2017 Analyst Day Ingredion Idea Labs Global Innovation Center

Transcription

1 2017 Analyst Day Ingredion Idea Labs Global Innovation Center Ilene Gordon Chairman, President and Chief Executive Officer Jim Zallie Executive Vice President, Global Specialties and President, Americas; Chief Executive Officer Elect Jorgen Kokke Senior Vice President and President, Asia-Pacific and EMEA James Gray Executive Vice President and Chief Financial Officer 1

2 Today s agenda 9:00 AM Strategic Overview Ilene Gordon, Chairman, President and CEO Capabilities Around the World Jim Zallie, Executive VP, Global Specialties and President, Americas; CEO Elect Jorgen Kokke, Senior Vice President and President, EMEA and Asia-Pacific 10:45 AM 12:00 PM Introduction to Tour Tony DeLio, Senior Vice President and Chief Innovation Officer Culinology Luncheon CULINOLOGY is a registered trademark of the Research Chefs Association. Used with permission. Delivering Shareholder Value James Gray, Executive Vice President and Chief Financial Officer 1:00 PM Adjourn 10:15 AM Questions and Answers 2

3 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, propels, opportunity, potential or other similar expressions or the negative thereof. All statements other than statements of historical facts in this release or referred to in this release 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; particularly United States tax reform; operating difficulties; availability of raw materials, including potato starch, tapioca, gum arabic and the specific varieties of corn upon which our products are based; our ability to develop new products and services at a rate or of a quality sufficient to meet expectations; 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. Factors relating to the acquisition of TIC Gums that could cause actual results and developments to differ from expectations include: the anticipated benefits of the acquisition, including synergies, may not be realized; and the integration of TIC Gum s operations with those of Ingredion which may be materially delayed or may be more costly or difficult than expected. 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, 2016 and subsequent reports on Forms 10-Q and 8-K. 3

4 A brief note on safety... In case of a medical emergency: Dial 5100 on any phone to summon site s Emergency Response Team Ingredion personnel are standing by to assist and call external services In case of an evacuation: Primary exit is behind you Follow the exit sign and go directly across the hall and out the doors into the courtyard Once outside follow the signs to the designated gathering point Be careful to stay out of roads to allow emergency vehicles to pass Secondary exit is in front of you Exit into the warehouse and walk across the warehouse toward lighted exits to the outside. Meet in the marked designated area outside 4

5 Strategic Overview Ilene Gordon Chairman, President and Chief Executive Officer 5

6 We are Ingredion Turning grains, fruits, vegetables and other plants into value-added ingredients and biomaterial solutions for the food, beverage, paper and corrugating, brewing and other industries 100 serving customers in more than 100 countries approximately 11,000 FORTUNE talented and experienced employees 500 company a global network of 27 Ingredion Idea Labs innovation centers, manufacturing facilities and sales offices presence in 40 countries $5.8B net sales 9/30/17 trailing twelve months headquartered outside of Chicago in Westchester, Illinois 6

7 More than 1,000 ingredient solutions NATURE- BASED RAW MATERIALS Corn Tapioca STARCHES Corn Rice Tapioca Waxy corn Potato Flours Functional native starches Modified starches Resistant starches Pre-gel Dextrin Gluten-free Blends Others SWEETENERS Stevia Glucose syrups Glucose solids HFCS Maltose syrups Maltodextrins Dextrose Polyols Non-GMO syrups Isomaltooligosaccharide Caramel color Fermentation products Blends Potato Stevia Rice Pulses Others FRUIT & VEGETABLE PRODUCTS Fruit juice concentrates Vegetable juice concentrates Purees and puree concentrates Essences Distillates Pomace Whole, sliced, diced strawberries OTHER Pulse proteins Corn gluten feed Corn gluten meal Crude corn oil Refined corn oil Hydrocolloids systems/blends Insoluble fiber Prebiotic soluble fiber Galactooligosaccharide Biopolymers Others 7

