Q3 2025 Ingredion Inc Earnings Call

Your presentation, there will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question Press Star. One again. Please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker Ms.

Operator: Since you're on a listen-only mode, after the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Noah Weiss, Vice President of Investor Relations. Please go ahead.

Sure Noah Wise, Vice President of Investor Relations. Please go ahead.

Good morning, and welcome to <unk> third quarter 2025 earnings call I'm, No wise, Vice President of Investor Relations. Joining me on today's call are Jim <unk>, our president and CEO and Jim Gray, our executive Vice President and CFO.

The press release, we issued today as well as the presentation, we will reference for the third quarter results can be found on our website ingredient dot com in the investors section.

Noah Weiss: Good morning and welcome to Ingredion's third quarter 2025 earnings call. I'm Noah Weiss, Vice President of Investor Relations. Joining me on today's call are Jim Zallie, our President and CEO, and Jim Gray, our Executive Vice President and CFO. The press release we issued today, as well as the presentation we will reference for the third quarter results, can be found on our website, ingredion.com, in the Investors section. As a reminder, our comments within the presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties and include expectations and assumptions regarding the company's future operations and financial performance. Actual results could differ materially from those estimated in the forward-looking statements, and Ingredion assumes no obligation to update them in the future as or if circumstances change.

Speaker #1: Two.

Speaker #2: Good day, and welcome to the Ingredion Q3, 2025 earnings call. At this time, all participants are on a listen-only mode. After the speaker presentation, there will be a question-and-answer session.

As a reminder, our commitments are comments within the presentation may contain forward looking statements.

These statements are subject to various risks and uncertainties and include expectations and assumptions regarding the company's future operations and financial performance actual results could differ materially from those estimated in the forward looking statements and ingredient assumes no obligation to update them.

Speaker #2: To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised.

Speaker #2: To withdraw your question, press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Noah Weiss.

In the future as or if circumstances change.

Speaker #2: Vice President of Investor Relations. Please go ahead.

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 will also refer to certain non-GAAP.

Speaker #3: Good morning, and welcome to Ingredion's third quarter 2025 earnings call. I'm Noah Weiss, Vice President of Investor Relations. Joining me on today's call are James Zallie, our President and CEO, and James Gray, our Executive Vice President and CFO.

Noah Weiss: 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 will also refer to certain non-GAAP financial measures, including adjusted earnings per share, adjusted operating income, and adjusted effective tax rate, which are reconciled to US GAAP measures in Note 2 non-GAAP information included in our press release and in today's presentation appendix. With that, I will turn the call over to Jim Zallie.

Speaker #3: The press release we issued today, as well as the presentation we will reference for the third quarter results, can be found on our website, ingredion.com, in the investor section.

Financial measures, including adjusted earnings per share adjusted operating income and adjusted effective tax rate, which are reconciled to U S. GAAP measures in note two non-GAAP information included in our press release and in today's presentation appendix with that I will turn the call over to Jim is out.

Speaker #3: As a reminder, our commitment—our comments within the presentation may contain forward-looking statements. These statements are subject to various risks and uncertainties and include expectations and assumptions regarding the company's future operations and financial performance.

Thank you Noah and good morning, everyone.

Speaker #3: Actual results could differ materially from those estimated in the forward-looking statements and Ingredion assumes no obligation to update them in the future as or if circumstances change.

The third quarter was more challenging than we expected with net sales and adjusted operating income down more than our previous guidance.

Despite Q3's results. We are however, confident that ingredients diversified business portfolio will deliver another full year of operating income growth.

Speaker #3: 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 Q and 8-K.

James Zallie: Thank you, Noah, and good morning, everyone. Q3 was more challenging than we expected, with net sales and adjusted operating income down more than our previous guidance. Despite Q3's results, we are, however, confident that Ingredion's diversified business portfolio will deliver another full year of operating income growth. As we discuss the performance in the quarter, we will highlight the progress we are making to improve upon recent and near-term operating challenges while navigating with agility pockets of economic weakness and uncertainty by remaining focused on driving innovation and operating excellence to deliver profit growth. Turning to the next slide, let's start with a summary of our net sales volume growth for the quarter. Texture and Healthful Solutions delivered a solid performance with 4% sales volume growth across US, Canada, and EMEA, including double-digit sales increases for clean label ingredient solutions.

As we discuss the performance in the quarter, we will highlight the progress we are making to improve upon recent and near term operating challenges, while navigating with agility pockets of economic weakness and uncertainty by remaining focused on driving innovation and operating excellence to deliver.

Speaker #3: During this call, we are also referred to certain non-GAAP financial measures, including adjusted earnings per share, adjusted operating income, and adjusted effective tax rate, which are reconciled to U.S.

Speaker #3: GAAP measures in Note 2, non-GAAP information, included in our press release and in today's presentation appendix. With that, I will turn the call over to James Zallie.

Profit growth.

Turning to the next slide let's start with a summary of our net sales volume growth for the quarter.

Speaker #4: Thank you, Noah, and good morning, everyone. The third quarter was more challenging than we expected, with net sales and adjusted operating income down more than our previous guidance.

Texture and helpful solutions delivered a solid performance with 4% sales volume growth across U S, Canada, and EMEA, including double digit sales increases for clean label ingredient solutions.

Speaker #4: Despite Q3's results, we are, however, confident that Ingredion's diversified business portfolio will deliver another full year of operating income growth. As we discussed the performance in the quarter, we will highlight the progress we are making to improve upon recent and near-term operating challenges while navigating with agility pockets of economic weakness and uncertainty by remaining focused on driving innovation and operating excellence to deliver profit growth.

Growth in foodservice channels globally, as well as for convenient grab and go offerings at retail drove increased demand for our batter and breading ingredients in the quarter.

Additionally, our solutions portfolio continues to grow outpacing the segment's net sales growth. Thanks to increased demand for specialty blend that help customers address affordability eliminate artificial ingredients and simplify labels.

James Zallie: Growth in food service channels globally, as well as for convenient grab-and-go offerings at retail, drove increased demand for our batter and breading ingredients in the quarter. Additionally, our solutions portfolio continues to grow, outpacing the segment's net sales growth thanks to increased demand for specialty blends that help customers address affordability, eliminate artificial ingredients, and simplify labels. In Food and Industrial Ingredients LATAM, the main driver of the sales volume decrease came from softer brewing industry volumes, with customers attributing it to cooler, wetter weather for some of the seasonal decline. More broadly, weaker LATAM demand became increasingly evident as higher inflation and interest rates impacted consumer spending.

Speaker #4: Turning to the next slide, let's start with a summary of our net sales volume growth for the quarter. Texture and healthful solutions delivered a solid performance, with 4% sales volume growth across U.S.-Canada and EMEA, including double-digit sales increases for clean label ingredient solutions.

In food and industrial ingredients Latam.

The main driver of the sales volume decrease came from softer brewing industry volumes with customers attributing it to cooler wetter weather for some of this where some of the seasonal decline.

More broadly.

Weaker Latam demand became increasingly evident as higher inflation and interest rates impacted consumer spending.

Speaker #4: Growth in food service channels globally as well as for convenient grab-and-go offerings at retail drove increased demand for our batter and breading ingredients in the quarter.

Our food and industrial ingredients U S. Canada segment experienced a 5% decline in net sales volume largely due to our inability to meet customer demand requirements from continued production challenges at our Chicago plant as well as overall softness in <unk>.

Speaker #4: Additionally, our solutions portfolio continues to grow, outpacing the segments' net sales growth thanks to increased demand for specialty blends that help customers address affordability and eliminate artificial ingredients and simplify labels.

James Zallie: Our Food and Industrial Ingredients US, Canada segment experienced a 5% decline in net sales volume, largely due to our inability to meet customer demand requirements from continued production challenges at our Chicago plant, as well as overall softness in beverage and food volumes. In contrast, we saw increasing volume demand for industrial starches to our major corrugating and paper and packaging customers. Moving to the next slide, I would like to take a moment to elaborate on the primary factor contributing to our Food and Industrial Ingredients US, Canada performance, and that is the ongoing operational challenges at our Argo facility outside of Chicago. For background, Argo is one of the largest plants in our network and accounts for more than 40% of the segment's net sales.

Beverage and food volumes in.

In contrast, we saw increasing volume demand for industrial starches to a major corrugated and paper and packaging customers.

Speaker #4: In food and industrial ingredients latte, the main driver of the sales volume decrease came from softer brewing industry volumes, with customers attributing it to cooler wetter weather for some of the seasonal decline.

Moving to the next slide I would like to take a moment to elaborate on the primary factor contributing to our food and industrial ingredients U S Canada performance.

Speaker #4: More broadly, weaker latte demand became increasingly evident as higher inflation and interest rates impacted consumer spending. Our food and industrial ingredients U.S.-Canada segment experienced a 5% decline in net sales volume largely due to our inability to meet customer demand requirements from continued production challenges at our Chicago plant as well as overall softness in beverage and food volumes.

And that is.

The ongoing operational challenges at our Argo facility outside of Chicago.

For background <unk>.

<unk> is one of the largest plants in our network and accounts for more than 40% of this segment's net sales.

Following a fire in our fee dryer at the end of quarter, two which halted the entire plant's production.

We faced several challenges while plant operations recovered during the third quarter.

Speaker #4: In contrast, we saw increasing volume demand for industrial starches to our major corrugating and paper and packaging customers. Moving to the next slide, I would like to take a moment to elaborate on the primary factor contributing to our food and industrial ingredients U.S.-Canada performance and that is the ongoing operational challenges at our Argo facility outside of Chicago.

James Zallie: Following a fire in our feed dryer at the end of Q2, which halted the entire plant's production, we faced several challenges while plant operations recovered during Q3. This quickly and directly contributed to tighter inventories being available for incremental sales. Given the size of the volumes that move through this plant on a daily basis, we estimate that the cumulative operating income impact to the segment was approximately $22 million across both the second and third quarters, with $12 million of that operating income impact being felt in Q3. Production rates remained challenged in July and August before improving in September. In Q4, our team remains focused on stabilizing production and rebuilding inventories. Also in the quarter, we experienced the overall market demand for sweetener products weakening in July and August before bouncing back in September.

This quickly and directly contributed to tighter inventories being available for incremental sales.

Given the size of the volumes that move through this plant on a daily basis, we estimate that the cumulative operating income impact to the segment.

Was approximately $22 million across both the second and third quarters with $12 million of that operating income impact being felt in quarter three.

Speaker #4: For background, Argo is one of the largest plants in our network and accounts for more than 40% of the segment's net sales. Following a fire in our feed dryer at the end of quarter two, which halted the entire plant's production, we faced several challenges while plant operations recovered during the third quarter.

Production rates remain challenged in July and August before improving in September.

In quarter four our team remains focused on stabilizing production.

And rebuilding inventories.

Also in the quarter, we experienced the overall market demand for sweetener products weakening in July and August.

Speaker #4: This quickly and directly contributed to tighter inventories being available for incremental sales. Given the size of the volumes that moved through this plant on a daily basis, we estimate that the cumulative operating income impact to the segment was approximately $22 million across both the second and third quarters with $12 million of that operating income impact being felt in quarter three.

Before bouncing back in September.

We believe many.

Beverage and food customers were experiencing slowing demand as a result of price increases that were put into effect to offset anticipated rising packaging costs, particularly from aluminum and tin plate.

James Zallie: We believe many beverage and food customers were experiencing slowing demand as a result of price increases that were put into effect to offset anticipated rising packaging costs, particularly from aluminum and tin plate. Turning to the next slide, our food and industrial ingredients LATAM segment saw a decrease in operating income this quarter, down 11% versus last year. The reduction is primarily attributable to the strategic realignment of our brewing customer mix, as well as lower brewing industry volumes. We are making good progress strategically diversifying our customer and product mix in LATAM towards higher margin sweeteners that serve food and confectionery customers. We will continue to repurpose our grind to improve the consistency of profit margins over time.

Turning to the next slide our food and industrial ingredients Latam segment.

Speaker #4: Production rates remain challenged in July and August before improving in September. In quarter four, our team remains focused on stabilizing production and rebuilding inventories.

So a decrease in operating income this quarter down 11% versus last year.

The reduction is primarily attributable to the strategic realignment of our brewing customer mix.

Speaker #4: Also in the quarter, we experienced the overall market demand for sweetener products weakening in July and August before bouncing back in September. We believe many beverage and food customers were experiencing slowing demand as a result of price increases that were put into effect to offset anticipated rising packaging costs particularly from aluminum and tin plate.

As well as lower brewing industry volumes.

We are making good progress strategically diversifying our customer and product mix in Latam towards higher margin sweeteners that serve food and confectionery customers.

We will continue to repurpose our grind.

To improve the consistency of profit margins overtime.

Beyond what we believe was a transitory impact from the brewing segment in the quarter.

Speaker #4: Turning to the next slide, our food and industrial ingredients latte segment. Saw a decrease in operating income this quarter down 11% versus last year.

We are monitoring softer consumer demand in general across Latam, which became increasingly evident in quarter, three as higher inflation and rising interest rates weigh upon GDP growth and consumer spending.

James Zallie: Beyond what we believe was a transitory impact from the brewing segment in the quarter, we are monitoring softer consumer demand in general across LATAM, which became increasingly evident in Q3 as higher inflation and rising interest rates weigh upon GDP growth and consumer spending. Turning to the next slide, it is important to reinforce the fact that we have made considerable progress to expand the company's gross margins over the last three years through a combination of service differentiation, operational excellence, and solutions selling. We are focused on not only sustaining the performance but steadily improving upon it by executing against our strategic pillars to drive mix improvement and enterprise productivity. Let me now update you on progress against our three strategic pillars.

