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    INGR
    Earnings call· Jun 2026(Q2 FY26)

    Ingredion Q2 FY26 earnings call INGR

    Aug 4, 2026 Source

    Executive summary

    Ingredion Q2 FY26 — Strong Texture & Healthful Solutions Performance Amidst Operational Challenges

    Ingredion navigated a mixed quarter with robust performance in its Texture and Healthful Solutions segment, driven by strong volume growth and strategic initiatives. While operational challenges at the Argo facility and macroeconomic headwinds in Mexico impacted overall profitability, the company made significant progress in resolving production issues and is advancing its portfolio transformation through the pending acquisition of Tate & Lyle. Management remains confident in its long-term strategy and ability to manage inflationary pressures.

    Highlights

    5

    • Net sales increased 1% to $1.85 billion.

    • Texture and Healthful Solutions (TNHS) net sales volume grew 7%, marking the ninth consecutive quarter of growth.

    • TNHS delivered its second highest quarterly operating income ever, up 5%.

    • Argo facility operating at normal production rates by end of June after sequential improvements.

    • Protein fortification net sales grew over 40%.

    Concerns

    5

    • Adjusted operating income decreased 5% to $258 million due to Argo manufacturing issues and macroeconomic pressures in Mexico.

    • Food and Industrial Ingredients U.S./Canada net sales declined 7% and operating income was $58 million, impacted by Argo production challenges and softer demand.

    • Food and Industrial Ingredients LatAm operating income decreased 7% due to transactional currency impacts in Mexico and challenging demand.

    • Tapioca costs increased over 40% since the start of the year, leading to near-term margin pressure.

    • Full-year adjusted operating income expected to be down mid-single digits, reflecting the sale of the Pakistan business.

    Guidance & targets

    16
    CategoryTargetConfidence
    Full-year 2026 Adjusted Earnings Per Share
    $10.30 to $10.90
    high materiality
    High
    Full-year 2026 Net Sales
    flat to up low single digits
    high materiality
    High
    Full-year 2026 Adjusted Operating Income
    down mid-single digits
    high materiality
    High
    Full-year 2026 Cash from Operations
    $700 million to $800 million
    medium materiality
    High
    Full-year 2026 Capital Expenditures
    $450 million to $490 million
    medium materiality
    High
    Full-year 2026 Diluted Shares Outstanding
    $63 million to $64 million
    low materiality
    High
    Q3 2026 Net Sales
    up low single digits
    medium materiality
    High
    Q3 2026 Adjusted Operating Income
    down mid-single digits
    medium materiality
    High
    Texture & Healthful Solutions FY26 Net Sales
    up mid-single digits
    medium materiality
    High
    Texture & Healthful Solutions FY26 Operating Income
    up mid- to high single digits
    medium materiality
    High
    Food & Industrial Ingredients LatAm FY26 Net Sales
    up low single digits
    medium materiality
    High
    Food & Industrial Ingredients LatAm FY26 Operating Income
    down low single digits
    medium materiality
    High
    Food & Industrial Ingredients U.S./Canada FY26 Net Sales
    down low single digits
    medium materiality
    High
    Food & Industrial Ingredients U.S./Canada FY26 Operating Income
    down 20% to 25%
    medium materiality
    High
    All Other FY26 Net Sales
    down 20% to 25%
    low materiality
    High
    All Other FY26 Operating Loss
    approximately $15 million
    low materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Texture and Healthful Solutions
    Driven by volume growth and FX favorability, partially offset by lower price/mix and higher tapioca costs. Achieved second highest quarterly operating income ever.
    Sales volume growth: 7%Foreign exchange favorability: 1%
    		—5%—up 5%
    Food and Industrial Ingredients LatAm
    Driven by favorable foreign exchange, partially offset by lower volumes and weaker price mix. Decrease in operating income due to transactional currency impacts in Mexico and challenging demand.
    		—3%—decreased 7% to $118 million
    Food and Industrial Ingredients U.S./Canada
    Impacted by production challenges at Argo facility and softer volumes and price mix.
    		—declined 7%—$58 million
    All Other
    Driven by strong net sales growth in protein fortification, particularly from higher-value isolates and specialty protein applications. Reflects improved mix and operating leverage.
    Net sales growth in protein fortification: >40%
    		—increased 8%—improved by $7 million year-over-year

    Operational metrics

    32
    Net Sales
    $1.85 billionup 1%
    Q2 FY26

    Company-wide net sales.