8 We are Ingredion One of the world s most global food ingredient companies Our success is anchored in our core value propositions of texture, sweetness, nutrition and our expertise in starch and hydrocolloid-based technology We are the global expert in texture solutions, including our proprietary clean label texture ingredients Our goal is to continue to drive growth in specialty ingredients Expanding our texture, sweetness, and nutritional offerings, adding new functionalities and broadening our portfolio beyond starch and aligned to key consumer trends We continue to generate strong cash flow And along with our balance sheet, gives us the flexibility to aggressively pursue valueenhancing opportunities Our success to date has resulted in substantial shareholder value creation 8

9 A proven Strategic Blueprint A LEADING GLOBAL SUPPLIER OF INGREDIENT SOLUTIONS SHAREHOLDER VALUE CREATION Organic Growth Broadening Ingredient Portfolio Geographic Scope OPERATING EXCELLENCE 9

10 Operating excellence SAFETY LEADERSHIP World-class levels Comprehensive strategy, strong management commitment and employee engagement COMMITMENT TO QUALITY 100% of targeted production facilities ISO:9001 certified* 100% of targeted facilities have achieved Global Food Safety* WORLD-CLASS MANUFACTURING AND GLOBAL SUPPLY CHAIN MANAGEMENT Focus on network optimization and operational excellence CULTURE OF CONTINUOUS IMPROVEMENT Using Lean Six Sigma methodologies to improve performance CUSTOMER-FOCUSED Local supplier with extensive manufacturing network Business and technical teams to serve regional and local markets CONTINUED FOCUS ON SUSTAINABILITY Commitment to further our efforts in environmental conservation Promoting responsible and ethical business practices across our supply chain *Recent acquisitions in process 10

11 Geographic opportunities for organic growth EUROPE, MIDDLE EAST AND AFRICA 10% 2017 Q3 YTD net sales PAKISTAN NORTH AMERICA 61% 2017 Q3 YTD net sales KENYA ASIA-PACIFIC 12% 2017 Q3 YTD net sales SOUTH AMERICA 17% 2017 Q3 YTD net sales 11

12 Broadening our ingredient portfolio Transformative transaction Portfolio expansion Most recent Analyst Day Portfolio expansion Potato-based ingredients Portfolio expansion Hydrocolloid ingredients Portfolio expansion Rice-based ingredients (Banglen) Corn Products begins trading on New York Stock Exchange Name Change Portfolio expansion Fruit and vegetable ingredients Shandong Huanong Capacity expansion in Asia Pacific 12

13 Delivering performance versus 2014 Analyst Day long-term objectives Change Specialty % of Net Sales 24% 28% * 4 pts Adjusted Operating Income Margin ** 10.9% 15.3% * 4.5 pts Adjusted Earnings Per Share ** $5.20 $7.65-$7.80 *** % ROCE ** 10.6% 12.4% **** 1.8 pts * During the nine months ended September 30, 2017 ** See appendix for a reconciliation of these non-gaap financial measures to U.S. GAAP measures *** 2017 full-year latest estimate **** ROCE calculated using adjusted operating income net of tax for the trailing twelve months ended September 30, 2017 and opening capital employed balance as of January 1,

14 Driving 25% annual total shareholder return since May 2009 INGR $ Nov 8, 2017 Index S&P 500 $2, Nov 8, 2017 INGR S&P 500 Total Shareholder Return + 552% + 254% CAGR + 25% + 16% INGR S&P 500 Price Appreciation + 459% + 196% CAGR + 22% + 14% 14

15 Capabilities Around the World Jim Zallie Executive Vice President, Global Specialties and President, Americas; Chief Executive Officer Elect Jorgen Kokke Senior Vice President and President, Asia-Pacific and EMEA 15

16 Our presence in North America Extensive footprint with manufacturing and service operations in Canada, Mexico and the United States 20 manufacturing plants producing a range of specialty starches, sweeteners, gums and fruit and vegetable products Local production in Canada, United States and Mexico provides network supply flexibility. Mexican production used predominantly for Mexican consumption NORTH AMERICA 61% 2017 Q3 YTD net sales 16

