Good day, and thank you for joining. Welcome to the Q1 2026 Ingredion Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question-and-answer session. To ask a question, please press 1 on your telephone, and wait for your name to be announced. To withdraw your question, please press 1 again. I would now like to hand the conference over to your speaker today, Noah Weiss, Vice President of Investor Relations.

Good morning, and welcome to Ingredion Incorporated's First Quarter 2026 Earnings Call. I am Noah Weiss, Vice President of Investor Relations. Joining me on today's call are Jim Zallie, our Chairman, President and CEO, and Jason Payant, our Vice President and interim CFO. The press release we issued today, as well as the presentation we will reference for our first 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 Incorporated assumes no obligation to update them in the future as or if circumstances change. Additional information concerning factors that could cause actual results to differ materially from those discussed during today's conference call or in this morning's press release can be found in the company's most recently filed Annual Report on Form 10-Ks and subsequent reports on Forms 10-Q and 8-Ks. During this call, we 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 U.S. GAAP measures in Note 2, Non-GAAP Information, included in the press release and in today's presentation appendix. With that, I will turn the call over to Jim.

Thank you, Noah, and good morning, everyone. While we expected a challenging quarter after last year's strong first quarter, results were weaker than anticipated in Food and Industrial Ingredients U.S./Canada due to operational challenges at our Argo facility. At the same time, performance in our Texture and Healthful Solutions and Food and Industrial Ingredients LatAm segments were in line with our expectations despite an increasingly uncertain macroeconomic environment. Overall, net sales were down 1% and adjusted operating income was down 22% versus last year, driven by Argo and softer industry volumes in Food and Industrial Ingredients U.S./Canada and LatAm. As expected, our Texture and Healthful Solutions segment delivered a solid quarter with broad-based volume growth reflecting increased adoption of our expanding solutions portfolio and continued customer demand for clean label offerings. Turning to the next slide, we are pleased that our Texture and Healthful Solutions segment posted its eighth straight quarter of volume growth, up 2%, led by clean label and texture solutions in EMEA and Asia-Pac. In Food and Industrial Ingredients LatAm, overall volumes were slightly down for the quarter due to expected weaker consumer demand versus a strong first quarter last year. We saw a modest recovery in Brazil, supported by improved customer demand and early benefits from our polyols network optimization completed at the end of last year. Additionally, this morning, we announced plans to cease operations at our Cabo manufacturing facility in Northeast Brazil by 2026 as we drive enterprise productivity to deliver operational efficiencies while sharpening customer mix priorities. We expect the actions we have taken in Brazil, both commercially and operationally, to deliver continued benefits throughout the year. In our Food and Industrial Ingredients U.S./Canada segment, net sales volumes declined 7% in the first quarter, driven primarily by operational issues at our Argo facility as well as softer demand across certain food and industrial markets. As noted earlier, Food and Industrial Ingredients U.S./Canada results were negatively impacted by Argo in the quarter. Within our February outlook, we expected $10 million to $15 million of additional costs to impact the quarter as the facility recovered to normal grind rates. However, additional operational challenges slowed the recovery and negatively impacted saleable inventory. As a result, the actual Q1 impact was much greater than anticipated, coming in at $40 million, comprised of higher maintenance spend and the costs associated with elevated levels of rework. Additionally, we incurred higher logistics costs as we sourced products from other facilities in our network to meet customer commitments. In response to challenges in our refinery operations, we took meaningful actions during the quarter to diagnose and remedy the sources of process failures. We