WESTCHESTER, ILL. — Despite the supply shocks of the conflict in Ukraine and a drought in Europe, Ingredion, Inc. was able to secure raw material, keep its customers supplied and overcome unexpected raw material inflations, ultimately delivering strong earnings and sales in fiscal 2022.
Net income attributable to Ingredion in the year ended Dec. 31, 2022, was $492 million, equal to $7.43 per share on the common stock, up sharply from $117 million, or $1.74 per share, in the previous fiscal year. Operating income of $762 million was up 146% from $310 million. Last year’s results included a net asset impairment charge related to the contribution of Ingredion’s Argentine assets to the Arcor joint venture.
Net sales of $7.95 billion were up 15% from $6.89.
In North America, operating income of $565 million was up 16% from $487 million in the previous year. The increase was driven by favorable price mix and expanded raw material risk management, Ingredion said. Net sales increased 19% to $4.93 billion.
In South America, operating income rose 22% to $169 million as favorable price mix more than offset higher corn and input costs. Net sales increased 6% to $1.12 billion. In Asia Pacific, operating income increased 7% to $93 million. Favorable price mix was only partially offset by foreign exchange impacts. Net sales increased 11% to $1.11 billion. In Europe, Middle East and Africa, operating income increased 4% to $110 million, largely attributable to favorable price mix in Europe that partially was offset by conditions in Pakistan. Net sales increased 11% to $781 million.
Companywide in the fourth quarter, net income attributable to Ingredion was $114 million, or $1.73 per share, up 70% from $67 million, or $1 per share, in the same time of the previous year. Net sales of $1.99 billion were up 13% from $1.76 billion.
During a Feb. 8 conference call with analysts, James P. Zallie, president and chief executive officer, noted progress within Ingredion’s specialty growth platforms. He said the company delivered more than $400 million in net sales in sugar reduction and specialty sweeteners, aided by strong double-digit growth in the fourth quarter.
“PureCircle’s talented go-to-market team delivered 14% net sales growth and positive operating income by volume and breakthrough product innovations,” Mr. Zallie said. “We are excited by the tremendous opportunities we see for our sugar reduction franchise worldwide. I’m also pleased to mention that we increased our ownership of the PureCircle business to 87%, up from our original 75% stake.”
Meanwhile, net sales in the company’s plant-based proteins business surged 118% in fiscal 2022 to $36 million. Despite the growth, Mr. Zallie believes Ingredion is capable of more.
“Although sales doubled and our profitability slightly improved, we did not grow the top line nor reduced the operating losses as much as we had expected,” he said. “Our South Sioux City (Neb.) facility is laser-focused on improved product quality attributes that we believe will appeal to broader market segments. We see exciting growth opportunities in fortified bakery, alternative dairy, sports nutrition and beverages. We continue to see the current $10 billion market for plant-based proteins, which is growing steadily at more than 6% per annum as an exciting growth opportunity. We remain committed to our strategy to execute upon a formulation approach toward structuring and fortifying plant-based foods with a leading portfolio of protein flours, concentrates and isolates.”
Ingredion in 2022 expects adjusted EPS to be in the range of $7.70 to $8.40, which would compare to adjusted EPS of $7.45 in 2022. Ingredion forecasts North American net sales to be up mid-double-digits and adjusted operating income to be up high-single-digits to low-double-digits.“As I reflect on the past year and look forward to 2023, I’m confident that we are well positioned to continue to execute against our strategic pillars for growth,” Mr. Zallie said. “Our priorities will be to grow our specialty ingredients portfolio, drive plant-based protein sales, continued grind optimization and maximize value from finishing channels for core ingredients while also further mitigating profit volatility. And lastly, invest in R&D to drive innovation and digital capabilities to transform the supply chain and enhance the customer experience.”