Slide 1: Third Quarter Earnings Call
THIRD QUARTER EARNINGS CALL November 8, 2023 © 2023 The Andersons, Inc. All Rights Reserved.
Slide 2: Safe Harbor and Non-GAAP Financial Measures
SAFE HARBOR AND NON-GAAP FINANCIAL MEASURES Certain information discussed today constitutes forward-looking statements. Actual results could differ materially from those presented in the forward-looking statements as a result of many factors including general economic, weather, and regulatory condit
Slide 3: Speakers
PAT BOWE President and Chief Executive Officer SPEAKERS BRIAN VALENTINE Executive Vice President and Chief Financial Officer MIKE HOELTER Vice President, Corporate Controller and Investor Relations 3
Slide 4: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS Solid underlying merchandising and grain asset TRADE fundamentals; Results impacted by a currency loss Record Q3 earnings on strong operations and industry RENEWABLES fundamentals; Continued growth in low CI renewable diesel feedstocks NUTRIENT & INDUSTRIAL Solid margins on
Slide 5: Key Financial Data – Third Quarter 2023
KEY FINANCIAL DATA – THIRD QUARTER 2023 $ In millions except per share Q3 '23 Q3 '22 YTD '23 YTD '22 Sales and merchandising revenues $ 3,636 $ 4,219 $ 11,537 $ 12,648 Gross profit 158 164 528 514 Pretax income from continuing operations 38 35 78 163 Pretax income from continuing operations attribut
Slide 6: Cash and Liquidity
CASH AND LIQUIDITY Cash from Operations Before Short-term Debt vs. RMI Working Capital Changes1 (in millions) (in millions) HIGHLIGHTS Strong consistent operating cash flows Readily marketable inventories (RMI) significantly exceed short-term debt Short-term debt lower year over year from strategic
Slide 7: Capital Spending and Long-Term Debt
CAPITAL SPENDING AND LONG-TERM DEBT Capital Spending1 Long-term Debt (in millions) (in millions) HIGHLIGHTS Capital investments include growth; expect total spend of $125M - $150M Strong and flexible balance sheet Continued focus on managing long-term debt-to-EBITDA ratio below 2.5x; currently at 1.
Slide 8: Trade — Q3 '23 Highlights
TRADE — Q3 ‘23 HIGHLIGHTS Grain assets realized solid elevation margins and space income Merchandising income below record Q3 2022, impacted by $19 million currency loss Recent investments in food and pet food ingredients contributing to earnings Unaudited in $M Q3 '23 Q3 '22 YTD '23 YTD '22 Adjuste
Slide 9: Renewables — Q3 '23 Highlights
RENEWABLES — Q3 ‘23 HIGHLIGHTS Record Q3 results as ethanol crush margins reached 10-year highs for the quarter Solid operating performance with improved ethanol yields and lower costs Continued growth in RD feedstock business Unaudited in $M Q3 '23 Q3 '22 YTD '23 YTD '22 Adjusted EBITDA1 ($M) Reven
Slide 10: Nutrient & Industrial — Q3 '23 Highlights
NUTRIENT & INDUSTRIAL — Q3 ‘23 HIGHLIGHTS Higher margins and volumes in ag supply chain products during the off season Lower volumes in specialty liquids from rail service interruption Adjusted EBITDA1 ($M) Unaudited in $M Q3 '23 Q3 '22 YTD '23 YTD '22 Revenues $ 129 $ 164 $ 738 $ 844 Gross profit 1
Slide 11: Outlook
OUTLOOK Grain asset income expected to be positive; Closely TRADE monitoring harvest completion; Wheat income opportunities could expand into 2024 Ethanol fundamentals should continue to support strong RENEWABLES crush margins; Continued focus on growth initiatives across this segment Anticipate yea
