Ingredion Incorporated
11/07/2025 | Press release | Distributed by Public on 11/07/2025 14:33
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Unless otherwise indicated or the context otherwise requires, as used in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," the terms "the Company," "Ingredion," "we," "us," and "our" and similar terms refer to Ingredion Incorporated and its consolidated subsidiaries. This discussion should be read in conjunction with the unaudited interim Condensed Consolidated Financial Statements and related notes included elsewhere in this report and with the audited Condensed Consolidated Financial Statements and the related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. This discussion contains forward-looking statements that are subject to numerous risks and uncertainties. Actual results may differ materially from those contained or implied in any forward-looking statements. See "Forward-Looking Statements" at the end of this discussion.
Overview
We are a leading global ingredients solutions provider that transforms grains, fruits, vegetables and other plant-based materials into value-added ingredient solutions for the food, beverage, animal nutrition, brewing and industrial markets. Our innovative ingredient solutions help customers stay on trend with simple ingredients and other in-demand ingredients. We are organized into three reportable segments that consist of Texture & Healthful Solutions ("T&HS"), Food & Industrial Ingredients ("F&II")-Latin America ("LATAM"), and F&II-U.S./Canada, as well as All Other.
Net income attributable to Ingredion for year-to-date 2025 increased to $564 million from $552 million for year-to-date 2024, which included a $90 million pre-tax gain from the sale of our South Korea business in February 2024. Operating income increased 10 percent year over year to $796 million for year-to-date 2025 from $721 million for year-to-date 2024, which included higher gross profit and lower restructuring and impairment charges, partially offset by increased operating expenses. Gross profit increased 4 percent to $1,398 million for year-to-date 2025 from $1,342 million for year-to-date 2024, primarily from lower corn and input costs. Net sales decreased 3 percent to $5,462 million for year-to-date 2025 from $5,630 million for year-to-date 2024, primarily due to lower price mix from lower raw material input costs.
We continue to monitor changing tariff requirements and reciprocal actions, as well as indirect effects in the economic environment, which may adversely affect our operations, although these factors have had an immaterial impact on our results for year-to-date 2025. Most of our products are made locally and sold locally. We sell the vast majority of our products to customers in the U.S., Mexico and Canada, where trade is governed by the United States-Mexico-Canada Agreement. Our operations in the U.S. source corn produced in the U.S., and our subsidiaries outside the U.S. utilize supplies of corn from their local regions, as well as corn imported from other geographic areas, including the U.S. Our tariff response hub continually assesses ongoing tariff actions so that we work effectively with customers to navigate supply chain complexity in a cost effective and less disruptive manner.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA"), which introduced a broad range of tax reforms. The OBBBA did not have a material impact on our third quarter Condensed Consolidated Financial Statements.
Results of Operations
We have significant operations globally. Fluctuations in foreign currency exchange rates affect the U.S. dollar amounts of our foreign subsidiaries' net sales and expenses. For most of our foreign subsidiaries, the local foreign currency is the functional currency. Accordingly, net sales and expenses denominated in the functional currencies of these subsidiaries are translated into U.S. dollars at the applicable average exchange rates for the period.
Third Quarter of 2025
With Comparatives to Third Quarter of 2024
Net sales. Net sales decreased 3 percent to $1,816 million for the third quarter of 2025 compared to $1,870 million for the third quarter of 2024. The decrease was driven by lower volume from each of the F&II segments and price mix, primarily from lower raw material costs, partially offset by T&HS volume increases.
Cost of sales. Cost of sales decreased 2 percent to $1,361 million for the third quarter of 2025 compared to $1,391 million for the third quarter of 2024. The decrease was due primarily to lower volumes and lower raw material and input costs. Gross profit margin decreased to 25 percent for the third quarter of 2025 from 26 percent for the third quarter of 2024 due to lower fixed cost absorption from lower volumes.
Operating expenses. Operating expenses increased 3 percent to $203 million for the third quarter of 2025 compared to $198 million for the third quarter of 2024. Operating expenses as a percentage of net sales were 11 percent for the third quarter of 2025 and 2024. The increase in operating expenses was primarily attributable to increased employee costs.
