Ingredion Incorporated

Good day, and thank you for standing by. Welcome to the Ingredients fourth quarter and full year 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Noah Weiss, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to Ingridown's fourth quarter and full year 2024 earnings call. I'm Noah Weiss, Vice President of Investor Relations. Joining me on today's call are Jim Zally, our President and CEO, and Jim Gray, our Executive Vice President and CFO. The press release we issued today as well as the presentation we will reference for our fourth quarter and full year results can be found on our website, ingredient.com, in the investor section. As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties and include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those estimated in the forward-looking statements 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 Form 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 rate, which are reconciled to U.S. GAAP measures in Note 2 non-GAAP information included in our press release and in today's presentation appendix. With that, I will turn the call over to Jim Zelle.

Thank you, Noah, and good morning, everyone. I am pleased to announce that Ingredion achieved significant double-digit adjusted EPS growth for the fourth quarter. This performance was driven by continued strong sales volume growth in texture and healthful solutions, as well as exceptional performance from each of our food and industrial ingredient segments. Our 2024 reorganization and new segment structure positioned our teams well against our targeted markets and customer opportunities, establishing a solid foundation for the future. Our food and industrial ingredients U.S.-Canada business benefited from the renewal of multi-year contracts that enabled us to recapture inflationary impacts and recover margins, resulting in significant operating income growth for the fourth quarter. For food and industrial ingredients LATAM, the Mexico and Andean businesses delivered strong results despite softer sweetener demand. The strength and agility of our business model in the region enabled us to manage pricing in the face of changing corn costs and currency fluctuations. These factors collectively led to a year-over-year increase of 5% in operating income or an increase of 8% when adjusting for the sale of of the South Korea business. Turning to a summary of our net sales volume growth for the quarter, Ingredion continued to drive organic growth with a 4 percent increase compared to last year when adjusted for the sale of our South Korea business. Beginning with texture and healthful solutions, we experienced a double-digit sales volume increase for the second consecutive quarter. Food and beverage categories in the U.S., such as yogurt, beverages, and batters and breadings, were key contributors to this growth. Despite ongoing food inflation impacting Western European markets, the categories most relevant to ingredient in that region have consistently outperformed the overall market throughout 2024, especially in the latter half of the year. Sectors such as dressings, ready-to-eat and frozen meals and dairy products continue to demonstrate recovery as consumers traveled and returned to more in-office work routines and placed an increased emphasis on value. As mentioned during our Texture Innovation Day, we are continuing to drive volume growth with our most differentiated products and solutions, which generally offer higher profitability. In the food and industrial ingredients LATAM segment, net sales volumes were down 4% in the quarter, mainly due to soft sweetener sales to the Mexican beverage market, in addition to sales to the Andean confectionery category also experienced softer demand. Lastly, in food and industrial U.S.-Canada, strong demand from papermaking and packaging customers was partially offset by weaker sweetener shipments. For the full year 2024, gross profit dollars and margins reached record levels of 1.8 billion with a corresponding margin of 24% up 270 basis points compared to 2023. Our operations and procurement teams have played a pivotal role in driving operational excellence across the organization. Their focus? on optimizing capacity utilization, streamlining supply chain processes, and implementing procurement-led cost-saving measures have increased efficiency and reduced costs. Let me now update you on our progress against our three strategic pillars. Beginning with business growth, in the quarter, our texture and healthful solution segment demonstrated robust performance with strong sales volume growth and expanding operating income margins. We continue to progress our solutions selling approach, focused on demonstrating the impact of textural solutions to improve taste and overall liking. Underpinning our solutions capabilities, we have invested in strengthening formulation expertise and improving the quality of customer briefs. We are focused on solving unique customer challenges by providing tailored solutions for health and wellness, clean label, and affordability. We are continuing to invest in future innovation and revenue growth. Our food and industrial ingredients U.S. can segment demonstrated significant operating income growth. We successfully adjusted multi-year contracts to recapture prior years' inflationary impacts and enable margin recovery. Further supporting this segment's performance was strong demand from the papermaking and packaging industries. Turning to the second strategic pillar, cost competitiveness through operational excellence. We are pleased to report that at the end of the first year of our cost to compete program, we exceeded our year one run rate cost savings target of 18 million by more than 30%. We will meet or exceed our run rate target of $50 million by the end of 2025 and will provide an update to the program outlook later this year. A significant portion of the targeted cost of goods sold savings in 2025 will come from strategic network sourcing moves that enabled us to further optimize our asset footprint and close three of our smaller facilities, one each in the UK, Brazil, and Canada. It is also noteworthy to mention that this morning we announced $100 million of investments to expand Ingredion's capabilities for delivering texture innovations to growing end markets while bolstering the economic viability and sustainability of the Indianapolis plant. Furthermore, by upgrading Indianapolis's energy infrastructure, Ingredion will improve operational efficiency and reliability while reducing greenhouse gas emissions. Additionally, these investments will enable the Indianapolis plant to lead in supplying the highest quality and most innovative specialty starch-based texturizers for global customers. Moving to our last pillar, our people-centric performance growth culture. In December, we were honored to be recognized for the first time ever by the Wall Street Journal as one of the 250 best managed companies. This recognition demonstrated Ingredion's achievements in customer satisfaction, employee engagement, innovation, and financial strength. In addition, our dedication to fostering an inclusive work environment was further highlighted by Ingredion Brazil being designated as a great place to work for 2025. And finally, Ingredion was named a top employer in Singapore and Thailand for the fifth consecutive year, while achieving that status in China, Germany, Malaysia, and the United Kingdom for three consecutive years. There are also a number of notable achievements to highlight after the first year of our global reorganization, business resegmentation, and cost-to-compete program. We advanced a customer-centric approach to optimizing and de-risking our supply chain by making selective investments and taking restructuring actions to enhance service and improve perfect order delivery. Resegmentation also increased business performance visibility, providing a clearer view of segment demand drivers. Global operations standardized roles and processes leveraging their global scale, which is just beginning to lead to better execution and improved efficiencies. Lastly, we made strategic investments for growth, progressing texture and healthful solutions capacity expansions in Thailand, the U.S., and Germany. Now, I am pleased to hand it over to Jim Gray for the financial review. Jim?