assembled a multidisciplinary team of internal and external experts in refinery unit operations and are pleased to say that downstream production returned to normal levels by quarter-end. Unfortunately, in the midst of this progress, on April 10, there was an isolated thermal event in Argo's corn germ processing operations. While the front-end grind and refinery were not impacted, crude oil production went offline. Our teams are working diligently to restore our germ processing capabilities, and we expect to return to normal operations in this unit within the second quarter. Our balance-of-the-year assumptions for Food and Industrial Ingredients U.S./Canada are based on the germ processing recovery timeline that I just outlined, as well as sustaining current levels of production and yield through the refinery operations at Argo. Turning to a significant driver of Texture and Healthful Solutions growth in the quarter, our solutions sales continue to outpace overall segment growth. As a reminder, our solutions portfolio is approximately $1 billion, or 40% of this segment's revenue. Clean label remains a major growth driver within our solutions offering. It is noteworthy to point out that even against a challenging volume backdrop, customers continue to seek clean label options. Our industry-leading portfolio of functional native starches grew strongly in the quarter, benefiting from sustained customer demand for simpler ingredient panels and increased reformulation support. Examples include customized texturizing systems for dairy and dairy-alternative applications, as well as solutions supporting reformulation for healthier bakery and beverage platforms. Solutions growth is coming from more than just clean label ingredients. It also reflects the breadth of our capabilities and how we are partnering with customers through co-development, providing formulation expertise and differentiated ingredients. This combination is helping us deepen customer engagement and improve mix within Texture and Healthful Solutions. As part of the innovation engine for solutions, we are increasingly leveraging artificial intelligence to power the consumer insights and predictive formulation work that are at the heart of our solutions customer briefs. This is helping us accelerate the brief-to-solution cycle time. Moving to another bright spot in the quarter, our Healthful Solutions portfolio, comprised of clean taste solutions for sugar reduction and protein fortification, continued to grow strongly. Sales of our pea protein isolates, driven by recent new product innovations, grew more than 50% in the quarter, and our clean-tasting stevia-based solutions also demonstrated a solid 6% growth in the quarter. Growth in these categories is broad-based across both branded and private label, reflecting the heightened consumer pull for protein-fortified and lower-sugar offerings. As we look ahead to the remainder of the year, we are actively monitoring and managing both the direct and secondary effects of higher energy prices. The largest impact we foresee is related to increased logistics costs, which we are actively working to offset within-year price increases. It is important to mention that at this point, we do not foresee major challenges related to sourcing any of our important manufacturing inputs. The work done in recent years to increasingly localize our supply chains should position us well to mitigate disruptions. We are also monitoring the impact higher energy costs are having on packaging inflation and gasoline prices, and the effect that together they could have on consumer demand in the second half. At this point, it is too early to estimate the degree to which these inflationary pressures may impact volumes. We are also carefully monitoring fluctuations in the value of the U.S. dollar. The Mexican peso has unexpectedly maintained its strength, and this is presenting a meaningful transactional foreign exchange headwind for the Food and Industrial Ingredients LatAm segment. The dynamics brought on by new inflationary headwinds are familiar to us, as we have successfully managed through these periods before. We have the operational experience to react with agility, and we are leveraging our pricing centers of excellence to implement targeted price increases where they are required and where possible. With that, I will turn the call over to Jason for the financial review.

