Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q2 2024 Earnings Presentation
31 slides from Archer-daniels-midland's earnings presentation, Jul 30, 2024
Slide 1: Second Quarter 2024 Earnings Conference Call
Proprietary business information of ADM. Second Quarter 2024 Earnings Conference Call July 30, 2024 Proprietary business information of ADM.
Slide 2: Cautionary Note Regarding Forward-Looking Statements
2 Cautionary Note Regarding Forward-Looking Statements Proprietary business information of ADM. This presentation contains “forward-looking statements” within These forward-looking statements are not guarantees of future the meaning of the Private Securities Litigation Reform Act of performance and
Slide 3: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures Proprietary business information of ADM. The Company uses certain “Non-GAAP” financial measures as corporate overhead costs as well as specified items. Segment 5. Adjusted Economic Value Added: Adjusted economic value added is ADM’s trailing defined by the Securities an
Slide 4: Financial Highlights
4 Financial Highlights Proprietary business information of ADM. Q2 and 1H 2024 (Unless Otherwise Stated) Q2 2024 Adjusted Q2 2024 Adjusted TRAILING 4-QUARTER Earnings Per Share1,2 Segment Operating Adjusted ROIC1 Profit1,3 $1.03 $1.0B 9.7% 1H 2024 Adjusted 1H 2024 Adjusted 1H Cash Flow From Earnings
Slide 5: Making progress on our value creation priorities for the year
Making progress on our value creation priorities for the year 1H 2024 Accomplishments Proprietary business information of ADM. Strategic Initiatives Operational Changes Enhanced Return of Cash to • Increased volumes in Destination • Continued improvement in demand Shareholders Marketing fulfillment
Slide 6: Total Consolidated Operating Profit and Earnings Per Share
6 Total Consolidated Operating Profit and Earnings Per Share Proprietary business information of ADM. Q2 2024 versus Prior Year Quarter Earnings declined primarily due to lower margins and price, partially offset by improved volumes Adjusted Segment Operating Profit2,3 Adjusted Earnings Per Share1 (
Slide 7: Ag Services & Oilseeds Operating Profit
7 Ag Services & Oilseeds Operating Profit Proprietary business information of ADM. Q2 2024 versus Prior Year Quarter Challenging operating environment in South America and less favorable global crush margins negatively impacted earnings Segment Operating Profit (In millions of dollars) • Smaller tha
Slide 8: Carbohydrate Solutions Operating Profit
8 Carbohydrate Solutions Operating Profit Proprietary business information of ADM. Q2 2024 versus Prior Year Quarter Improved volumes, manufacturing costs, and strong export ethanol margins partially offset lower margins in the EMEA region Segment Operating Profit (In millions of dollars) • In S&S,
Slide 9: Nutrition Revenue
9 Nutrition Revenue Proprietary business information of ADM. Q2 2024 versus Prior Year Quarter Nutrition revenue on strong M&A contributions and volumes, primarily driven by the Flavors Business Segment Revenue (In millions of dollars) • Overall, Nutrition revenue increased ~3% • In Human Nutrition,
Slide 10: Nutrition Operating Profit
10 Nutrition Operating Profit Proprietary business information of ADM. Q2 2024 versus Prior Year Quarter Higher margins in Animal Nutrition partially supported earnings as challenges in Specialty Ingredients business continued Segment Operating Profit (In millions of dollars) • In Specialty Ingredie
Slide 11: Other Business Results and Corporate
11 Other Business Results and Corporate Proprietary business information of ADM. Q2 2024 versus Prior Year Quarter Other Business Earnings Operating declined due to lower Corporate Profit margins partially offset by and Other improvements Costs in processed volumes and costs (In millions of dollars)
Slide 12: Cash Flow from Operations and Cash Deployment
12 Cash Flow from Operations and Cash Deployment Proprietary business information of ADM. 1H 2024 versus 1H 2023 Continued strong cash flow created opportunity to return excess cash to shareholders Cash from Operations Before Working Capital 1 Cash Deployment (In billions of dollars) (In billions of
Slide 13: Segment Outlook
13 Segment Outlook Proprietary business information of ADM. Q3 2024 and FY 2024 Operating Profit Q3 2024 FY 2024 Full Year Planning Assumptions • Anticipate easing global supply environment with another year of strong South American crops Expect to be • Expect global soybean crush margin in the rang
Slide 14: Consolidated Outlook
14 Consolidated Outlook Proprietary business information of ADM. FY Metric FY 2023 2024 Guidance1 1H 2024 Adjusted EPS1,3 $6.98 $5.25 – $6.25 $2.49 Corporate Costs* $1.6 billion ~$1.8 billion $844 million Corporate Net Interest Expense $431 million ~$525 million $238 million Capital Expenditures $1.
