Ingredion Incorporated
05/08/2026 | Press release | Distributed by Public on 05/08/2026 11:33
Quarterly Report for Quarter Ending March 31, 2026 (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, 2025. 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 the first quarter of 2026 decreased to $142 million from $197 million for the first quarter of 2025. Operating income decreased 26 percent to $203 million for the first quarter of 2026 from $276 million for the first quarter of 2025, which included lower gross profit and increased operating expenses. Gross profit decreased 14 percent to $401 million for the first quarter of 2026 from $466 million for the first quarter of 2025, primarily from lower fixed cost absorption from lower volumes. Net sales decreased 1 percent to $1,792 million for the first quarter of 2026 from $1,813 million for the first quarter of 2025.
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.
First Quarter of 2026
With Comparatives to First Quarter of 2025
Net sales. Net sales decreased 1 percent to $1,792 million for the first quarter of 2026 compared to $1,813 million for the first quarter of 2025. The decrease was primarily driven by lower volume and less favorable mix in the F&II-U.S./Canada business, partially offset by higher net sales in T&HS and favorable foreign exchange impacts.
Cost of sales. Cost of sales increased 3 percent to $1,391 million for the first quarter of 2026 compared to $1,347 million for the first quarter of 2025. The increase was due primarily to increased operating costs in the F&II-U.S./Canada business. Gross profit margin decreased to 22 percent for the first quarter of 2026 from 26 percent for the first quarter of 2025 due to lower fixed cost absorption from lower volumes.
Operating expenses. Operating expenses increased 4 percent to $200 million for the first quarter of 2026 compared to $193 million for the first quarter of 2025. Operating expenses as a percentage of net sales was 11 percent for both the first quarter of 2026 and 2025. The increase in operating expenses was primarily attributable to increased employee costs.
Other operating (income), net. Other operating (income), net was $(13) million for the first quarter of 2026 compared to $(10) million for the first quarter of 2025.
Restructuring/impairment charges. Restructuring/impairment charges were $11 million for the first quarter of 2026 compared to $7 million for the first quarter of 2025, and were primarily related to estimated legal entity restructuring costs in the current quarter.
Financing costs. Financing costs of $9 million for the first quarter of 2026 were unchanged from the first quarter of 2025.
Provision for income taxes. Our effective income tax rate for the first quarter of 2026 was 25.8 percent compared to 25.5 percent for the first quarter of 2025. The increase in the effective tax rate was primarily driven by the impact estimated costs related to a legal entity restructuring in the quarter. This impact was partially offset by the change in value of the Mexican peso relative to the U.S. dollar.
Net income attributable to Ingredion. Net income attributable to Ingredion for the first quarter of 2026 decreased to $142 million from $197 million for the first quarter of 2025. The decrease was primarily due to the decrease in operating income, partially offset by a lower provision for income taxes.
Segment Results
Texture & Healthful Solutions
Net sales. T&HS net sales increased to $617 million for the first quarter of 2026 from $602 million for the first quarter of 2025. The increase was primarily due to higher volumes and favorable foreign exchange impacts, partially offset by unfavorable price mix.
Segment operating income. T&HS operating income increased 1 percent to $100 million for the first quarter of 2026 compared to $99 million for the first quarter of 2025. The increase was primarily due to foreign exchange impacts.
Food & Industrial Ingredients-LATAM
Net sales. F&II-LATAM net sales increased 1 percent to $579 million for the first quarter of 2026 from $573 million for the first quarter of 2025. The increase was primarily due to favorable foreign exchange impacts, partially offset by lower volumes and product mix.
Segment operating income. F&II-LATAM operating income decreased 9 percent to $115 million for the first quarter of 2026 compared to $127 million for the first quarter of 2025. The decrease was driven primarily by Mexico transactional currency impacts and softer volumes.
Food & Industrial Ingredients-U.S./Canada
Net sales. F&II-U.S./Canada net sales decreased 9 percent to $475 million for the first quarter of 2026 from $520 million for the first quarter of 2025. The decrease was primarily due to lower volumes and unfavorable price mix partly offset by favorable foreign exchange impacts.
Segment operating income. F&II-U.S./Canada operating income decreased 63 percent to $34 million for the first quarter of 2026 from $92 million for the first quarter of 2025. The decrease resulted primarily from production challenges at our Argo facility and softer volumes and mix.
All Other
Net sales. All Other net sales increased 3 percent to $121 million for the first quarter of 2026 from $118 million for the first quarter of 2025. The increase was primarily due to improved price mix.