Thank you, Jim, and good morning, everyone. Moving to our income statement, net sales for the first quarter were $1.8 billion, down 1% versus prior year. Gross profit declined 14% with gross margin decreasing to 22.4%, driven primarily by operational challenges at Argo; lower volumes and unfavorable mix in Food and Industrial Ingredients U.S./Canada and Food and Industrial Ingredients LatAm; and transactional foreign exchange impacts in Mexico. Reported and adjusted operating income were $203 million and $212 million, respectively. Turning to our Q1 net sales bridge, the 1% decrease was driven by $32 million in lower volume and $22 million in lower price/mix, partially offset by $33 million of favorable foreign exchange translational impacts. Moving to the next slide, we highlight net sales drivers by segment for the first quarter. Texture and Healthful Solutions net sales were up 2%, driven by sales volume growth of 2% and foreign exchange favorability of 2%, partially offset by lower price/mix. Food and Industrial Ingredients LatAm net sales were up 1%, driven by favorable foreign exchange, partially offset by lower volumes and weaker price/mix. Food and Industrial Ingredients U.S./Canada net sales declined 9%, driven by operational challenges at Argo and weaker consumer demand. Now let us turn to a summary of results by segment. Texture and Healthful Solutions net sales were up 2% in the first quarter, and operating income was up 1%. The increase in operating income was driven by favorable input costs, foreign exchange, and better volumes, partially offset by strategic price and mix management. In Food and Industrial Ingredients LatAm, net sales were up 1% in the quarter. However, operating income decreased by 9% to $115 million, with operating margins of approximately 20%. These decreases were driven primarily by Mexico transactional currency impact and softer volumes in Mexico and the Andean region. Positive performance in Brazil and the Argentina joint venture helped offset some of these headwinds, allowing the total segment to deliver results in line with expectations. Moving to Food and Industrial Ingredients U.S./Canada, first-quarter net sales were down 9%. Operating income was $34 million, driven by operational challenges at our Argo plant and weaker volumes and mix. Net sales in All Other increased approximately 3%, driven by continued growth in protein fortification, particularly in higher-value isolate and specialty protein applications. Operating income improved by over $3 million year on year, reflecting improved mix and operating leverage. Turning to our first-quarter earnings bridge, the top half of the slide reconciles reported to adjusted earnings per share, and the bottom half walks through the drivers of the year-over-year change. Adjusted diluted earnings per share declined by $0.63 year over year, including $0.71 of margin impacts and $0.14 of volume impacts, that were primarily the result of the operational challenges we previously discussed. These headwinds were partially offset by foreign exchange benefits of $0.07 and other income benefits of $0.08 per share, as well as $0.07 of non-operating items, including $0.06 of share repurchase benefits. Turning to cash flow and capital allocation, we continue to demonstrate financial discipline in the quarter. Year-to-date cash from operations was $33 million, reflecting a planned investment of approximately $205 million in working capital. This was driven primarily by receivables and payables. We invested $110 million of capital expenditures, net of disposals, to support reliability, capacity, and strategic priorities across the business. During the quarter, we continued to return cash to shareholders through $52 million in dividends and the repurchase of $14 million of shares. This underscores our commitment to balanced capital allocation and long-term shareholder value creation. Now let me turn to our updated 2026 outlook. As Jim noted in his opening remarks, we have revised our outlook to reflect the updated impact from Argo; foreign exchange transactional impacts from continued strength of the Mexican peso relative to the U.S. dollar; the impact of higher energy prices on input costs and logistics; and softer volumes in LatAm. For the full year 2026, we now anticipate net sales to be flat to up low single digits and adjusted operating income will be flat to down low single digits. Our 2026 financing cost estimate is in the range of $35 million to $45 million and a reported and adjusted effective tax rate of 26% to 27.5%. Our full-year adjusted earnings per share is now expected to be in the range of $10.45 to $11.15. This outlook assumes sequential operating improvements at Argo and continued resilience in the Texture and Healthful Solutions side. Our adjusted earnings per share range is based on a diluted share count of 63.5 million to 64.5 million shares. We anticipate that our 2026 cash from operations will now be in the range of $725 million to $825 million, reflecting our updated net income expectation as well as working capital investments in line with net sales growth and normalized inventory levels in Food and Industrial Ingredients U.S./Canada. Capital expenditures for the full year are now anticipated to be between $400 million to $440 million. Please note that our guidance reflects current tariff levels in effect as of April 2026. In addition, this guidance excludes any acquisition-related integration and restructuring costs as well as any potential impairment costs. Turning to our updated full-year outlook by segment, our net sales outlook for Texture and Healthful Solutions remains the same, but operating income is now expected to be up low single digits, which still reflects volume growth but is partially offset by higher input cost inflation. For Food and Industrial Ingredients LatAm, net sales are now estimated to be flat to down low single digits and operating income is expected to be down low single digits, reflecting foreign currency transactional headwinds in Mexico and softer volumes in LatAm. As a reminder, our Mexico business is U.S. dollar denominated, but most of our SG&A and operating costs are in pesos. As the peso strengthens against the dollar, our transactional costs increase in dollar terms, which negatively impacts operating income and can more than offset translational benefits against a weaker U.S. dollar in other parts of our LatAm business. For Food and Industrial Ingredients U.S./Canada, we now expect net sales to be down low single digits, and operating income is projected to be down low double digits, which reflects the impact of operational challenges in Q1 on our full-year outlook. All Other operating income is still anticipated to improve by $5 million to $10 million from full year 2025. Lastly, for 2026, we expect net sales to be flat to up low single digits and adjusted operating income to be down high single digits, as we lap a very strong second quarter in 2025. That concludes my comments, and I will turn it back over to Jim.

