Ingredion’s Strong Financial Performance in 2024

Ingredion, a leading global provider of ingredient solutions, has reported impressive financial results for the year 2024. The company’s net sales, profitability, and cash flow generation have all shown significant improvements compared to the previous year.

Revenue and Profit Trends

Ingredion’s net sales decreased slightly in 2024 to $7.4 billion, down from $7.6 billion in 2023. This decrease was primarily driven by unfavorable price mix and negative foreign exchange impacts, partially offset by increased sales volumes.

Despite the lower sales, Ingredion’s net income attributable to the company increased to $647 million in 2024, up from $643 million in 2023. This increase was mainly due to reduced financing costs and a gain from the sale of the company’s South Korea business, partially offset by higher restructuring and impairment charges.

The company’s operating income performance varied across its business segments. Texture & Healthful Solutions (T&HS) saw an 11% decrease in operating income, while Food & Industrial Ingredients - LATAM (F&II - LATAM) and Food & Industrial Ingredients - U.S./Canada (F&II - U.S./Canada) reported 7% and 25% increases, respectively. The All Other segment, which includes the divested South Korea business, saw a decline in operating income.

Strengths and Weaknesses

One of Ingredion’s key strengths is its diversified business model, with operations across various geographic regions and product categories. This diversification helps to mitigate the impact of challenges in any one particular market or segment.

The company’s focus on innovation and developing value-added ingredient solutions has also been a strength, allowing it to maintain a competitive edge and meet the evolving needs of its customers.

However, Ingredion has faced some challenges, including the impact of unfavorable foreign exchange rates and the need to restructure and consolidate certain manufacturing facilities. The company has also incurred significant impairment charges related to these facility closures and divestitures.

Outlook for the Future

Looking ahead, Ingredion remains cautiously optimistic about its future prospects. The company is committed to driving profitability and creating value for its shareholders through continued operational improvements, strategic investments, and disciplined capital allocation.

Ingredion’s management has set long-term financial performance targets, including maintaining an Adjusted Return on Invested Capital (Adjusted ROIC) of over 10% and a Net Debt to Adjusted EBITDA ratio of 2.5 or less. In 2024, the company exceeded these targets, achieving an Adjusted ROIC of 14.8% and a Net Debt to Adjusted EBITDA ratio of 0.7.

To support its growth and strategic initiatives, Ingredion plans to invest approximately $450 million in capital expenditures in 2025, focused on updating, expanding, and improving its manufacturing facilities.

The company’s strong liquidity position, with $2.6 billion in total available liquidity as of the end of 2024, provides it with the financial flexibility to fund its operations, invest in growth opportunities, and return capital to shareholders through dividends and share repurchases.

Conclusion

Ingredion’s financial performance in 2024 demonstrates the company’s ability to navigate challenging market conditions and deliver solid results. Its diversified business model, focus on innovation, and disciplined approach to capital allocation have been key drivers of its success.

Looking ahead, Ingredion remains well-positioned to capitalize on emerging trends and opportunities in the global ingredients market. By continuing to execute on its strategic priorities and maintain a strong financial foundation, the company is poised to deliver long-term value for its shareholders.