Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q3 2016 Earnings Presentation
22 slides from Archer-daniels-midland's earnings presentation, Nov 1, 2016
Slide 1: Third Quarter 2016 Earnings Conference Call
Third Quarter 2016 Earnings Conference Call November 1, 2016
Slide 2: Safe Harbor Statement
2 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. These statements are based on many assumptions and factors that a
Slide 3: Chairman's Perspective
3 Chairman’s Perspective • Capitalized on improving operating conditions in the third quarter with solid execution • Continued to advance strategic and capital plans: ◦ Executed growth, operational efficiency and portfolio management initiatives ◦ Achieved ~$250 million in run-rate savings through f
Slide 4: Q3 2016 Financial Highlights
4 Q3 2016 Financial Highlights Quarter Ended Sept. 30 (Amounts in millions except per share data and percentages) 2016 2015 Change Adjusted earnings per share (1) (2) $0.59 $0.60 ($0.01) Adjusted segment operating profit (1) (3) $650 $684 -$34 Effective tax rate 28% 31% Trailing 4Q average adjusted
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended Sept. 30 (Amounts in millions) 2016 2015 Change Agricultural Services $193 $149 $44 Merchandising & Handling (excluding specified items) 92 57 35 Milling and Other (excluding specified item) 60 61 (1) Transportation (excluding specified
Slide 6: Balanced use of cash between CapEx, M&A and return of capital to shareholders
6 Balanced use of cash between CapEx, M&A and return of capital to shareholders Nine Months Ended Sept. 30 (Amounts in millions) 2016 2015 Cash from operations before working capital charges $1,561 $1,487 Changes in working capital (405) (389) Purchases of property, plant and equipment (621) (819) N
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) Sep. 30, 2016 Sep. 30, 2015 Cash⁽¹⁾ $957 $1,137 Net property, plant and equipment 9,853 9,807 Operating working capital⁽²⁾ 7,328 7,910 - Total inventories 7,228 7,428 Total debt 7,073 6,782 - CP outstanding — 870 Shareholders’ Equity 17,556 17,878 Mem
Slide 8: Adjusted Segment Operating Profit of $650 million
8 Adjusted Segment Operating Profit of $650 million Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 • Headwinds began to subside at $684 $633 $573 $573 $650* end of Q2 • Capitalized on improving operating environment
Slide 9: Ag Services: Earnings Up Sequentially and Year-Over-Year
9 Ag Services: Earnings Up Sequentially and Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 • Increased U.S. export volumes as $149 $214 $76 $57 $195* S.A. crop shortages accelerated demand to N.A. • T
Slide 10: Corn: Earnings Up Sequentially and Year-Over-Year
10 Corn: Earnings Up Sequentially and Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 • Sweeteners & Starches up due $165 $126 $129 $163 $214* to higher volumes and improved margins • International ope
Slide 11: Oilseeds: Down vs. Historically Strong Year-Ago Quarter
11 Oilseeds: Down vs. Historically Strong Year-Ago Quarter Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 • Lower global soy crush margins $276 $229 $261 $235 $145* vs. high 2015 levels • RPBO up with solid performa
Slide 12: WFSI: Up Slightly vs. Year-Ago Quarter
12 WFSI: Up Slightly vs. Year-Ago Quarter Adjusted segment operating profits (in millions) Excludes specified items and timing effects • Continued strong operating Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 $70 $47 $70 $94 $73* profit growth for WILD Flavors • Integration, solid performance from Eatem
Slide 13: Driving Value Creation
13 Driving Value Creation Strengthen our Existing Managing Costs to Fueling Future Operations Grow Margins Growth • Golden Peanut and • $250M in new run-rate • Continued WFSI bolt- Tree Nuts streamlined cost savings in 2016, ons with Caterina operations on track to exceed Foods acquisition $275M yea
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Upcoming Investor Events
15 Upcoming Investor Events Citi & J.P. Morgan Chicago Food Field Trip Chicago November 9 Vertical Research Partners Global Materials Conference New York City November 17 Citi Global Consumer Conference London November 29-30
Slide 16: Appendix
Appendix
Slide 17: GAAP Statement of Earnings Summary
17 GAAP Statement of Earnings Summary Quarter Ended Sept. 30 (Amounts in millions except per share data) 2016 2015 Change Revenues $15,832 $16,565 ($733) Gross profit 1,105 1,089 16 Selling, general and administrative expenses 561 519 42 Asset impairment, exit, and restructuring charges 11 65 (54) E
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended Sept. 30 2016 2015 Earnings per share (fully diluted) as reported $ 0.58 $ 0.41 Adjustments LIFO (credit)/charge (0.09) (0.07) Gains on sales of assets/revaluations 0.02 (0.04) Impairment, restructuring, and settlement charges 0.08 0.10 Loss on debt extin
Slide 19: ROIC versus Long-Term WACC
19 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q3 CY16 (1)(2) Trailing 4Q Average Adjusted ROIC 5.8 % 12% Annual WACC 6.6 % Trailing 4Q Average Adjusted EVA ($196M) 10% Trailing 4Q Average ROIC (1)(3) 7.2 % 8% 6% 4% 2% 0% Q3 Q3 Q3 Q3 Q3 FY12 FY13 CY14 CY15 CY16 Trailing 4Q Average R
Slide 20: Return on Invested Capital
20 Return on Invested Capital Adjusted ROIC Earnings(3) (Amounts in millions) Four Quarters Quarter Ended Ended Dec. 31, 2015 Mar. 31, 2016 June 30, 2016 Sep. 30, 2016 Sep. 30, 2016 Net earnings attributable to ADM $ 718 $ 230 $ 284 $ 341 $ 1,573 Adjustments Interest expense 73 70 65 78 286 LIFO 14
Slide 21: Processed Volumes
21 Processed Volumes Metric Tons Processed (000s) Fiscal Year Calendar Year 2011 2012 2012 2013 2014 2015 Oilseeds Processing 29,630 31,161 31,820 31,768 32,208 33,817 Corn Processing 23,412 24,618 24,517 23,688 23,668 23,126 53,042 55,779 56,337 55,456 55,876 56,943 CY14 CY15 CY16 Q1 Q2 Q3 Q4 Q1 Q2
Slide 22: Notes: Non-GAAP Reconciliation
22 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
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