Ingredion Reports 9% Decrease in Net Sales for Fiscal Year 2024

Ingredion Incorporated reported a decrease in net sales for the fiscal year 2024, totaling $7.43 billion, down 9% from $8.16 billion in 2023. The decline was attributed to a combination of unfavorable pricing mix, reduced sales from the divestiture of its South Korea business, and foreign exchange impacts. Despite the drop in sales, net income attributable to Ingredion increased slightly to $647 million, or $9.71 per diluted share, compared to $643 million, or $9.60 per diluted share in the previous year. This increase in net income was primarily driven by lower financing costs and a gain from the sale of the South Korea business, which was partially offset by higher effective tax rates and restructuring charges.

The company underwent significant operational changes, including the closure of manufacturing facilities in Canada, the United Kingdom, and Brazil, which resulted in impairment charges totaling $127 million for the year. Additionally, Ingredion restructured its business segments effective January 1, 2024, creating three reportable segments: Texture & Healthful Solutions, Food & Industrial Ingredients - Latin America, and Food & Industrial Ingredients - U.S./Canada. This reorganization aims to better align production assets and commercial efforts.

In terms of operational metrics, Ingredion's employee headcount stood at approximately 11,200 as of December 31, 2024, with a significant portion of its workforce located in Latin America. The company reported a gross profit margin increase to 24% in 2024, up from 21% in 2023, primarily due to lower raw material costs. The Texture & Healthful Solutions segment saw a 4% decrease in net sales to $2.37 billion, while the Food & Industrial Ingredients - LATAM segment's sales decreased by 7% to $2.45 billion. Conversely, the Food & Industrial Ingredients - U.S./Canada segment reported a 25% increase in operating income, attributed to favorable pricing under multi-year contracts.

Looking ahead, Ingredion anticipates continued challenges from market volatility, including fluctuations in commodity prices and foreign exchange rates. The company plans to focus on innovation and product development to meet evolving consumer preferences, particularly in health and wellness. Ingredion's management expressed confidence in its ability to navigate these challenges, supported by a strong liquidity position of $2.6 billion as of December 31, 2024, which includes cash and cash equivalents of $997 million. The company expects to maintain sufficient liquidity to fund its operations and capital expenditures in the foreseeable future.