Slide 12: Q&A Session
Q&A SESSION Q&A SESSION
Slide 13: Thank You for Joining Us
Thank you for joining us. Our next earnings call is scheduled for February 21, 2024 at 11 a.m. ET
Slide 14: Appendix
APPENDIX
Slide 15: Adjusted Net Income
NON-GAAP RECONCILIATION — Adjusted net income from continuing operations attributable to The Andersons, Inc. (unaudited) Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2023 2022 2023 2022 Net income from continuing operations $ 30,523 $ 24,880
Slide 16: Quarter to Date Segment Data
NON-GAAP RECONCILIATION — Quarter to Date Segment Data (unaudited) Nutrient & (in thousands) Trade Renewables Industrial Other Total Three months ended September 30, 2023 Sales and merchandising revenues $ 2,639,059 $ 868,099 $ 128,533 $ — $ 3,635,691 Gross profit 85,997 53,045 18,659 — 157,701 Oper
Slide 17: Year to Date Segment Data
NON-GAAP RECONCILIATION — Year to Date Segment Data (unaudited) Nutrient & (in thousands) Trade Renewables Industrial Other Total Nine months ended September 30, 2023 Sales and merchandising revenues $ 8,213,649 $ 2,585,396 $ 738,067 $ — $ 11,537,112 Gross profit 283,886 137,140 106,623 — 527,649 Op
Slide 18: Quarter to Date EBITDA and Adjusted EBITDA
NON-GAAP RECONCILIATION — Quarter to Date EBITDA and Adjusted EBITDA (unaudited) Nutrient & (in thousands) Trade Renewables Industrial Other Total Three months ended September 30, 2023 Net Income (loss)1 $ 8,073 $ 47,096 $ (8,452) $ (16,194) $ 30,523 Interest expense (income) 6,515 963 1,484 (774) 8
Slide 19: Year to Date EBITDA and Adjusted EBITDA
NON-GAAP RECONCILIATION — Year to Date EBITDA and Adjusted EBITDA (unaudited) Nutrient & (in thousands) Trade Renewables Industrial Other Total Nine months ended September 30, 2023 Net income (loss)1 $ 52,427 $ 31,187 $ 23,675 $ (53,197) $ 54,092 Interest expense (income) 29,235 5,648 5,649 (1,766)
Slide 20: Cash from Operations Before Working Capital Changes
NON-GAAP RECONCILIATION — Cash from Operations Before Working Capital Changes (unaudited) Three months ended September 30, Nine months ended September 30, (in thousands, except per share data) 2023 2022 2023 2022 Cash used in operating activities $ 488,683 $ 568,429 $ 696,087 $ (153,370) Changes in
Slide 21: Trade Adjusted EBITDA
NON-GAAP RECONCILIATION – Trade Adjusted EBITDA (unaudited) Twelve months ended December 31, Nine months ended September 30, (in thousands) 2019 2020 2021 2022 2023 Net income (loss)1 $ (17,328) $ 24,687 $ 87,946 $ 95,225 $ 52,427 Interest expense 34,843 21,974 23,688 42,551 29,235 Depreciation & am
Slide 22: Renewables Adjusted EBITDA
NON-GAAP RECONCILIATION – Renewables Adjusted EBITDA (unaudited) Twelve months ended December 31, Nine months ended September 30, (in thousands) 2019 2020 2021 2022 2023 Net income (loss)1 $ 47,660 $ (47,338) $ 81,205 $ 108,221 $ 31,187 Interest expense 943 7,461 7,602 8,775 5,648 Depreciation & amo
Slide 23: Nutrient & Industrial Adjusted EBITDA
NON-GAAP RECONCILIATION – Nutrient & Industrial Adjusted EBITDA (unaudited) Twelve months ended December 31, Nine months ended September 30, (in thousands) 2019 2020 2021 2022 2023 Net income1 $ 9,159 $ 16,015 $ 42,615 $ 39,162 $ 23,675 Interest expense 7,954 5,805 4,355 7,298 5,649 Depreciation & a