Ingredion Incorporated — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net sales for the third quarter of 2026 were $1,792 million, a 1% decrease from $1,816 million in the prior-year period; excluding the Pakistan business sale, net sales increased 2%.
• Year-to-date net sales were $5,434 million, down 1% from $5,462 million in 2025; excluding Pakistan, sales increased 2%.
• Reported operating income was $201 million for the third quarter, down 19% from $249 million in 2025; excluding foreign exchange impacts, operating income declined 21%.
• Adjusted operating income was $206 million for the third quarter, down 19% from $254 million in 2025; excluding foreign exchange impacts, adjusted operating income declined 21%.
• Reported diluted EPS was $2.23 for the third quarter, down from $2.61 in 2025.
• Adjusted diluted EPS was $2.28 for the third quarter, down from $2.75 in 2025.
• Year-to-date reported operating income was $592 million, down 26% from $796 million in 2025.
• Year-to-date adjusted operating income was $676 million, down 16% from $800 million in 2025.
• Total debt was $1.8 billion as of September 30, 2026, compared to $1.8 billion at December 31, 2025.
• Cash and short-term investments were $993 million as of September 30, 2026, compared to $1.0 billion at December 31, 2025.
• Net adjusted financing costs were $10 million for the third quarter of 2026, compared to $7 million in the prior-year period.
• Reported effective tax rate was 26.8% for the third quarter of 2026, compared to 28.6% in 2025; adjusted effective tax rate was 26.4% for both periods.
• Capital expenditures totaled $313 million through September 30, 2026, partially offset by $36 million in proceeds from property sales.

Guidance and Future Outlook:

• Full-year 2026 reported diluted EPS guidance is lowered to a range of $8.04 to $8.49.
• Full-year 2026 adjusted diluted EPS guidance is lowered to a range of $9.25 to $9.70.
• Full-year 2026 net sales are expected to be flat; excluding the Pakistan business, sales are expected to be flat to up low single digits.
• Full-year 2026 reported operating income is expected to be down low double digits.
• Full-year 2026 adjusted operating income is expected to be down mid-teens.
• Full-year 2026 cash from operations is expected to be in the range of $650 million to $750 million.
• Full-year 2026 capital expenditures are expected to be approximately $450 million to $490 million.
• Full-year 2026 reported effective tax rate is expected to be 27.9% to 28.9%; adjusted effective tax rate is expected to be 26.5% to 27.5%.
• Full-year 2026 corporate costs are expected to be down mid-single digits.
• Segment outlook for 2026:
  • Texture & Healthful Solutions operating income expected to be flat to up low single digits.
  • Food & Industrial Ingredients–LATAM operating income expected to be down mid-to-high single digits.
  • Food & Industrial Ingredients–U.S./CAN operating income expected to be down 35-40%.
  • All Other operating loss expected to be approximately $(15) million.

Business Segments and Product Lines:

• Texture & Healthful Solutions (T&HS) reported net sales of $610 million for the third quarter, up 1% from $605 million in 2025; operating income was $95 million, down 10% from $105 million in 2025.
• T&HS achieved its 10th consecutive quarter of net sales volume growth, driven by clean label demand, though higher tapioca costs and manufacturing input inflation negatively impacted profit growth.
• Food & Industrial Ingredients–LATAM reported net sales of $624 million for the third quarter, up 7% from $585 million in 2025; operating income was $109 million, down 6% from $116 million in 2025.
• LATAM volume growth was driven by brewing and beverage customers in Mexico and Brazil, offset by foreign exchange impacts from a stronger Mexican peso and business disruption from the August earthquake in Colombia.
• Food & Industrial Ingredients–U.S./CAN reported net sales of $504 million for the third quarter, down 1% from $507 million in 2025; operating income was $52 million, down 36% from $81 million in 2025.
• U.S./CAN operating income decline was driven by higher manufacturing expenses at the Argo facility and volume declines, partially offset by favorable price mix.
• All Other reported net sales of $54 million for the third quarter, down 55% from $119 million in 2025, primarily due to the sale of the majority stake in the Pakistan business.
• All Other operating loss increased to $11 million for the third quarter from $4 million in 2025, reflecting the Pakistan sale impact partially offset by improvements in the Protein Fortification business.

Market and Competitive Landscape:

• T&HS continues to gain share in strategic categories with continued global growth in clean label solutions as customers reformulate for simpler labels, affordability, and nutrition.
• Consumer softness in food and beverage demand impacted profitable volume growth across the company.
• The company faces input cost inflation, specifically higher tapioca costs and manufacturing input costs.
• Foreign exchange impacts include a stronger Mexican peso affecting LATAM results and the value of the Mexican peso relative to the U.S. dollar affecting tax items.

Risks and Challenges:

• The recovery of the Argo facility's financial performance is slower than anticipated, with high manufacturing costs and softer demand impacting profitability.
• Business disruption in Colombia resulted from the August earthquake affecting Andean operations.
• The sale of the majority stake in the Pakistan business resulted in a loss of volume and reduced earnings contribution for the second half of 2026.
• The company faces risks related to the pending acquisition of Tate & Lyle, including integration challenges, potential failure to close, and loss of contracts or customers.
• Operational challenges at the Argo facility include thermal event costs and the need to sustainably lower operating costs.

Management Commentary and Tone:

• Jim Zallie, Chairman, President, and CEO, stated that third-quarter results fell short of expectations primarily due to Argo's slower financial recovery, higher input costs, and consumer softness.
• Management noted that while production at Argo remained stable and inventories were rebuilt, the focus has shifted to lowering operating costs and improving volume growth.
• Management expressed confidence that actions taken to improve financial performance through operating cost discipline and spend management will improve earnings, though the recovery is taking longer than expected.
• Management highlighted T&HS volume growth as a bright spot, driven by strong global demand for clean label products.
• Management indicated they are building the foundation for a stronger company with greater opportunities for growth and innovation in 2027 and beyond as they progress integration planning for the Tate & Lyle acquisition.

Analyst Questions and Answers:

• No specific analyst questions and answers were included in the provided press release text.

Other Key Points:

• The company declared a quarterly dividend increase to $0.83 per share on September 17, 2026, marking the 12th consecutive year of dividend increases; dividends paid in the third quarter totaled $53 million.
• Through September 30, 2026, the company repurchased $85 million of common stock and is on track to complete its $100 million full-year share repurchase target.
• The company recorded a net pre-tax gain of $44 million related to the sale of its Pakistan business during the nine months ended September 30, 2026.
• The company recorded pre-tax acquisition and integration costs of $6 million for the third quarter of 2026, primarily related to the pending acquisition of Tate & Lyle.
• The company recorded pre-tax impairment charges of $6 million for the third quarter of 2026, including charges related to the sale of the Vanscoy, Canada facility and an equity investment.
• The company recorded a pre-tax restructuring benefit of $17 million for the third quarter of 2026, primarily from the gain on the sale of land in Lane Cove, Australia.
• The company recorded pre-tax charges of $8 million for the third quarter of 2026 related to the Argo thermal event.
• The company expects the 2026 full-year outlook to reflect tariff levels in effect as of the end of October 2026.
• The pending acquisition of Tate & Lyle is expected to create opportunities for growth, innovation, and shareholder value creation in 2027 and beyond.