17 Leveraging our position in North America for value creation An innovation network across seven Ingredion Idea Labs developing specialty solutions from sweeteners, starches, hydrocolloids, and simple fruit and vegetable ingredient technology Efficient cost structure enables competitive input costs for both specialty and core ingredients Specialty 25% 2017 Q3 YTD net sales Recent finishing channel capacity expansion investments in U.S. and Mexico are driving specialty growth 17

18 Our presence in South America One of the largest manufacturers of corn- and tapioca-based starches and sweeteners in South America Successfully operating in the region for more than 80 years Nine strategically located manufacturing plants operating across Brazil, the Southern Cone, and Andean sub-regions, servicing customers in large urban areas SOUTH AMERICA 17% 2017 Q3 YTD net sales World-class, diversified manufacturing footprint in Brazil provides supply to grow across all customer segments 18

19 Leveraging our position in South America for value creation Right sizing of our Brazilian network and restructuring actions in Argentina optimized our cost structure Three Ingredion Idea Labs innovation centers located in São Paulo, Cali and Buenos Aires Breadth in core ingredients enables customer-focused business model to provide specialty ingredient solutions Only corn wet miller and specialty tapioca starch manufacturer in Colombia Focused value propositions for a growing middle class and a younger demographic Specialty 16% 2017 Q3 YTD net sales 19

20 Our presence in Asia-Pacific Ten manufacturing plants Five corn-based (South Korea, Australia and China) Three tapioca-based (Thailand) One rice-based (Thailand) One gums (China) Well positioned to benefit from urbanization and growing middle class ASIA-PACIFIC 12 % 2017 Q3 YTD net sales Strong go-to-market presence throughout region Sales offices providing broad coverage across developing and emerging Asia 20

21 Leveraging our position in Asia-Pacific for value creation 12 regional Ingredion Idea Labs innovation centers including key locations in Singapore, Shanghai and Seoul Balanced mix of core and specialty products World class tapioca supply chain out of Thailand Capacity expansions in China and Thailand to support specialty growth Integrating our recent Shandong, Banglen Rice and TIC Gums acquisitions Specialty 44% 2017 Q3 YTD net sales 21

22 Our presence in Europe, Middle East and Africa (EMEA) Five manufacturing facilities Germany, United Kingdom, Pakistan EUROPE, MIDDLE EAST AND AFRICA 10% 2017 Q3 YTD net sales Breadth of customers in CPG and retail food Four sales offices in emerging markets Russia, Kenya, Dubai and South Africa Direct sales force complemented by specialties distributor network KENYA PAKISTAN 22

23 Leveraging our position in EMEA for value creation Five regional Ingredion Idea Labs innovation centers Key locations in Hamburg and Manchester European business predominantly specialties Leader in clean label innovation Strong presence in Pakistan with good core growth Building specialties platform Growing specialties business in emerging markets in Middle East, Eastern Europe and Africa Specialty 47% 2017 Q3 YTD net sales 23

24 Ingredion s path forward Success anchored in key value propositions in texture, sweetness and nutrition Innovation competency is aligned with consumer market and customer trends Growth driven by specialty ingredients Building differentiated customer-focused capabilities Strong cash generation Substantial shareholder value creation 24

25 2022 Long-term objectives* Specialty ingredients target of more than $2 billion of net sales Specialty ingredients target of 32-35% of net sales 2 percentage points margin expansion target** Low double-digit targeted EPS Growth Target ROCE greater than 10% *The company s long-term objectives are considered internal goals based on 2017E year-end and as such, do not represent guidance ** Represents real gross margin absolute dollar growth; actual margins vary due to pass-through of changes in raw material costs and FX 25

26 Local presence and supply chain integration drive differentiated go-to-market capabilities Customer Channels Multi-National CPGs Local Customers Private Label Manufacturers SMEs (small and mid-sized enterprises) Food Service 26