Other operating (income) expense.Other operating expense was zero for the third quarter of 2025 compared to $1 million for the third quarter of 2024.
Restructuring/impairment charges. Restructuring/impairment charges were $3 million for the third quarter of 2025 primarily related to restructuring costs, compared to $12 million for the third quarter of 2024, which was for an impairment charge related to property, plant and equipment associated with manufacturing operations in the United Kingdom.
Financing costs. Financing costs increased to $7 million for the third quarter of 2025 compared to $1 million for the third quarter of 2024. The increase was primarily due to lower foreign exchange gains in the third quarter of 2025 compared to the third quarter of 2024.
Provision for income taxes. Our effective income tax rate for the third quarter of 2025 and 2024 was 28.6 percent and 30.8 percent. The decrease in the effective tax rate was primarily driven by an adverse ruling by tax authorities that generated a multi-year tax contingency during the third quarter of 2024 and the change in value of the Mexican peso against the U.S. dollar. These impacts were partially offset by the change in our permanent reinvestment status of a foreign affiliate during the third quarter of 2025 and the tax treatment related to the sale of our South Korea business in 2024.
Net income attributable to Ingredion. Net income attributable to Ingredion for the third quarter of 2025 decreased to $171 million from $188 million for the third quarter of 2024. The decrease was primarily due to the decrease in operating income, partially offset by a lower effective tax rate.
Segment Results
Texture & Healthful Solutions
Net sales. T&HS net sales increased to $605 million for the third quarter of 2025 compared to $600 million for the third quarter of 2024. The increase was primarily due to higher volumes and favorable foreign exchange impacts, partially offset by unfavorable price mix.
Adjusted operating income. T&HS adjusted operating income increased 9 percent to $105 million for the third quarter of 2025 compared to $96 million for the third quarter of 2024. The increase was primarily due to lower raw material costs and favorable volume impacts, partially offset by unfavorable price mix.
Food & Industrial Ingredients-LATAM
Net sales. F&II-LATAM net sales decreased 6 percent to $585 million for the third quarter of 2025 compared to $620 million for the third quarter of 2024. The decrease was primarily due to lower brewing industry volumes, customer and product mix management, and softer consumer demand.
Adjusted operating income. F&II-LATAM adjusted operating income decreased 11 percent to $116 million for the third quarter of 2025 compared to $131 million for the third quarter of 2024. The decrease was primarily due to the lower brewing industry volumes, customer and product mix management, and softer consumer demand.
Food & Industrial Ingredients-U.S./Canada
Net sales. F&II-U.S./Canada net sales decreased 7 percent to $507 million for the third quarter of 2025 from $548 million for the third quarter of 2024. The decrease was primarily due to lower volumes from the beverage and food industry and unfavorable price mix.
Adjusted operating income. F&II-U.S./Canada adjusted operating income decreased 18 percent to $81 million for the third quarter of 2025 from $99 million for the third quarter of 2024. The decrease resulted primarily from continued production challenges at one of our large manufacturing facilities and lower beverage and food industry volume demand.
All Other
Net sales. All Other net sales increased 17 percent to $119 million for the third quarter of 2025 from $102 million for the third quarter of 2024. The increase was primarily due to an increase from the Pakistan business.
Adjusted operating loss. All Other adjusted operating loss was $4 million for the third quarter of 2025 and 2024, reflecting improvements in the plant-based protein business, offset by lower profits from the Pakistan business.
Year-to-Date 2025
With Comparatives to Year-to-Date 2024
Net sales. Net sales decreased 3 percent to $5,462 million for year-to-date 2025 compared to $5,630 million for year-to-date 2024, primarily due to unfavorable price mix from lower raw material costs, unfavorable foreign exchange impacts, and lower volumes.
Cost of sales. Cost of sales decreased 5 percent to $4,064 million for year-to-date 2025 compared to $4,288 million for year-to-date 2024. The decrease was primarily due to lower raw material and input costs, leading to an increase in gross profit margin to 26 percent for year-to-date 2025 compared to 24 percent for year-to-date 2024.