Thank you, Jason. To close, even in a challenging quarter, we continue to see momentum in the highest-value parts of our portfolio, particularly Texture and Healthful Solutions, where customer demand remains robust, supported by clean label, healthy eating, reformulation, and solutions-led growth. As stated, our Food and Industrial Ingredients U.S./Canada projections are based on the sequential operational recovery at Argo throughout Q2 and reflect sustaining current levels of production and yield for the balance of the year. We are actively monitoring and managing the impacts of energy and currency movements and are pursuing targeted price increases where required and where possible. Our enterprise productivity initiatives, specifically from network optimization, are providing operational and commercial benefits which will support margin. With a strong balance sheet and solid cash generation, we remain well positioned to invest for growth, support our strategic priorities, and deploy capital with discipline as we continue to build long-term shareholder value. We will now open the call for questions. Operator?

Thank you. Press 1 on your telephone and wait for your name to be announced. To withdraw your question, please press 1 again. One moment for questions. And our first question comes from Pooran Sharma with Stephens. You may proceed.

Hi. This is Jack Harden on for Pooran Sharma. Thanks so much for the question. Once Argo normalizes, do you still view the Food and Industrial Ingredients U.S./Canada business as capable of getting back to the mid- to high-teens operating margin profile? And is that more of a 2027 target now, or could that run rate be possible exiting 2026? And a quick follow-up on capital allocation. With updated cash flow from operations guidance and CapEx guidance remaining the same, how should we think about capital allocation through the rest of the year? And is the prior commitment of $100 million roughly the right way to think about it, or has that been updated as well? Thanks.

Yes, the answer to that question is yes. We are still committed to getting back to the mid-teens operating income margins for that business, consistent with what we put forward in the Investor Day in September. The issues at Argo are the predominant driving factor in relationship to the margin decline and the operating income decline in that business. We are encouraged by how the grind and how the refinery operations finished the quarter. We were disappointed with the April 10 issue in the corn germ processing unit, but, again, that particular issue is isolated. It is in a very specific location within the plant, separate from grind, separate from the refinery operations, and the repairs are well underway. That unit should be back up and running again within Q2. So in answer to your question from a standpoint of getting back the majority of the 1,000 basis points of margin decline in this quarter compared to the 16% to 17% that we are typically projecting, I think we would say for 2027, certainly, that is our expectation at this point in time. Assuming that we can string a couple of good quarters together of run-ability and reliability, we feel that from a standpoint of the demand and how we have been able to service customers through this period, we can get back to those levels of operating income.

Yes. I would say yes. Certainly, based on our current cash flow projections and capital allocation priorities, we plan to build on the $14 million shares we repurchased in Q1 to meet our full-year targeted commitment.

And Q1's CapEx came in consistent with the full-year projections as well. So yes, it is to continue as planned for the capital allocation priorities. Thanks so much.

Thank you. Our next question comes from Joshua Spector with UBS. You may proceed.

Hi. Good morning. I wanted to drill into Texture and Health a little bit more and just understand some of your assumptions through the year. I guess if I look at the first quarter, your organic growth was about flat. You got the couple points basically from FX. So assuming FX becomes less of a tailwind, you basically need organic growth to pick up. So I am just curious relative to the 2% volumes and the down 2% pricing, how do you expect that to evolve through the year to get the segment to the low- to mid-single-digit growth you expect for the year in total? Also, I would be more specifically curious on pricing, because you guys had done well on volumes, but pricing has been a persistent headwind. It sounds like from how you described the call today, you would expect pricing maybe to pick up to cover some of the higher costs that you are starting to see in logistics and other areas. Is that the right framework?

The mid-single-digit target is part of our long-term algorithm for growth. We are pleased to deliver 2% net sales volume growth in the quarter, and I think it is noteworthy again to highlight that it is the eighth consecutive quarter of sales volume growth. We really believe that the focus that we have now on solutions, which is a result of the re-segmentation work that we completed nearly two years ago, and the solution selling approach that we have globally implemented with trainings and certifications and formulation experts that collaborate with our 30-plus Idea Labs around the world, plus our technical headquarters in Bridgewater, New Jersey, all of that continues to come together very well on behalf of the customer. At the same time, driven by regulatory changes and health and wellness trends, there are a number of reformulations that are coming to us from customers. We also have proactively decoded, I guess you could say, better than we have in the past, the private label ecosystem and the supply networks, the co-packing networks, and we have an increasing pipeline of project briefs to support customers with solution selling and co-creation, which is driving really deeper engagement and faster delivery of solutions to customers. And so I think all of that makes us feel confident that when the macroeconomic conditions and inflationary pressures lessen a bit, that is going to enable us to move from what currently is low single digits to that mid-single-digit territory that we believe is absolutely achievable and correct for that segment based on the portfolio that we have, based on the differentiated ingredients that we have, and based on the investments that we have made in capabilities, both in people capabilities as well as in equipment capabilities within our R&D facilities. So that is what gives us the confidence that we can do that. Regarding pricing and margins: what is encouraging to highlight is that margins in U.S. and Canada in Texture and Healthful Solutions actually increased in the quarter. The majority of the slight margin compression we are seeing is related to the rapid rise in tapioca costs in Asia-Pac. Tapioca for us is a significant business, and that pretty rapid increase in tapioca costs in Asia-Pac started to occur at the end of Q4 last year, and so the time lag that it takes to pass through those costs through increasing pricing is what we are seeing in Q1 manifest itself. That typically takes about a quarter to a quarter and a half to work its way through, just on how tapioca pricing works. So that may help to clarify what you are highlighting in relationship to the quarter and some of the margin compression that we experienced. It is something that is pretty heavily weighted and unique to that particular issue. Regarding how pricing recovers: going into contracting, for our less differentiated products, we were pricing to maintain market share and, in some cases, increase market share. We are expecting and are seeing increases in fixed cost absorption through our Texture and Healthful Solutions manufacturing facilities because we did pursue volume in the contracting period, and that is why the setup for this year you are seeing some of that play itself out in the way of how pricing is being viewed. We believe that was the right approach to remain relevant with the customer base we targeted, and over time solutions are margin accretive. The tapioca costs will flow through; it just takes about a quarter to a quarter and a half to get them.