Speaker #4: The reduction is primarily attributable to the strategic realignment of our brewing customer mix, as well as lower brewing industry volumes. We are making good progress strategically diversifying our customer and product mix in latte.

Turning to the next slide.

It is important to reinforce the fact that we have made considerable progress to expand the companys gross margins over the last three years through a combination of service differentiation operational excellence.

Speaker #4: Towards higher margin sweeteners that serve food and confectionery customers. We will continue to repurpose our grind to improve the consistency of profit margins over time.

And solutions selling.

We are focused on not only sustaining the performance, but steadily improving upon it by executing against our strategic pillars to drive mix improvement and enterprise productivity.

Speaker #4: Beyond what we believe was a transitory impact from the brewing segment in the quarter, we are monitoring softer consumer demand in general across latte which became increasingly evident in quarter three as higher inflation and rising interest rates weigh upon GDP growth and consumer spending.

Let me now update you on progress against our three strategic pillars.

To start.

I'd like to highlight our focus on driving profitable growth, particularly within texture and helpful Solutions segment, where we continue to expand our leadership in clean label ingredients and solutions globally.

Speaker #4: Turning to the next slide, it is important to reinforce the fact that we have made considerable progress to expand the company's gross margins over the last three years through a combination of service differentiation, operational excellence, and solutions selling.

James Zallie: To start, I'd like to highlight our focus on driving profitable growth, particularly within Texture and Healthful Solutions segment, where we continue to expand our leadership in clean label ingredients and solutions globally. North America and Asia-Pacific experienced double-digit clean label growth this quarter, reflecting a growing demand from customers and consumers for greater transparency and simplicity in ingredient labeling. This trend has become mainstream, with both private label and CPG customers reformulating products at an accelerated pace. Additionally, demand for protein isolates remains robust, as evidenced by our record sales for protein fortification during the quarter and the fact that we are already more than 50% contracted for isolates for 2026. Our high-value P-protein isolates offer notable functional advantages and benefits from labeling preferences compared to other protein sources across various food categories, with our new product introductions being preferred for their taste and overall quality.

North America, and Asia Pac experienced double digit clean label growth this quarter, reflecting a growing demand from customers and consumers for greater transparency and simplicity and ingredient labeling this.

This trend has become mainstream.

Speaker #4: We are focused on not only sustaining the performance but steadily improving upon it by executing against our strategic pillars to drive mix improvement and enterprise productivity.

With both private label and CPG consumer customers re formulating products at an accelerated pace.

Additionally, <unk>.

Demand for protein isolates remains robust as evidenced by our record sales for protein fortification during the quarter and the fact that we are already more than 50% contracted for isolate for 2026.

Speaker #4: Let me now update you on progress against our three strategic pillars. To start, I'd like to highlight our focus on driving profitable growth, particularly within texture and healthful solutions segment.

Our high value Pea protein isolates offer notable functional advantages and benefits from labeling preferences compared to other protein sources across various food categories with our new product introductions being preferred for their taste and overall quality.

Speaker #4: Where we continue to expand our leadership and clean label ingredients and solutions globally. North America and Asia pack experienced double-digit clean label growth this quarter reflecting a growing demand from customers and consumers for greater transparency and simplicity in ingredient labeling.

Moving now to our second pillar innovation, our focus on integrated solutions continues to favorably impact texture and <unk> results with solutions based sales growing at a faster rate than the overall segment's net sales growth for the quarter.

Speaker #4: This trend has become mainstream with both private label and CPG consumer customers reformulating products at an accelerated pace. Additionally, demand for protein isolates remains robust as evidenced by our record sales for protein fortification during the quarter and the fact that we are already more than 50% contracted for isolates for 2026.

James Zallie: Moving now to our second pillar, innovation. Our focus on integrated solutions continues to favorably impact Texture and Healthful's results, with solutions-based sales growing at a faster rate than the overall segment's net sales growth for the quarter. Furthermore, as food inflation pressures persist, affordability remains a key catalyst for recipe reformulation across our customer base. Brands are actively seeking our assistance with cost-effective ingredient solutions that allow them to maintain quality and shelf life while reducing input costs. Our latest innovations in egg and cocoa replacement solutions deliver cost savings, improved functionality, and enhanced flavor profiles. By enabling customers to reformulate recipes without compromising taste or texture, we're helping them differentiate their products and respond quickly to market trends. As consumer demand for natural sweetness continues to increase, Ingredion is advancing development partnerships for sweet proteins and novel customized clean taste solutions containing stevia and sweet proteins.

Furthermore, as food inflation food inflation pressures persist affordability remains a key catalyst for recipe re formulation across our customer base.

Brands are actively seeking our assistance with cost effective ingredient solutions that allow them to maintain quality and shelf life, while reducing input costs our latest innovations.

Speaker #4: Our high-value pea protein isolates offer notable functional advantages and benefits from labeling preferences compared to other protein sources across various food categories. With our new product introductions being preferred for their taste and overall quality.

In AG and cocoa replacement solutions delivered cost savings improved functionality and enhanced flavor profiles.

By enabling customers to reformulate recipes without compromising taste or texture, we're helping them differentiate their products and respond quickly to market trends.

Speaker #4: Moving now to our second pillar. Innovation. Our focus on integrated solutions continues to favorably impact texture and healthful results with solutions-based sales growing at a faster rate than the overall segment's net sales growth for the quarter.

As consumer demand for natural sweetness continues to increase ingredient is advancing development partnerships for sweet proteins and novel customized clean taste solutions containing stevia and sweet proteins.

Speaker #4: Furthermore, as food inflations pressures persist, affordability remains a key catalyst for recipe reformulation across our customer base. Brands are actively seeking our assistance with cost-effective ingredient solutions that allow them to maintain quality and shelf life while reducing input costs.

We believe this will further strengthen ingredients position as a leader in sugar reduction innovation.

Lastly, I would like to comment on our operational excellence pillar.

Our operational focus has translated into meaningful benefits at our Indianapolis facility, where we've taken steps to maximize asset utilization across our starch network by modernizing the plant layout and reengineering slurry transfer systems, we've created flexibility to run specialty starch operations and.

James Zallie: We believe this will further strengthen Ingredion's position as a leader in sugar reduction innovation. Lastly, I'd like to comment on our operational excellence pillar. Our operational focus has translated into meaningful benefits at our Indianapolis facility, where we've taken steps to maximize asset utilization across our starch network. By modernizing the plant layout and re-engineering slurry transfer systems, we've created flexibility to run specialty starch operations in a more integrated manner with downstream operations. This means fewer bottlenecks, better load balancing, and improved throughput. These changes reduce inventory requirements, enhance service levels, and deliver meaningful savings, all while better positioning the plant to support future growth for Texture Solutions. Additionally, we feel confident we will surpass our $50 million run-rate cost-to-compete savings target and will realize more than $55 million in run-rate savings by the end of 2025.

Speaker #4: Our latest innovations in egg and cocoa replacement solutions deliver cost savings, improved functionality, and enhanced flavor profiles. By enabling customers to reformulate recipes without compromising taste or texture, we're helping them differentiate their products and respond quickly to market trends.

On a more integrated manner with downstream operations. This means fewer bottlenecks better load balancing and improved throughput. These.

These changes reduce inventory requirements enhance service levels and deliver meaningful savings all while better positioning of the plant to support future growth for texture solutions.

Speaker #4: As consumer demand for natural sweetness continues to increase, ingredient is advancing development partnerships for sweet proteins and novel customized clean taste solutions containing stevia, and sweet proteins.

Additionally, we feel confident we will surpass our $50 million run rate cost to compete savings target and we will realize more than $55 million run rate savings by the end of 2025.

Speaker #4: We believe this will further strengthen ingredients' position as a leader in sugar reduction innovation. Lastly, I'd like to comment on our operational excellence pillar.

Speaker #4: Our operational focus has translated into meaningful benefits at our Indianapolis facility where we've taken steps to maximize asset utilization across our starch network. By modernizing the plant layout and re-engineering slurry transfer systems, we've created flexibility to run specialty starch operations in a more integrated manner with downstream operations.

This achievement reflects a relentless focus on operational efficiency and disciplined cost management across the organization.

By optimizing processes, eliminating waste leveraging technology and driving continuous improvement initiatives, we've been able to unlock significant savings.

James Zallie: This achievement reflects a relentless focus on operational efficiency and disciplined cost management across the organization. By optimizing processes, eliminating waste, leveraging technology, and driving continuous improvement initiatives, we've been able to unlock significant savings. Last month, we hosted our first-ever Supplier Day, bringing together strategic partners from across our supply chain globally in the pursuit of shared value creation. This was a valuable forum for collaboration, knowledge sharing, and strengthening of relationships. The event created increased awareness and understanding by our suppliers of our business and is already leading to new opportunities for value creation for us and them. Lastly, in October, we held a global AI forum for our entire employee base to accelerate adoption for the responsible usage of AI. Our AI priorities for value creation are focused on enhancing the customer experience, driving supply chain and manufacturing efficiency, and accelerating innovation.

Last month, we hosted our first ever supplier day, bringing together strategic partners from across our supply chain globally in the pursuit of shared value creation. This was a valuable forum for collaboration and knowledge sharing and strengthening our relationships. The event created increased awareness.

Speaker #4: This means fewer bottlenecks, better load balancing, and improved throughput. These changes reduce inventory requirements and enhance service levels and deliver meaningful savings, all while better positioning the plant to support future growth for texture solutions.

And understanding by our suppliers of our business and is already leading to new opportunities for value creation for us and them.

Speaker #4: Additionally, we feel confident we will surpass our $50 million run rate cost to compete savings target and will realize more than 55 million in run rate savings by the end of 2025.

Lastly in October we held a global AI forum for our entire employee base to accelerate adoption for the responsible usage of AI.

Speaker #4: This achievement reflects a relentless focus on operational efficiency and disciplined cost management across the organization. By optimizing processes, eliminating waste, leveraging technology, and driving continuous improvement initiatives, we've been able to unlock significant savings.

<unk> AI priorities for value creation are focused on enhancing the customer experience.

Driving supply chain and manufacturing efficiency and accelerating innovation.

Now I am pleased to hand, it off to Jim Gray for the financial review Jim.

Speaker #4: Last month, we hosted our first-ever supplier day bringing together strategic partners from across our supply chain globally in the pursuit of shared value creation.

Thank you Jim and good morning, everyone.

Moving to our income statement.

Net sales for the third quarter or $1 $8 billion down.

Speaker #4: This was a valuable forum for collaboration, knowledge sharing, and strengthening of relationships. The event created increased awareness and understanding by our suppliers of our business and is already leading to new opportunities for value creation for us and them.

James Zallie: Now, I'm pleased to hand it off to Jim Gray for the financial review. Jim?

Down 3% versus prior year.

Gross profit dollars decreased by 5% with gross margin slightly lower at 25, 1%.

Noah Weiss: Thank you, Jim, and good morning, everyone. Moving to our income statement. Net sales for the third quarter were $1.8 billion, down 3% versus prior year. Gross profit dollars decreased by 5%, with gross margins slightly lower at 25.1%. As volume headwinds are partially offset by lower input costs. Reported and adjusted operating income were $249 million and $254 million, respectively. Turning to our Q3 net sales bridge, the 3% decrease was driven by $39 million in lower volume and $30 million in lower price mix, offset partially by $15 million of favorable foreign exchange. Moving to the next slide, we highlight net sales drivers for the third quarter. Texture and Healthful Solutions net sales were up 1%, driven by sales volume growth of 4% and foreign exchange favorability of 2%, partially offset by price mix.

As volume headwinds are partially offset by lower input costs.

Reported and adjusted operating income were 249 and $254 million respectfully.

Speaker #4: Lastly, in October, we held a global AI forum for our entire employee base to accelerate adoption for the responsible usage of AI. Our AI priorities for value creation are focused on enhancing the customer experience, driving supply chain and manufacturing efficiency, and accelerating innovation.

Turning to our Q3 net sales bridge.

A 3% decrease was driven by $39 million, and lower volume and $30 million and lower price mix.

Offset partially by $15 million a favorable foreign exchange.

Moving to the next slide we highlight net sales drivers for the third quarter.

Speaker #4: Now, I'm pleased to hand it off to Jim Gray for the financial review. Jim, thank you, Jim, and good morning, everyone. Moving to our income statement.

Texture and helpful solutions net sales were up 1%.

Driven by sales volume growth of 4% and foreign exchange favorability of 2%, partially offset by price mix.

Speaker #4: Net sales for the third quarter were $1.8 billion, down 3% versus prior year. Gross profit dollars decreased by 5% with gross margins slightly lower at 25.1%.

Food and industrial ingredients Latam reported a net sales decrease of minus 6% largely attributed to a reduction in sales volumes, which was mainly influenced by weaker brewing demand.

Speaker #4: As volume headwinds are partially offset by lower input costs. Reported and adjusted operating income were $249 and $254 million, respectively. Turning to our Q3 net sales bridge, the 3% decrease was driven by 39 million dollars in lower volume and 30 million in lower price mix.

As well as slower macroeconomic growth across the segment.

