Third Quarter 2016 Earnings Call November 2, 2016 Ilene Gordon, Chairman, President, and CEO Jack Fortnum, Executive Vice President and Chief Financial Officer
Forward-Looking Statements This presentation contains or may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends these forward-looking statements to be covered by the safe harbor provisions for such statements. Forward-looking statements include, among other things, any statements regarding the Company’s prospects or future financial condition, earnings, revenues, tax rates, capital expenditures, expenses or other financial items, any statements concerning the Company’s prospects or future operations, including management’s plans or strategies and objectives therefor and any assumptions, expectations or beliefs underlying the foregoing. These statements can sometimes be identified by the use of forward looking words such as “may,” “will,” “should,” “anticipate,” “assume”, “believe,” “plan,” “project,” “estimate,” “expect,” “intend,” “continue,” “pro forma,” “forecast,” “outlook” or other similar expressions or the negative thereof. All statements other than statements of historical facts in this presentation or referred to in this presentation are “forward-looking statements.” These statements are based on current circumstances or expectations, but are subject to certain inherent risks and uncertainties, many of which are difficult to predict and are beyond our control. Although we believe our expectations reflected in these forward-looking statements are based on reasonable assumptions, stockholders are cautioned that no assurance can be given that our expectations will prove correct. Actual results and developments may differ materially from the expectations expressed in or implied by these statements, based on various factors, including the effects of global economic conditions, including, particularly, continuation or worsening of the current economic, currency and political conditions in South America and economic conditions in Europe, and their impact on our sales volumes and pricing of our products, our ability to collect our receivables from customers and our ability to raise funds at reasonable rates; fluctuations in worldwide markets for corn and other commodities, and the associated risks of hedging against such fluctuations; fluctuations in the markets and prices for our co-products, particularly corn oil; fluctuations in aggregate industry supply and market demand; the behavior of financial markets, including foreign currency fluctuations and fluctuations in interest and exchange rates; volatility and turmoil in the capital markets; the commercial and consumer credit environment; general political, economic, business, market and weather conditions in the various geographic regions and countries in which we buy our raw materials or manufacture or sell our products; future financial performance of major industries which we serve, including, without limitation, the food and beverage, paper, corrugated, and brewing industries; energy costs and availability, freight and shipping costs, and changes in regulatory controls regarding quotas, tariffs, duties, taxes and income tax rates; operating difficulties; availability of raw materials, including potato starch, tapioca and the specific varieties of corn upon which our products are based; energy issues in Pakistan; boiler reliability; our ability to effectively integrate and operate acquired businesses,; our ability to achieve budgets and to realize expected synergies; our ability to complete planned maintenance and investment projects successfully and on budget; labor disputes; genetic and biotechnology issues; changing consumption preferences including those relating to high fructose corn syrup; increased competitive and/or customer pressure in the corn refining industry; and the outbreak or continuation of serious communicable disease or hostilities including acts of terrorism. Our forward-looking statements speak only as of the date on which they are made and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of the statement as a result of new information or future events or developments. If we do update or correct one or more of these statements, investors and others should not conclude that we will make additional updates or corrections. For a further description of these and other risks, see “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2015 and subsequent reports on Forms 10-Q and 8-K. 2