    Adjusted Operating Income
    $258 milliondown 5%
    Q2 FY26

    Company-wide adjusted operating income.

    Reported Operating Income
    $188 million
    Q2 FY26

    Company-wide reported operating income.

    Net Sales
    $3.6 billionflat
    YTD FY26

    Company-wide net sales for the first 6 months.

    Reported Operating Income
    $391 milliondecrease of 29%
    YTD FY26

    Company-wide reported operating income for the first 6 months.

    Adjusted Operating Income
    $470 milliondecrease of 14%
    YTD FY26

    Company-wide adjusted operating income for the first 6 months.

    Adjusted Diluted EPS
    $0.05declined
    Q2 FY26

    Decline in adjusted diluted EPS compared to prior year.

    Adjusted Diluted EPS
    $0.68decrease of
    YTD FY26

    Decrease in adjusted diluted EPS for the first 6 months.

    Working Capital Investment
    $231 million
    YTD FY26

    Planned investment in working capital, driven primarily by receivables and payables.

    Capital Expenditures
    $210 million
    YTD FY26

    Capital expenditures, net of disposals, to support reliability, capacity, and strategic priorities.

    Dividends Paid
    $105 million
    H1 FY26

    Cash returned to shareholders through dividends.

    Share Repurchases
    $14 million
    H1 FY26

    Cash returned to shareholders through share repurchases.

    Tapioca Cost Increase
    more than 40%since start of year
    YTD FY26

    Due to weather-related impacts limiting supply.

    FX Impact on Net Sales
    $36 millionfavorable
    Q2 FY26

    Favorable foreign exchange impact on net sales.

    Volume Impact on Net Sales
    $20 millionhigher
    Q2 FY26

    Higher volume impact on net sales.

    Price/Mix Impact on Net Sales
    $39 millionunfavorable
    Q2 FY26

    Unfavorable price/mix impact on net sales.

    FX Impact on Adjusted Diluted EPS
    $0.05favorable
    Q2 FY26

    Favorable foreign exchange impacts on adjusted diluted EPS.

    Other Income Impact on Adjusted Diluted EPS
    $0.09favorable
    Q2 FY26

    Other income benefits on adjusted diluted EPS.

    Nonoperating Benefit on Adjusted Diluted EPS
    $0.12
    Q2 FY26

    Total nonoperating benefit on adjusted diluted EPS.

    Share Repurchases Impact on Adjusted Diluted EPS
    $0.07
    Q2 FY26

    Benefit from share repurchases on adjusted diluted EPS.

    Lower Financing Costs Impact on Adjusted Diluted EPS
    $0.05
    Q2 FY26

    Benefit from lower financing costs on adjusted diluted EPS.

    FX Impact on YTD Adjusted Diluted EPS
    $0.12favorable
    YTD FY26

    Foreign exchange impact on year-to-date adjusted diluted EPS.

    Other Income Impact on YTD Adjusted Diluted EPS
    $0.17favorable
    YTD FY26

    Other income impact on year-to-date adjusted diluted EPS.

    Share Repurchases Impact on YTD Adjusted Diluted EPS
    $0.13favorable
    YTD FY26

    Benefit from fewer shares outstanding on year-to-date adjusted diluted EPS.