27 Specialties remain at the center of our strategy based upon consumer and technology trends CONSUMER TRENDS CUSTOMER BENEFIT PLATFORMS SPECIALTY SOLUTIONS TECHNOLOGY PLATFORMS TECHNOLOGY TRENDS Growth platforms and framework for innovation Connect our value propositions to our customers needs Technology choices that are platforms for sustained competitive advantage BEAUTY AND HOME 27

28 Specialties remain at the center of our strategy based upon consumer and technology trends CONSUMER TRENDS CUSTOMER BENEFIT PLATFORMS CUSTOMER BENEFIT PLATFORMS SPECIALTY SOLUTIONS Growth platforms and framework for innovation TECHNOLOGY PLATFORMS TECHNOLOGY TRENDS Connect our value propositions to our customers needs Connect our value propositions to our customers needs Technology choices that are platforms for sustained competitive advantage BEAUTY AND HOME 28

29 Texturizers are a large and increasingly influential part of food formulation Global ingredient sales ~ $150 B 1 Total texture industry sales ~ $40 B 1 Preservatives Fruits & Colors $4 $6 Vitamins/ vegetables $2 minerals $6 Starches $6 $6 Animal Protein* $15 Emulsifiers $3 Sweeteners $72 Hydrocolloids $6 Flavors $17 Fibers $3 Acidulants $4 Plant Protein* $8 Cultures & Enzymes $2 1 Markets and Markets, Technavio, Modor, LMC Global Sweetener Market, LMC Global Starch Market, Giract, Food Preservatives Market Global Trends to 2022, Ingredion internal intelligence * Animal protein includes dairy and egg categories. Plant protein includes soy, wheat gluten and other. 29

30 Texture is significantly impacting new product innovation Front of package texture claims have grown 79% from 2011 to In 2018, the sound, feel, and satisfaction that texture provides will become more important to companies and consumers alike. According to Mintel, texture is the latest tool to engage the senses and deliver experiences that are worth sharing Claims 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5, % CAGR Sources: Markets and Markets report, Food Stabilizers (Blends/ Systems) Market 2016, Mintel, Ingredion internal intelligence 30

31 Free-from consumer trend is driving opportunities for texture New product launches with claims of Low, No and Reduced Sugar have increased 17% on average 6,000 Other free from formulations (e.g. oils, gluten, eggs) require texture to be built back 5,000 4,000 3,000 17% CAGR 2,000 1,000 Source: Mintel GNPD Europe Asia Pacific Latin America North America Middle East & Africa 31

32 Ingredion s Customer Benefit Platforms Key areas of focus and growth based on global consumer trends Recipe Savings Reduced Manufacturing Costs Convenient Foods & Beverages Processing Stability Extended Shelf Life Natural & Simple Ingredients Free-From Ingredients Organic & Non-GMO Added Nutrition & Protein Reduced Sugar Fiber Enriched Crispy, Crunchy, Creamy, Sweet Foods Silky Creams & Lotions Fresh 32

33 Fast-growing powdered beverage segment being enabled by TIC Gums solutions Market Drivers Clean label claims have grown from 8% in 2012 to 38% of launches in 2016 (CAGR 56.7%*) Good-for-you and protein fortified beverages now expand beyond sports applications Leverages TIC Gums expertise in xanthan gum, acacia gum and guar gum Consumer Value Proposition Hydrates quickly and delivers consistent viscosity for immediate beverage consumption Label friendly *Innova Market Insights,

34 Well positioned to offer solutions for the global snacking category Texture driving innovation in savory snacks in Colombia Market Drivers Pandeyuca and Pandebono are typical Colombia cheese blends that are positioned as healthy snack alternatives The category is very dynamic, with taste and texture innovation opportunities Innovation & Solutions: Easy to make: it s a complete ingredient solution, the client only has to add two ingredients to the final formulation Significant reduction in the processing time Consumer Value Proposition Healthy snacks: baked vs. fried Nutritional snacks: the formula includes cheese 34