Okay. I appreciate that. I guess I would be more specifically curious on pricing, because you guys had done well on volumes, but pricing has been a persistent headwind. It sounds like from how you described the call today, you would expect pricing maybe to pick up to cover some of the higher costs that you are starting to see in logistics and other areas. Is that the right framework?

Let me try to clarify in relationship to something that occurred uniquely in the quarter to help put that in perspective. First of all, margins in U.S. and Canada in Texture and Healthful Solutions actually increased in the quarter. The majority of the slight margin compression we are seeing is related to the rapid rise in tapioca costs in Asia-Pac. That rapid increase started at the end of Q4 last year, and the time lag to pass through those costs is what we are seeing manifest in Q1. Typically that takes about a quarter to a quarter and a half to work its way through. So that may help clarify what you are highlighting related to the quarter and some of the margin compression. In short: there are strategic reasons we pursued volume through contracting, and solutions growth is margin accretive over time. The tapioca issue is a unique, regionally concentrated cost pressure that we expect to pass through over time.

Okay. One other quick follow-up around that issue is just so pricing was still reported down. How do I square an escalation in cost and the pricing side there? Is that the timing that that margin and that price recovers in 2Q? Or are there other factors outside of this which are still pressuring that?

So regarding pricing and taking it back to what we said going into the year: for less differentiated products we were pricing to maintain market share and in some cases increase it. We are expecting increases in fixed cost absorption in our Texture and Healthful manufacturing because we pursued volume in contracting. That is why you see how pricing is being viewed. But the encouraging part is solutions growth in the quarter, which is margin accretive. Then there was the one issue related to tapioca costs, which we have navigated before; those prices will flow through, just with a lag of a quarter to a quarter and a half.

Thank you. Our next question comes from Benjamin Thomas Mayhew with BMO Capital Markets. You may proceed.

Hi. Good morning, and thanks for taking the questions. So my first question has to do with customers having to manage pricing. So I am just wondering what you are seeing in terms of elasticity on your products, and how, when you are trying to take this pricing, how might that impact volumes should you need to pass through an extended amount of costs through the balance of the year? And just a follow-up: your balance sheet—the cash balance is still very, very strong. We know that you have been looking at a pretty robust M&A pipeline, but that valuations have not quite been where they need to be to take action. As you are looking at a potentially tougher environment for the industry, how are you thinking about your M&A pipeline? Is it getting more interesting? And are you prepared to pursue more inorganic growth? Thanks.

I am going to let Jason take the elasticity and pricing setup, but to set it up: similar to last year with tariffs, we have been proactive and put in place a Middle East response team that is collecting all of the input to our business as it relates to the inflationary impacts of increased energy prices. We are monitoring and managing those direct and indirect impacts, and we have a handle on the direct impacts and what we need to do to offset logistics cost increases and increases flowing through to us directly with chemicals and packaging. Jason, do you want to give some perspective?

Yes. As we have done in the past with tariffs and other disruptions, we do believe that we will be able to pass through most of the costs. There may be a small but manageable net negative impact, but overall history has shown that, contractually and consistent with market dynamics, we are able to pass those costs through. The bigger watch-out is the indirect impacts on consumer demand as our customers work to pass through those incremental costs to the market. Last year, we navigated tariffs well and the net impact was manageable. For the current Middle East energy price situation, the direct impacts we have projected are in a similar manageable range, but we are watching carefully for second-half consumer demand impacts.

