Right Ingredients, Great Solutions
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RIGHT INGREDIENTS, GREAT SOLUTIONS Annual Report Ingredion is constantly improving, innovating, developing and efficiently delivering ingredient solutions that align with rapidly evolving consumer trends and customer needs. We enjoy a rich legacy of exceptional performance and market-leading innovation. In 2017, we continued to leverage our strengths — global reach with local touch, texture expertise and innovator — delivering another year of solid operating results and financial performance — creating consistent, compelling value for our customers and shareholders. About Ingredion Ingredion Incorporated provides the world with ingredients that make everyday products better. We turn grains, fruits, vegetables and other plant materials into ingredients that make yogurt creamy, candy sweet, crackers crispy, paper strong and nutrition bars high in fiber. We serve more than 60 diverse sectors in the food, beverage, paper and corrugating, brewing and other industries. Headquartered outside of Chicago, Illinois, Ingredion employs approximately 11,000 people worldwide and operates global manufacturing, R&D and sales offices that serve customers in more than 120 countries. INGREDION INCORPORATED 1 RIGHT INGREDIENTS, GREAT SOLUTIONS WINNING RECIPE FOR INGREDIENT SOLUTIONS We continue to build on our strong presence around the world by adhering to our six distinguishing strengths: global go-to-market model, market/customer relevance, innovation capability, operating excellence, a broad ingredient portfolio and geographic diversity. This strategy positions us for long-term profitable growth in current and emerging markets. Customer-centric mindset Regional teams and facilities are stra- Global With a global reach and local touch, we tegically located close to our customers create and deliver outstanding customer to better understand local consumer Go-to-Market Model experiences that position Ingredion as trends and customer needs, whether in the supplier of choice. From multina- Singapore or São Paulo, and to address tional consumer-product companies and their challenges with innovative solutions foodservice providers to local manu- and technical support. We develop quality facturers and emerging businesses, we consumer insights to guide innovation. have deep and long-standing customer And, digital marketing tools improve relationships around the world. And the ease and cost of doing business our customer-focused mindset inspires a with Ingredion. relentless passion for customers across all functions and levels of the Company. Market/Customer Ingredion’s outside-in thinking SENSORY EXPERIENCE Market/Customer Five key, highly market- and customer- ™ relevant areas of focus guide our • Eating and drinking experience Relevance specialty ingredient growth strategies as • Hair and skin feel we develop customized solutions that • Freshness help our customers win in their markets. AFFORDABILITY™ CLEAN & SIMPLE ™ • Recipe savings • Natural and simple • Reduced manufacturing costs • Clean labels • Organic • Free-from CONVENIENCE & PERFORMANCE™ • Non-GMO • Functional performance • Processability • Stability HEALTH & NUTRITION™ • Renewable • Nutrition minus/Nutrition plus • Weight and disease management • Digestive health • Medical nutrition 2 INGREDION INCORPORATED RIGHT INGREDIENTS, GREAT SOLUTIONS OUR VALUE PROPOSITION Our ingredient solutions are used in packaged foods sold in grocery stores and prepared foods sold in food service outlets. Our ingredients are found in homes the world over. Our value proposition is based on our advancements in texture, sweetness and nutrition. We bring solutions to market quickly by leveraging our advanced technology, operational capabilities and expanding portfolio. Our customers range from global CPGs to faster-growing smaller and mid-size companies. Ideas to solutions and nutrition. We invested approximately Innovation Ingredion and innovation are synonymous. 3 percent of specialty ingredient sales in We turn ideas into science-based R&D initiatives in 2017. Capability solutions for customers through an expanding portfolio of starches, sweeteners, nutritional ingredients, natural concentrates, fibers and pulse proteins. More than 350 scientists in 27 Ingredion Idea Labs® across the world apply global We provide ingredients that are central expertise through collaboration to to our customers’ product successes, develop innovative, on-trend, localized enabling them to develop innovative solutions for our customers. These solutions that anticipate and respond solutions match changing consumer to consumer trends. trends focused on sweetness, texture Operating Ongoing plant and network optimization Pivotal footprint Operating Ingredion’s more