Noah Weiss: Food and Industrial Ingredients LATAM reported a net sales decrease of minus 6%, largely attributed to a reduction in sales volumes, which was mainly influenced by weaker brewing demand, as well as slower macroeconomic growth across the segment. Food and Industrial Ingredients US/Canada net sales declined 7%. The sales volume decline of 5% was impacted by the extended recovery time to normalize production at our Argo plant, as well as softness and sweetener volume demand. Now, let's turn to a summary of results by segment. For the third quarter 2025, Texture and Healthful Solutions net sales was up 1% and operating income was up 9%, equating to a 17.4% operating income margin, significantly higher than prior year. This result has been driven by lower raw material costs, as well as favorable volume impact, partially offset by unfavorable price mix.

Food and industrial ingredients U S can net sales declined 7%.

The sales volume decline of 5% was impacted by the extended recovery time to normalized production at our Argo plant.

Speaker #4: Offset partially by 15 million of favorable foreign exchange. Moving to the next slide, we highlight net sales drivers for the third quarter. Texture and healthful solutions net sales were up 1%, driven by sales volume growth of 4% and foreign exchange favorability of 2%.

As well as softness in sweetener volume demand.

Now, let's turn to a summary of results by segment.

For the third quarter 2025 texture and helpful solutions net sales was up 1% and operating income was up 9%.

Equating to a 17, 4% operating income margin significantly higher than prior year.

Speaker #4: Partially offset by price mix. Food and industrial ingredients LATAM reported a net sales decrease of minus 6%, largely attributed to a reduction in sales volumes which was mainly influenced by weaker brewing demand.

This result has been driven by lower raw material costs as well as favorable volume impact, partially offset by unfavorable price mix.

And food and industrial ingredients Latam net sales were down 6% versus last year op.

Speaker #4: As well as slower macroeconomic growth across the segment. Food and industrial ingredients USCAN net sales declined 7%. The sales volume decline of 5% was impacted by the extended recovery time to normalize production at our Argo plant.

Operating income declined to $116 million with an operating income margin of 19, 8% holding strong.

Noah Weiss: In Food and Industrial Ingredients LATAM, net sales were down 6% versus last year. Operating income declined to $116 million, with an operating income margin at 19.8%, holding strong. Moving to Food and Industrial Ingredients US/Canada, third quarter net sales were down 7%. Operating income was $81 million, down 18% or $18 million, driven by production challenges at our Argo plant and lower than expected beverage and food volume demand. As we stated earlier, we estimate that this disruption has had a $12 million operating loss impact on the quarter's results. For the all-other group of businesses, the 17% increase in net sales was driven by increases across the board. Operating income was flat versus the prior year, as protein fortification gains were offset by lower profits from the Pakistan business.

Moving to food and industrial grade answer U S can third quarter net sales were down 7%.

Speaker #4: As well as softness and sweetener volume demand. Now let's turn to a summary of results by segment. For the third quarter 2025, texture and healthful solutions net sales was up 1% and operating income was up 9%.

Operating income was $81 million.

Down, 18% or $18 million driven by production challenges at our Argo plant and lower than expected beverage and food volume demand.

As we stated earlier, we estimate that this disruption has had a $12 million operating loss impact on the quarter's results.

Speaker #4: Equating to a 17.4% operating income margin, significantly higher than prior year. This result has been driven by lower raw material costs as well as favorable volume impact partially offset by unfavorable price mix.

For the all other group of businesses, the 17% increase in net sales.

It was driven by increases across the board.

Speaker #4: In food and industrial ingredients LATAM, net sales were down 6% versus last year. Operating income declined to $116 million, with an operating income margin at 19.8% holding strong.

Operating income was flat versus the prior year as protein fortification gains were offset by lower profits from our Pakistan business.

Turning to our earnings bridge on the top App you can see the reconciliation from reported to adjusted earnings per share.

Speaker #4: Moving to food and industrial ingredients USCAN, third quarter net sales were down 7%. Operating income was $81 million. Down 18% or $18 million. Driven by production challenges at our Argo plant and lower than expected beverage and food volume demand.

Operationally, we saw a decrease of 31 per share for the quarter driven by a decrease in operating margin of 22.

Noah Weiss: Turning to our earnings bridge, on the top half, you can see the reconciliation from reported to adjusted earnings per share. Operationally, we saw a decrease of $0.31 per share for the quarter, driven by a decrease in operating margin of $0.22 and a volume of minus $0.12, partially offset by foreign exchange of $0.03 per share. Moving to the change in non-operational items, we had an increase of $0.01 per share. Shares outstanding had a favorable impact of $0.05. A lower tax rate equivalent had a $0.02 per share impact, partially offset by higher financing costs of minus $0.06 per share. Shifting to our year-to-date income statement highlights, net sales for the first nine months were approximately $5.5 billion, down 3% versus prior year. Gross profit dollars grew by 4%, and gross margin has increased to 25.6%, up 180 basis points.

And a volume of minus 12.

Partially offset by foreign exchange of <unk> <unk> per share.

Moving to the change in non operational items, we had an increase of <unk> <unk> per share shares outstanding had a favorable impact of <unk>.

Speaker #4: As we stated earlier, we estimate that this disruption has had a $12 million operating loss impact on the quarter's results. For the all other group of businesses, the 17% increase in net sales was driven by increases across the board.

A lower tax rate equivalent had a <unk> <unk> per share impact par.

Partially offset by higher financing costs of minus <unk> <unk> per share.

Speaker #4: Operating income was flat versus the prior year, as protein fortification gains were offset by lower profits from the Pakistan business. Turning to our earnings bridge, on the top half you can see the reconciliation from reported to adjusted earnings per share.

Shifting to our year to date income statement highlights.

Net sales for the first nine months were approximately $5 5 billion.

Down 3% versus prior year.

Gross profit dollars grew by 4% and gross margin has increased to 25, 6% up 180 basis points.

Speaker #4: Operationally, we saw a decrease of 31 cents per share for the quarter driven by a decrease in operating margin of 22 cents. And in volume, of minus 12 cents.

Reported and adjusted operating income was 796 and $800 million.

An increase of 10% and 4% respectively.

Speaker #4: Partially offset by foreign exchange of 3 cents per share. Moving to the change in non-operational items, we had an increase of 1 cent per share.

Turning to our year to date earnings bridge.

The result is an increase of 58 per share.

Noah Weiss: Reported and adjusted operating income were $796 million and $800 million, an increase of 10% and 4%, respectively. Turning to our year-to-date earnings bridge, the result is an increase of $0.58 per share. Operationally, we saw an increase of $0.36 per share for the nine months. The increase was driven by an operating margin increase of $0.61, as well as favorable other income of $0.14 per share, primarily from our Argentina joint venture. And these were partially offset by volume of minus $0.38. Moving to the change in non-operational items, we had an increase of $0.22 per share, primarily driven by fewer shares outstanding of $0.15, as well as lower financing costs and tax rate of $0.03 per share each. Moving to cash flow, year-to-date cash from operations was $539 million, which includes an investment in working capital in the current year.

Operationally, we saw an increase of 36 cents per share for the nine months.

Speaker #4: Shares outstanding had a favorable impact of 5 cents, and a lower tax rate equivalent had a 2 cent per share impact. Partially offset by higher financing costs of minus 6 cents per share.

The increase was driven by an operating margin increase of 61.

As well as favorable other income of <unk> 14 per share primarily from our Argentina joint venture.

Speaker #4: Shifting to our year-to-date income statement highlights, net sales for the first nine months were approximately $5.5 billion, down 3% versus prior year. Gross profit dollars grew by 4%, and gross margin has increased to 25.6%, up 180 basis points.

And these were partially offset by volume of minus 38 cents.

Moving to the change in non operational items, we had an increase of 22 per share.

Primarily driven by fewer shares outstanding of 15.

As well as lower financing costs and tax rate of <unk> <unk> per share each.

Speaker #4: Reported and adjusted operating income were $796 and $800 million, an increase of 10% and 4% respectively. Turning to our year-to-date earnings bridge, the result is an increase of 58 cents per share.

Moving to cash flow.

Year to date cash from operations was $539 million, which includes an investment in working capital in the current year.

Year to date capital expenditures net of disposals were $298 million.

Speaker #4: Operationally, we saw an increase of 36 cents per share for the nine months. The increase was driven by an operating margin increase of 61 cents as well as favorable other income of 14 cents per share primarily from our Argentina joint venture.

The company expects to invest in organic growth initiatives that provide a significantly higher return than our cost of capital.

Lastly, we have repurchased $134 million.

Noah Weiss: Year-to-date capital expenditures net of disposals were $298 million. The company expects to invest in organic growth initiatives that provide a significantly higher return than our cost of capital. Lastly, we have repurchased $134 million of outstanding common shares, exceeding our share repurchase target of $100 million. We have paid out $157 million in dividends and increased the dividend per share to $0.82 for the quarter, which represents our 11th consecutive annual dividend increase. Now, let me turn to our updated outlook for the year. For the full year of 2025, we anticipate net sales to be flat to down low single digits, with our outlook reflecting lower price mix due to the pass-through of corn costs, and an updated view of the effects of foreign exchange. We anticipate that adjusted operating income will be up low single digits to mid-single digits for the full year.

Of outstanding common shares exceeding our share repurchase target of $100 million.

Speaker #4: And these were partially offset by volume of minus 38 cents. Moving to the change in non-operational items, we had an increase of 22 cents per share.

We have paid out $157 million in dividends and increased the dividend per share to <unk> 82 for the quarter, which.

Which represents our 11th consecutive annual dividend increase.

Speaker #4: Primarily driven by fewer shares outstanding of 15 cents as well as lower financing costs and tax rate of 3 cents per share each. Moving to cash flow.

Now, let me turn to our updated outlook for the year.

For the full year of 2025, we anticipate net sales to be flat to down low single digits.

Speaker #4: Year-to-date cash from operations was $539 million, which includes an investment in working capital in the current year. Year-to-date capital expenditures net of disposals were $298 million.

With our outlook, reflecting lower price mix due to the pass through of corn costs.

And an updated view of the effects of foreign exchange.

We.

<unk> that adjusted operating income will be up low single digits to mid single digits for the full year.

Speaker #4: The company expects to invest in organic growth initiatives that provide a significantly higher return than our cost of capital. Lastly, we have repurchased 134 million of outstanding common shares exceeding our share repurchase target of 100 million.

Our 2025 financing cost estimate will now be in the range of $35 million to $40 million, reflecting year to date foreign exchange impact.

For the full year of 2025, we expect our reported effective tax rate of $25 five to 26, 5%.

Speaker #4: We have paid out 157 million in dividends and increased the dividend per share to 82 cents for the quarter which represents our 11th consecutive annual dividend increase.

Noah Weiss: Our 2025 financing cost estimate will now be in the range of $35 million to $40 million, reflecting year-to-date foreign exchange impact. For the full year of 2025, we expect a reported effective tax rate of 25.5% to 26.5%, and an adjusted effective tax rate of 26% to 27%. We are narrowing our full year adjusted EPS range to $11.10 to $11.30. Given the macroeconomic softness evident in the third quarter for Latin American economies and the incremental issues that we absorbed related to F&B US canned segments Chicago plant outage, we anticipate our 2025 cash from operations will now be in the range of $800 million to $900 million. Our guidance reflects current tariff levels in effect at the end of 2025. In addition, this guidance excludes any acquisition-related integration or restructuring costs, as well as any potential impairment costs.

And adjusted effective tax rate of 26% to 27%.

We are narrowing our full year adjusted EPS range to be $11 10 to $11 30.

Speaker #4: Now let me turn to our updated outlook for the year. For the full year of 2025, we anticipate net sales to be flat to down low single digits with our outlook reflecting lower price mix due to the pass-through of corn costs and an updated view of the effects of foreign exchange.

Given the macroeconomic softness softness evident in the third quarter for Latin American economies.

And the incremental issues that we absorbed related to F&I use can segments Chicago plant outage.

Speaker #4: We anticipate that adjusted operating income will be up low single digits to mid-single digits for the full year. Our 2025 financing cost estimate will now be in the range of 35 million to 40 million reflecting year-to-date foreign exchange impact.

We anticipate our 2025 cash from operations will now be in the range of $800 million to $900 million.

Our guidance reflects current tariff levels in effect at the end of 2025 and.

In addition, this guidance excludes any acquisition related.

Speaker #4: For the full year 2025, we expect a reported effective tax rate of 25.5 to 26.5% and an adjusted effective tax rate of 26 to 27%.

Integration or restructuring costs as well as any potential impairment costs.

Turning to the full year outlook for each segment, where we have made updates.

For texture and helpful solutions, our estimate for net sales is to be up low single digits.

Speaker #4: We are narrowing our full year adjusted EPS range to be $11.10 to $11.30. Given the macroeconomic softness evident in the third quarter for Latin American economies, and the incremental issues that we absorbed related to FNI USCAN segments Chicago plant outage.

We have raised our operating income profit growth to now be up high double digits.

Noah Weiss: Turning to the full year outlook for each segment, where we have made updates. For Texture and Healthful Solutions, our estimate for net sales is to be up low single digits. We have raised our operating income profit growth to now be up high double digits. For F&I LATAM, we have lowered our net sales outlook to be down mid-single digits and operating profit to be flat to up low single digits. For F&I US Canada, we have now lowered our outlook for net sales to be down mid-single digits and operating income to be down low double digits based upon operating challenges. That concludes my comments, and I'll turn it back over to Jim.

For F&I Latam.

We have lowered our net sales outlook to be down mid single digits.

And operating profit to be flat to up low single digits.