One of the things we are fortunate to have is a strong balance sheet and strong cash flows, which provides optionality to pursue value-accretive M&A. We have a track record of remaining disciplined in pursuit of M&A prospects, and when we do pursue a target and integrate that business, we have typically integrated and delivered on the business case. We have a robust M&A pipeline and are actively pursuing a number of businesses that could bring us sales, EBITDA, talent, and technology. Anything that enhances our winning aspiration in the areas of Texture Solutions and Healthful Solutions is our priority. We will remain disciplined regarding value accretion, executability, and synergies.

Thank you. Our next question comes from Analyst with Barclays. You may proceed.

Good morning. Thanks for taking my question. I just wanted to follow up a little bit on the performance in Latin America and what has been driving this. You have called out the volume decline, but if we look at some of the underlying trends, be it at the Coke bottlers or even what we saw with a large beer brewer in Brazil earlier this morning as well—reporting surprisingly better results—I was just wondering where the mismatch is between what we saw operationally for the Coke bottlers and brewers in the region, where we have actually flattish to maybe even slightly up volume, versus you guys having about a 7% impact on volume. I just wanted to understand the mismatch here. Thank you.

It is a good question. What we can say about our LatAm volumes: we expect volumes to be down slightly, lapping a strong 2025. For us, brewery volumes have been lower than anticipated thus far due to conservative customer ordering ahead of the World Cup, which is surprising. We believe this has the potential to pick up in Q2. However, we are lapping soft volumes in Q3 of last year related to a particular customer contract management issue, and we think that in the second half the volumes are going to be stronger. The Mexican economy continues to demonstrate softness, and thus we have a cautious outlook on volumes for the remainder of the year for Mexico. Overall, against a record Mexico performance last year, we are seeing softness, and then, as Jason alluded to, we have the impact of the Mexican peso, which is a headwind for us as well. We will dig more into the numbers that you refer to, specifically in brewing, and try to understand what may be happening in relation to no- and low-alcohol beers, which appears to be growing 25% in comparison to mainstay beers, and understand how that flows through to us and impacts us. But that is what we are seeing and can say at this point in time.

Okay. And then just following up, the price/mix—was it more price, or was it more mix in terms of what drove the headwinds here? Just to understand if it is more like a price pass-through or if it is an actual mix effect to lower-price items.

In Latin America, the impacts are largely a mix issue. We are seeing differentiated customer mix and some product mix that is having an impact. Overall, results were in line with our expectations for the quarter, and the change in our guidance is driven more by Argo—about half of it—and then the balance is the Mexican peso and some Middle East impacts on energy costs. So the LatAm piece is a smaller component of the guidance change and is more mix-driven than purely price.

Thank you. Our next question comes from Kristen Owen with Oppenheimer. You may proceed.

Hi, Jim, Jason. Thank you for the time this morning. Just following up on this thread on LatAm, I wanted to ask if you could provide a little bit of background on the Cabo plant—just what the decision factor was there, and how we should think about that influencing margins. Also, just clarification on the model: is the shutdown of that plant included in the updated outlook? And then I have a follow-up. Thank you.

The answer to your last question is yes, and I will give you some context in relation to the decision announced today. We continuously evaluate the efficiency and optimization of our operations and network. As part of a broader initiative to adjust our operating footprint in Brazil, with a goal of strengthening operational efficiency, competitiveness, and long-term business sustainability, we made the decision to cease operations at our Cabo plant. That plant is in the northeast part of Brazil. Economic growth in that part of Brazil compared to when we made the decision to make that investment has not lived up to its potential. Brazil at the time of that plant going in was growing much faster; here we are fifteen-plus years later, and the potential for that plant with its location and the economic growth in that territory just has not delivered. While these decisions are never easy, the decision regarding Cabo aligns with our long-term vision for Brazil as we concentrate resources on higher value-generating businesses. It is also noteworthy that in Q4 we closed our Alcantara plant. The ingredient polyols business in Brazil is a strategic growth platform, and we successfully expanded polyols production at our flagship facility at Mogi Guaçu, which is delivering on all elements. We are encouraged by that, and that will provide strength for the Brazilian business this year as well as savings associated with the Cabo facility. These moves were necessary to strengthen our footprint and network in Brazil, dealing with realities of the marketplace.