35 Creating value in the clean label space Collaboration with key Chinese dairies to create products with consumer preferred market positioning Market Drivers Free from additives / artificial ingredients Recognizable ingredient list which conveys trust Growing chilled and ambient yogurt category Innovation & Solutions: functional starches made in Thailand from rice and tapioca multifunctional rice and tapioca flours Consumer Value Proposition Front-of-pack claims that drive purchase intent Natural ingredients that consumers trust and understand No compromise on eating quality 35

36 Satisfying the sweet tooth of Asian consumers Reduce/remove sugars without compromising sweetness Market Drivers Concerns with increasing sugar consumption in developing countries Governments intervening with health-awareness campaigns and taxes Innovation & Solutions: Customized sweetener solution using formula science: Natural High Intensity Sweeteners: and Bestevia Dietary fiber sweetener: Consumer Value Proposition Sugar/calorie reduction Sucrose-like taste profile Minimize reformulation impact 36

37 Creating new snacking experiences Create high-quality snacks with a signature texture Market Drivers Snacking on the rise 2% global growth and 4% Asian, driven by India, Indonesia and Philippines* Consumers seek variety in snack types and healthier options Innovation & Solutions: Broad range of texturizers such as crisp series offering different snacking experiences Proprietary sensory language: Consumer Value Proposition Range of textural possibilities Mix-and-match to create signature texture Improved manufacturing efficiency and product quality *Giract, Markets and Markets, UBIC, 37

38 Help consumers meet their fiber and digestive health needs Meet the growing demand for high-fiber foods without compromising taste Market Drivers Demand for fiber in food and beverages projected to grow an average of 8% per year through 2022* Consumer fiber intake falls short of recommendations E.g. 14g average daily intake vs 19g requirement in Japan Asia Pacific leads fiber demand, with estimated CAGR of >10% from * Innovation & Solutions: resistant starch portfolio - potato, tapioca, wheat sources 90% white fiber, not destroyed by processing in baking, extrusion Highly functional: sugar reduction, texture enhancement Consumer Value Proposition Easily formulated into foods (e.g. noodles, bakery items, breakfast cereals) No grittiness or impact on taste Convenient source of fiber in everyday foods *Giract, Markets and Markets, UBIC, 38

39 Positioning our go-to-market capabilities to capitalize on changes in consumer behavior Seismic shift in food consumption from home to away from home; Significant growth in foodservice Large CPG brand companies have growth challenges; small and mid-sized companies drive industry growth Market Share by Company Size $606B $681B SMEs 42.8% 45.9% 3-5% CAGR Large (>$5.5B) 57.2% 54.1% 1% CAGR Source: 2016 IRI Study 39

40 Significant investments made to drive specialty growth ~3% of specialty sales invested in R&D in 2017 TTM * 350 More than scientists worldwide 27 Ingredion Idea Labs state-of-theart innovation centers around the world focused on new-product development and customer collaboration; global headquarters in Bridgewater, NJ Capital investments expanding on our specialties capabilities in Brazil, China, Colombia, Germany, Korea, Mexico, Thailand and the U.S. * 9/30/17 trailing twelve months 40

41 Summary Our specialties offer differentiated value propositions that are aligned with key consumer trends and channels Five Customer Benefit Platforms: Clean and Simple Health and Nutrition Sensory Experience Affordability Convenience and Performance Strong growth opportunities focused on texture, sweetness, and nutrition Our strong technology capabilities and global innovation network are key reasons why customers prefer to work with us We have made and are making significant investments to drive specialty ingredient growth 41

42 Financial Results and Long-term Outlook James Gray Executive Vice President and Chief Financial Officer 42

43 Our specialty portfolio is approximately 28% of net sales 2017 Q3 YTD specialty % of net sales Specialty 28% North America 25% South America 16% APAC 44% EMEA 47% Specialty net sales 28% 43

