Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q1 FY2012 Earnings Presentation
23 slides from Archer-daniels-midland's earnings presentation, Nov 1, 2011
Slide 1: First Quarter FY2012 Earnings Conference Call
First Quarter FY2012 Earnings Conference Call November 1, 2011
Slide 2: Safe Harbor Statement
Safe Harbor Statement Some of our comments constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. The statements are based on many assumptions and factors, including
Slide 3: Speakers
Speakers Pat Woertz Chairman, Chief Executive Officer and President Ray Young Senior Vice President and Chief Financial Officer Juan Luciano Executive Vice President and Chief Operating Officer FIRST QUARTER FY2012 ARCHER DANIELS MIDLAND COMPANY 3
Slide 4: Chairman’s Perspective
Chairman’s Perspective Difficult and Challenging Market Environment • Generally weak oilseeds margin environment and high corn costs • Offset some pressure with risk management and broad, diverse business portfolio Expanding our Core Model • Oilseeds acquisitions in Poland and India • Ag Services pr
Slide 5: Q1 2012 Financial Highlights
Q1 2012 Financial Highlights Challenging Margin Environments Impacted Results Quarter Ended Sept. 30 (Amounts in millions, except per share data and percentages) 2011 2010 Change (1) Segment operating profit $ 699 $ 765 (9)% Net earnings attributable to ADM $ 460 $ 345 33% Effective tax rate 30% 26%
Slide 6: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results Quarter Ended Sept. 30 (Amounts in millions) 2011 2010 Change Oilseeds Processing $ 221 $ 308 $ (87) Crushing & Origination 115 176 Refining, Packaging, Biodiesel & Other 49 76 Asia 57 56 Corn Processing $ 179 $ 341 $ (162) Sweeteners & Starches 28 146
Slide 7: Cash Flow Summary
Cash Flow Summary Dividends and Buybacks Returned $347 Million to Shareholders Quarter Ended (Amounts in millions) September 30 2011 2010 Cash from operations before working capital changes $ 782 $ 510 Changes in working capital 1,305 (1,381) Purchases of property, plant and equipment (443) (335) Ne
Slide 8: Balance Sheet Highlights
Balance Sheet Highlights Strong Balance Sheet Provides Financial Flexibility (Amounts in millions) Sept. 30 2011 (1) Cash $ 1,826 Net property, plant and equipment 9,655 Operating working capital (2) 13,793 - Total Inventories 11,122 Total debt $ 9,497 - CP outstanding 0 Shareholders' equity $ 18,40
Slide 9: Oilseeds Processing Highlights
Oilseeds Processing Highlights (Amounts in millions) Q1 highlights: Q1 2012 Performance • Diversity of global oilseed business mitigated some $308 $(61) $(27) $1 $221 margin pressures • Crushing & Origination results down in weaker global oilseed crushing environment • RPBO results down with Q1-FY11
Slide 10: Corn Processing Highlights
Corn Processing Highlights (Amounts in millions) Q1 highlights: Q1 2012 Performance • Lower Sweeteners & $341 $(118) $(44) $179 Starches results reflective of corn futures hedging benefits recognized in FY11 • Good ethanol and lysine margins supported results, Q1-FY11 Sweeteners & Bioproducts Q1-FY1
Slide 11: Agricultural Services Highlights
Agricultural Services Highlights (Amounts in millions) Q1 highlights: Q1 2012 Performance • Results boosted by strong $132 $116 $(4) $244 global merchandising including recovery of Black Sea exports • Transportation results steady despite lower U.S. grain exports Q1-FY11 Merchandising Transportation