Slide 15: Manage through the Cycle: Nutrition Recovery, Capital Allocation
15 Proprietary business information of ADM. M anage through Nutrition Recovery Capital Allocation the Cycle: Productivity + Innovation
Slide 16: Appendix
16 Appendix
Slide 17: Total Consolidated Adjusted Operating Profit and Earnings Per Share, 1H
17 Total Consolidated Adjusted Operating Profit and Earnings Per Share Proprietary business information of ADM. 1H 2024 versus 1H 2023 Earnings declined primarily due to lower margins and price, partially offset by improved volumes and manufacturing costs Adjusted Segment Operating Profit2,3 Adjuste
Slide 18: Ag Services & Oilseeds Operating Profit, 1H
18 Ag Services & Oilseeds Operating Profit Proprietary business information of ADM. 1H 2024 versus 1H 2023 Higher processed volumes and improved manufacturing costs partially supported earnings as margins declined Segment Operating Profit (In millions of dollars) • Stabilization of trade flows has l
Slide 19: Carbohydrate Solutions Operating Profit, 1H
19 Carbohydrate Solutions Operating Profit Proprietary business information of ADM. 1H 2024 versus 1H 2023 Improved volumes and manufacturing costs support higher earnings as margins in EMEA move lower off record levels Segment Operating Profit (In millions of dollars) • In S&S, lower domestic ethan
Slide 20: Nutrition Revenue, 1H
20 Nutrition Revenue Proprietary business information of ADM. 1H 2024 versus 1H 2023 Nutrition revenue supported by strong M&A contributions and Flavors performance, partially offset by challenges in Specialty Ingredients Segment Revenue (In millions of dollars) • Overall, Nutrition revenue increase
Slide 21: Nutrition Operating Profit, 1H
21 Nutrition Operating Profit Proprietary business information of ADM. 1H 2024 versus 1H 2023 Challenges in Specialty Ingredients business led to significant decline in operating profit Segment Operating Profit • In Specialty Ingredients, unplanned (In millions of dollars) downtime at Decatur East r
Slide 22: Other Business Results and Corporate, 1H
22 Other Business Results and Corporate Proprietary business information of ADM. 1H 2024 versus 1H 2023 Other Business Earnings Operating declined due to lower Corporate Profit margins partially offset by and Other improvements Costs in processed volumes and costs (In millions of dollars) (In millio
Slide 23: Segment Operating Profit and Corporate Results
23 Segment Operating Profit and Corporate Results Proprietary business information of ADM. Quarter Ended June 30 Six Months Ended June 30 (Amounts in millions) 2024 2023 Change 2024 2023 Change Earnings before income taxes 596 1,132 (536) 1,481 2,529 (1,048) Corporate Unallocated 418 393 25 844 715
Slide 24: Balance Sheet Highlights
24 Balance Sheet Highlights Proprietary business information of ADM. June 30 (Amounts in millions) 2024 2023 Cash (1) $ 764 $ 1,426 Net property, plant, and equipment 10,628 10,127 Operating working capital (2) 9,827 10,898 - Total inventories 10,443 11,902 Total debt 10,560 8,670 - CP outstanding 9
Slide 25: Cash Flow Highlights
25 Cash Flow Highlights Proprietary business information of ADM. Six Months Ended June 30 (Amounts in millions) 2024 2023 Cash from operations before working capital changes $ 1,692 $ 2,490 Changes in working capital (524) (1,591) Purchases of property, plant, and equipment (690) (614) Net assets of
Slide 26: GAAP Statement of Earnings Summary
26 GAAP Statement of Earnings Summary Proprietary business information of ADM. Quarter Ended June 30 Six Months Ended June 30 (Amounts in millions except per share data) 2024 2023 Change 2024 2023 Change Revenues $ 22,248 $ 25,190 $ (2,942) $ 44,095 $ 49,262 $ (5,167) Gross profit 1,396 1,883 (487)
Slide 27: Reconciliation of Net Earnings and Adjusted Earnings Per Share (EPS)
27 Reconciliation of Net Earnings and Adjusted Earnings Per Proprietary business information of ADM. Share (EPS) Quarter Ended June 30 Six Months Ended June 30 2024 2023 2024 2023 In millions Per share In millions Per share In millions Per share In millions Per share Net earnings and EPS (fully dilu
Slide 28: ROIC versus WACC
28 ROIC versus WACC Q2 CY24 Proprietary business information of ADM. Trailing 4Q Average Adjusted ROIC(1)(2) 9.7% LT ROIC Objective: 10% Annual WACC 8.00% Trailing 4Q Average Adjusted EVA $0.6B Long-Term WACC 7.0% Trailing 4Q Average ROIC (1)(3) 8.9% 1. Non-GAAP measure - see notes on page 3 2. Adju
Slide 29: Reconciliation of Return on Invested Capital
29 Reconciliation of Return on Invested Capital Proprietary business information of ADM. ROIC Earnings (Amounts in millions) Four Quarters Quarter Ended Ended Sep. 30, 2023 Dec. 31, 2023 Mar. 31, 2024 June 30, 2024 June 30, 2024 Net earnings attributable to ADM $ 821 $ 565 $ 729 $ 486 $ 2,601 Adjust
Slide 30: Adjusted EBITDA Four Quarters Ended June 30, 2024
30 Adjusted Earnings Before Interest, Taxes, Depreciation, and Proprietary business information of ADM. Amortization (EBITDA) (1) Four Quarters Ended June 30, 2024 Adjusted EBITDA(1) (Amounts in millions) Four Quarters Quarter Ended Ended Sep. 30, 2023 Dec. 31, 2023 Mar. 31, 2024 June 30, 2024 June
Slide 31: Reconciliation of Adjusted Net Debt to Total Debt and Adjusted EBITDA
31 Reconciliation of Adjusted Net Debt to Total Debt and to Proprietary business information of ADM. Adjusted EBITDA Adjusted Net Debt June 30 (Amounts in millions) 2024 2023 Short-term debt $ 2,312 $ 125 Current maturities of long-term debt 1 301 Long-term debt 8,247 8,244 Total Debt 10,560 8,670 C
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