Ingredion Incorporated

Good day and thank you for standing by. Welcome to the fourth quarter 2025 Ingridion 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 during this session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Noah Weiss. Please go ahead, sir.

Good morning, and welcome to Ingredion's fourth quarter and full year 2025 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 the 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 Ingredient 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 will 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 two U.S. GAAP measures in Note 2, non-GAAP information included on our press release and in today's presentation appendix. With that, I will turn the call over to Jim Zally.

Thank you, Noah, and good morning, everyone. Despite unforeseen challenges throughout the year, we are pleased to share that we delivered record full-year operating income and earnings per share growth driven by continued strength in texture and healthful solutions and solid results from our food and industrial ingredients LATAM business. Although the largest facility in our food and industrial ingredients U.S.-Canada segment faced operational difficulties, we have taken steps at the Argo facility to systematically address the issues. While we expect a gradual recovery, The actions we are taking should lead to steadily improving performance throughout 2026. Turning to the next slide, let's start with a summary of our net sales volume growth for the fourth quarter. Texture and Healthful Solutions posted its seventh straight quarter of volume growth, up 4%, led by clean label ingredients and solutions. Clean label ingredient volumes experienced significant growth in both the fourth quarter and throughout the year across Asia Pacific and U.S. Canada. Clean label remains one of the food industry's fastest growing areas, emphasizing its critical role in meeting consumers' preference for authentic ingredients and simple food labels. Ingredion continues to be a leader in the clean label texturizing space due to the breadth and strength of its portfolio, which is supported by proprietary technology, patents, consumer insights, and years of formulating expertise. Furthermore, our solutions selling approach continues to deliver robust growth, outpacing the segment's overall net sales performance. This comprehensive way of engaging customers is driving greater intimacy at a time when food companies are pursuing more reinvention and reformulation. These higher margin sales are also expected to be margin accretive to the segment over time. In our food and industrial ingredients LATAM segment, we started to see brewing adjunct volume demand recover from our long-term contracted customers. However, the region continued to face challenges in the confectionery and paper and corrugating sectors where demand remains soft. Partially offsetting this softness, food ingredient sales experienced modest growth. Lastly, our food and industrial ingredients U.S. Canada segment saw a 7% decrease in net sales volume in the most recent quarter, primarily driven by ongoing production challenges at Argo, which limited our ability to produce inventory available for sale. In addition to this operational issue, our business and the industry faced overall softness in beverage sweetener volumes, further contributing to lower sales. As we move to segment updates, I want to highlight progress against key growth investments and strategic initiatives, starting with texture and healthful solutions. Our focus on the customer has never been stronger, delivering sales volume growth of 4% and OI growth of 16% versus prior year. In addition, strategic capital growth and cost savings investments were completed. At our flagship Indianapolis facility, our starch modernization project, completed in quarter four, will reduce our modified starch production costs through more efficient product flows and debottlenecking, which will drive the release of new capacity. In addition, we completed the expansion of our blending center of expertise in Bell Camp, Maryland, which increases customized solutions revenue potential by $30 million a year. The range of solutions capable to be produced from this facility support clean label, plant-based protein, and fiber fortification, sugar reduction, and affordable formulating. Turning now to our food and industrial ingredients LATAM segment, Against a backdrop of regional, economic, and political volatility throughout the year, our team managed to deliver record operating income and margins of greater than 21% for the year, up 140 basis points. Mexico specifically demonstrated resilience to offset challenging, unforeseen economic conditions, delivering another record year of operating income. In pursuit of more profitable growth, Mexico repurposed a portion of its grind to strategically diversify its customer and product mix towards higher margin ingredients that serve food and confectionery customers. We successfully completed a complex network optimization move in Brazil for a long-term cost competitiveness. We closed our Alcantara facility and successfully expanded polyol production at Mojiguazu. our largest facility in Brazil. This investment was supported by long-term customer volume commitments. Now turning to our food and industrial ingredients U.S.