Segment operating income. All Other operating income was $3 million for the first quarter of 2026 and zero for the first quarter of 2025, reflecting improvements in the plant-based protein business.
Liquidity and Cash
As of March 31, 2026, we had total available liquidity of $3.8 billion. Domestic liquidity of $1.5 billion consisted of $546 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 March 31, 2026, we had international liquidity of $2.3 billion, consisting of $368 million of cash and cash equivalents and $4 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 $39 million as of March 31, 2026. We believe that our consolidated subsidiaries will be able to meet their financial obligations as they become due.
As of March 31, 2026, we had total debt outstanding of $1.8 billion. Our outstanding debt consists primarily of senior notes under which repayment at maturity will occur in various years commencing in 2026 through 2050. We classify senior notes due in 2026 as long-term as we have the intent and ability to refinance the principal amount on a long-term basis. The weighted average interest rate on our total indebtedness was 4.1 percent for the first quarter of 2026 and 4.0 percent for the first quarter of 2025.
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 $33 million for the first quarter of 2026 compared to cash provided by operating activities of $77 million for the first quarter of 2025. The decrease was primarily attributable to a decrease in net income of $55 million partly off by a $26 million change in working capital primarily driven by decreased inventories.
We used $110 million of cash for capital expenditures and mechanical stores purchases to update, expand and improve our facilities during the first quarter of 2026 compared to $92 million of cash we applied during the first quarter of 2025 for the same purposes. Capital investment commitments for the remainder of 2026 are anticipated to be between $400 million and $440 million.
We used $48 million of cash for financing activities during the first quarter of 2026 compared to cash used for financing activities of $166 million during the first quarter of 2025. The difference primarily reflected proceeds from net borrowings of $35 million during the first quarter of 2026 compared to $48 million of net repayments of borrowings during the first quarter of 2025. In addition, during the first quarter of 2026, we repurchased 120 thousand outstanding shares of common stock in open market transactions at a net cost of $14 million, compared to the first quarter of 2025 when we repurchased 409 thousand outstanding shares of common stock at a net cost of $55 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 $52 million during the first quarter of 2026 and 2025. This reflects an increase in our quarterly dividend rate to $0.82 per share in 2026 from $0.80 per share in 2025, offset by a decrease in our outstanding common shares.
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, 2025. There have been no changes to our critical accounting policies and estimates during year-to-date 2026.
New Accounting Pronouncements
Information relating to new accounting pronouncements 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. Ingredion 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, price sensitivity, behaviors, demand and perceptions; the impact of geopolitical developments, tensions, threats or conflicts on the availability and prices of raw materials and energy supplies; supply chains and foreign exchange and interest rates; the impact of global business and economic conditions on demand for our products or our access to global credit and equity markets; our reliance on certain industries for a significant portion of our sales; operating difficulties at our manufacturing facilities and liabilities relating to product safety and quality; our ability to keep pace with technological developments in research and development and continue to offer innovative products; competitive pressures that may adversely affect our market share, revenue and profitability; market volatility that may adversely affect our ability to pass through potential increases in the cost of corn and other raw materials to customers, to purchase quantities of corn and other raw materials at prices sufficient to sustain or increase our profitability, or to supply product quantities and meet shipment delivery requirements that our customers demand; the impact on inputs to our procurement, production processes and delivery channels, such as raw material, energy, and freight and logistics, of price fluctuations, supply chain interruptions, tariffs, duties, and shortages; our ability to contain costs, manage working capital, and achieve budgets, including completion of planned maintenance and investment projects on time and on budget; global climate change and legal, regulatory, or market measures to address climate change; our ability to identify and complete acquisitions, divestitures, or strategic alliances on favorable terms or achieve anticipated synergies; the economic, political and other risks inherent in conducting operations in foreign countries and with foreign currencies; our ability to maintain satisfactory labor relations; our ability to attract, develop, retain, motivate and maintain good relationships with our workforce, including key personnel; the impact of legal and regulatory proceedings; the risks associated with pandemics; the impact of any impairment charges on intangible assets and goodwill; global and regional economic policies and changes to existing laws and regulations; changes in our tax rates or exposure to additional income tax liabilities; increases in interest rates that could increase our borrowing costs; risks affecting our ability to raise funds at reasonable rates and other factors affecting our access to sufficient funds for future growth and expansion; risks relating to the use of artificial intelligence and other advanced technologies, and our reliance on third-party technology providers; 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, 2025 and in our subsequent reports on Form 10-Q and Form 8-K filed with the Securities and Exchange Commission.
Ingredion Incorporated published this content on May 08, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on May 08, 2026 at 17:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]