For F&I U S. Canada, we have now lowered our outlook for net sales to be down mid single digits.

Speaker #4: We anticipate our 2025 cash from operations will now be in the range of $800 million to $900 million. Our guidance reflects current tariff levels and effect at the end of 2025.

And operating income to be down low double digits based upon operating challenges.

That concludes my comments and I'll turn it back over to Jim.

Speaker #4: In addition, this guidance excludes any acquisition-related integration or restructuring costs, as well as any potential impairment costs. Turning to the full-year outlook for each segment, we have made updates.

Thank you Jim.

As we conclude today's call I want to emphasize the focus we have on our operational and strategic priorities.

Clearly, we have a near term focus on improving productivity at Argo and rebuilding inventories and driving sales recovery in our U S food and industrial ingredients segment.

Speaker #4: For texture and healthful solutions, our estimate for net sales is to be up low single digits. We have raised our operating income profit growth to now be up high double digits.

James Zallie: Thank you, Jim. As we conclude today's call, I want to emphasize the focus we have on our operational and strategic priorities. Clearly, we have a near-term focus on improving productivity at Argo and rebuilding inventories and driving sales recovery in our US food and industrial ingredients segment. Complementing this focus on operational excellence, the entire organization is committed to exceeding its cost-to-compete target, delivering $55 million of run-rate savings by year-end. We will continue to deploy capital towards organic growth opportunities to expand and strengthen our Texture and Healthful Solutions portfolio. Lastly, we remain committed to returning capital to shareholders through share repurchases. As of the end of September, we exceeded our full year target by purchasing $134 million worth of shares and have increased our 2025 share repurchase target to $200 million.

Complementing this focus on operational excellence the entire organization is committed to exceeding its cost to compete target delivering $55 million of run rate savings by year end well.

Speaker #4: For FNI LATAM, we have lowered our net sales outlook to be down mid-single digits and operating profit to be flat to up low single digits.

We will continue to deploy capital towards organic growth opportunities to expand and strengthen our texture and helpful solutions portfolio.

Speaker #4: For FNI US Canada, we have now lowered our outlook for net sales to be down mid-single digits and operating income to be down low double digits based upon operating challenges.

Lastly, we remain committed to returning capital to shareholders through share repurchases.

Speaker #4: That concludes my comments and I'll turn it back over to Jim.

As of the end of September we exceeded our full year target.

Speaker #2: Thank you, Jim. As we conclude today's call, I want to emphasize the focus we have on our operational and strategic priorities. Clearly, we have a near-term focus on improving productivity at Argo.

By purchasing $134 million worth of shares and have increased our 2025 share repurchase target.

To $200 million.

Underscoring our commitment to maximizing shareholder value and reflecting our confidence in the future.

Speaker #2: And rebuilding inventories and driving sales recovery in our US food and industrial ingredient segment. Complementing this focus on operational excellence, the entire organization is committed to exceeding its cost-to-compete target delivering 55 million dollars of run rate savings by year-end.

We are announcing that our board has authorized a new share repurchase program of up to 8 million shares over the next three years.

James Zallie: Underscoring our commitment to maximizing shareholder value and reflecting our confidence in the future, we are announcing that our board has authorized a new share repurchase program of up to eight million shares over the next three years. Now, let's open the call for questions.

Now, let's open the call for questions.

Speaker #2: We will continue to deploy capital towards organic growth opportunities to expand and strengthen our texture and healthful solutions portfolio. Lastly, we remain committed to returning capital to shareholders.

Thank you as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw your question Press Star one again.

Time restraints, we ask that you. Please limit yourself to one question and one follow up question. Please standby, while we compile the Q&A roster.

Speaker #2: Through share repurchases. As of the end of September, we exceeded our full year target by purchasing 134 million dollars' worth of shares and have increased our 2025 share repurchase target to 200 million dollars.

Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again. Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question will come from the line of Andrew Strelzik with BMO Capital Markets. Your line is open.

And our first question will come from the line of Andrew <unk> with BMO capital markets. Your line is open.

Hey, good morning, Thanks for taking the questions.

Speaker #2: Underscoring our commitment to maximizing shareholder value and reflecting our confidence in the future, we are announcing that our board has authorized a new share repurchase program of up to 8 million shares over the next three years.

I wanted to start on the demand environment and I apologize if you've covered some of this in the prepared remarks that I missed.

But.

I guess I'm just I'm, just curious how you're seeing that evolve it certainly seems a bit softer than anticipated.

Andrew Strelzik: Hey, good morning. Thanks for taking the questions. I wanted to start on the demand environment, and I apologize if you covered some of this in the prepared remarks that I missed. But I guess I'm just curious how you're seeing that evolve. It certainly seems a bit softer than anticipated. And so I guess, are you seeing it continue sequentially to slow? Are you seeing any signs of stabilization? And in the release, you mentioned some customer mix management. I was hoping you could maybe elaborate on that as well.

Are you seeing it continue sequentially due to slow or are you seeing any signs of stabilization in the release you mentioned some customer mix management I was hoping you could maybe elaborate on that as well.

Speaker #2: Now, let's open the call for questions.

Speaker #3: Thank you. As a reminder to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, press star 11 again.

Okay, Andrew I'm going to stop.

Start back with the response related to.

Speaker #3: Due to time restraints, we ask that you please limit yourself to one question and one follow-up question. Please stand by while we compile the Q&A roster.

What's happening in Latam, and with Mexico, and Brazil, I think Thats, where the line got cut off is that correct.

James Zallie: Okay, Andrew, I'm going to start back with the response related to what's happening in LATAM and with Mexico and Brazil. I think that's where the line got cut off. Is that correct?

Speaker #3: And our first question will come from the line of Andrew Strelzik with BMO Capital Markets. Your line is open.

Yes.

The question was broadly about the demand backdrop, you know what you're going to see any signs of stabilization. But then there was the comment I think it was in Latam about the mixed management customers mixed management right.

Speaker #4: Hey, good morning. Thanks for taking the questions. I wanted to start on the demand environment, and I apologize if you covered some of this in the prepared remarks that I missed.

Right right, yes. So.

Andrew Strelzik: Yeah. I mean, the question was broadly about the demand backdrop and if you're seeing any signs of stabilization. But then there was a comment, I think it was in LATAM, about the mix management, customer mix management, so please elaborate on it.

In Brazil, and in Mexico, we're seeing inflation elevated prices that are impacting the consumer.

Speaker #4: But I guess I'm just curious how you're seeing that evolve. It certainly seems a bit softer than anticipated. And so I guess, are you seeing it continue sequentially to slow, or are you seeing any signs of stabilization?

Interest rates are relatively high versus history, and we do believe that's impacting consumer spending and confidence Mexico GDP is forecasted to only grow a half a percent and Brazil's GDP is forecasted to grow only 2%.

James Zallie: Right. Right. Yeah. So. In Brazil and in Mexico, we're seeing inflation, elevated prices that are impacting the consumer. Interest rates are relatively high versus history, and we do believe that's impacting consumer spending and confidence. Mexico's GDP is forecasted to only grow 0.5%, and Brazil's GDP is forecasted to grow only 2%. It's just noteworthy to remind everyone that food spending represents approximately 20% to 30% of disposable income for the LATAM consumer. And thus, when we see softness, we're seeing the cumulative impacts related to softness in beverage and multiple food categories. Moving to the United States, we saw demand for sweeteners in particular decrease in July and August. That's what the industry data showed. It was a pretty notable drop in July and August, but it did recover nicely in September. But for the quarter, July and August was impacted.

Speaker #4: And in the release, you mentioned some customer mix management. I was hoping you could maybe elaborate on that as well.

It's just noteworthy to remind everyone that food spending represents approximately 20% to 30% of disposable income for the Latam consumer and thus when we see softness and thus we're seeing the cumulative impacts related to softness in beverage and.

Speaker #5: Yeah, Andrew. I'm going

Speaker #3: Ladies and gentlemen, please remain on the line. Your conference will resume shortly. Once again, ladies and gentlemen, please remain on the line. Ladies and gentlemen, please remain on the line.

Food categories moving to the United States.

Sure.

We saw.

Demand for sweeteners in particular.

Decrease in July and August that's what the industry data showed it was a pretty.

Notable drop in July and August, but it did recover nicely in September so but for the quarter.

July and August was impacted and of course, we at the same time in those months had issues related to Argo depletion of inventories inability to sell.

But things picked up in September.

Speaker #3: Your conference will resume shortly. Once again, ladies and gentlemen, please remain on the line. Mr. Strelzik, I just want to make sure that you can hear me.

And again as it relates to texture and healthful, we didn't see that.

James Zallie: And of course, we at the same time in those months had issues related to Argo, depletion of inventories, inability to sell, but things picked up in September. And again, as it relates to Texture and Healthful, we didn't see that kind of decline. In fact, the US market contributed most to volume net sales and operating income growth, but all three geographies grew operating income high single digits for global and Texture and Healthful. Hopefully, that answers the question.

Kind of decline in fact.

The U S market contributed most to volume net sales and operating income growth, but all three geographies grew operating income high single digits for global and texture and helpful.

Hopefully.

That answers the question.

It does thank you.

As a follow up I was hoping you could drill down a little bit more on.

The texture helpful solutions segment the change in.

In the outlook there is that what kind of is the biggest driver of that piece is it is it more what you saw in <unk> was it more with what your expectation is for the <unk> I was just looking for a little more color on the guidance change there. Thank you.

Speaker #4: I can, yes.

Andrew Strelzik: It does. Thank you. And as a follow-up, I was hoping you could drill down a little bit more on the Texture and Healthful Solutions segment. The change in the outlook there, is that what kind of is the biggest driver of that piece? Is it more of what you saw in Q3? Is it more what your expectation is for the Q4? I was just looking for a little more color on the guidance change there. Thank you.

Speaker #3: Okay. Just one moment. Speakers?

Speaker #4: Yes, we're here.

Speaker #2: Yes, we're back. Yep.

Speaker #4: Ingredient speakers.

Great I'm going to let you take that out.

Speaker #3: Okay. You're loud and clear, and we still have Andrew on the line for his question.

Andrew I mean, I think that as we look at Q4, we have are.

Speaker #2: Okay. Andrew, I'm going to start back with the response related to what's happening in LATAM and with Mexico and Brazil. I think that's where the line got cut off.

From prior years kind of a slightly easier lab, but I think more importantly, when we look across texture and helpful. It's really a diversity of customers and so we have some of our largest customers that are that are in foodservice.

James Zallie: Jim Gray, I'm going to let you take that.

Andrew Strelzik: Yeah. Andrew, I mean, I think that as we look at Q4, we have, from prior years, kind of a slightly easier lap. But I think more importantly, when we look across Texture and Healthful, it's really a diversity of customers. And so we have some of our largest customers that are in food service. We also have customers that are into private label, as well as kind of branded CPG. So. When affordability and value against either the US or the European consumer, we're already benefiting a bit from what that sort of food service traffic and food service ticket looks like, as well as whether it's store brands or private label brands. I think we're seeing a nice balance of our volume demand across all of our customers.

Speaker #2: Is that correct?

Also have customers that are into private label as well as kind of branded CPG. So.

Speaker #4: Yeah. I mean, the question was broadly about the demand backdrop and if you're seeing any signs of stabilization. But then there was the comment, I think it was in LATAM, about the mix management, customer mix management.

When affordability and value against either the U S or the European consumer we're already benefiting a bit from what that sort of foodservice traffic in foodservice ticket looks like as well as whether its store brands or private label brands I think we're seeing a nice balance of our <unk>.

Speaker #2: Right.

Speaker #4: So elaborate

Speaker #2: Right. Right. Yeah. So in Brazil and in Mexico, we're on. seeing inflation, elevated prices that are impacting the consumer, interest rates are relatively high versus history, and we do believe that's impacting consumer spending and confidence.

<unk> demand across across all of our customers and so we feel like that's a.

Speaker #2: Mexico's GDP is forecasted to only grow by a half a percent, and Brazil's GDP is forecasted to grow by only 2%. It's noteworthy to remind everyone that food spending represents approximately 20% to 30% of disposable income for the LATAM consumer.

Well diversified very solid business right now that has some growth right in front of it and we're also benefiting from a.

Focus.

With a well defined.

Definitions for solutions selling.

Andrew Strelzik: And so we feel like that's a well-diversified, very solid business right now that has some growth right in front of it.

We went through.

Speaker #2: And thus, when we see softness in, and thus we're seeing the cumulative impacts related to softness in beverage and multiple food categories. Moving to the United States, we saw demand for sweeteners in particular decrease in July and August.

A complete re training of our go to market sales and technical service force.

James Zallie: And we're also benefiting from a focus with a well-defined definition for solutions selling, where we've went through a complete retraining of our go-to-market sales and technical service force. And we're into the second full year of, I would say, more advanced solution selling than we've ever had in relationship to selling differentiating ingredients, customized blends, and solutions all around consumer benefit platforms around affordability, health, and wellness, which are really aligned to the trends. And that's why I think we're seeing the strength in our clean label solutions growth, which again grew double digits in the US and AsiaPac.

And we're into the second full year of I would say more advanced solution selling than we've ever had in relationship to selling differentiating greeting ingredients customized blends and solutions all around consumer benefit platforms around affordability health and wellness, which are really aligned to the trends in that.

Speaker #2: That's what the industry data showed. It was a pretty notable drop in July and August, but it did recover nicely in September. But for the quarter, July and August was impacted, and of course, we at the same time in those months had issues related to Argo depletion of inventories, inability to sell.