Perspective on 3Q 2016 • Strong operating results – Overall operating income $221M, up 27% – 1% Volume decline; -2% from Port Colborne sale – Improved price/product mix • Specialty sales • Margin expansion in our core ingredients – Operational efficiencies and global optimization • Business model and strategy are working 3
North America third quarter business highlights • North America operating income $164M, up $31M • Overall volumes were down 3%; driven by Port Colborne sale • Improved price/product mix – Specialty sales – Margin expansion in our core ingredients • Improvements in operational efficiencies 4
South America third quarter business highlights • South America operating income $27M, down $1M affected by: – Lower volumes due to macroeconomic environment – Higher input costs • Continued pricing actions to recover inflationary costs • Accelerated network optimization 5
Asia Pacific third quarter business highlights • $29M of operating income, up $2M • Overall volume up 9% • Strong specialty sales in China and Southeast Asia • Margin expansion • Capacity expansion on track 6
Europe/Middle East/Africa (EMEA) third quarter business highlights • $25M of operating income, up $3M • Overall volume up 8% • Margin expansion offset currency headwinds 7
Third quarter 2016 Income statement highlights $ in millions, unless noted 3Q 2015 3Q 2016 Change Net Sales $ 1,437 $ 1,489 $ 52 Gross Profit $ 330 $ 369 $ 39 Gross Profit Margin 23.0% 24.8% 180 bps. Reported Operating Income $ 175 $ 221 $ 46 Adjusted Operating Income* $ 192 $ 224 $ 32 Reported Diluted EPS $ 1.48/share $ 1.93/share $ 0.45/share Adjusted Diluted EPS* $ 1.64/share $ 1.96/share $ 0.32/share Note: Amounts may not foot due to rounding. *See appendix for a reconciliation of these non-GAAP financial measures to U.S. GAAP measures. 8
Third quarter 2016 Net sales bridge 4% $ in millions $91 $1,489 1,500 $1,437 1,450 1,400 $(19) $(19) 1,350 1,300 1,250 1,200 1,150 1,100 1,050 1,000 3Q 2015 FX Volume Price/Mix 3Q 2016 Note: Amounts may not foot due to rounding. 9
Third quarter 2016 Net sales variance by region Foreign Price/mix Net Sales Volume Exchange Change North America - -3% 5% 2% South America -8% -8% 24% 8% Asia Pacific 3% 9% -6% 6% EMEA -3% 8% -2% 3% Ingredion -1% -1% 6% 4% Note: Amounts may not foot due to rounding. 10
Third quarter 2016 Operating income bridge $ in millions 240 $3 $2 $224 $31 $221 220 $(4) $(1) $(3) 200 $17 $192 $175 180 160 +16% 140 120 100 3Q 15 Non- 3Q 15 North America South America Asia Pacific EMEA Corporate 3Q 16 Non- 3Q 16 Reported GAAP Adj. Adjusted* Adjusted* GAAP Adj. Reported 2016 Q3 OI $164 $27 $29 $25 $(22) $224 $(3) $221 Note: Amounts may not foot due to rounding. *See appendix for a reconciliation of these non-GAAP financial measures to U.S. GAAP measures. 11
Third quarter 2016 EPS bridge Amounts are dollars/share 3Q 2015 Reported Diluted EPS $ 1.48 Acquisition/Integration Costs 0.03 Margin $ 0.21 Impairment/Restructuring Costs 0.13 Volume 0.01 Foreign Exchange Rates 0.03 3Q 2015 Adjusted Diluted EPS* $ 1.64 Other Income / (Expense) 0.04 Changes from Operations $ 0.29 3Q 2016 Adjusted Diluted EPS* $ 1.96 Financing Costs $ (0.01) Impairment/Restructuring Costs (0.02) Non-controlling Interests - 3Q 2016 Reported Diluted EPS $ 1.93 Tax Rate 0.08 Shares Outstanding (0.04) Non-Operational Changes $ 0.03 Note: Amounts may not foot due to rounding. *See appendix for a reconciliation of these non-GAAP financial measures to U.S. GAAP measures. 12
First nine months 2016 Income statement highlights $ in millions, unless noted YTD 15 YTD 16 Change Net Sales $ 4,216 $ 4,304 $ 88 Gross Profit $ 929 $ 1,063 $ 134 Gross Profit Margin 22.0% 24.7% 270 bps. Reported Operating Income $ 487 $ 619 $ 132 Adjusted Operating Income* $ 529 $ 636 $ 107 Reported Diluted EPS $ 4.09/share $ 5.29/share $ 1.20/share Adjusted Diluted EPS* $ 4.47/share $ 5.46/share $ 0.99/share Note: Amounts may not foot due to rounding. *See appendix for a reconciliation of these non-GAAP financial measures to U.S. GAAP measures. 13
First nine months 2016 net sales bridge $ in millions +2% 4,400 $265 $4,304 $4,216 4,200 $26 4,000 $(202) 3,800 3,600 3,400 3,200 3,000 2,800 2,600 2,400 2,200 2,000 YTD 2015 FX Volume Price/Mix YTD 2016 Note: Amounts may not foot due to rounding. 14
Recommend
More recommend