Okay. Great. Thank you for that. And then my follow-up question: we have talked about some of the moving pieces in Food & Industrial North America. I am wondering if you can help us understand how to think about co-product opportunities just given where feed prices have moved—maybe some crosswinds on the paper and packaging side—how we should think about that influencing the balance of the year. Thank you.

Our co-products are always an important part of the business. Over the past few years we have been able to mitigate some of the volatility related to co-products by hedging further forward on our corn during contracting and hedging further forward on our co-products. That tempers volatility relative to our forecast, which is beneficial. We will see some benefit as prices rise for the unhedged portion of our contracts, but it will be muted relative to what we may have seen five or ten years ago.

Thank you.

Thank you. Our next question comes from Heather Lynn Jones with Heather Jones Research. You may proceed.

Good morning, and thanks for the question. I hopped on late, so I apologize if my question is repetitive. I was wondering on the guidance side—I guess I just wanted to ask about your confidence level. As far as the Argo issue, you had the issues from last year's fire, and now there was a recent fire, I think, in the corn germ part of the plant. I was wondering: have the issues from last year been fully resolved? And does your guidance for the rest of the year assume that the corn germ piece is fully resolved relatively soon?

Yes. The answer to your last question is yes. In Q2, that issue we expect will be behind us. Because Argo was so significant in the quarter, I want to put it in perspective. Early in the first quarter, we had a failure in our corn conveying at the plant, which led to incremental intraplant logistics to have corn flow as it should, and that led to increased logistics and maintenance costs. This was repaired in the quarter, and that is now behind us. In addition, in our downstream refinery operations, we experienced operational reliability challenges in our syrup refining, and that led to product downgrades and unexpected rework costs. Typically, we can overcome that quickly. In this case, getting to the root cause took longer than anticipated, and the issue persisted through the quarter and was the single biggest unexpected negative impact to results. That is now resolved and behind us, and refinery production is operating at normalized rates as we exited the quarter. Regarding the thermal event on April 10: we suffered a thermal event in our corn germ processing unit, which took this unit offline for approximately five to six weeks. That is scheduled to be back online within Q2. It was isolated to the germ processing area; the front-end grind and refinery were not impacted. Due to the nonrecurring nature and magnitude of this event, that impact will be excluded from our adjusted results. Our outlook assumes sequential improvement at Argo and sustaining current production and yield levels.

It does. I just want to clarify before my next question: so the issues from last year—where I think there was a dryer issue related to your gluten feed and gluten meal—that was fully resolved and was not a factor in Q1? It was more on the downstream refinery, but that is all been resolved and is working well. The corn germ issue is not resolved, but it is expected to be. But regardless, it is excluded from your adjusted guidance.

That is 100% correct. The challenge when germ processing goes down is you have more germ to manage. We can store a good proportion to process once online, but some will go into the wet feed pile and impact co-product values because you have a larger portion of product to dry. We will not be able to manage that through all of the dryers. The issues of last year are resolved. We do expect a little follow-on co-product headwind as we get germ processing back online.

Okay. Thank you so much. I appreciate it.

Thanks for taking my questions. One quick one for me. You alluded in your prepared remarks earlier in the call to optionality regarding growth investments. I am wondering a couple of things around this dynamic. First, have the issues that you have been forced to navigate—be it Argo or the various macro dynamics—in any way compromised your ability to really focus on growth initiatives so far year to date? Second, can you talk about how you see these growth investments evolving? Are you leaning more into the protein side of the business that you highlighted, still focused on the Texture and Healthful Solutions segment? Any context there would be great.

We ring-fenced certain investments to support our Texture Solutions capability build and proceeded with people investments and innovation investments. One of the bodies of work in enterprise productivity is enhancing our innovation operating model—not just cost reduction but making innovation more efficient through investments in artificial intelligence to get predictive formulation and measurement capabilities for structure-function predictability in texture solutions. We have preserved those investments and continue to make them. Our cash flows allow us to invest in growth capital as well as reliability capital, and we are assessing those needs to maintain the right balance going forward.

Very good. I appreciate that context. I will get back in queue.

Thank you. I would now like to turn the call back over to Jim Zallie for any closing remarks.

I want to thank everyone for joining us this morning. We look forward to seeing many of you at our upcoming investor events, with the next significant engagement being the BMO Farm to Market on May 13 in New York. I want to thank everyone for your continued interest in Ingredion Incorporated.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.