Why I think we're seeing the strength in our clean label solutions growth, which again grew double digits in the U S and Asia Pac.

Great. Thank you very much.

Thank you one moment our next question.

That will come from the line of Kristen Owen with Oppenheimer. Your line is open.

Speaker #2: But things picked up in September. And again, as it relates to texture and healthful, we didn't see that kind of decline; in fact, the US market contributed most to volume net sales and operating income growth, but all three geographies grew operating income, high single digits for global and texture and healthful.

Hi, Good morning, Thank you for taking the question.

Andrew Strelzik: Great. Thank you very much.

Jim Jim.

Operator: Thank you. One moment for our next question. That will come from the line of Kristen Owen with Oppenheimer. Your line is open.

Just wanted to follow up on the F&I business day, and you gave some helpful color on Argo in the prepared remarks, but can you just help us unpack how much of the volume wise.

Kristen Owen: Hi, good morning. Thank you for taking the question. Jim, Jim, I did want to follow up on the F&I businesses. You gave some helpful color on Argo in the prepared remarks, but can you just help us unpack how much of the volume was sort of this macro weakening that you addressed in the first question? How much of that was sort of these company-specific events like the Chicago plant or this transition in your brewing business in LATAM? And I'm just trying to think how much of those one-time items kind of roll off in Q4 and what sticks with us. If we could start there, and then I'll have a follow-up, please.

Macro weakening that you're addressing the first question how much of that bled.

Are these company specific events like this Chicago plant or the transition and you bring business in Latam and I'm just trying to think how much of the one time items kind of roll off in the fourth quarter.

Speaker #2: Hopefully, that answers the question.

Speaker #4: It does. Thank you. And as a follow-up, I was hoping you could drill down a little bit more on the texture and healthful solution segment.

If we could start there and then I'll have a follow up hey, Christina can we just clarify which segment. So U S. Can F&I first yes, let's take why don't we take U S. Canada F&I first Jim and then maybe I'll take the Latam F&I, yes, Okay is that okay Kristen.

Speaker #4: The change in the outlook there, is that what kind of is the biggest driver of that piece? Is it more what you saw in three Q?

Speaker #4: Is it more what your expectation is for the four Q? I was just looking for a little more color on the guidance change there.

Speaker #4: Thank you.

Yes, I was hoping to get okay. Thank you.

Andrew Strelzik: Yeah. Hey, Kristen, can we just clarify which segment? So, USCAN, F&I first?

Speaker #2: Jim Gray, I'm going to let you take that.

Speaker #5: Yeah. Andrew, I mean, I think that as we look at Q4, we have from prior years, kind of a slightly easier lap. But I think more importantly, when we look across texture and healthful, it's really a diversity of customers.

Okay. So I think with regard to the U S can <unk>.

James Zallie: Yeah. Why don't we take US, Canada, F&I first, Jim, and then maybe I'll take the LATAM F&I?

So first of all as Jim mentioned on the on the.

Andrew Strelzik: Yeah. Okay.

James Zallie: Is that okay, Kristen? Yeah?

They were pre.

Pre recording that the fee dryer is very much at the end of the process when that goes down the entire plant has to shut down.

Kristen Owen: Yes. I was hoping to get both. So thank you.

Speaker #5: And so we have some of our largest customers that are in food service. We also have customers that are into private label. As well as kind of branded CPG.

Andrew Strelzik: Okay. So I think with regard to US corn, FI, and I. So first of all, as Jim mentioned on the pre-recording, that the feed dryer is very much at the end of the process. When that goes down, the entire plant has to shut down. And so then as we looked at those, we wanted to bring up the full recovery of the plant. And so we had a couple of impacts in terms of you have some lower value from your co-products that you got to clear out. You also had some periodic halting of the grind, which impacted a variety of the refinery processes. And so we didn't have as much volume available. We also had to absorb some fixed costs. And then as we got running to kind of normal production rates in September, you can really put a kind of cap on those costs.

And so then as we looked at those we just we wanted to bring up the full recovery of the plant and so we had a couple of impacts in terms of you have some lower value from your coal products that <unk> got to clear out.

Speaker #5: So when affordability and value against either the US or the European consumer were already benefiting a bit from what that sort of food surface traffic and food service ticket looks like as well as whether it's store brands or private label brands, I think we're seeing a nice balance of our volume demand.

You also had some periodic halting of the grind, which impacted a variety of the refinery processes and so we didn't have as much volume available. We also had to absorb some fixed costs.

And then as we got running to kind of normal production rates in September you can really put a cap on those costs.

Speaker #5: Across all of our customers. And so we feel like that's a well-diversified, very solid business right now that has some growth right in front of it.

And that cap is around $12 million impact Q3 don't really anticipate that thats going to repeat.

Speaker #2: And we're also benefiting from a focus with a well-defined definition for solutions selling. Where we've went through a complete retraining of our go-to-market sales and technical service force.

I mean, we want to we want to work on reliability, we think about our planning as we go forward and obviously, we plan to run at normal to full capacities in 2026. So I really don't think we're going to overlap this maintenance in the idle plant charges.

Andrew Strelzik: And that cap is around $12 million impact to Q3. Don't really anticipate that that's going to repeat, right? I mean, we want to work on reliability. We think about our planning as we go forward. And obviously, we plan to run at normal to full capacities in 2026. So really don't think we're going to overlap this maintenance and the idle plant charges within US corn, FI, and I.

Speaker #2: And we're into the second full year of, I would say, more advanced solution selling than we've ever had in relationship to selling differentiating greetings, customized blends and solutions, all around consumer benefit platforms around affordability, health and wellness, which are really aligned to the trends.

Within U S cannot finite alright.

Alright, So 12 of the 18 decline, we would attribute to the Argo issues. The remainder relate it to the market weakness that we saw which was very curious with the drop off in July and August but the good news is we saw industry recovery.

Speaker #2: And that's why I think we're seeing the strength in our clean label solutions growth, which again grew double digits in the US and Asia-Pac.

James Zallie: Right. So 12 of the 18 decline, we would attribute to the Argo issues. The remainder related to the market weakness that we saw, which was very curious with the drop-off in July and August. But the good news is we saw industry recovery in September. So let me pivot, and I'll talk about LATAM. For the LATAM F&I segment, approximately 40% of the revenue decline year-on-year was attributable to soft brewing volumes. Now, the largest contributing factor was related to the impact of the terms and timing of purchases associated with the rollover of a significant customer's multi-year agreement. That situation is now satisfactorily resolved, and it should not repeat. So, for color in the quarter, Mexico was down 10% with half of the net sales decline due to brewing-related situations to that unique customer situation.

In September.

So let me pivot and I'll talk about Latam for for the Latam F&I segment.

Speaker #4: Great. Thank you very much.

Speaker #3: Thank you. One moment for our next question. That will come from the line of Kristen Owen with Oppenheimer. Your line is open.

Approximately 40% of the revenue decline year on year was attributable to soft brewing volumes now.

Now the largest contributing factor was related to the impact of.

Speaker #6: Hi, good morning. Thank you for taking the question. Jim, Jim, I did want to follow up on the FNI businesses. You gave some helpful color on Argo and the prepared remarks, but can you just help us unpack how much of the volume was sort of this macro weakening that you addressed in the first question?

The terms and timing of purchases associated with the rollover.

Of our significant customers multi year agreement.

That situation is now <unk>.

<unk> resolved.

Speaker #6: How much of that was sort of these companies specific events like the Chicago plant or this transition in your brewing business in LATAM? And I'm just trying to think how much of those one-time items kind of roll off in the fourth quarter and what sticks with us.

And it should not repeat.

So for color.

In the quarter.

Mexico was down 10% with half of the net sales decline.

Due to growing related.

Speaker #6: If we could start there and then I'll have a follow-up, please.

Situations to that unique customer situation.

Speaker #4: Yeah. Hey, Kristen, can we just clarify which segment? So US can, FNI first?

And in Brazil, 90% of the decline.

Speaker #2: Yeah. Let's take, why don't we take US, Canada, FNI first, Jim, and then maybe I'll take the LATAM FNII. Okay. Is that okay, Kristen?

Due to brewing demand again predominantly relate it to that customer situation.

Speaker #4: Yeah. Yeah.

And because brewing adjunct represented 18% of net sales.

Speaker #6: Yes, I was hoping to get both. So thank you.

Speaker #2: Okay. So I think with regard to US can, FNI, so first of all, as Jim mentioned on the pre-recording that the feed dryer is very much at the end of the process.

James Zallie: And in Brazil, 90% of the decline was due to brewing demand, again, predominantly related to that customer situation. And because brewing adjunct represents 18% of net sales for F&I LATAM and a larger percentage of our volume, what we've been doing is we're actively pursuing alternative paths to utilize our grind more profitably by trading up to support higher margin products in food and confectionery. We believe this represents an exciting incremental opportunity to diversify beyond brewing and valorize our grind more profitably. So, hopefully that answers the question related to what we believe is some transitory aspects in F&I. We would say about half of the decline in LATAM was due to the brewing transitory nature. And Jim indicated about 2/3 of the decline in F&I US Canada was related to the Argo situation. Hopefully, that's clear.

For F&I Latam.

And a larger percentage of our volume what we've been doing is we are actively pursuing alternative paths to utilize our grind more profitably.

By trading up to support higher margin products and food and confectionery.

Speaker #2: When that goes down, the entire plant has to shut down. And so then as we looked at those, we wanted to bring up the full recovery of the plant.

We believe this represents an exciting incremental opportunity to diversify beyond brewing.

Speaker #2: And so we had a couple of impacts in terms of you have some lower value from your co-products that you got to clear out.

And Valorize our grind.

More profitably.

So hopefully that.

Speaker #2: You also had some periodic halting of the grind, which impacted a variety of the refinery processes. And so we didn't have as much volume available.

Answers the question related to <unk>.

The.

What we believe is some transitory aspects in F&I.

About half of the decline in Latam was due to the brewing transitory in nature.

Speaker #2: We also had to absorb some fixed costs. And then as we got running to kind of normal production rates in September, you can really put a kind of cap on those costs.

And Jim indicated about two thirds of the decline in F&I, Our U S. Canada was related to the Argo situation hopefully that's clear.

Speaker #2: And that cap is around 12 million dollars impact to Q3. Don't really anticipate that that's going to repeat. Right? I mean, we want to work on reliability; we think about our planning as we go forward.

No really appreciate all of that that color that is very helpful.

Helping us understand what goes away in the fourth quarter.

And my follow up question is actually Asbury thinking about fourth quarter contracting season, and I understand it's a little early on 2020.

Speaker #2: And obviously, we plan to run at normal to full capacities in 2026. So really don't think we're going to overlap this maintenance and the idle plant charges within US can, FNI.

Kristen Owen: No, really appreciate all of that color. That is very helpful in helping us understand what goes away in the fourth quarter. My follow-up question is actually, as we're thinking about fourth-quarter contracting season, I understand it's a little early on 2026, but just given some of these one-time items in 2025, I'm wondering if you can give us a sense of how you're thinking about price-cost dynamics into 2026. I mean, we've had a lot of volatility on the input cost side, and then you've got some of these one-time items on the cost side. So just some of the big buckets that we should think about from a price-cost perspective into 2026 would be very helpful. Thank you.

Given some of these one time items in 'twenty five and I'm wondering if you can give us a sense of how youre thinking about price cost dynamics into 2026, I mean, we've had a lot of volatility on the input cost side.

Speaker #2: Right. So 12 of the 18 decline, we would attribute to the Argo issues; the remainder related to the market weakness that we saw, which was very curious.

And then you've got some of these one time items on the cost side.

Speaker #2: With the drop-off in July and August, but the good news is we saw industry recovery in September. So let me pivot, and I'll talk about LATAM.

Just some of the big buckets that we should think about ice class perspective into 2020 would be very helpful. Thank you.

Yes, I would say just as it relates to contracting obviously.

Speaker #2: For the LATAM FNII segment, approximately 40% of the revenue declined year-on-year was attributable to soft brewing volumes. Now, the largest contributing factor was related to the impact of the terms and timing of purchases associated with the rollover of a significant customer's multi-year agreement.

We're early in the process I would say that we're currently midway through firm price contracting in the U S and in Europe, So still a long way to go.

And as it relates to inflationary pressures, which there are on input costs, along with U S cost of corn projected to be higher in 2006 versus 25.

James Zallie: Yeah. I would say just as it relates to contracting, obviously. We're early in the process. I would say that we're currently midway through firm price contracting in the US and in Europe. So still a long way to go. As it relates to inflationary pressures, which there are on input costs, along with US cost of corn projected to be higher in 2026 versus 2025, we anticipate this is going to prolong customer commitments and that contracting will not be completed until late in the year. Obviously, we always do a, we think, a pretty good job of balancing all of the puts and takes, especially given the pricing centers of excellence that we have stood up over the last few years that have served us very well during the inflationary period.

We anticipate this is going to prolong customer commitments and the contracting will not be completed until late in the year and obviously, we always do we think a pretty good job of balancing all of the puts and takes especially given the pricing centers of excellence that we have stood up over.

Speaker #2: That Was due to brewing demand again predominantly related to that customer situation. And because brewing adjunct represents 18% of net sales, for FNII LATAM, and a larger percentage of our volume, what we've been doing is we're actively pursuing alternative paths to utilize our grind more profitably by trading up to support higher margin products in food and confectionery.

