Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q1 2016 Earnings Presentation
22 slides from Archer-daniels-midland's earnings presentation, May 3, 2016
Slide 1: First Quarter 2016 Earnings Conference Call
First Quarter 2016 Earnings Conference Call May 3, 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 • Challenging market conditions continued into the quarter, particularly affecting Ag Services • In first quarter, continued to advance strategic plan: ◦ Executed growth, operational efficiency and portfolio management initiatives ◦ Achieved ~$50 million in run-rate savings
Slide 4: Q1 2016 Financial Highlights
4 Q1 2016 Financial Highlights Quarter Ended Mar. 31 (Amounts in millions except per share data and percentages) 2016 2015 Change Adjusted earnings per share (1) $0.42 $0.78 -$0.36 Adjusted segment operating profit (1) $573 $892 -$319 Effective tax rate 25% 29% Trailing 4Q average adjusted ROIC (1)
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended Mar. 31 (Amounts in millions) 2016 2015 Change Agricultural Services $75 $194 ($119) Merchandising & Handling (excluding specified item) 24 107 (83) Milling and Other 48 55 (7) Transportation 4 32 (28) Restructuring charges (2) (1) — (1)
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 Three Months Ended Mar. 31 (Amounts in millions) 2016 2015 Cash from operations before working capital charges $557 $577 Changes in working capital (534) (532) Purchases of property, plant and equipment (180) (244) Net a
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) Mar. 31, 2016 Mar. 31, 2015 Cash⁽¹⁾ $1,231 $1,296 Net property, plant and equipment 9,891 9,739 Operating working capital⁽²⁾ 7,667 8,147 - Total inventories 7,914 8,372 Total debt 6,646 6,412 - CP outstanding 685 725 Shareholders’ Equity 17,913 18,757
Slide 8: Segment Operating Profit of $573 million
8 Segment Operating Profit of $573 million Segment operating profits in millions Excludes specified items and timing effects Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 • Challenging conditions $892 $738 $695 $599 $573* continued • Q1 operating profit down 36% vs. year-ago quarter Ag Services Corn Oilse
Slide 9: Ag Services: Difficult Start to the Year
9 Ag Services: Difficult Start to the Year Segment operating profits in millions Excludes specified items and timing effects Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 • Challenging merchandising $194 $127 $149 $214 $76* environment due to weak U.S. export competitiveness • Global trade desk losses cau
Slide 10: Corn: Up Sequentially and Year-Over-Year
10 Corn: Up Sequentially and Year-Over-Year Segment operating profits in millions Excludes specified items and timing effects Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 • Sweeteners & Starches up due $127 $188 $165 $126 $129* to improved cost environment, strong capacity utilization • Bioproducts down
Slide 11: Oilseeds: Down vs. Exceptional Year-Ago Quarter
11 Oilseeds: Down vs. Exceptional Year-Ago Quarter Segment operating profits in millions Excludes specified items and timing effects Cocoa and Other results are combined with RPBO, reflecting the sale of the Cocoa business in Q4-2015. Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 • Global soybean crush
Slide 12: WFSI Up, Excluding Start-Up Costs
12 WFSI Up, Excluding Start-Up Costs Segment operating profits in millions Excludes specified items and timing effects • WFSI up, in line with company Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 $68 $104 $70 $47 $70* expectations • Results include start-up costs for Tianjin Fibersol plant, Campo Grande
Slide 13: Delivering the Scorecard, Driving Results
13 Delivering the Scorecard, Driving Results Optimize the Core Drive Operational Efficiencies Expand Strategically ✓ Complete ACTI integration – Inventories (capital reduction) ❑ Diversify & expand trade & origination territory ✓ Build Global Trade Desk (GTD) ❑ Expand destination marketing ❑ Reduce
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Upcoming Investor Events
15 Upcoming Investor Events • Annual Stockholder’s Meeting Decatur, Illinois May 5 • Goldman Sachs Staples Conference New York City May 10 • BMO Farm to Market Conference New York City May 20-21 • Stephens Spring Investment Conference New York City June 7-8
Slide 16: Appendix
Appendix
Slide 17: GAAP Statement of Earnings Summary
17 GAAP Statement of Earnings Summary Quarter Ended Mar. 31 (Amounts in millions except per share data) 2016 2015 Change Revenues $14,384 $17,506 ($3,122) Gross profit 796 1,102 (306) Selling, general and administrative expenses 475 498 (23) Asset impairment, exit, and restructuring charges 13 — 13
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended Mar. 31 2016 2015 Reported earnings per share (fully diluted) $0.39 $0.77 Adjustments LIFO (credit)/charge 0.02 — Impairment and restructuring charges 0.01 — U.S. biodiesel credits — 0.01 Adjusted earnings per share (non-GAAP)(1) $ 0.42 $ 0.78 Timing effe
Slide 19: ROIC versus Long-Term WACC
19 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q1 CY16 Trailing 4Q Average Adjusted EVA ($74M) 12% Trailing 4Q Average Adjusted ROIC(1)(2) 6.3 % Annual WACC 6.6 % 10% Trailing 4Q Average ROIC (1)(3) 7.2 % 8% 6% 4% 2% 0% Q1 Q1 Q1 Q1 Q1 FY12 FY13 CY14 CY15 CY16 Trailing 4Q Average ROI
Slide 20: Return on Invested Capital
20 Return on Invested Capital Adjusted ROIC Earnings(3) (Amounts in millions) Four Quarters Quarter Ended Ended June 30, 2015 Sept. 30, 2015 Dec. 31, 2015 Mar. 31, 2016 Mar. 31, 2016 Net earnings attributable to ADM $ 386 $ 252 $ 718 $ 230 $ 1,586 Adjustments Interest expense 85 69 73 70 297 LIFO 61
Slide 21: Processed Volumes
21 Processed Volumes Metric Tons Processed (000s) Fiscal Year Calendar Year 2011 2012 2012 2013 2014 2015 Oilseeds 29,630 31,161 31,820 31,768 32,208 33,817 Corn 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 Q3 Q4 Q1 Oilseeds 8,6
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
Archer-Daniels-Midland Company — Q1 2016 Earnings Presentation on 6ix