44 Our specialty portfolio is expected to exceed $2 billion in net sales by Q3 YTD net sales Five year mix objective* Specialty 28% Specialty 32-35% Net sales growth objective Specialty net sales Remaining net sales Mid to high single digit Low single digit Total annual average 1% 4% * Excludes impact of potential future acquisitions 44

45 Our sales portfolio over time is shifting to higher-value food ingredients Animal Nutrition 10% 2017 Q3 YTD net sales Five year mix objective** Other* 8% Animal Nutrition 10% Other* 8% Paper & Corr. 10% Brewing 7% Beverage 12% * Other includes beauty and home, pharmaceutical, building products and more. Food 53% Paper & Corr. 9% Brewing 6% Beverage 11% Annual Long Term Growth Objective Food 3% - 5% Beverage 1% - 2% Brewing 0% - 1% Paper & Corrugating 0% - 1% All Other 2% - 4% Go to market differentiation Food 55% Total Company 1% - 4% ** Excludes impact of potential future acquisitions 45

46 Regional net sales outside of North America drives higher growth 2017 Q3 YTD net sales Five year mix objective* EMEA 10% EMEA 11% APAC 12% APAC 14% South America 17% North America 61% South America 18% North America 57% * Assumes constant currency; Excludes impact of potential future acquisitions Annual long term growth objective North America 1% - 3% South America 2% - 4% APAC 4% - 6% EMEA 5% - 7% Total Company 1% 4% 46

47 Of sweeteners, HF55 represents <10% of global net sales Co-Products & Other 19% Sweeteners 37% Global Starches 44% North America Over 90% of glucose sales are within the food application; primarily confectionery, dairy and processed foods Go to market differentiation Other sweeteners include products like maltose syrups, dextrose, polyols, maltodextrin, HF42, caramel color and stevia. These are sold primarily within confectionery, dairy, brewery, baking and processed foods HF55 9% 11% Glucose 9% 8% Other Sweeteners 19% 21% Source: Internal forecast; 9/30/17 trailing twelve months 47

48 Balanced earnings growth algorithm Long Term Growth Net Sales +1% to 4% Profit Gross Profit +4% to 6% SG&A Leverage +2pp Operating Income 6% to 8% ~2/3 Drivers and Risks Higher specialty growth Higher emerging market growth Gradual North America HFCS decline Specialty premiums and margins maintained Strategic deployment of cash +4pp ~1/3 Strong cost management Earnings Per Share Low double-digit The company s long-term objectives are considered internal goals and as such, do not represent guidance Represents real gross margin absolute dollar growth; actual margins vary due to pass-through of changes in raw material costs and FX Net sales growth objective assumes constant currency and corn/raw material costs equivalent to

49 The attractiveness of specialties Net sales growth More than 2X Gross profit growth More than 2X Core Specialty Core Specialty Enhancing our Specialty Portfolio Significant impact to margin expansion and earnings growth 49

50 Solid returns and financial performance Specialty % of Net Sales 25% 26% 28% *** Gross Profit Margin % 22% 25% 26% *** Adjusted Earnings Per Share * $5.88 $7.13 $7.65-$7.80 **** Return on Capital Employed * 11.5% 12.6% 12.4% ** * See appendix for a reconciliation of these non-gaap financial measures to U.S. GAAP measures ** ROCE calculated using adjusted operating income net of tax for the trailing twelve months ended September 30, 2017 and opening capital employed balance as of January 1, 2017 *** During the nine months ended September 30, 2017 **** 2017 full year latest estimate 50

51 Strong balance sheet provides flexibility TTM Investment Grade Rating - S&P and Fitch - Moody s BBB Baa2 BBB Baa2 BBB Baa2 Net Debt / Adjusted EBITDA * 1.6x 1.4x 1.3x Net Debt to Capitalization * 37% 34% 31% *See appendix for a reconciliation of these non-gaap financial measures to U.S. GAAP measures. 51