Speaker #2: situation is now satisfactorily resolved, and it should not repeat. So for color, in the quarter, Mexico was down 10% with half of the net sales decline due to brewing-related situations to that unique customer situation and in Brazil, 90% of the decline.

The last few years that have served us very well during the inflationary period and now as we manage a.

More benign, but yet still sticky inflationary period.

We're cautiously optimistic.

That 2026 contracting will position us for another year of modest profit growth based on everything Thats <unk>.

James Zallie: Now, as we manage a more benign but yet still sticky inflationary period, we're cautiously optimistic that 2026 contracting will position us for another year of modest profit growth based on everything that's happening in the economies globally, along with the backdrop of uncertainty.

Happening in the economies globally, along with the backdrop of of uncertainty.

Thank you so much.

One moment for our next question.

And that will come from the line of Ben Theurer with Barclays. Your line is open.

Speaker #2: We believe this represents an exciting incremental opportunity to diversify beyond brewing and valorize our grind more profitably. So hopefully that answers the question related to the what we believe is some transitory aspects in FNII; we would say about half of the decline in LATAM was due to the brewing transitory nature and Jim indicated about two-thirds of the decline in FNII US Canada was related to the Argo situation.

Hi, Yes, good morning, Jim and Jim.

Wanted to follow up on th just the dynamics in the quarter and the outlook. So the first question really is related if you could elaborate maybe with a few examples on what's been driving the negative price mix and textured health care solution.

Kristen Owen: Thank you so much.

Operator: One moment for our next question. That will come from the line of Ben Thurer with Barclays. Your line is open.

Ben Thurer: Yeah. Good morning, Jim and Jim. Wanted to follow up on T&H, just the dynamics in the quarter and the outlook. So the first question really is related, if you could elaborate maybe with a few examples on what's been driving the negative price mix in Texture and Healthful Solutions, which at -5% looked pretty high. So that's the first thing I would like to understand, and then I'll have a quick follow-up.

At minus 5% look look pretty high so that's the first thing I would like to understand and then I'll have a quick follow up.

Let me have Jim I'll make that comment Jim.

So Ben on the price mix.

You look quarter over quarter right. So some of the pricing that we had coming into the beginning of 2025 from Europe. We had some higher energy costs that were evident in 'twenty four and so as energy costs have come down that was part of our pricing mix, that's been kind of true all year.

Speaker #2: Hopefully that's clear.

Speaker #6: No, really appreciate all of that color. That is very helpful in helping us understand what goes away in the fourth quarter. My follow-up question is actually, as we're thinking about fourth quarter contracting season, I understand it's a little early on 2026, but just given some of these one-time items in '25, I'm wondering if you can give us a sense of how you're thinking about price cost dynamics into 2026.

James Zallie: Yeah. Let me have Jim make that comment. Jim?

Andrew Strelzik: So Ben, on the price mix, when you look quarter over quarter, right, so some of the pricing that we had coming into the beginning of 2025 from Europe, we had some higher energy costs that were evident in 2024. And so as energy costs had come down, that was part of our pricing mix. That's been kind of true all year, as well as some of the corn. I think corn was about equal, but we've also seen some higher expected corn costs and basis for some of our specialty grains. So that's literally in the prior year that was there. And then as there's been more plentiful corn, some of that basis has come down year over year. So it's really more of a pass-through, I think, of some of the either net corn costs or the inputs.

As well as.

Some of the corn.

Corn was about equal, but we've also seen some.

Some higher than expected corn costs and like basis for some of our specialty grains. So that's literally.

Speaker #6: I mean, we've had a lot of volatility on the input cost side. And then you've got some of these one-time items on the cost side.

In the prior year that was there and then as is theres been more plentiful corn some of that basis has come down year over year. So it's really more of a pass through I think because some of the either net corn costs are the inputs.

Speaker #6: So just some of the big buckets that we should think about from a price cost perspective into 2026 would be very helpful. Thank you.

Speaker #2: Yeah. I would say, just as it relates to contracting, obviously, we're early in the process. I would say that we're currently midway through firm price contracting in the U.S. and in Europe.

Okay Perfect and then my follow up question really coming back to some of the dynamics in food Industrial Latin America and the outlook in particular.

Speaker #2: So still a long way to go. And as it relates to inflationary pressures, which there are, on input costs, along with US cost of corn projected to be higher in '26 versus '25, we anticipate this is going to prolong customer commitments and that contracting will not be completed until late in the year.

So as you're probably aware of and Mexico. There is a proposal which is about to be approved for a significant increase on taxation for soft drinks.

Ben Thurer: Okay. Perfect. And then my follow-up question is really coming back to some of the dynamics in Food & Industrial, Latin America, and the outlook in particular. So as you're probably aware of, in Mexico, there is a proposal out which is about to be approved for a significant increase on taxation for soft drinks, which would not only affect the ones with caloric content but also the ones with no sugar in it, so no caloric content at all, and still being taxed. The bottlers down there, for example, the expectation that there's going to be a significant need to pass pricing because of those taxes and with an expectation of large volume declines.

Which would not only affects the one with caloric content, but also the ones with no sugar in it so no caloric content at all it's still being taxed and.

Yes.

Speaker #2: And obviously, we always do a we think a pretty good job of balancing all of the puts and takes especially given the pricing centers of excellence that we have stood up over the last few years that have served us very well during the inflationary period and now as we manage a more benign but yet still sticky inflationary period.

The bottlers down there.

Expectation that there's going to be a significant need to pass pricing because of those taxes with an expectation.

Large volume declines so wanted to understand what is what is your provisioning and how can you kind of like protect.

Protect maybe volume or what are you doing in order to on your contracting side, particularly in Mexico as it relates.

Speaker #2: We're cautiously optimistic that 2026 contracting will position us for another year of modest profit growth based on everything that's happening in the economies globally along with the backdrop of uncertainty.

So the <unk> piece, but also the non caloric sweeteners as alternative which both are going to be impacted by the taxation into 2026.

Ben Thurer: So I wanted to understand what is your positioning and how can you kind of protect Bev volume, or what are you doing on your contracting side, particularly in Mexico, as it relates to the sweeteners piece, but also the non-caloric sweeteners as alternatives, which both are going to be impacted by the taxation into 2026?

Jim why don't you take it.

First and then I'll pick up on it.

So the obviously what.

Ben you're discussing is is this kind of sweetness tax that is across both caloric as well as non caloric or light beverages.

Speaker #6: Thank you so much.

Speaker #7: One One moment for our next question. And that will come from the line of Ben Thurrer with Barclays. Your line is open.

James Zallie: Jim, why don't you take it first, and then I'll pick up on it.

That will impact in Mexico, I think that legislation is up for a vote or maybe its approved the effective date I thought was January one 2026.

Andrew Strelzik: So obviously, what, Ben, you're discussing is this kind of sweetness tax that is across both caloric, as well as non-caloric or light, beverages. That will impact in Mexico. I think that legislation is up for a vote, or maybe it's approved, but the effective date, I thought, was 1 January 2026. So on the caloric side, clearly, the bottlers in Mexico have a choice between kind of liquefied sugar and HFCS. We think that as you look at the cost competitiveness and the formulation for HFCS, it should lean a little bit more towards kind of the use of HFCS.

Speaker #8: Hi, yeah, good morning. Jim and Jim, I wanted to follow up on T&H, just the dynamics in the quarter and the outlook. So, the first question really is related: could you elaborate, maybe with a few examples, on what's been driving the negative price mix and texture in healthcare solutions, which at -5% looks pretty high?

So on the caloric side clearly the bottlers in Mexico have a choice between kind of liquefied sugar and hfcs.

And we think that as you look at the cost competitiveness in the formulation for hfcs, it should lean a little bit more towards kind of the use of hfcs.

Speaker #8: So that's the first thing I would like to understand and then have a quick follow-up.

And then just and while we've also seen historically when we've seen kind of taxes.

Speaker #2: Yeah, let me have Jim make that comment. Jim? So Ben, on the price mix, when you look quarter over quarter, right? So some of the pricing that we had coming into the beginning of 2025 from Europe, we had some higher energy costs that were evident in '24.

Go into place.

On beverages is that usually there is an initial.

Sort of a sticker shock, but then after that.

Andrew Strelzik: Just what we've also seen historically when we've seen kind of taxes go into place on beverages is that usually there's an initial sort of sticker shock, but then after that, I think consumers generally kind of sort of accept or work that into their overall cost of their grocery basket or their cost of lunch on the go or dinner. So there's always usually an initial impact for anywhere between a month to three, four, five months. Then it sort of works through. I think the customers that we have also are very much thoughtful around their price pack architecture and will think about value and those trade-offs. I think for non-caloric sweeteners, it's more of an interesting issue, right, which is there's a consumption tax going in.

I think consumers generally kind of sort of accept or work that into their overall cost of their grocery basket or their cost of lunch on the go or dinner.

Speaker #2: And so as energy costs had come down, that was part of our pricing mix. That's been kind of true all year. As well as some of the corn, I think corn was about equal, but we've also seen some higher expected corn costs in basis for some of our specialty grains.

And so there is always usually an initial impact for anywhere between a month to 345 months.

And then it sort of works through I think the.

The customers that we have also a very much thoughtful around their pack break there.

Speaker #2: So that's literally in the prior year, that was there and then as there's been more plentiful corn, some of that basis has come down year over year.

There are price pack architecture, and we'll think about value in those tradeoffs I think for non caloric sweeteners, it's more of an interesting issue right which is.

Speaker #2: So it's really more of a pass-through, I think, of some of the either net corn costs or the inputs.

There was a consumption tax going in will you see any separation.

Speaker #8: Okay, perfect. And then my follow-up question is really coming back to some of the dynamics in food industrial Latin America and the outlook in particular.

For beverages.

We sell like maybe a stevia solution into.

Speaker #8: So as you probably are aware of, in Mexico, there is a proposal out which is about to be approved for a significant increase on taxation for soft drinks.

Where you have.

Where you have.

Maybe a unique proposition on that on that beverage and that might be able to withstand that tax increase yes, what I would also say Ben is that.

Andrew Strelzik: Will you see any separation for beverages that we sell, like maybe a Stevia solution, into where you have maybe a unique proposition on that beverage, and that might be able to withstand that tax increase?

Speaker #8: Which would not only affect the ones with caloric content, but also the ones with no sugar in it. So no caloric content at all and still being taxed.

This.

Proposed increase which I think is 17 a leader on.

Speaker #8: And the bottlers down there, for example, the expectation that there's going to be a significant need to pass pricing because of those taxes and with an expectation of large volume declines.

<unk> drinks and again, non sugary drinks, but sweetened with artificial sweeteners as well.

James Zallie: Yeah. What I would also say, Ben, is that this proposed increase, which I think it's 17 cents a liter on sugary drinks, and again, non-sugary drinks, but sweetened with artificial sweeteners as well, that will go into effect. It's coming now, maybe eight years later than the first 6.8% tax that was put in place. And as Jim said, when that went into effect, there was a dampening for six months to nine months on purchases. And then what was interesting is consumer behavior was modified, and the tax actually had unintended consequences and impacted purchases of other products outside even the food category, where people then went back to products that they liked, which were some of the caloric beverages, especially consumed by laborers and the construction workers, etc. And we actually observed that. Now, we'll see what's going to happen this time.

That will go into effect.

It's it's coming now.

Maybe eight years later than the first.

Speaker #8: So I wanted to understand what is your positioning and how can you kind of protect maybe volume or what are you doing in order on your contracting side particularly in Mexico as it relates to the sweeteners piece, but also the non-caloric sweeteners as alternatives, which both are going to be impacted by the taxation into 2026.

Six 8% tax that was put in place and as Jim said when that went into effect. There was a dampening for six months to nine months on purchases and then what was interesting is consumer behavior was modified and the tax actually had unintended consequences and impacted purchases.

Other products outside even the food category, where people then went back to.

Speaker #2: Jim, why don't you take it first and then I'll pick up on it.

The products that they.

They liked which were some of the caloric beverages, especially consumed by labors and the construction workers et cetera, and we actually observe that now we will see what's going to happen. This time, but the other important point Jim that I think is important for us to highlight is we do not export.

A lot of say hfcs into Mexico in fact, it's a very small quantity because we produce locally and we're not a large hfcs producer locally where much more of a glucose producer globally.

James Zallie: But the other important point, Jim, that I think is important for us to highlight is we do not export a lot of, say, HFCS into Mexico. In fact, it's a very small quantity because we produce locally, and we're not a large HFCS producer locally. We're much more of a glucose producer locally. So from a standpoint of how we're directly, so I use the word directly, going to be impacted, I don't foresee it will have a direct impact. How it impacts the industry and what indirect effects are kind of remains to be seen. But I do think it won't be a one-for-one that is prolonged. Consumers will adjust as they did when that tax went into effect in 2016, 2017. And we'll see then what happens from there.

From a standpoint of how directly so I use the word directly going to be impacted.

I don't foresee it will have a direct impact how it impacts the industry and what indirect effects are.

Kind of remains to be seen but I do think it won't be.

Hey.

A one for one.

That is.

Is prolonged it will consumers will adjust as they did when that tax went into effect in 2016, 17, and and we will see then what happens from there.

Okay perfect. Thank you very much for that clarification.

Yes. Thank you one moment our next question.

And that will come from the line of <unk> Sharma with Stephens. Your line is open.

Ben Thurer: Okay. Perfect. Thank you very much for that clarification.

Good morning, and thanks for the question.

