Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q3 2020 Earnings Presentation
30 slides from Archer-daniels-midland's earnings presentation, Oct 30, 2020
Slide 1: Third Quarter 2020 Earnings Conference Call
Third Quarter 2020 Earnings Conference Call October 30, 2020
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Proprietary business information of ADM. Some of our comments and materials in this presentation constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company performance and financia
Slide 3: Q3 Accomplishments
3 Q3 Accomplishments Proprietary business information of ADM. • $100M in AS&O capital • 1ADM driving efficiencies, • Algar Agro OP tripled YOY reduction initiatives growth, decision-making • Production expansion for • Operational excellence capabilities high-quality USP-grade initiatives strengthene
Slide 4: Q3 2020 Financial Highlights
4 Q3 2020 Financial Highlights (in millions except per share data and percentages) Proprietary business information of ADM. Quarter Ended Sept. 30 2020 2019 Change Adjusted earnings per share (1) (2) $0.89 $0.77 $0.12 Total segment operating profit (unadjusted) (3) $904 $758 $146 Adjusted segment op
Slide 5: Q3 Other Business and Corporate Results
5 Q3 Other Business and Corporate Results (In millions) Proprietary business information of ADM. Other Business Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 • Other Business results lower on $47 $13 $11 $38 $20 ADM Investor Services earnings and captive insurance underwriting losses, including high water
Slide 6: AS&O: Great Execution in Good Environment
6 AS&O: Great Execution in Good Environment Proprietary business information of ADM. Adjusted segment operating profit (in millions) Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Breaking Records $417 $739 $422 $413 $436 Record YTD volumes in soy crush and global trade Ag Services Crushing Refined Product
Slide 7: Carbohydrate Solutions: Good Execution in Improving Environment
Carbohydrate Solutions: Good Execution in 7 Improving Environment Proprietary business information of ADM. Adjusted segment operating profit (in millions) Expanding the Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Portfolio Launched Prolite® $182 $174 $68 $195 $246 MeatTEX textured and non-textured wheat
Slide 8: Nutrition: 5th Consecutive Quarter of 20+% YOY Growth
Nutrition: 5th Consecutive Quarter of 20+% 8 YOY Growth Proprietary business information of ADM. Adjusted segment operating profit (in millions) In Three Quarters Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Nutrition OP has $118 $102 $142 $158 $147 already surpassed full-year 2019 Human Nutrition Animal