52 Consistent cash generation Cash principles Maintain investmentgrade status Dividend payout ratio target of 25-30% Pursue value-enhancing acquisitions and shareholder payout* 2017E Annual Cash Flows $ Millions $750 - $775 $300- $320 ~$150 ~$280 $320 - Cash Flow from Operations CAPEX Dividends Free Cash Flow After Dividends *Shareholder payout includes dividend payments and share repurchases 52

53 Delivering earnings algorithm EPS growth 2017 EPS Guidance $ $ Year EPS CAGR: 15% 10 Year EPS CAGR: 12% 5 Year EPS CAGR: 7% 1 Year EPS CAGR: 8% * 2010* 2011* 2012* * 2015* 2016* 2017E Note: CAGR is calculated based on adjusted EPS for , and CAGR are calculated based on the midpoint of 2017 guidance. See appendix for a reconciliation of these non-gaap financial measures to U.S. GAAP measures. 53

54 2022 Long-term objectives* Specialty ingredients target of more than $2 billion of net sales Specialty ingredients target of 32-35% of net sales 2 percentage points margin expansion target** Low double-digit targeted EPS Growth Target ROCE greater than 10% *The company s long-term objectives are considered internal goals based on 2017E year-end and as such, do not represent guidance ** Represents real gross margin absolute dollar growth; actual margins vary due to pass-through of changes in raw material costs and FX 54

55 Closing Remarks Jim Zallie Executive Vice President, Global Specialties and President, Americas; Chief Executive Officer Elect 55

56 Ingredion s path forward Success anchored in key value propositions in texture, sweetness and nutrition Innovation competency is aligned with consumer market and customer trends Growth driven by specialty ingredients Building differentiated customer-focused capabilities Strong cash generation Substantial shareholder value creation 56

57 Questions and Answers 57

58 Appendix To supplement the consolidated financial results prepared in accordance with Generally Accepted Accounting Principles ( GAAP ), the Company uses non-gaap historical financial measures, which exclude certain GAAP items such as acquisition and integration costs, impairment and restructuring costs, and certain other unusual items. The Company uses the term adjusted when referring to these non-gaap amounts. Management uses non-gaap financial measures internally for strategic decision making, forecasting future results and evaluating current performance. By disclosing non-gaap financial measures, management intends to provide investors with a more meaningful, consistent comparison of the Company s operating results and trends for the periods presented. These non-gaap financial measures are used in addition to and in conjunction with results presented in accordance with GAAP and reflect an additional way of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These non-gaap measures should be considered as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with generally accepted accounting principles. Non-GAAP financial measures are not prepared in accordance with GAAP; therefore, the information is not necessarily comparable to other companies. A reconciliation of each non-gaap historical financial measure to the most comparable GAAP measure is provided in this Appendix. 58

59 Reconciliation of non-gaap net income and earnings per share 59

60 Reconciliation of non-gaap net income and earnings per share 60

61 Reconciliation of non-gaap adjusted operating income 61

62 2017 adjusted EPS forecast from Q3 62

63 Reconciliation of non-gaap ROCE metric 63

64 Reconciliation of non-gaap adjusted effective income tax rate to GAAP effective income tax rate 64

65 Reconciliation of non-gaap credit metrics Net debt to adjusted EBITDA ratio 65

66 Reconciliation of non-gaap credit metrics Net debt to capitalization percentage 66

67 New Accounting Regulations (in millions) Net sales Cost of sales Gross profit OpEx OpInc Op Inc Margin Nine Months Ended September 30, 2017 ASU Current Change Updated $ 4,395 $ 4,395 3, ,285 $ 1,113 $ (3) $ 1, $ 639 $ (6) $ % 14.4% Other non-op inc EBIT $ 582 $ - $ 582 Accounting Standard Update is effective for 2018; prior periods will be restated It is intended to improve the presentation of net periodic benefit cost for pension and postretirement benefit plans Presentation change will impact both gross profit and operating income No impact on net income or EPS 67