    Lower Financing Costs Impact on YTD Adjusted Diluted EPS
    $0.04favorable
    YTD FY26

    Benefit from lower financing costs on year-to-date adjusted diluted EPS.

    Sunstar Mark-to-Market Gain
    $2 million
    Q2 FY26

    Mark-to-market gain on new investment in Sunstar, recorded in TNHS segment.

    Industry Capacity Closure
    5%
    2027

    A competitor announced closing a facility, representing about 5% of U.S. industry capacity, impacting contracting in 2027.

    Argo Impact
    $40 millioncumulative
    Q2-Q4 FY25

    Cumulative impact from Argo issues in the prior year.

    Argo Impact
    $40 million
    Q1 FY26

    Impact from Argo issues in Q1 FY26.

    Argo Impact
    $20 million to $25 million
    Q2 FY26

    Estimated impact from Argo issues in Q2 FY26, confirmed directionally by management.

    Argo Impact
    $10 million to $15 million
    Q3 FY26

    Estimated impact from Argo issues in Q3 FY26, confirmed directionally by management.

    Total Argo Impact
    $70 million to $75 million
    Q1-Q3 FY26

    Estimated total impact from Argo issues for the first three quarters of FY26, confirmed directionally by management.

    Industry KPIs

    4
    MetricValueDetails
    Brand platform growth>40%%
    Adjusted EPS operating income$258 millionUSD
    Volume mix vs pricing decomposition7%%
    Elasticity consumer response commentarymixed

    Product announcements

    4
    ProductTypeDetails
    ask Ingredionlaunch
    Benicarosupdate
    Plant-based alternatives for PFAS-containing grease-resistant barriersupdate
    Bio-based adhesive solutions for corrugated packagingupdate

    Deals & partnerships

    5
    Tate & LyleAcquisition of entire issued and to be issued share capital.all-cash offer

    Establishes Ingredion as a more comprehensive global leader in ingredient solutions. Subject to regulatory approval in 11 jurisdictions.

    SandStarStrategic partnership to strengthen pharma business in India.

    Part of Texture and Healthful Solutions diversified portfolio.

    BenicarosAcquisition of a clinically supported immune health prebiotic.

    Aligns with consumer trends in digestive health, immune support, and clean label formulation.

    nullSale of majority stake in Pakistan business.

    Completed at the end of Q2.

    nullClosure of Cabo, Brazil Plant.

    Announced last quarter.

    Capital programs

    1
    Argo Facility Reliability Investmentsunderway

    Benefit: improve reliability, redundancies built in to prevent any kind of impact should one of those tanks not perform as they should

    The investment of some targeted additional capital directed specifically towards reliability at Argo gives confidence in the guidance. Investments are in targeted locations throughout the plant to improve reliability, alongside changes in maintenance, training, leadership, and operating procedures.

    Risks & headwinds

    7
    Argo Facility Operational ChallengesQ2 FY26, Q3 FY26

    Q2-Q4 last year: $40 million cumulative; Q1 FY26: $40 million; Q2 FY26: $20 million to $25 million (estimated); Q3 FY26: $10 million to $15 million (estimated)

    Mitigation: Systematic addressing of issues (grind, refinery, thermal event), targeted capital investments for reliability, improvements in maintenance, training, leadership, and operating procedures. Expects normalized run rates for balance of year.

    Macroeconomic Pressures in MexicoQ2 FY26

    Food and Industrial Ingredients LatAm operating income decreased 7%

    Mitigation: Underlying long-term market trends remain intact.

    Increased Tapioca CostsQ2 FY26 (near-term margin pressures)

    up more than 40% since the start of the year

    Mitigation: Actively passing through price increases (takes 1 to 1.5 quarters to realize). Views impact as temporary, not structural.

    Transactional Currency Impacts (Mexican Peso)Q2 FY26, Q3 FY26

    negatively impacts operating income

    Mitigation: Mexico business is U.S. dollar denominated, but most SG&A/operating costs are in pesos; peso strengthening increases dollar costs.

