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    Ingredion Inc (INGR)

    Q4 2024 Earnings Summary

    Reported on Feb 18, 2025 (Before Market Open)
    Pre-Earnings Price$134.73Last close (Feb 3, 2025)
    Post-Earnings Price$132.00Open (Feb 4, 2025)
    Price Change
    $-2.73(-2.03%)
    • Ingredion anticipates mid-single-digit sales volume growth in their high-margin Texture and Healthful Solutions segment for 2025, driven by customer wins and expanding demand in regions like Southeast Asia, China, Europe, and the Middle East.
    • The company expects improved profitability in their "All Other" segment in 2025, supported by growth in their profitable Pakistan and sugar reduction businesses, as well as closing an unprofitable plant (Vanscoy), leading to a $10 million profit improvement. Additionally, their protein fortification business is steadily improving and aiming for breakeven profitability within a couple of years.
    • Ingredion's robust hedging practices and local sourcing strategies reduce their exposure to commodity price volatility and potential trade disruptions. Their extensive hedging of corn costs and co-products mitigates earnings volatility from corn price changes, and their strong local manufacturing presence in key markets like Mexico and Canada helps insulate them from potential tariffs or trade barriers.
    • The company's 2025 EPS guidance has a wide range, with the low end implying just about 1% growth, due to potential headwinds from currency weakness, higher corn costs, and softer co-product values in Europe. This suggests that earnings growth could be minimal if these challenges materialize.
    • Growth expectations rely heavily on the Texture and Healthful Solutions segment, while the Food & Industrial Ingredients businesses have lower volume growth targets, and net sales in LATAM are expected to be flat. This indicates a potential over-reliance on a single segment for growth. ,
    • Currency fluctuations, particularly a stronger US dollar, could negatively impact growth in key regions such as Southeast Asia, China, Europe, and the Middle East, affecting the performance of the Texture and Healthful Solutions segment.
    MetricYoY ChangeReason

    Total Revenue

    +81%

    Q4 2024’s revenue increased from USD 1,921 million to USD 3,483 million largely due to an expanded business scale compared to the previous period’s lower base, reflecting stronger demand and improved pricing and mix dynamics that built on trends seen in earlier quarters.

    Operating Income

    +87%

    Operating income grew from USD 202 million to USD 378 million, outpacing revenue growth. This suggests that the company achieved significant margin expansion and cost efficiency improvements—benefiting from earlier initiatives and favorable cost management—that amplified profitability in Q4 2024.

    Net Income

    +62%

    Net income rose from USD 139 million to USD 225 million, indicating robust operational performance and cost control. Although the absolute gains were slightly lower than those in operating income, improvements in underlying margins and cost savings from previous periods contributed to this strong increase.

    Interest Expense

    -30%

    Interest expenses declined from USD 26 million to USD 18 million, driven by lower average outstanding debt balances and favorable foreign exchange effects. This reduction reflects the company’s effective leverage management compared to prior periods when higher financing costs were a burden.

    Earnings Per Share

    -26% to -28%

    EPS dropped from 1.99 USD (basic) in Q4 2023 to 1.47 USD in Q4 2024, indicating potential dilution or share-related adjustments despite improved operating and net income. This contrast suggests that while operational performance enhanced profitability, changes in the share count or capital structure diminished per-share earnings relative to the previous period.

    TopicPrevious MentionsCurrent PeriodTrend

    Texture and Healthful Solutions

    Mentioned in Q1 with flat or declining net sales and pricing challenges ; Q2 and Q3 saw volume growth and margin recovery

    Q4 reported strong double‐digit sales volume increases and expanding operating income margins

    Consistent improvement with a rebound in growth and margins

    Volume Growth Trends

    Q1 noted gradual volume improvement with pickup in distributor demand ; Q2 showed 8% growth and replenishment recovery ; Q3 highlighted an 11% increase and sustainable replenishment

