Ingredion Incorporated

Good day and thank you for standing by. Welcome to the first quarter 2021 Ingredient Incorporated earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I will now hand the conference over to your speaker today, Tiffany Willis, Vice President, Investor Relations, and Corporate Communications Officer. Please go ahead.

Thank you, Carmen. Good morning, and welcome to Ingredient's first quarter 2021 earnings call. I'm Tiffany Willis, Vice President of Investor Relations and Corporate Communications Officer. On today's call are Jim Zally, our President and CEO, and Jim Gray, our Executive Vice President and Chief Financial Officer. We issued our results today in a press release that can be found on our website, ingredient.com, in the investor section. The slides accompanying this presentation can also be found on the website and were posted today for your convenience. As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties. These statements include expectations and assumptions regarding the company's future operations and financial performance. including the impact of the COVID-19 pandemic. Actual results could differ materially from those predicted in the forward-looking statement, and Ingredion assumes no obligation to update them in the future as or if circumstances change. Additional information concerning factors that could cause actual results to differ materially from those discussed during today's conference call or in this morning's press release can be found in the company's most recently filed annual report on Form 10-K and subsequent reports on Forms 10-Q and 8-K. During this call, we also refer to certain non-GAAP financial measures, including adjusted earnings per share, adjusted operating income, and adjusted effective tax rates, which are reconciled to U.S. GAAP measures in Note 2, non-GAAP information included in our press release and in today's presentation's appendix. And with that, I'm pleased to turn the call over to Jim Vallee.

Thank you, Tiffany, and good morning, everyone. We started the year off very well, delivering excellent financial results in the quarter and positioning us for an exceptionally strong first half. For the quarter, global net sales were up 5% compared to the year-ago period. The increase was driven by higher volumes in Asia Pacific and South America, as well as the inclusion of Pure Circle. Adjusted operating income for the quarter was up in all four regions, led by exceptionally strong performance in South America, which was up 20% year over year. Our execution in Asia Pacific was excellent, as we began to lap the impacts of the pandemic from the prior year. North America also grew operating income by 7%, benefiting from lower net corn costs and the delivery of substantial cost-smart savings. Notably, volumes in North America continue to recover from the impact of last year's COVID-19 restrictions. Global net sales growth of 5% was led by Asia Pacific, where a combination of the inclusion of Pure Circle sales, organic growth, and the lapping of prior year COVID-19 impacts contributed to 24% net sales growth. South America had a fantastic quarter with year-over-year growth of 15%, followed by EMEA with 5% growth. North America closed the quarter with net sales down slightly, reflecting food service traffic that is picking up but has not yet recovered to pre-pandemic levels. We continue to make progress against our strategic pillars and are pleased to share some highlights with you. Specialty ingredients remain a bright spot, with particularly strong net sales growth in both Asia Pacific and South America. The Pure Circle and Verdient acquisitions are enabling us to capitalize on growth opportunities in sugar reduction and plant-based foods, with significant year-over-year net sales growth achieved in both platforms. In the first quarter, we strengthened the strategic pillar of commercial excellence by introducing our customer-focused Be What's Next brand positionings. This reflects our passion and mission to innovate and co-create with our customers to bring them new and novel ideas and solutions. Jim will address our progress on cost smart in his remarks, and I will expand later on how our team is reimagining the future of work with customer centricity, speed, and agility. Now, let me share with you some exciting highlights from our plant-based protein growth platform. In March, we virtually welcomed more than 700 attendees, including over 500 customers from 28 countries to our South Sioux City manufacturing facility, which produces pulse-based protein isolates. We were delighted with the breadth of ingredient interest, requests for samples, and new product development opportunities, which has come from the many discussions we have had with new and existing customers. These activities, along with a growing sales pipeline, are exciting leading indicators for future sales growth. We are also pleased to report that we are in the final stages of completing mechanical and operations testing and obtaining food grade certification at our Van Scoy plant for our new range of pulse-based protein flours and concentrates. Our ability to formulate with and supply a complete range of protein-based flours, concentrates, and isolates makes us an attractive development partner to fast-growing plant-based foods companies. On April 1st, we completed the acquisition of KTEC, headquartered in Lubeck, Germany, which is very close to our European headquarters in Hamburg. We are pleased to welcome this innovative team of creative application specialists who develop customized ingredient blends that enhance texture and provide stabilization, particularly in dairy, dairy alternatives, bakery, and savory applications. KTEC is a great acquisition that complements our existing specialty ingredient portfolio. It expands our food systems platform with a comprehensive suite of innovative capabilities that assist food and beverage manufacturers with product formulation, ingredient functionality and technical assistance. It also adds a European hub to complement our existing U.S. and Asia food systems operations. Yesterday, we announced an exciting, exclusive manufacturing, marketing, and sales partnership with a leading synthetic biotechnology company, Ameris, to produce and market a great-tasting sugar reduction ingredient, REBM, which is derived from fermentation. The Ameris relationship makes for a powerful combination of with their leading technology and ability to develop, scale, and produce fermentation-based products combined with Ingredion's global customer reach and formulation capabilities. Adding a fermented RebM product to our existing PureCircle sugar reduction portfolio now provides Ingredion with the most comprehensive trifecta of leaf extract and bioconverted stevia and fermented RebM in the world. This enables us to meet the growing needs of a global customer base that is looking now for ways to reduce sugar without compromising taste. Our relationship with Amaris may include, over time, other R&D collaborations to manufacture and market additional fermentation-based food ingredients. As we are reimagining the future of work, we are doing so with a customer-centric mindset and a focus on speed and agility. The pandemic has enabled us to reposition how we engage with our customers. Because all of us are relying more on digital tools and digital connections, this opens a window for us to become more efficient and intimate with our customers. We've recently relaunched our global website and are expanding our customer portals. We are actively working toward providing greater availability of on-demand technical service, live chat, and virtual co-creations. This reinvention of the way we work affords us a great opportunity to improve productivity and do so in a manner that supports customer satisfaction and high employee engagement. Now, let me hand it off to Jim Gray, who will provide a financial review.