foregoing.

These statements can sometimes be identified by the use of forward looking words such as "may," "will," "should," "anticipate," "assume", "believe," "plan," "project," "estimate," "expect," "intend," "continue," "pro forma," "forecast," "outlook," "propels," "opportunities," "potential," "provisional" or other similar expressions or the negative thereof. All statements other than statements of historical facts in this release or referred to in this release are "forward-looking statements."

These statements are based on current circumstances or expectations, but are subject to certain inherent risks and uncertainties, many of which are difficult to predict and are beyond our control. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, investors are cautioned that no assurance can be given that our expectations will prove correct.

Actual results and developments may differ materially from the expectations expressed in or implied by these statements, based on various factors, including the effects of global economic conditions, including, particularly, economic, currency and political conditions in South America and economic conditions in Europe, and their impact on our sales volumes and pricing of our products, our ability to collect our receivables from customers and our ability to raise funds at reasonable rates; fluctuations in worldwide markets for corn and other commodities, and the associated risks of hedging against such fluctuations; fluctuations in the markets and prices for our co-products, particularly corn oil; fluctuations in aggregate industry supply and market demand; the behavior of financial markets, including foreign currency fluctuations and fluctuations in interest and exchange rates; volatility and turmoil in the capital markets; the commercial and consumer credit environment; general political, economic, business, market and weather conditions in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products; future financial performance of major industries which we serve, including, without limitation, the food, beverage, paper and corrugated, and brewing industries; energy costs and availability, freight and shipping costs, and changes in regulatory controls regarding quotas; tariffs, duties, taxes and income tax rates; particularly recently enacted United States tax reform; operating difficulties; availability of raw materials, including potato starch, tapioca, gum arabic and the specific varieties of corn upon which some of our products are based; our ability to develop or acquire new products and services at rates or of qualities sufficient to meet expectations; energy issues in Pakistan; boiler reliability; our ability to effectively integrate and operate acquired businesses; our ability to achieve budgets and to realize expected synergies; our ability to complete planned maintenance and investment projects successfully and on budget; labor disputes; genetic and biotechnology issues; changing consumption preferences including those relating to high fructose corn syrup; increased competitive and/or customer pressure in the corn-refining industry; and the outbreak or continuation of serious communicable disease or hostilities including acts of terrorism. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement as a result of new information or future events or developments. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of these and other risks, see "Risk Factors" included in our Annual Report on Form 10-K for the year ended December 31, 2017 and subsequent reports on Forms 10-Q and 8-K.

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CONTACT:

Investors: Heather Kos, 708-551-2592

Media: Becca Hary, 708-551-2602