Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q3 FY2012 Earnings Presentation
23 slides from Archer-daniels-midland's earnings presentation, May 1, 2012
Slide 1: Third Quarter FY2012 Earnings Conference Call
Third Quarter FY2012 Earnings Conference Call May 1, 2012
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 ARCHER DANIELS MIDLAND COMPANY 3
Slide 4: Chairman's Perspective
Chairman’s Perspective Very Good Results Despite Difficult Margin Environments Challenging margins in ethanol and European oilseeds Solid performance against tough comparator quarter Driving shareholder returns • Wilmar partnerships in fertilizer, ocean freight and European tropical oil refining • G
Slide 5: Q3 2012 Financial Highlights
Q3 2012 Financial Highlights Very Good Results This Quarter; Great Year-Ago Quarter Quarter Ended Mar 31 (Amounts in millions, except per share data and percentages) 2012 2011 Change Segment operating profit (1) $ 887 $ 1,006 (12%) Net earnings attributable to ADM $ 399 $ 578 (31%) Effective tax rat
Slide 6: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results Quarter Ended Mar 31 (Amounts in millions) 2012 2011 Change Oilseeds Processing $ 395 $ 512 $ (117) Crushing & Origination 271 405 Refining, Packaging, Biodiesel & Other 75 89 Asia 49 18 Corn Processing $ 130 $ 204 $ (74) Sweeteners & Starches 93 46 Bio
Slide 7: Cash Flow Summary
Cash Flow Summary Dividends and Buybacks Returned $822M to Shareholders FYTD Nine Months Ended (Amounts in millions) March 31 2012 2011 Cash from operations before working capital changes $ 1,929 $ 2,221 Changes in working capital 329 (6,970) Purchases of property, plant and equipment (1,193) (913)
Slide 8: Balance Sheet Highlights
Balance Sheet Highlights Strong Balance Sheet Provides Financial Flexibility (Amounts in millions) (1) Cash $ 1,246 Net property, plant and equipment 9,800 (2) Operating working capital 14,962 - Total Inventories 13,232 Total debt 10,330 - CP outstanding 1,200 Shareholders' equity 18,551 Note: Avail
Slide 9: Oilseeds Processing Highlights
Oilseeds Processing Highlights (Amounts in millions) Q3 2012 highlights: Q3 Performance • Comparable absent year-ago MTM timing effects in Crushing $512 $(134) $(14) $31 $395 and Origination • Margin weakness in Europe • Strong North American meal exports • Good South American grain Q3-FY11 Crushing
Slide 10: Corn Processing Highlights
Corn Processing Highlights (Amounts in millions) Q3 2012 highlights: Q3 Performance • Sweetener export demand remained strong $204 $47 $(111) $(10) $130 • Average sweetener selling prices rose with new contracts • Ethanol margins weak through quarter • Closed 30 MGPY dry mill in Q3-FY11 Sweeteners B
Slide 11: Agricultural Services Highlights
Agricultural Services Highlights (Amounts in millions) Q3 2012 highlights: Q3 Performance • Stable earnings reflecting $171 $1 $7 $179 balanced footprint • North American grain exports lower • Good international merchandising volumes and margins Q3-FY11 Merchandising Transportation Q3-FY12 Operating
Slide 12: Other Businesses Highlights
Other Businesses Highlights (Amounts in millions) Q3 2012 highlights: Q3 Performance • Excluding timing effects, $119 $105 $(41) $183 results were comparable • Cocoa press margins drove $201 continued strength • Wheat milling including Gruma, flat • Other financial loss due to $(18) higher insurance
Slide 13: Current Landscape Assessment
Current Landscape Assessment Current Market Conditions Implications OILSEEDS • Smaller South American crop coming into • Shorter seasonal margin pressure in market the U.S. • Global protein meal consumption • Will grow into capacity over time; growing aligning regional S&D important short term CORN
Slide 14: Reorganization of Segment Reporting
Reorganization of Segment Reporting In March, announced realignment of reporting structure Beginning Q4 FY12, ADM’s segment reporting will change • Oilseeds Processing segment will include new category of “Cocoa and Other” • Agricultural Services segment will include new category of “Milling and Oth
Slide 15: Q&A
Q&A ARCHER DANIELS MIDLAND COMPANY 1515
Slide 16: Upcoming Webcasts
Upcoming Webcasts BMO 2012 Farm to Market Conference • New York, May 15, 2012 9th Annual Deutsche Bank Global Consumer Conference • Paris, June 19, 2012 ARCHER DANIELS MIDLAND COMPANY 16
Slide 17: Appendix
Appendix 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 March 31 2012 2011 Change Net sales and other operating income $ 21,155 $ 20,077 $ 1,078 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Gross profit 1,008 1,160
Slide 19: Adjusted Earnings Per Share
Adjusted Earnings Per Share Quarter Ended March 31 2012 2011 Reported Earnings Per Share (fully diluted) $ 0.60 $ 0.86 Adjustments: LIFO (credit)/charge 0.10 0.04 Asset impairment, exit and restructuring costs 0.08 - Gains on interest rate swaps - (0.01) Start-up costs - 0.02 Early debt remarketing
Slide 20: Historical ROIC and WACC Trend
Historical ROIC and WACC Trend ROIC Objective: 200 bp over WACC Q312 Trailing 4Q LIFO Adjusted ROIC Earnings(1) $1.6B 18% Trailing 4Q LIFO Adjusted Invested Capital(1) $28.5B 16% Trailing 4Q Adjusted ROIC(1)(2) 5.6% 14% Trailing 4Q WACC 6.1% 12% Trailing 4Q Average LIFO-Adjusted ROE(1)(2) 7.0% 10% 8
Slide 21: Return on Invested Capital
Return on Invested Capital (Amounts in millions) LIFO Adjusted ROIC Earnings(4) Four Quarters Quarter Ended Ended Jun 30, 2011 Sep 30, 2011 Dec 31, 2011 Mar 31, 2012 Mar 31, 2012 Net earnings attributable to ADM $ 381 $ 460 $ 80 $ 399 $ 1,320 Adjustments Interest expense 129 113 96 116 454 Finance i
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 Q2 Q
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 — Q3 FY2012 Earnings Presentation on 6ix