    Q4 reiterated double‐digit growth and a stable volume recovery trajectory

    Sustainably positive trend with steady recovery across periods

    Cost Savings Initiatives and Margin Expansion Programs

    Q1 introduced Cost2Compete targeting $50M savings and integrated initiatives ; Q2 reported $18M saving progress with margin improvements ; Q3 noted being ahead of targets and operational efficiency

    Q4 exceeded first-year targets with over $23M in savings and outlined further steps toward $50M savings

    Consistent progress with accelerating cost‐savings and margin expansion efforts

    Commodity Price Volatility and Corn Costs

    Q1 referenced lower corn costs benefiting margins but with inventory challenges ; Q2 focused on hedging strategies to manage lower corn costs ; Q3 noted price/mix declines due to cost pass-through

    Q4 highlighted robust hedging practices mitigating volatility, even amid crop price rallies

    Ongoing exposure managed by enhanced hedging, maintaining stability

    Protein Fortification Business Profitability Transition

    Q1 mentioned reduced operating losses in the “all other” segment ; Q2 detailed a turnaround plan with sales growth ; Q3 reported significant YOY improvement despite losses

    Q4 discussed steady improvement with very strong YOY performance, targeting profit breakeven in the near future

    Gradual transition with improvements steering toward profitability

    Regional Market Expansion and Performance

    Q1 emphasized strong performance in China and LATAM ; Q2 detailed record results in LATAM and growth in China/SE Asia ; Q3 focused on LATAM and Europe showing recovery

    Q4 showed strong LATAM performance with recovering European markets and cautious growth in China and SE Asia

    Consistent regional growth with evolving challenges in select markets

    Hedging Practices and Local Sourcing Strategies

    Q1 provided no specific mention; Q2 discussed hedging ~80–85% of raw material costs and sustainable sourcing efforts ; Q3 mentioned hedging with less focus on local sourcing

    Q4 detailed both effective hedging practices and robust local sourcing strategies across key regions

    Enhanced focus in Q4 with integration of hedging and local sourcing strategies

    Margin Compression and Pricing Pressures

    Q1 cited margin compression from high-cost legacy inventory and a natural pricing reset ; Q2 indicated ongoing pricing pressure with revised margins ; Q3 showed price/mix challenges partly mitigated by volume growth

    Q4 confirmed continued pricing pressures from lower corn cost pass-through but noted improved operating income due to efficiencies

    Persistent pricing pressures counter-balanced by operational and volume gains

    Operational Restructuring and Resegmentation Efforts

    Q1 described major segmentation restructuring to focus on customer/market needs ; Q2 highlighted resegmentation as part of the Cost2Compete program ; Q3 emphasized a matured global operating model yielding cost savings

    Q4 expanded restructuring efforts with strategic facility closures and network optimization driving cost improvements

    Ongoing restructuring delivering increasing clarity, efficiency, and cost benefits

    Geopolitical Risks and Supply Chain Disruptions

    Q1, Q2, and Q3 had no specific mention [n/a]

    Q4 addressed geopolitical risks—including tariffs and trade regulatory uncertainties—and emphasized local manufacturing as a mitigating factor

    An emergent discussion in Q4, reflecting a cautious stance amid external uncertainties

    Plant Closures and Asset Optimization Strategies

    Q1, Q2, and Q3 did not mention plant closures or asset optimization strategies [n/a]

    Q4 discussed the Vanscoy closure along with closures in the U.K., Brazil, and Canada as part of network optimization

    A new topic emerging in Q4 that underscores an increased focus on asset optimization

    Earnings Guidance and Future Outlook Uncertainty

    Q1 provided guidance amid uncertainties related to weather, demand, and geopolitical risks ; Q2 and Q3 offered detailed guidance with emphasis on macroeconomic fluctuations and FX effects

    Q4 set 2025 EPS guidance amid uncertainty from FX, commodity costs, and volume trends, with a wide range reflecting these risks

    Consistent emphasis on guidance with persistent uncertainty amplified by macro factors