Operating expenses. Operating expenses increased 4 percent to $604 million for year-to-date 2025 compared to $578 million for year-to-date 2024. Operating expenses as a percentage of net sales were 11 percent for year-to-date 2025 and 10 percent for year-to-date 2024. The increase was primarily attributable to increased employee costs.
Other operating (income) expense. Other operating income was $15 million for year-to-date 2025 compared to Other operating expense of $5 million for year-to-date 2024, primarily due to higher income from our Argentina joint venture and indirect tax benefits in Brazil.
Restructuring and impairment charges. Restructuring and impairment charges were $13 million for year-to-date 2025 primarily related to impairment charges for certain equity investments, decommissioning costs for previously announced plant closures and restructuring charges. Restructuring and impairment charges were $38 million for year-to-date 2024 primarily due to impairment charges related to certain equity investments and restructuring charges for our resegmentation that was effective January 1, 2024.
Financing costs. Financing costs decreased 7 percent to $28 million for year-to-date 2025 compared to $30 million for year-to-date 2024. The decrease was primarily due to lower interest expense on lower average outstanding debt balances during year-to-date 2025 compared to year-to-date 2024, partially offset by the impacts from foreign exchange losses in 2025 compared to foreign exchange gains in 2024.
Provision for income taxes. Our effective income tax rate for year-to-date 2025 decreased to 25.8 percent from 28.5 percent for year-to-date 2024. The decrease in the effective tax rate was primarily driven by the change in value of the Mexican peso against the U.S. dollar, an adverse ruling by tax authorities that generated a multi-year tax contingency in 2024, and the impairment of an equity method investment during 2024. These impacts were partially offset by the tax treatment on the sale of our South Korea business during 2024 and the change in our permanent reinvestment status of a certain foreign affiliate during the third quarter of 2025.
Net income attributable to Ingredion. Net income attributable to Ingredion for year-to-date 2025 increased to $564 million from $552 million for year-to-date 2024. Excluding the impact of the $90 million gain on the sale of our South Korea business in 2024 and lower effective tax rate in 2025, the increase was primarily due to the increase in operating income.
Segment Results
Texture & Healthful Solutions
Net sales. T&HS net sales increased 1 percent to $1,806 million for year-to-date 2025 from $1,785 million for year-to-date 2024. The increase was primarily due to higher volumes and favorable foreign exchange impacts, partially offset by unfavorable price mix.
Adjusted operating income. T&HS adjusted operating income increased 23 percent to $315 million for year-to-date 2025 from $256 million for year-to-date 2024. The increase was primarily due to lower raw material and manufacturing costs, partially offset by unfavorable price mix.
Food & Industrial Ingredients-LATAM
Net sales. F&II-LATAM net sales decreased 6 percent to $1,754 million for year-to-date 2025 from $1,866 million for year-to-date 2024. The decrease was primarily due to lower volumes and unfavorable foreign exchange impacts, partially offset by favorable price mix.
Adjusted operating income. F&II-LATAM adjusted operating income increased 2 percent to $370 million for year-to-date 2025 from $362 million for year-to-date 2024. The Argentina joint venture financial results for year-to-date 2025 improved from year-to-date 2024 primarily as a result of the Argentine peso devaluation that occurred in the first quarter of 2024. Apart from the joint venture results, the adjusted operating income increase was primarily due to lower raw material costs.
Food & Industrial Ingredients-U.S./Canada
Net sales. F&II-U.S./Canada net sales decreased 6 percent to $1,550 million for year-to-date 2025 from $1,644 million for year-to-date 2024. The decrease was primarily due to lower volumes and unfavorable price mix from softer beverage and food industry demand.
Adjusted operating income. F&II-U.S./Canada adjusted operating income decreased 11 percent to $259 million for year-to-date 2025 from $291 million for year-to-date 2024. The decrease resulted primarily from lower volumes and continued production challenges at one of our large manufacturing facilities, partially offset by lower raw material costs.