Slide 9: The Nutrition Opportunity
9 The Nutrition Opportunity Proprietary business information of ADM. Sources: Euromonitor, FMI, ADM estimates
Slide 10: Building a Global Nutrition Leader
10 Proprietary business information of ADM. Building a Global Nutrition Leader
Slide 11: Complete Pantry of Ingredients and Solutions from Nature
11 Complete Pantry of Ingredients and Solutions from Nature Proprietary business information of ADM.
Slide 12: Driving Nutrition Growth for a Bright Future
12 Driving Nutrition Growth for a Bright Future Proprietary business information of ADM.
Slide 13: Confident in Strong Q4, Continued Momentum Through 2021
13 Confident in Strong Q4, Continued Momentum Through 2021 Proprietary business information of ADM.
Slide 14: Upcoming Investor Events
14 Upcoming Investor Events Proprietary business information of ADM. (All events virtual) Baird 2020 Global Industrial Conference November 10 Stephens Annual Investment Conference November 19 BMO Growth & ESG Conference December 8-9
Slide 15: Additional Facts and Explanations
Additional Facts and Explanations
Slide 16: Industry Environment
16 Industry Environment Proprietary business information of ADM. Spot Gross Current Q2 Call Farmer Selling2 Crush Margins1 US$/MT US$/MT 2020/2021 Crop Year 5-Year Prior Soybeans Current Average Year US ~$40 $15-$25 Corn Europe $30-$40 $25-$30 US 40% 31% 33% Exp: $0-$5 Exp: $0-$5 Brazil n/a n/a n/a
Slide 17: ADM Additional Information
17 ADM Additional Information Proprietary business information of ADM. Processed Volumes by Quarter (000s of metric tons) Adjusted EBITDA(1)(2) by Segment (in millions) CY 19 CY 20 Trailing 4-Quarters Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q3 20 Q3 19 Q3 20 Q3 19 Oilseeds 9,167 8,773 9,062 9,269 9,163 9,103 8,970 Adj
Slide 18: Financial Appendix
18 Financial Appendix
Slide 19: Q3 Adjusted Segment OP $849 million
19 Q3 Adjusted Segment OP $849 million Proprietary business information of ADM. Adjusted segment operating profit (1,2) (in millions) Excludes specified items Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 $764 $1,028 $643 $804 $849* Ag Services and Oilseeds Carbohydrate Solutions Nutrition Other Business
Slide 20: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results 20 Quarter Ended Sept. 30 (Amounts in millions) 2020 2019 Change (1) Total Segment Operating Profit $ 904 $ 758 $ 146 Proprietary business information of ADM. Specified items: (Gains) loss on sales of assets and businesses (57) — (57) Impairment, restru
Slide 21: Balance Sheet Highlights
21 Balance Sheet Highlights Proprietary business information of ADM. (Amounts in millions) Sep. 30, 2020 Sep. 30, 2019 Cash (1) $948 $958 Net property, plant, and equipment 9,816 10,101 Operating working capital (2) 8,122 7,457 - Total inventories 8,762 8,075 Total debt 8,133 8,888 - CP outstanding
Slide 22: Cash Flow Highlights
22 Cash Flow Highlights Proprietary business information of ADM. Nine Months Ended Sept. 30 (Amounts in millions) 2020 2019 Cash from operations before working capital changes $2,295 $1,700 Changes in working capital (1) 792 375 Purchases of property, plant, and equipment (558) (566) Net assets of b
Slide 23: GAAP Statement of Earnings Summary
23 GAAP Statement of Earnings Summary Proprietary business information of ADM. (Amounts in millions except per share data) Quarter Ended Sept. 30 2020 2019 Change Revenues $15,126 $16,726 ($1,600) Gross profit 1,042 1,078 (36) Selling, general and administrative expenses 636 578 58 Asset impairment,
Slide 24: Adjusted Earnings Per Share (EPS)
24 Adjusted Earnings Per Share (EPS) (Amounts in millions except per share data) Proprietary business information of ADM. Quarter Ended Sept. 30 2020 2019 Pre-tax After-tax Per share Pre-tax After-tax Per share Earnings and EPS (fully diluted) as reported $ 200 $ 225 $ 0.40 $ 503 $ 407 $ 0.72 Adjust
Slide 25: ROIC versus WACC
25 ROIC versus WACC Q3 CY20 LT ROIC Objective: 10% Proprietary business information of ADM. (1)(2) Trailing 4Q Average Adjusted ROIC 8.3 % Annual WACC 5.75 % Trailing 4Q Average Adjusted EVA $740M Long-Term WACC 7.0 % 11% Trailing 4Q Average ROIC (1)(3) 6.3 % 10% 9% 8% 7% 6% 5% 4% Q3 Q3 Q3 Q3 Q3 CY1
Slide 26: Return on Invested Capital
26 Return on Invested Capital Proprietary business information of ADM. Adjusted ROIC Earnings(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Dec. 31, 2019 Mar. 31, 2020 Jun. 30, 2020 Sep. 30, 2020 Sep. 30, 2020 Net earnings attributable to ADM $ 504 $ 391 $ 469 $ 225 $ 1,589 Adjustment
Slide 27: Adjusted EBITDA Four Quarters Ended September 30, 2020
27 Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)(1) Four Quarters Ended September 30, 2020 Proprietary business information of ADM. Adjusted EBITDA(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Dec. 31, 2019 Mar. 31, 2020 Jun. 30, 2020 Sep. 30, 2
Slide 28: Adjusted EBITDA Four Quarters Ended September 30, 2019
28 Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)(1) Four Quarters Ended September 30, 2019 Proprietary business information of ADM. Adjusted EBITDA(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Dec. 31, 2018 Mar. 31, 2019 Jun. 30, 2019 Sep. 30, 2
Slide 29: 2019 Segment OP and Adjusted Segment OP Comparatives
29 2019 Segment OP and Adjusted Segment OP(1,2) Comparatives with VCP in Carbohydrate Solutions (in millions) Proprietary business information of ADM. Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Year Ended Mar. 31, 2019 Jun. 30, 2019 Sep. 30, 2019 Dec. 31, 2019 Dec. 31, 2019 As As As As As As As As
Slide 30: Notes: Non-GAAP Reconciliation
30 Notes: Non-GAAP Reconciliation Proprietary business information of ADM. The Company uses certain “Non-GAAP” financial measures as defined by the Securities and Exchange Commission. These are measures of performance not defined by accounting principles generally accepted in the United States, and
Archer-Daniels-Midland Company — Q3 2020 Earnings Presentation on 6ix