than 100-year history Our manufacturing network serves almost of commercial, technical and financial 60 industry sectors in more than 120 Excellence achievements has been built on a solid countries. The network, coupled with our foundation of operating excellence which robust supply chain, provides us with includes commitments to quality and safety. a distinct competitive advantage with We invest significantly to continuously existing and potential customers. In 2017, improve our manufacturing and supply chain we optimized our Brazilian network and networks, driving cost savings and quality restructured in Argentina to drive cost enhancements that will maximize customer savings and quality enhancements that and shareholder value. will maximize shareholder value. Broadening Acquisitions Partnerships and alliances Broad Ingredion recently acquired TIC Gums and M&A activity is not the only way to expand the Sun Flour rice ingredients business in capabilities. We always are exploring Ingredient Portfolio Thailand, significantly strengthening our opportunities to partner with strong global specialty ingredients business and niche providers to bring new solutions to broadening the portfolio. We are expanding the marketplace. A good example is our our specialty capabilities in Brazil, China, distribution alliance with Lyckeby Starch, Colombia, Germany, Korea, Mexico, Thailand a Swedish manufacturer of potato-based and the United States. starch and fiber products. ® INGREDION INCORPORATED 3 CompanyCompany Headquarters HeadquartersProductionProduction Facility FacilityIngredionIngredion Idea Labs Idea® Headquarters Labs® HeadquartersIngredionIngredion Idea Labs Idea® Innovation Labs® Innovation Center CenterSales/RepresentativeSales/Representative Oce Oce RIGHT INGREDIENTS, GREAT SOLUTIONS Worldwide presence Geographic Ingredion’s global manufacturing network, technical capabilities, innovation and sales presence across all regions create a solid, long-term growth platform. Our worldwide presence Diversity and ability to certify our supply chains add signicant eciencies that provide the ability to deliver solutions on a global scale and the agility to meet the needs of local markets. NORTH AMERICA SOUTH AMERICA . B MM .B MM of net sales operating of customers of world’s of net sales operating of customers of world’s income population income population • Extensive manufacturing and customer service footprint • Optimized cost structure • Local production/network supply exibility • Developing specialty solutions • Ecient cost structure • Serving customers in countries Innovation across multiple ingredient technologies Growing middle class and younger demographics Recent nishing channel capacity expansion investments in the We are one of the largest manufacturers of corn- and tapioca-based United States and Mexico are driving specialty growth. starches and sweeteners in South America. Our strategic locations provide access to our customer locations throughout the region. 4 INGREDION INCORPORATED Company Headquarters Production Facility Ingredion Idea Labs® Headquarters Ingredion Idea Labs® Innovation Center Sales/Representative Oce Company Headquarters Production Facility Ingredion Idea Labs® Headquarters Ingredion Idea Labs® Innovation Center Sales/Representative Oce RIGHT INGREDIENTS, GREAT SOLUTIONS Company Headquarters Production Facility Ingredion Idea Labs® Headquarters Ingredion Idea Labs® Innovation Center Sales/Representative Oce ASIA PACIFIC EUROPE, MIDDLE EAST, AFRICA MM MM MM MM of net sales operating of customers of world’s of net sales operating of customers of world’s income population income population • Positioned to benet from urbanization and • Strong direct sales and specialty distributor network growing middle class • Broad and diverse customer base • Strong go-to-market presence • Leader in clean-label solutions and growing specialties • Balanced mix of core and specialty products business in emerging markets Specialty capacity expansion in China and Thailand Specialty opportunities in key emerging markets Acquisitions, capacity expansion and a world-class tapioca supply chain Ingredion enjoys a breadth of customers from packaged goods are driving specialty growth in rice and tapioca. Sales oces provide manufacturers to leading retailers. We are a leader in clean-label broad coverage across developing and emerging Asia. innovation in Europe and focused on our specialty business in emerging markets in the Middle East, Eastern Europe and Africa. INGREDION INCORPORATED 5 RIGHT INGREDIENTS, GREAT SOLUTIONS Dear Fellow Shareholders Ingredion delivered another solid year of excellent shareholder returns despite a challenging year for the packaged-food sector. We ended 2017 with record earnings per share and operating income. Our volumes grew by