All Other
Net sales. All Other net sales increased 5 percent to $352 million for year-to-date 2025 from $335 million for year-to-date 2024. The increase was due to increased volumes, which offset the impact of lost sales volumes from our South Korea business that we sold in February 2024.
Adjusted operating loss. All Other adjusted operating loss decreased to $5 million for year-to-date 2025 from $18 million for year-to-date 2024. The decrease was primarily due to improved performance in the plant-based protein business.
Liquidity and Cash
As of September 30, 2025, we had total available liquidity of $3.8 billion. Domestic liquidity of $1.4 billion consisted of $423 million in cash and cash equivalents and $1.0 billion available through our commercial paper program. The commercial paper program is backed by $1.0 billion of borrowing availability under a five-year revolving credit agreement.
As of September 30, 2025, we had international liquidity of $2.4 billion, consisting of $492 million of cash and cash equivalents and $6 million of short-term investments held by our operations outside the U.S., as well as $1.9 billion of unused operating lines of credit in foreign countries where we operate. As the parent company, we guarantee certain obligations of our consolidated subsidiaries, which totaled $40 million as of September 30, 2025. We believe that our consolidated subsidiaries will be able to meet their financial obligations as they become due.
As of September 30, 2025, we had total debt outstanding of $1.8 billion. Of our outstanding debt, $1.7 billion consists of senior notes that do not require repayment until 2026 through 2050. The weighted average interest rate on our total indebtedness was approximately 4.0 percent for the third quarter of 2025 and 2024.
During the third quarter of 2025, we entered into a new revolving credit agreement to replace the previous revolving credit agreement, which was simultaneously terminated. The new revolving credit agreement provides for a five-year unsecured revolving credit facility in an aggregate principal amount of $1.0 billion outstanding at any time that matures on August 27, 2030. Loans under the revolving credit facility accrue interest at a per annum rate equal, at our option, to either a term rate based upon the secured overnight financing rate ("SOFR") plus an applicable margin, or a base rate (generally determined according to the highest of the prime rate, the federal funds rate plus 0.50%, or the 1-month term SOFR rate plus 1.00%) plus an applicable margin.
The principal source of our liquidity is our internally generated cash flow, which we supplement as necessary with our ability to borrow under our credit facilities and commercial paper program and to raise funds in the capital markets. We currently expect that our available cash balances, future cash flow from operations, access to debt markets and borrowing capacity under our revolving credit facility and commercial paper program will provide us with sufficient liquidity to fund our anticipated capital expenditures, dividends and other operating, investing and financing activities for at least the next twelve months and for the foreseeable future thereafter. Our future cash flow needs will depend on many factors, including our rate of revenue growth, cost of raw materials, changing working capital requirements, the timing and extent of our expansion into new markets, the timing of introductions of new products, potential acquisitions of complementary businesses and technologies, continuing market acceptance of our new products and general economic and market conditions. We may need to raise additional capital or incur indebtedness to fund our needs for less predictable strategic initiatives, such as acquisitions.
Net Cash Flows
Our cash provided by operating activities was $539 million for year-to-date 2025 compared to cash provided by operating activities of $1,000 million for year-to-date 2024. The decrease was primarily attributable to a $487 million change in working capital resulting from increased trade accounts receivables due to reduced utilization of customer financing programs, and increased inventories.
We used $298 million of cash for capital expenditures and mechanical stores purchases to update, expand and improve our facilities year-to-date 2025 compared to $170 million of cash we applied year-to-date 2024 for the same purposes. Capital investment commitments for the full year of 2025 are anticipated to be between $400 million and $425 million. In addition, we received proceeds of $255 million in year-to-date 2024 and $12 million in year-to-date 2025 for the sale of our South Korea business, and we made $11 million of net investments in unconsolidated affiliates in year-to-date 2025.
We used $340 million of cash for financing activities year-to-date 2025 compared to cash used for financing activities of $601 million year-to-date 2024. The difference primarily reflected the absence of commercial paper borrowings year-to-date 2025 compared to $327 million of net repayments of commercial paper year-to-date 2024. In addition, for year-to-date 2025, we repurchased 1,036 outstanding shares of common stock in open market transactions at a net cost of $134 million, compared to year-to-date 2024 when we repurchased 762 thousand outstanding shares of common stock at a net cost of $87 million.