    Geopolitical/Middle East Conflict Inflationary PressuresFY26

    in the range of a few million dollars

    Mitigation: Managed by a "Middle East response team"; impact is manageable and offset by pricing increases.

    Potential 301 TariffsAugust (mid-August)

    null

    Mitigation: Company has managed through similar situations multiple times, has network capabilities to move product, and expects to pass through additional costs to customers.

    Softer Production and Demand (F&I U.S./Canada)Q2 FY26

    volumes remain below prior year levels, net sales declined 7%

    Mitigation: Partially offset by strong performance in other segments (TNHS). Expects improvement as macroeconomic conditions normalize.

    What to watch in Q3 FY26

    5

    Argo Facility Reliability and Profitability

    Q3 FY26 and balance of year
    Currentoperating at normal production rates across all major operating units by end of June
    TargetSustained reliability and restoration of profitability

    Why it matters

    Argo's operational issues significantly impacted Q1 and Q2 results; sustained recovery is crucial for F&I U.S./Canada segment performance and overall profitability.

    Our focus remains on sustaining reliability and restoring profitability.

    Q&A highlights

    6

    Inquired about potential volume/mix headwinds in the second half guidance for U.S./Canada, specifically concerning Argo's recovery.

    Management clarified that underlying full-year expectations are unchanged, with better performance in TNHS offsetting softer F&I U.S./Canada. Argo's production rates and yields are improving, and the plant finished June at normal rates. Some corporate cost benefits in Q2 will unwind, and the Argentine peso decline will negatively impact Q3.

    “The business is performing in line with expectations and we continue to see solid execution across TNHS, which is very encouraging.”

    asked by Kristen Owen · answered by Jason Payant

    2 min read5 chapters

    Detailed Narrative

    01

    Tate & Lyle Acquisition Progress

    Shareholders approved the deal, an important milestone. The transaction is now subject to ordinary regulatory approval in 11 jurisdictions, including the U.S. and the EU. The combination is expected to add $2.7 billion in highly complementary revenue, deliver $130 million of expected run-rate synergies by 2030, and be greater than 15% adjusted EPS accretive in the first full calendar year post-acquisition, with a clear path to achieving less than 2.5x net leverage within 18 months of closing.

    02

    Texture and Healthful Solutions Momentum

    This segment continues its strong performance, driven by broad-based growth in solutions offerings and clean label ingredients. Customer innovation activity is robust, focusing on health and wellness, protein and fiber fortification, and clean label. These trends align with Ingredion's growth strategy and reinforce confidence in sustainable long-term volume and margin growth.

    03

    Argo Facility Recovery

    Significant progress has been made at the Argo facility, with the grind now operating reliably and at expected run rates. Downstream refinery issues and the thermal event on April 10th have been addressed, and oil processing is back to historical run rates. Targeted capital investments and improvements in maintenance, training, leadership, and operating procedures are expected to sustain reliability and restore profitability.

    04

    Innovation and Portfolio Transformation

    Ingredion launched "ask Ingredion," an AI-powered formulation platform, and strengthened its healthful solutions portfolio through the acquisition of Benicaros, an immune health prebiotic. The company is also advancing in higher-value industrial applications like sustainable food packaging (replacing PFAS) and bio-based adhesives for corrugated packaging. Portfolio optimization includes the sale of the Pakistan business and closure of the Cabo, Brazil plant.

    05

    Inflationary Pressures and Mitigation

    The company is experiencing increased tapioca costs, up more than 40% since the start of the year, due to weather-related impacts. These costs are being actively passed through, typically with a 1 to 1.5 quarter lag. A "Middle East response team" has been assembled to manage inflationary pressures from geopolitical events, with the net impact estimated to be manageable and largely offset by pricing actions. The company is also monitoring potential implications of 301 tariffs.

    AI-generated summary of the company’s earnings call. Not investment advice.