James Zallie: Yep. Thank you.

Just wanted to add.

Operator: One moment for our next question. That will come from the line of Pooran Sharma with Stephens. Your line is open.

Ask about.

U S Canada.

<unk>.

I think you mentioned in the prepared comments.

Pooran Sharma: Good morning, and thanks for the question. I just wanted to ask about US, Canada, FII. I think you mentioned it in the prepared comments and in the Q&A here. I think you called out $12 million weakness from Argo and $6 million from the softer market. Just parsing into that further, you mentioned softness in July and August, but a recovery in September. Were you speaking on a volume basis, and are you able to kind of share if that recovery has held into October or what you're seeing thus far, quarter to date?

In the Q&A here.

Thank you called out.

12 million weakness from Argo and $6 million from a softer market and just parsing into that further.

Mentioned softness in July and August, but a recovery in.

In September.

Were you speaking on a on a volume basis, and and are you able to kind of share.

If that recovery has held into October.

Or what youre seeing thus far quarter to date.

Yes, I think you've summarized it accurately as it relates to U S. Canada and the comments that we made about July and August in U S. Canada related to volume shipments of in the industry of.

James Zallie: Yeah. I think you've summarized it accurately as it relates to US, Canada. And the comments that we made about July and August in US, Canada related to volume shipments in the industry of sweeteners, which is what we were specifically talking about. And that recovery in September was also volume-related and related to sweeteners. I would say it's early yet in the quarter for Q4. But we're not, I don't believe, going to see the July and August step-downs that we saw from an order of magnitude. And we do really believe that it was related to a subset of brand food companies in both beverages and packaged foods taking price, promoting less, and absorbing higher aluminum and tin plate packaging costs, passing those on. Because the 232 tariffs that went into effect actually were announced, I believe, in March.

Sweeteners, which is what we were specifically talking about and that recovery in September was also volume related and related to sweeteners.

I would say it's in its early yet in the quarter for quarter four.

But.

We're not I don't believe going to see.

July and August step Downs that we saw from an order of magnitude and we do really believe.

That it was related to.

A subset of brand <unk>.

Company's brand food companies in both beverages, and packaged foods, taking price promoting less and absorbing higher aluminum and tin plate packaging cost passing those on.

Because the $2 32 tariffs that went into effect actually were announced I believe in March.

And by the time, they started to be manifested at the retail level, we believe.

That one time impact.

Was experienced in those months.

They liked which were some of the caloric beverages especially consumed by laborers and the construction workers Etc and we actually observe that now we'll see what's going to happen this time but the other important Point Jim that I think is important for us to highlight, is we do not export a lot of say hfcs into Mexico. In fact, it's a very small quantity because we produce locally and we're not a large hfcs producer locally. We're much more of a glucose producer globally so from a standpoint of how we work directly, so I use the word directly going to be impacted. I don't foresee. It will have a direct impact how it impacts the industry and what indirect effects are

Yeah.

The manufacturers were optimizing their approach to how they were going to price and thus the impact was felt by consumers the adjustments have occurred.

James Zallie: And by the time they started to be manifested at the retail level, we believe that that one-time impact was experienced in those months. And the manufacturers were optimizing their approach to how they were going to price. And thus, the impact was felt by consumers. The adjustments have occurred. Again, September was evidence of that. That's how we have interpreted it. And again, we need more data points going forward to really be conclusive. But that's our best understanding of what took place and how we would explain the impact in the quarter.

Kind of remains to be seen, but I do think it won't be a, uh, a 1-for-1 that.

And.

Again September was evidenced of that that's how we have interpreted it and again, we need more data points going forward to really.

Is prolonged. It will consumers will adjust as they did when that tax went into effect in 201617 and and we'll see then uh what happens from there?

Be conclusive, but thats, our best understanding of what what took place and how we would explain the impact in the quarter.

Thank you very much for that clarification.

Yep. Thank you. 1 moment for our next question.

Will come from the line.

Yeah.

We're in Sharma with Stevens. Your line is open.

Alright, great I appreciate that detail there.

Maybe wanted to understand.

Argo a little bit better.

Maybe I was wrong in my thinking, but I think last time, we spoke.

Um, good morning and, and thanks for the question. I, um, just wanted to uh, ask about, um,

Us, uh, Canada, uh, fii. Um

Our last earnings call you were expecting to get some of the volumes back as we work through <unk> and <unk>. So I was just wondering what.

Pooran Sharma: Great. Great. I appreciate that detail there. And just maybe wanted to understand just Argo a little bit better. Maybe I was wrong in my thinking, but I think last time we had spoke or last earnings call, you were expecting to get some of the volumes back as we worked through Q3 and Q4. So I was just wondering what you were all facing from a production challenge standpoint. And do you see these manufacturing issues abating by 2026, or what kind of timeline should we be thinking of here?

I, I think you, you mentioned it in the preparedness and, and in the Q&A here, uh, I think you called out.

You are all facing from like a production challenge standpoint.

And.

Do you see.

<unk>.

Manufacturing issues are abating.

12 million weakness from Argo and 6 million from softer market and just parsing into that further. You mentioned softness in July and August but a recovery in

By 2026, or what kind of timeline should we be thinking of here yes.

Yes, no you are correct and in what we had expected and what we thought was possible. The point we wanted to make the point, we will make again is that Argo is a big complex.

In uh, September were you were, were you speaking on a on a volume basis and and are you able to kind of share uh if that recovery has held into uh October um or or what you're seeing thus far quarter today?

James Zallie: Yeah. No, you are correct in what we had expected and what we thought was possible. The point we wanted to make and the point we'll make again is that Argo is a big complex facility, factory. And when it runs well, we can make up for a lot of lost ground. And what we were expecting was that it was going to recover more quickly than it did. And unfortunately, the recovery lasted into the quarter. So, not to be repetitive, but when a factory like that of that size goes down, the first challenge that we have, because it impacted what we call the back end, which is the co-products and the feed, is we then lose the valorization premium on co-products. And we have to get the plant up and running, and we have to dispose of the co-products so it doesn't become a bottleneck.

Facility factory and when it runs well we can make up for a lot of lost ground and what we were expecting was that it was going to recover more quickly than it did and unfortunately, the recovery last it into.

The quarter.

So.

Not to be repetitive, but when a factory like that of that size goes down. The first challenge that we have because it impacted what we call the backend which is the co products in the feed is.

Yeah, I think you've summarized it accurately, as it relates to US, Canada. And the comments that we made about July and August in US, Canada related to volume shipments, uh, in the industry of, um, sweeteners, which is what we were specifically talking about. And that recovery in September, was also volume related and related to sweeteners. Um, I would say it's it's early yet in the quarter for quarter 4 but um, we're not, I don't believe going to see

We then lose the valor <unk> premium.

<unk> co products and we have to.

The July and August step Downs, that we saw from an order of magnitude, and we do really believe.

We have to get the plant up and running and we have to dispose of.

The co products, so it doesn't become a bottleneck.

That it was related to a subset of brand.

And it takes time to normalize the quality of those co products to get the validation. In addition, you then have periodic halting of the grind that impacts the downstream refinery processes and then that leads to product downgrades and then that leads to under absorption of fixed costs and unplanned maintenance costs and we incurred all.

Companies, brand food companies in both Beverages and packaged Foods, taking price, promoting less and absorbing higher aluminum and Tin plate. Packaging costs passing those on.

James Zallie: And it takes time to normalize the quality of those co-products to get the valorization. In addition, you then have periodic halting of the grind that impacts the downstream refinery processes. And then that leads to product downgrades, and then that leads to underabsorption of fixed costs and unplanned maintenance costs. And we incurred all of that. Again, the production impacts that we experienced, separate from what we saw in the industry from a standpoint of volume, for us was particularly acute in July and August, but September returned to normal production rates. So the team right now is very focused. We don't want to declare victory. We're seeing steady recovery, stabilization, and we're hopeful that certainly Q4 is going to be better than Q3. And then as we go into the winter, assuming we don't hit. We've lived through polar vortexes and those kind of things.

that went into effect actually were announced, I believe in March

All of that.

The yen the.

<unk> impacts that we experienced separate from what we saw in the industry from a standpoint of volume for US was particularly acute in July and August but September returned to normal production rates. So.

And by the time, they started to be manifested at the retail level, We Believe.

Was experienced in those months.

The team right now is very focused we don't want to declare victory.

And the manufacturers were optimizing their approach to how they were going to price.

They are.

We're seeing steady recovery stabilization and we're hopeful that.

And thus, the impact was felt by consumers, the adjustments have occurred.

Certainly quarter, four is going to be better than quarter, three and then as we.

Go into the winter, assuming we don't hit.

We've lived through polar vortex is in.

And uh, again September was evidence of that. That's how we have interpreted it. And again, we need more data points going forward to really, uh, you know, be conclusive. But that's our best understanding of what what took place and how we would explain the impact in the quarter.

And those kind of things assuming we don't have anything like that we should be on a steady road to recovery at Argo.

Okay. Thank you if I call it.

One moment for our next question.

And that will come from the line of Josh Spector from UBS. Your line is open.

James Zallie: Assuming we don't have anything like that, we should be on a steady road to recovery at Argo.

Yeah, Hi, good morning.

So just to follow up on the U S. Canada side, just specific for your fourth quarter.

Pooran Sharma: Great. Thank you for the call.

Operator: One moment for our next question. That will come from the line of Josh Spector from UBS. Your line is open.

I mean, it looks like on your guidance for the year download double digits. It maybe implies that your fourth quarters around $70 million in EBIT, So youre still down around $10 million year over year. I guess is that right and is that primarily just comments around weaker market buying and seasonality.

Josh Spector: Yeah. Hi. Good morning. So just to follow up on the US, Canada side, just specific for your fourth quarter, I mean, it looks like on your guidance for the year, down low double digits, it maybe implies that your fourth quarter is around $70 million in EBIT. So you're still down around $10 million year over year. I guess, is that right? And is that primarily just comments around weaker market buying and seasonality? Were there any other effects there? And I guess I'll ask my follow-up in addition here. Does that carry into the first half of next year with some of the comments around weaker consumer buying or not?

Great great. I I appreciate that detail there and and just maybe wanted to understand um just Argo a little bit better. Um maybe I was wrong in my thinking but I think last time we we had spoke um, her last earnings call, you were expecting to get some of the volumes back as we work through 3Q and 4 q. So I was just wondering what, um, you are all facing from like a production challenge. Uh standpoint and and um, you know, do you see uh, do you see these predict?

Manufacturing issues abating by 2026 or what? What kind of timeline should we be thinking of here?

Are there any other effects, there and I guess I'll ask my follow up in addition here that around.

Yeah, no, you are correct in.

Does that carry into the first half of next year with some of the comments around weaker consumer buying or not.

Hey, Jonathan this is Jim Gray.

In what we had, uh, expect it. And what we thought was was possible, the point we wanted to make and the point we'll make again, is that Argo is a big complex.

I think with regard to how we think about the momentum going into Q4.

We don't really expect any kind of operational issues are one time issues.

Whether it's the U S can Chicago plant operations or kind of the Latam brewing, but we did want to come back and just say for for U S can market for the demand for beverages and food.

James Gray: Hey, Josh. This is Jim Gray. I think with regard to how we think about the momentum going into Q4, we don't really expect any kind of operational issues or one-time issues, whether if it's the US can, Chicago plant operations, or kind of the LATAM brewing. But we did want to come back and just say, for US can market, for the demand for beverages and food, for kind of our sweetener syrups, I think we do see some customers, not just branded, but also private label, taking price in the market. They are overcoming expected package cost inflation. And our consumer is always going to be a little elastic. And we've seen this before. It's not dramatic in terms of the overall cost inflation that we're seeing in the market. But you are seeing some unit price increases show up in kind of the scanner data.

Facility Factory. And when it runs well, we can make up for a lot of lost ground. And what we were expecting was that it was going to recover more quickly than it did and unfortunately the recovery lasted into uh the quarter. So uh

For our sweetener serves I think we do see some customers.

Not just branded but also private label taking price in the market. They are overcoming package.

Not to be repetitive, but when a factory of that size goes down, the first challenge that we have is that it impacted what we call the back end, which is the co-products. And the feed is,

We then lose the valorization premium.

On co-products. And we have to,

Expected package cost inflation.

And our markets are always a consumer is always going to be a little elastic.

And we've seen this before.

Not dramatic in terms of the overall.

Cost inflation that we're seeing in the market.

But you are seeing some unit price increases show up in the kind of the scanner data.

And I do anticipate that that will carry into Q4.

We have to get the plan up and running and we have to dispose of the co-products, so it doesn't become a bottleneck and it takes time to normalize the quality of those co-products to get the valorization. In addition, you then have periodic halting of the grind that impacts the downstream Refinery processes and then that leads to product downgrades and then that leads

And so thats kind of whats shaped our guidance a little bit but overall.

To under absorption of fixed costs and unplanned maintenance costs. And we incurred. All of that.

It's not a shock I think the U S consumers in a good spot with regard to wages.

James Gray: And I do anticipate that that will carry into Q4. And so that's kind of what's shaped our guidance a little bit. But overall, it's not a shock. I think the US consumer is in a good spot with regard to wages. And affordability is always top of mind. But I think there is some necessary, if not modest, pricing inflation on behalf of some beverage and food customers, and that's going to always slow the demand for sweeteners. But we're in a good spot if that sweetener demand does pick up in Q4. And that's kind of part of our guidance.

Affordability is always top of mind.