-Canada segment. Operational issues at our Argo facility stubbornly persisted throughout the fourth quarter. Despite being encouraged by a strong September, we experienced intermittent grind shutdowns, which resulted in higher maintenance costs, lower yields, and fixed cost absorption, which reduced both our saleable finished product inventory and our co-product valorization. Furthermore, industry volume demand for sweeteners was down throughout the second half. The 2025 full-year operating income impact of Argo's operational challenges was approximately $40 million. With the majority of the first quarter still ahead of us, our team remains focused on executing an achievable recovery plan. Despite the unforeseen challenges and headwinds described, Food and Industrial Ingredients US Canada delivered greater than 15.5% operating income margins for the year. Let me now update you on progress against our three strategic pillars. Let me start with driving profitable growth. By continuing to prioritize solutions and clean label offerings, we have significantly enhanced the results of our texture and healthful segment. As mentioned previously, sales in both ingredient solutions and clean label categories have outpaced the overall segment's net sales growth during the second half of 2025, and we have a strong pipeline and growth momentum in both areas going forward. Furthermore, we are excited to report that our protein fortification business delivered a record year with net sales growth exceeding 40%. As you know, we have been working diligently to optimize this business for several years. In 2025, we doubled production and were able to increase the average selling price through new product innovation. We see this business representing a viable, long-term growth opportunity for us, supported by strong and clear consumer pull. Looking at our second strategic pillar, innovation, we have developed a new family of ingredient solutions that help customers readily replace ingredients that have been impacted by shortages and rapidly rising raw material costs. For example, our suite of solutions to replace cocoa in product reformulations have seen steady sales increases throughout 2025. Furthermore, we are advancing our proprietary sugar reduction taste modulation platform in collaboration with Oobly through a strategic commercial partnership. Our sweet proteins and stevia blends improve the quality of natural sweetness while offering a cost-competitive clean taste solution. Regarding innovation, Texture elevation represents the next level in value delivery that we are offering to select customers. This co-creation approach combines proprietary consumer insights, sensory science, and rapid formulation expertise to help customers predict overall liking and deliver consumer preferred textures faster and with higher success rates. Our 2025 customer engagements proved very effective and are leading to customer successes in the marketplace. We are extremely excited by this opportunity and what it represents to grow customized solution sales with the potential also to generate new service revenues. Lastly, I'd like to comment on our operational excellence pillar. In 2025, we delivered $59 million of cost-to-compete run rate savings, exceeding our previously stated $50 million savings targets. This achievement reflects our ability to optimize across manufacturing, our manufacturing network, as well as deliver procurement and SG&A savings, leveraging our scale. Building off the success of Cost to Compete, we are transitioning our operational excellence strategic pillar toward long-term enterprise productivity. We look forward to updating you on our enterprise productivity progress in the future. It is also worth highlighting that despite the volatile trade and tariff environment in 2025, Ingredion was minimally directly impacted. This was due to the fact that more than 80% of our production is locally made and locally sold. Turning to the next slide, our results this year demonstrate how Ingredion's Diversified portfolio continues to drive stronger and more consistent profitability. While navigating volatile market conditions, we delivered record gross profit and expanded margins to over 25%, a clear testament to our agility and operational discipline. This performance also reflects the ability to leverage the strength of our global network, adapt quickly to shifting demand and our focus on higher value solutions. As we continue to optimize our mix and execute against our strategy, we're building a foundation for sustained long-term growth. Overall, 2025 stands out as a year where disciplined actions and portfolio balance enabled us to perform well in a challenging environment. Before I turn the call over to Jim to discuss our financial results, I do want to take a moment to comment on our CFO transition. Last week, we announced that Jim Gray will be retiring on March 31st, 2026, and we have begun a comprehensive search to identify his successor. The board, the executive leadership team, and I are incredibly grateful for Jim's leadership during his more than nine years as a CFO of Ingredion. He's been an invaluable partner to me and has made significant contributions to our success. I wish Jim all the best in retirement, and with that, I'll turn the call over to Jim Gray for the financial review. Jim?