We declare and pay cash dividends to our common stockholders of record on a quarterly basis. Dividends paid, including those to non-controlling interests, was $157 million year-to-date 2025 compared to $156 million year-to-date 2024. The increase in dividend payments reflected an increase in our quarterly dividend rate to $0.82 per share in 2025 from $0.80 per share in 2024.
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are described in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no changes to our critical accounting policies and estimates during year-to-date 2025.
New Accounting Pronouncements
The information called for by this section is incorporated herein by reference to Note 1 to the Condensed Consolidated Financial Statements included in this report.
Forward-Looking Statements
This Form 10-Q 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 ("Exchange Act"). Ingredion Incorporated intends these forward-looking statements to be covered by the safe harbor provisions for such statements.
Forward-looking statements include, among others, any statements regarding our prospects, future operations, or future financial condition, earnings, net sales, tax rates, capital expenditures, cash flows, expenses or other financial items,
including management's plans or strategies and objectives for any of the foregoing and any assumptions, expectations or beliefs underlying any of 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," "opportunities," "potential," or other similar expressions or the negative thereof. All statements other than statements of historical facts therein 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 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 risks and uncertainties, including changes in consumer practices, preferences, demand and perceptions that may lessen demand for the products we make; geopolitical conflicts and actions arising from them, including the impacts on the availability and prices of raw materials and energy supplies, supply chain interruptions, and volatility in foreign exchange and interest rates; the effects of global economic conditions and the general political, economic, business, and market conditions that affect customers and consumers in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products, and the impact these factors may have on our sales volumes, the pricing of our products and our ability to collect our receivables from customers; our reliance on purchases of our products by major industries which we serve and from which we derive a significant portion of our sales, including, without limitation, the food, beverage, animal nutrition and brewing industries; the risks associated with pandemics; our ability to develop or acquire new products and services at rates or of qualities sufficient to gain market acceptance; increased competitive and/or customer pressure in the corn-refining industry and related industries, including with respect to the markets and prices for our primary products and our co-products, particularly corn oil, and the ability to pass through price increases in our key inputs; price fluctuations, supply chain disruptions, tariffs, duties and shortages affecting inputs to our procurement, production processes and delivery channels, including raw materials, energy costs and availability and cost of freight and logistics; our ability to contain costs, achieve budgets and realize expected synergies, including our ability to complete planned maintenance and investment projects on time and on budget as well as to effectively manage freight and shipping costs and hedging activities; operating difficulties at our manufacturing facilities and liabilities relating to product safety and quality; the effects of climate change and legal, regulatory, and market measures to address climate change; our ability to successfully identify and complete acquisitions, divestitures, or strategic alliances on favorable terms, as well as to successfully conduct due diligence, integrate acquired businesses or implement and maintain strategic alliances and achieve anticipated synergies with respect to such transactions; economic, political and other risks inherent in conducting operations in foreign countries and in foreign currencies; the failure to maintain satisfactory labor relations; our ability to attract, develop, motivate, and maintain good relationships with our workforce; the impact of legal and regulatory proceedings, lawsuits, claims and investigations; the impact of any impairment charges on our goodwill or long-lived assets; the impact on our business of political events, trade and international disputes, war, threats or acts of terrorism, and natural disasters; changes in government policy, law, or regulation and costs of legal compliance, including compliance with environmental regulation or the occurrence of other significant events beyond our control; changes in our tax rates or exposure to additional income tax liability; risks affecting our ability to raise funds at reasonable rates and other factors affecting our access to sufficient funds for future growth and expansion; increases in interest rates that could increase our borrowing costs; interruptions, security incidents, or failures with respect to information technology systems, processes, and sites; risks affecting the continuation of our dividend policy; and our ability to maintain effective internal control over financial reporting.
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 or otherwise. 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" and other information included in our Annual Report on Form 10-K for the year ended December 31, 2024 and in our subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission.
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