Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q2 2017 Earnings Presentation
23 slides from Archer-daniels-midland's earnings presentation, Aug 1, 2017
Slide 1: Second Quarter 2017 Earnings Conference Call
Second Quarter 2017 Earnings Conference Call August 1, 2017
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 • Year-over-year results improved ◦ Q2 adjusted EPS up 39 percent • Continue to advance strategic plan ◦ Diversifying our capabilities and geographic reach with acquisition of French sweetener company Chamtor; Industries Centers in Israel; new mill in Illinois ◦ Managing cos
Slide 4: Q2 2017 Financial Highlights
4 Q2 2017 Financial Highlights Quarter Ended June 30 (Amounts in millions except per share data and percentages) 2017 2016 Change Adjusted earnings per share (1) (2) $0.57 $0.41 $0.16 Adjusted segment operating profit (1) (3) $658 $573 $85 Effective tax rate 28% 29% Trailing 4Q average adjusted ROIC
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended June 30 (Amounts in millions) 2017 2016 Change Total Segment Operating Profit(1) $642 $680 ($38) Specified items: Gains (loss) on sales of assets and businesses/revaluation (8) (118) 110 Impairment, restructuring, and settlement charges
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 Six Months Ended June 30 (Amounts in millions) 2017 2016 Cash from operations before working capital changes $1,000 $1,038 Changes in working capital 314 (1,407) Purchases of property, plant and equipment (452) (396) Net
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) June 30, 2017 June 30, 2016 Cash⁽¹⁾ $670 $730 Net property, plant and equipment 9,945 9,802 Operating working capital⁽²⁾ 7,034 8,184 - Total inventories 7,846 8,000 Total debt 6,980 7,386 - CP outstanding 220 1,415 Shareholders’ Equity 17,418 17,669 M
Slide 8: Adjusted Segment Operating Profit of $658 million
8 Adjusted Segment Operating Profit of $658 million Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 $573 $650 $827 $678 $658* • Q2 adjusted segment operating profit up nearly 15% vs. year-ago quarter • 1H2017 adjuste
Slide 9: Ag Services: Earnings Up Year-Over-Year
9 Ag Services: Earnings Up Year-Over-Year Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 • Fourth consecutive quarter of $57 $195 $245 $88 $109 year-over-year increases in operating profit • Strong North America carries in wheat, corn and soybeans • Global Trade results improving, up for the quarter • Soli
Slide 10: Corn: Strong Quarter With Earnings Up Year-Over-Year
10 Corn: Strong Quarter With Earnings Up Year-Over-Year Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 • Global Sweeteners and Starches $163 $214 $255 $171 $224 performed very well • Higher volumes and improved margins in North America Sweeteners and Starches • Bioproducts up on ethanol margins • Animal Nu
Slide 11: Oilseeds: Results Down; Benefited from Portfolio Diversity
11 Oilseeds: Results Down; Benefited from Portfolio Diversity Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 • Compressed origination margins $235 $145 $239 $314 $206 in South America • Competing proteins led to weak soybean crush margins • Capitalized on flex crush opportunities • RPBO up; Asia results hi
Slide 12: WFSI: Earnings In Line with Prior Year
12 WFSI: Earnings In Line with Prior Year • Double-digit earnings growth in Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 $94 $73 $38 $75 $92 WILD • Specialty Ingredients down, impacted by production interruptions and start-up costs in some facilities • Continued investments to build and expand capabiliti
Slide 13: Portfolio Actions Since 2014
13 Portfolio Actions Since 2014
Slide 14: Driving Value Creation
14 Driving Value Creation Optimize the Core Drive Project Readiness Expand Strategically • Crop Risk Divestiture • Convergence of operational • Chamtor acquisition in excellence and business Europe • Enhancements to transformation export terminal in • Industries Centers Santos, Brazil • Ahead of ope
Slide 15: Looking Ahead
Looking Ahead
Slide 16: Upcoming Investor Events
16 Upcoming Investor Events Piper Jaffray Global Agriculture Symposium August 15 Minneapolis, MN Farm Progress Show August 29-31 Decatur, IL Credit Suisse Chicago Consumer One-on-One Conference September 19 Chicago, IL
Slide 17: Appendix
Appendix
Slide 18: GAAP Statement of Earnings Summary
18 GAAP Statement of Earnings Summary Quarter Ended June 30 (Amounts in millions except per share data) 2017 2016 Change Revenues $14,943 $15,629 ($686) Gross profit 887 737 150 Selling, general and administrative expenses 531 500 31 Asset impairment, exit, and restructuring charges 23 12 11 Equity
Slide 19: Adjusted Earnings Per Share
19 Adjusted Earnings Per Share Quarter Ended June 30 2017 2016 Earnings per share (fully diluted) as reported $ 0.48 $ 0.48 Adjustments LIFO (credit)/charge 0.01 0.09 Gains (loss) on sales of assets and businesses/revaluation 0.04 (0.17) Asset impairment, restructuring, and settlement charges 0.04 0
Slide 20: ROIC versus WACC
20 ROIC versus WACC Q2 CY17 (1)(2) LT ROIC Objective: 10% Trailing 4Q Average Adjusted ROIC Annual WACC 6.8% 6.0% Long-term WACC 7.0% 12% Trailing 4Q Average Adjusted EVA $195M Trailing 4Q Average ROIC (1)(3) 6.3% 10% 8% 6% 4% 2% 0% Q2 Q2 Q2 Q2 Q2 FY13 FY14 CY15 CY16 CY17 Trailing 4Q Average ROIC Tr
Slide 21: Return on Invested Capital
21 Return on Invested Capital Adjusted ROIC Earnings(1) (Amounts in millions) Four Quarters Quarter Ended Ended Sep. 30, 2016 Dec. 31, 2016 Mar. 31, 2017 June 30, 2017 June 30, 2017 Net earnings attributable to ADM $ 341 $ 424 $ 339 $ 276 $ 1,380 Adjustments Interest expense 78 80 81 86 325 LIFO (85
Slide 22: Processed Volumes
22 Processed Volumes Metric Tons Processed (000s) Calendar Year 2012 2013 2014 2015 2016 Oilseeds Processing 31,820 31,768 32,208 33,817 33,788 Corn Processing 24,517 23,688 23,668 23,126 22,273 56,337 55,456 55,876 56,943 56,061 CY15 CY16 CY17 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Oilseeds 8,849 8,438 8,14
Slide 23: Notes: Non-GAAP Reconciliation
23 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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