Ingredion (INGR) Prelim. Q2 EPS Misses Views, Lowers FY Guidance

• The Company accelerates Cost Smart savings program by establishing a $125 million target by year-end 2021 through reduction of Cost of Sales and SG&A expenses.
• Cost Smart supply chain initiatives encompass future network optimization and today the Company announces the cessation of wet-milling at its Stockton, California facility by the end of 2018.
• The Company currently anticipates second quarter earnings per share ("EPS") and Adjusted EPS* of $1.51 to $1.59 and $1.63 to $1.68, respectively due to lower than expected North America performance.
• The Company revises its 2018 adjusted EPS Guidance to $7.50 to $7.80 from $7.90 to $8.20. Its revised expectation for adjusted cash flow provided by operating activities* ("adjusted cash flow") is $800 million - $850 million, excluding one-time tax benefits.

Today, Ingredion Incorporated (NYSE: INGR), a leading global provider of ingredient solutions to diversified industries accelerated its Cost Smart program, designed to improve profitability and deliver increased value to shareholders. The Company introduced this cost savings initiative, in its First Quarter 2018 Earnings Call on May 3, to further streamline its global business. The Company is setting forth Cost Smart targets to include an anticipated $75 million Cost of Sales savings, including global network optimization and $50 million in anticipated SG&A savings by year-end 2021. The Company expects restructuring costs to be incurred earlier in the program and expects savings to be realized beginning in 2018 and building momentum toward the targets through 2021.

As part of today's announcement, the Company will cease wet-milling operations at its Stockton, California facility and establish a shipping distribution station by year-end 2018. After the transition, the Company will begin using the facility to distribute finished products to customers in the Western United States, in particular California. Currently, the facility produces high fructose corn syrup and industrial starch.

"We're taking this necessary action to balance our capacity versus sweetener demand, focus future resource investment toward our specialty growth initiatives, and continue to deliver on our customer experience commitments," said Jim Zallie, Ingredion president and chief executive officer.

*Adjusted diluted earnings per share ("adjusted EPS") and adjusted cash flow provided by operating activities are non-GAAP financial measures.
See the Supplemental Financial Information entitled "Non-GAAP Information" included in this press release for a reconciliation of these non-GAAP
financial measures to the most directly comparable U.S. GAAP measures.

Today's actions to optimize the North America network by cessation of wet-milling at its Stockton facility are expected to save $6 million - $9 million and will reduce its fixed cost footprint.

The Company has driven a culture of continuous improvement and operational excellence for the last five years, which has improved efficiencies throughout its global operations. Recently, the Company extended cost savings initiatives to support functions, which included streamlining its finance organization and establishing a shared service center in Tulsa, Oklahoma. Cost Smart SG&A initiatives are underway with the goal of establishing global centers of excellence. Cost Smart supply chain initiatives will address manufacturing, freight and procurement, as well as, future opportunities to optimize the Company's global manufacturing network.

"Establishing firm Cost Smart targets will ensure the most effective use of our resources to better navigate future cost pressures and ensure long-term shareholder value creation," said Jim Gray, Ingredion executive vice president and chief financial officer. "We remain steadfast in our efforts to operate efficiently and simplify our global business while mitigating the impacts of inflation."

The Company currently expects EPS and adjusted EPS of $1.51 to $1.59 and $1.63 to $1.68, respectively for the second quarter of 2018. For the full-year, the Company anticipates adjusted EPS of $7.50 to $7.80 in 2018, versus the previously anticipated $7.90 to $8.20. In North America, the Company experienced lower than expected sweetener volumes sold into beverages and higher than expected manufacturing costs. Its expectation for adjusted cash flow is $800 million - $850 million, excluding one-time tax benefits. Going forward, the Company remains on target to grow its specialty portfoliobusiness to $2 billion in annual sales by 2022, comprising 32 to 35 percent of net revenue.

(Street sees Q2 EPS of $1.92 and FY EPS of $7.92)

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