Slide 12: Other Businesses Highlights
Other Businesses Highlights (Amounts in millions) Q1 highlights: Q1 2012 Performance • Milling showed continued $(16) $33 $38 $55 strong results • Cocoa improved due to stronger press margins $59 $26 • Financial improved on reduced $(4) captive insurance losses $(42) • Consolidated cocoa operation Q
Slide 13: CapEx 2012 Priorities
CapEx 2012 Priorities • Targeting half of growth capital investments outside U.S. in FY12 • Capital spending of $455 million through Q1 – 75% of spend on growth and efficiency – Focused on Ag Services and Oilseeds outside the U.S. FIRST QUARTER FY2012 ARCHER DANIELS MIDLAND COMPANY 13
Slide 14: Current Landscape Assessment
Current Landscape Assessment Current Market Conditions Implications OILSEEDS • Board margins are up vs. depressed levels • Modest improvement in margin of last quarter outlook • Global protein meal demand growing at • Will grow into capacity over time; approximately 4% per year balancing S&D importa
Slide 15: Q&A
Q&A FIRST QUARTER FY2012 ARCHER DANIELS MIDLAND COMPANY 1515
Slide 16: Upcoming Webcasts
Upcoming Webcasts • Morgan Stanley Global Consumer Conference – New York, November 15, 2011 • ADM Analyst Luncheon – New York, December 1, 2011 • ADM Global Oilseeds Business Review – Hamburg, Germany, March 28, 2012 FIRST QUARTER FY2012 ARCHER DANIELS MIDLAND COMPANY 16
Slide 17: Appendix
Appendix FIRST QUARTER FY2012 ARCHER DANIELS MIDLAND COMPANY 1717
Slide 18: Statement of Earnings Summary
Statement of Earnings Summary (Amounts in millions, except per share data and percentages) Quarter Ended September 30 2011 2010 Change Net sales and other operating income $ 21,902 $ 16,799 $ 5,103 Gross profit 1,034 808 226 Selling, general and administrative expenses (407) (381) (26) Equity in ear
Slide 19: Adjusted Earnings Per Share
Adjusted Earnings Per Share Quarter Ended September 30 2011 2010 Reported Earnings Per Share (fully diluted) $ 0.68 $ 0.54 Adjustments: LIFO (credit)/charge (0.11) 0.12 Debt exchange costs 0.01 Losses on interest rate swaps 0.03 Start-up costs 0.03 Adjust quarterly effective tax rate to fiscal year
Slide 20: Historical ROIC and WACC Trend
Historical ROIC and WACC Trend ROIC Objective: 200 BPS over WACC Q112 Trailing 4Q LIFO Adjusted ROIC Earnings(1) $2.5B 18% Trailing 4Q LIFO Adjusted Invested Capital(1) $29.3B 16% Trailing 4Q Adjusted ROIC(1) 8.6% 14% Trailing 4Q WACC 6.4% 12% Trailing 4Q Average LIFO-Adjusted ROE(1) 12.5% 10% 8% 6%
Slide 21: Return on Invested Capital
Return on Invested Capital (Amounts in millions) LIFO Adjusted ROIC Earnings(4) Four Quarters Quarter Ended Ended Dec 31, 2010 Mar 31, 2011 Jun 30, 2011 Sep 30, 2011 Sep 30, 2011 Net earnings attributable to ADM $ 732 $ 578 $ 381 $ 460 $ 2,151 Adjustments Interest expense 115 121 129 113 478 Finance
Slide 22: Processed Volumes
Processed Volumes Metric Tons Processed (000s) Fiscal Year 2007 2008 2009 2010 2011 Oilseeds Processing 28,439 29,532 28,248 29,095 29,630 Corn Processing 18,043 17,666 17,833 19,618 23,412 Wheat and Cocoa 7,248 7,369 7,165 7,291 7,179 53,730 54,567 53,246 56,004 60,221 FY11 FY12 Q1 Q2 Q3 Q4 Q1 Oils
Slide 23: Notes: Non-GAAP Reconciliation
Notes: Non-GAAP Reconciliation 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 should be considered in addition to, not in
Archer Daniels Midland Company — Q1 FY2012 Earnings Presentation on 6ix