Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q1 2017 Earnings Presentation
22 slides from Archer-daniels-midland's earnings presentation, May 2, 2017
Slide 1: First Quarter 2017 Earnings Conference Call
First Quarter 2017 Earnings Conference Call May 2, 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 as a company and in all four business units ◦ Adjusted EPS up 43 percent • Continue to advance strategic plan in quarter ◦ Announced acquisition of Chamtor in Europe, new feed capabilities in China ◦ $50 million in run-rate cost savings ◦ Re
Slide 4: Q1 2017 Financial Highlights
4 Q1 2017 Financial Highlights Quarter Ended Mar. 31 (Amounts in millions except per share data and percentages) 2017 2016 Change Adjusted earnings per share (1) (2) $0.60 $0.42 $0.18 Adjusted segment operating profit (1) (3) $678 $573 $105 Effective tax rate 26% 25% Trailing 4Q average adjusted ROI
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended Mar. 31 (Amounts in millions) 2017 2016 Change Agricultural Services $81 $75 $6 Merchandising & Handling (excluding specified item) 19 24 (5) Milling and Other (excluding specified item) 45 48 (3) Transportation 24 4 20 Impairment and re
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) 2017 2016 Cash from operations before working capital charges $508 $557 Changes in working capital (99) (532) Purchases of property, plant and equipment (200) (180) Net as
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) Mar. 31, 2017 Mar. 31, 2016 Cash⁽¹⁾ $748 $1,231 Net property, plant and equipment 9,771 9,891 Operating working capital⁽²⁾ 7,387 7,667 - Total inventories 8,664 7,914 Total debt 7,207 6,646 - CP outstanding 300 685 Shareholders’ Equity 17,129 17,913 M
Slide 8: Adjusted Segment Operating Profit of $678 million
8 Adjusted Segment Operating Profit of $678 million Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 • Q1 results up over 18% vs. year- $573 $573 $650 $827 $678* ago quarter amid improving conditions and actions to im
Slide 9: Ag Services: Earnings Up Modestly Year-Over-Year
9 Ag Services: Earnings Up Modestly Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 • Strong North American grain $76 $57 $195 $245 $88* exports, execution volumes • International merchandising results
Slide 10: Corn: Strong Quarter With Earnings Up Year-Over-Year
10 Corn: Strong Quarter With Earnings Up Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 • Strong demand drove volume $129 $163 $214 $255 $171* and margin growth in Sweeteners & Starches in North Ameri
Slide 11: Oilseeds: Strongest Recent Quarter, With Earnings up Year-Over-Year
11 Oilseeds: Strongest Recent Quarter, With Earnings up Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 • Benefits of softseed footprint $261 $235 $145 $239 $314* and flex crush capacity offset soybean
Slide 12: WFSI: Earnings Up Year-Over Year
12 WFSI: Earnings Up Year-Over Year Adjusted segment operating profits (in millions) Excludes specified items and timing effects • Strong WILD Flavors Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 $70 $94 $73 $38 $75* performance, including from WILD EMEAI • Specialty proteins up; weakness in fibers *WFSI
Slide 13: Driving Value Creation
13 Driving Value Creation Optimize the Core Drive Operational Excellence Expand Strategically • Crop Risk Services • About $50m in new run-rate • Announced Chamtor sale, grain marketing cost savings in Q1 acquisition in Europe services partnership ◦ On pace to meet $225m with Validus target for 2017
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Upcoming Investor Events
15 Upcoming Investor Events NYSE Closing Bell Ringing May 16 BMO Farm to Market Conference New York, NY May 17 Vertical Group Ingredients Conference New York, NY May 17 Stephens Spring Conference New York, NY June 6-7 Vertical Research Partners Materials Conference Westbrook, CT June 14-15
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) 2017 2016 Change Revenues $14,988 $14,384 $604 Gross profit 868 781 87 Selling, general and administrative expenses 521 479 42 Asset impairment, exit, and restructuring charges 10 13 (3) Equity in
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended Mar. 31 2017 2016 Earnings per share (fully diluted) as reported $ 0.59 $ 0.39 Adjustments LIFO (credit)/charge (0.01) 0.02 Asset impairment and restructuring charges 0.01 0.01 Certain discrete tax adjustments 0.01 — Adjusted earnings per share (non-GAAP)
Slide 19: ROIC versus Long-Term WACC
19 ROIC versus Long-Term WACC Q1 CY17 (1)(2) ROIC Objective: 200 BPS over WACC Trailing 4Q Average Adjusted ROIC Annual WACC 6.4% 6.0% Long-term WACC 7.0% 12% Trailing 4Q Average Adjusted EVA $98M Trailing 4Q Average ROIC (1)(3) 6.4% 10% 8% 6% 4% 2% 0% Q1 Q1 Q1 Q1 Q1 FY13 FY14 CY15 CY16 CY17 Trailin
Slide 20: Return on Invested Capital
20 Return on Invested Capital Adjusted ROIC Earnings(1) (Amounts in millions) Four Quarters Quarter Ended Ended June 30, 2016 Sep. 30, 2016 Dec. 31, 2016 Mar. 31, 2017 Mar. 31, 2017 Net earnings attributable to ADM $ 284 $ 341 $ 424 $ 339 $ 1,388 Adjustments Interest expense 65 78 80 81 304 LIFO 88
Slide 21: Processed Volumes
21 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 Oilseeds 8,849 8,438 8,148 8
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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