Uh, they again the production impacts that we experienced, separate from what we saw in the industry from a standpoint of volume.

But I think there is some necessary if not modest.

Pricing inflation on behalf of some beverage and food customers and that's kind of that's kind of always slow the demand for sweeteners, but we're in a we're in a good spot if that sweetener demand does pick up in Q4.

For us, it was particularly acute in July and August, but September returned to normal production rates. So,

The team right now is very focused, we don't want to declare victory.

And that's kind of part of our guidance.

Okay. Thank you.

One moment for our next question.

And that will come from the line of Heather Jones with Heather Jones Research. Your line is open.

Good morning, Thanks for the question and I apologize if I repeat anything I got on the call late.

They are, uh, we're seeing steady recovery stabilization and we're hopeful that uh you know, certainly quarter 4 is going to be better than quarter 3 and then as we uh you know go into the winter assuming we don't hit, you know, we've lived through polar vortexes and um and those kind of things. Assuming we don't have anything like that. We we should be on a steady road to recovery at Argo

Josh Spector: Okay. Thank you.

Operator: One moment for our next question. That will come from the line of Heather Jones with Heather Jones Research. Your line is open.

Good, thank you for calling.

Was wondering if you talk about Latam.

1 moment for our next question.

And as Youre thinking about 26 and <unk>.

And that will come from the line of Josh Spectre from UBS. Your line is open,

The Mexico tax issue that you discussed and then just broader inflation challenges for the consumer just wondering I know, you're not giving 2000 <unk> guidance, yet but just.

Heather Jones: Good morning. Thanks for the question. Apologies if I repeat anything. I got on the call late. I was wanting to talk about LATAM. As you're thinking about '26 and the Mexico tax issue that you discussed, and then just the broader inflation challenges for the consumer, just wondering, I know you're not giving '26 guidance yet, but just wondering now how you're thinking about that setup for next year, particularly given it's had a couple of really good years. Just was hoping you could give us some color on that.

I'm wondering now how youre thinking about that setup for next year.

Particularly given that <unk> had.

A couple of really good years, just was hoping you could give us some color on that.

Yeah. Hi, good morning. Um so just to follow up on the the US Canada side, just specifically for your fourth quarter. I mean it looks like on your guidance for the year, you know, download double digits. It may be implies that your fourth quarter is around 70 million in ebit, so you're still down around 10 million euro,

Yes.

Just make a comment we just actually celebrated our 100th year operating in Mexico. In fact, we had a board meeting in Mexico, and we were able to meet with government officials and we were able to hear from economists in relationship to the.

James Zallie: Yeah. Let me just make a comment. We just actually celebrated our 100th year operating in Mexico. In fact, we had a board meeting in Mexico, and we were able to meet with government officials, and we were able to hear from economists in relationship to the pulse on the economy. And definitely the government's budget deficit in Mexico has presented a challenge along with the muted GDP growth. So we are seeing a softer Mexican economy, and also some of the companies that we sell to there export to the US and export to a Hispanic community in the US from the standpoint of some of their products and brands. And we all have read from CPG companies in the US about a weaker Hispanic consumer here in the US. So clearly that manifested itself in the shipments that we make to these customers in the third quarter.

Over a year, I guess, is that, right? And is that primarily just comments around weaker Market, buying and seasonality are there any other effects there and I guess I'll ask my follow-up. In addition here that around. Does that carry into the first half of next year with some of the comments around weaker consumer, buying or or not?

Pulse on the economy and definitely.

The government's budget deficit in Mexico.

With regard to, you know, how we think about the momentum going into Q4.

Has presented a challenge along with.

The muted GDP growth. So we are seeing.

A softer Mexican economy, and also some of the companies that we sell to their export to the U S and export to a Hispanic community in the U S from a standpoint of some of their products and brands, So and we all have read.

um, you know, we don't really expect any kind of operational issues or 1-time issues, um, you know why they're if it's the US, can Chicago plan operations, or kind of the latam Brewing,

What we did want to come back and just say for us, can market for the demand for beverages and food.

From CPG companies in the U S about a weaker Hispanic consumer here in the U S. So clearly that manifested itself in the shipments that we make to these customers in.

In the third quarter.

Not really prior to that it's starting and.

Yes.

Youre going to have an overhang as well in relationship to U S. MCA negotiations that will need to be resolved.

James Zallie: Not really prior to that. It's starting. And you're going to have an overhang as well in relationship to USMCA negotiations that will need to be resolved or postponed by July of 2026. So there will be, we believe, some uncertainty that will hang over certainly the Mexican economy. And that's kind of what we're anticipating as we exit the year and as we head into the year. That all being said, the position that we hold in the Mexican market is a very solid position, very strong position. And the overall Mexican consumer has been resilient. And affordability is going to be very, very important, that plays to one of our strengths from a standpoint of how we work with customers on recipe development. And we also really know how to optimize our network down there.

Or.

Postponed.

By July of 2006.

Um, for kind of our sweetener syrups, I, I think we do see some customers, uh, not just branded but also private label taking price in the market, they are overcoming package. Uh, expected package cost insulation, um, and our markets are always, are consumers are always going to be a little elastic. Um, and we've seen this before, um, it's not dramatic, uh, in terms of the overall, um, you know, cost inflation that we're seeing in the market, um, but you are seeing some unit price increases show up in the kind of the scanner data, uh, and I do anticipate that that will carry into to Q4. Um, and so that's kind of what's, you know, shaped our guidance a little bit. Um, but overall it's not a shock. I think the US consumers in a good spot with regard to wages, and

So there will be we believe.

Some uncertainty that will hangover certainly the Mexican economy.

You know, affordability is always top of mind. Um, but I think there is some necessary, if not modest, ...

And.

That's kind of what we're anticipating as we exit the year and as we head into the year that will being said.

The <unk>.

Position that we hold in the Mexican market as a very solid position very strong position.

Pricing inflation on the on behalf of some beverage and food customers. And that's going to that's going to always slow the demand for sweeteners but we're going to we're in a good spot if that's what you're demand does pick up in Q4. Um and that's kind of part of our guidance.

And.

Okay, thank you.

The overall.

1 moment for our next question.

Mexican consumer has been been resilient and affordability is going to be very very important that plays to one of our strengths from a standpoint of how we work with customers on recipe development and.

And that will come from the line of Heather Jones with Heather Jones Research. Your line is open.

We also really know how to optimize our network down there we've got three great plants and the team is working very hard to.

Good morning. Thanks for the question and I apologies. If I repeat anything, uh, I got on the call late, um, was wanting to talk about latam. Um,

Optimize supply chains and look at cost management so.

Thats kind of the backdrop and that's how we're approaching it right now, but it's early it's really early to project too much forward, what we've seen in Q3 into 26 at this point in time.

James Zallie: We've got three great plants, and the team is working very hard to optimize supply chains and look at cost management. So that's kind of the backdrop, and that's how we're approaching it right now. But it's early. It's really early to project too much forward what we've seen in Q3 into 2026 at this point in time.

And as you're thinking about 2026 and, you know, the Mexico tax issue that you discussed, and then just the broader inflationary challenges for the consumer, just wondering. I know you're not giving 2026 guidance yet, but just ...

Wondering now how you're thinking about that setup for next year? Um,

Okay. Thank you for that and then my next question is just on the share repo.

A thorough back two years ago, but I remember at one point.

Particularly given its, you know, had a a couple of really good years just was hoping you could give us some color on that.

Your shares Warren as liquid.

As far as how they trade and all that so that's sort of limited the optionality.

Heather Jones: Okay. Thank you for that. And then my next question is just on the share repo. This is a throwback to years ago, but I remember at one point your shares weren't as liquid as far as how they trade and all. And so that sort of limited the optionality on the magnitude of share repurchases. So I was just wondering if you could update us as far as your thinking on that. Is there a limit to how many you want to repurchase ultimately? And just updated thinking on that.

On the magnitude of share repurchases. So I was just wondering if you could update us as far as your thinking on that is there a limit.

Two how many you want to repurchase ultimately in gist.

Just updated thank you on that.

Yeah, we let me just make a comment, we just actually, uh, celebrated our 100th year operating in Mexico. In fact, we had a board meeting in Mexico, uh, and we were able to meet with government officials. And we were able to hear from economists, you know, in relationship to the, uh, pulse on the economy and definitely

Yes.

the government's budget deficit in Mexico.

Well first of all I mean, why the new authorization from our board on our share repurchase program. So our or the program that we had in place was set to expire at the end of 'twenty five.

Has presented a challenge. Uh, along with um, you know, the muted GDP growth. So we are seeing a

I think overall, we're confident in the growth strategy for the company and believe that organic investment is going to continue to favorably impact cash flow growth.

James Gray: Yeah. Well, first of all, I mean, why the new authorization from our board on our share repurchase program? The program that we had in place was set to expire at the end of 2025. I think overall, we're confident in the growth strategy for the company and believe that organic investment is going to continue to favorably impact cash flow growth. And so if you look at that going forward, then our capital allocation priorities are still around reliability capital, organic growth investment, supporting the dividend. But after that, we have strategic cash to deploy, and we have a healthy cash balance today. And so I think we look at our repurchase history for 2024 and now for 2025, with trying to exceed $200 million of share repurchases in 2025.

And so if you look at that going forward, then our capital allocation priorities are still around reliability capital organic growth investment.

Softer, Mexican economy, and also some of the companies that we sell to their export, to the US, and Export to a Hispanic community in the US from a standpoint of some of their products and Brands. So, and we all have read

Supporting the dividend, but after that we have strategic cash to deploy.

And we have a healthy cash balance today, and so I think we look at our repurchase history for 2024 and now for 2025 with <unk>.

Turning to exceed $200 million of share repurchases in 2025, So we're going to anticipate that we're going to have kind of more share repurchases in 'twenty six 'twenty $7 28.

From CPG companies in the U.S. about a weaker Hispanic consumer here in the U.S. So clearly that manifested itself in the shipments that we make to these customers in, um, you know, in the third quarter, not really prior to that. It's starting and, um,

You know, you're going to have an overhang as well in relationship to usmca negotiations. That will

Thus the need.

To come back and renew.

Need to be resolved. Um, or

And reauthorize it at 8 million shares over over that time period.

James Gray: So we're going to anticipate that we're going to have kind of more share repurchases in 2026, 2027, 2028, and thus the need to come back and renew and reauthorize it at eight million shares over that time period.

Postponed, uh, by July of 26.

Okay perfect. Thank you so much.

Okay.

Thank you I'm showing no further questions in the queue. At this time I would now like to turn the call back over to Mr. Jim Sally for any closing remarks.

some uncertainty that will hang over, certainly the Mexican economy and um

Thank you operator, and I want to thank all of you for joining US. This morning, we look forward to seeing many of you at our upcoming investor events in the next engagement being the Stephens annual investment conference in mid November.

that's kind of what we're anticipating as we exit the year and as we head into the year that all being said,

Heather Jones: Okay. Perfect. Thank you so much.

uh, the

James Gray: Okay.

Operator: Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Jim Zallie for any closing remarks.

Position that we hold in the Mexican market is a very uh, solid position. Very strong position and um

you know, the overall

James Zallie: Thank you, operator. I want to thank all of you for joining us this morning. We look forward to seeing many of you at our upcoming investor events in the next engagement, being the Stephens Annual Investment Conference in mid-November. At this time, I just want to thank everybody again for your continued interest in Ingredion.

And at this time I just want to thank everybody again for your continued interest in ingredients.

Yeah.

This concludes today's program. Thank you all for participating you may now disconnect.

From a standpoint of how we work with customers on recipe development, we also really know how to optimize our network down there. We've got three great plants, and the team is working very hard to.

Operator: This concludes today's program. Thank you all for participating. You may now disconnect.

Optimize supply chains and look at cost management, so that's kind of the backdrop, and that's how we're approaching it right now. But it's early; it's really early.

To project too much forward what we've seen in Q3 into 2026 at this point in time.

just want to share repo, this is

a throwback to years ago but I remember at 1 Point um you know the your shares weren't as liquid um as far as how they trade and all and so that sort of limited the optionality um

On the magnitude to share repurchases. So I was just wondering if you could update us as far as your thinking on that. Is there a limit um, to how many you want to repurchase? Ultimately and just just how I just updated, thank you on that.

Yeah. Um, well, first of all, I mean why the new authorization from our board on our share repurchase program. So our our our the program that we had in place was set to expire at the end of 25.

Um, you know, I think overall we're confident in the growth strategy for the company and believe that organic investment is going to continue to favorably impact cash flow growth.

Um, and so if you look at that going forward, then our Capital allocation priorities are still around reliability Capital organic growth investment supporting the dividend. But after that we have strategic cash to deploy and we have a healthy cash balance today. And so you know I think we look at our repurchase history for 2024 and now for 2025 with um trying to you know exceed $200 million of share repurchases in 2025. So we're going to anticipate that we're going to have kind of more share repurchases in in 26, you know, 2728 and thus, the need, um, to come back and renew, uh, and and reauthorize it, uh, at 8 million shares over over that time period.

Okay. Perfect. Thank you so much.

Okay.

Thank you. I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Jim zallie, for any closing remarks

Thank you, operator. And I want to thank all of you for joining us this morning. We look forward to seeing many of you at our upcoming investor events, in the next engagement, uh, being the Stevens, uh, annual investment conference in mid November. And at this time, I just want to thank everybody again for your continued interest in ingredient.

Today's program, thank you all for participating. You may now. Disconnect