Ingredion Incorporated (NYSE:INGR) Q3 2019 Earnings Conference Call - Final Transcript

Oct 31, 2019 • 08:00 am ET

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Ingredion Incorporated (NYSE:INGR) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Third Quarter 2019 Ingredion Incorporated Earnings Conference Call. [Operator Instructions] After the speaker presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded. [Operator instructions]

I would now like to hand the conference over to Director, Corporate Finance and Investor Relations, Ryan Koller.

Executive
Ryan Koller

Good morning. And welcome to Ingredion's third quarter 2019 earnings call. On today's call, you will hear from Jim Zallie, our President and CEO; and Jim Gray, our Executive Vice President and Chief Financial Officer. Our results were issued this morning in a press release that can be found on our website, ingredion.com, in the Investors section. The slides accompanying this presentation can also be found on the website and were posted a few hours ago for your convenience.

As a reminder, our comments within this presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties. Actual results could differ materially from those predicted in the forward-looking statements, and Ingredion is under no obligation to update them in the future as or if circumstances change.

Additional information concerning factors that could cause actual results to differ materially from those discussed during today's conference call or in this morning's press release can be found in the Company's most recently filed annual report on Form 10-K and subsequent reports on forms 10-Q and 8-K.

During this call, we also refer to certain non-GAAP financial measures, including adjusted earnings per share, adjusted operating income, adjusted effective tax rate and adjusted cash flow from operations, which are reconciled to US GAAP measures in Note 2 non-GAAP information, included in our press release and in today's presentation's appendix. Now I'm pleased to turn the call over to Jim Zallie.

Executive
Jim Zallie

Thank you, Ryan, and welcome to everyone joining us today. I would like to begin today's call with my perspective on our third quarter performance. For the quarter, our global net sales were up slightly. Absent $52 million of negative foreign exchange impacts, net sales were up 4% versus the prior year.

Our pricing actions delivered $50 million of favorability in the quarter, nearly offsetting all of the foreign exchange impacts versus the year-ago period. Adjusted operating income for the quarter was up 2% year-over-year, and up 7% absent foreign exchange translation impacts. I am pleased to share that North America returned to profit growth and delivered a 5% increase in adjusted operating income.

During the quarter, production utilization increased throughout our network, driven by greater reliability and operational efficiencies as the rebalancing of stock in volumes took full effect. Furthermore, our successful integration of Western Polymer contributed to North America's growth. We're pleased that specialty ingredients delivered net sales growth across all regions, led primarily by starch-based texturizers and specialty sweeteners. Consumer-preferred demand continues to grow for specialty sweeteners, including non-GMO sweeteners and natural reduce calorie sweeteners such as Stevia.

To further align with consumer preference for natural sweeteners,