Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q4 2015 Earnings Presentation
24 slides from Archer-daniels-midland's earnings presentation, Feb 2, 2016
Slide 1: Fourth Quarter 2015 Earnings Conference Call
Fourth Quarter 2015 Earnings Conference Call February 2, 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 Global dynamics reduced margins across: • U.S. agricultural export sector • U.S. ethanol industry • Global soybean crushing industry In 2015, continued to execute strategic plan • Adjusted ROIC in excess of WACC; positive EVA • Executed growth, operational efficiency and por
Slide 4: Q4 2015 Financial Highlights
4 Q4 2015 Financial Highlights Quarter Ended Dec. 31 (Amounts in millions except per share data and percentages) 2015 2014 Change Adjusted earnings per share (1) $0.61 $1.00 -$0.39 Adjusted segment operating profit (1) $599 $1,128 -$529 Effective tax rate (2)% 29% Memo: Annual adjusted effective tax
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended Dec. 31 (Amounts in millions) 2015 2014 Change Agricultural Services $219 $407 ($188) Merchandising & Handling (excluding specified items) 100 263 (163) Milling and Other 61 66 (5) Transportation 53 92 (39) Gain on acquisition (2) 6 — 6
Slide 6: Cash Flow Summary: Strong Cash Flow Generation and Asset Sales Supported $2.7 Billion Return of Capital
6 Cash Flow Summary: Strong Cash Flow Generation and Asset Sales Supported $2.7 Billion Return of Capital Years Ended Dec. 31 (Amounts in millions) 2015 2014 Cash from operations before working capital charges $2,043 $2,702 Changes in working capital 249 2,260 Purchases of property, plant and equipm
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) Dec. 31, 2015 Dec. 31, 2014 Cash⁽¹⁾ $1,348 $1,614 Net property, plant and equipment 9,853 9,851 Operating working capital⁽²⁾ 7,074 7,771 - Total inventories 8,243 9,374 Total debt 5,877 5,660 - CP outstanding — — Shareholders’ Equity 17,915 19,630 Mem
Slide 8: Segment Operating Profit of $599 million
8 Segment Operating Profit of $599 million Segment operating profits in millions Excludes specified items and timing effects Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 • Lower year-over-year Q4 operating $1,128 $892 $738 $695 $599* profits in all segments, except WFSI • Full-year operating profit down
Slide 9: Ag Services: Down from Last Year's Very Strong Q4
9 Ag Services: Down from Last Year's Very Strong Q4 Segment operating profits in millions Excludes specified items and timing effects Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 • Fewer N.A. merchandising $421 $194 $127 $149 $214* opportunities due to low commodity prices • Strong U.S. dollar, ample glo
Slide 10: Corn: Down Sequentially, Year-Over-Year
10 Corn: Down Sequentially, Year-Over-Year Segment operating profits in millions Excludes specified items and timing effects Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 • Good sweetener demand $281 $127 $188 $165 $126* supported margins and volumes • Falling crude prices, high industry production pressu
Slide 11: Oilseeds: Down vs. Very Strong Year-Ago Quarter
11 Oilseeds: Down vs. Very Strong Year-Ago Quarter Segment operating profits in millions Excludes specified items and timing effects Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 • Soy crush margins declined through $359 $492 $315 $287 $195* quarter as buyers anticipated Argentine exports into well-suppli
Slide 12: WFSI: WILD Flavors Achieved First Full Year Accretion of $0.10 Per Share
12 WFSI: WILD Flavors Achieved First Full Year Accretion of $0.10 Per Share Segment operating profits in millions Excludes specified items and timing effects Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 • Positive contributions from $40 $68 $104 $70 $47* WILD Flavors, SCI and Eatem Foods • Implemented $4
Slide 13: Delivering the Scorecard, Driving Results
13 Delivering the Scorecard, Driving Results Optimize the Core Drive Operational Expand Strategically Efficiencies ✓ Complete ACTI integration ❑ Inventories (capital ❑ Diversify & expand trade & origination territory ✓ Build Global Trade Desk (GTD) ❑ Leverage ADM brand equity and distribution reach
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Upcoming Investor Events
15 Upcoming Investor Events CAGNY • Boca Raton, Fla. • February 16 CITI Bank WILD Flavors Field Trip • Erlanger, Ky. • February 24 Bank of America Merrill Lynch 2016 Global Agriculture & Chemicals Conf. • Fort Lauderdale, Fla. • March 2-3
Slide 16: Appendix
Appendix
Slide 17: GAAP Statement of Earnings Summary
17 GAAP Statement of Earnings Summary Quarter Ended Dec. 31 (Amounts in millions except per share data) 2015 2014 Change Revenues $16,445 $20,894 ($4,449) Gross profit 865 1,451 (586) Selling, general and administrative expenses 482 637 (155) Asset impairment, exit, and restructuring charges 104 74
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended Dec. 31 2015 2014 Reported earnings per share (fully diluted) $1.19 $1.08 Adjustments LIFO (credit)/charge 0.01 (0.01) Gain on acquisition/sale of assets (0.70) (0.14) Impairment, restructuring, and settlement charges 0.24 0.13 Wild-related charges — 0.03
Slide 19: Quarterly Adjusted Earnings Per Share
19 Quarterly Adjusted Earnings Per Share Mar'15 Jun'15 Sep'15 Dec'15 YTD'15 Reported earnings per share (fully diluted) $0.77 $0.62 $0.41 $1.19 $2.98 Adjustments LIFO (credit)/charge — 0.06 (0.07) 0.01 — Gain on acquisition/sale of assets — (0.11) (0.04) (0.70) (0.83) Impairment, restructuring, and
Slide 20: ROIC versus Long-Term WACC
20 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q4 CY15 Trailing 4Q Average Adjusted EVA $173M Trailing 4Q Average Adjusted ROIC(1)(2) 7.3% Annual WACC 6.6% Trailing 4Q Average ROIC (1)(3) 8.2% (1) Non-GAAP measure - see notes on page 24 (2) Adjusted for LIFO and specified items - se
Slide 21: Return on Invested Capital
21 Return on Invested Capital Adjusted ROIC Earnings(3) (Amounts in millions) Four Quarters Quarter Ended Ended Mar. 31, 2015 June 30, 2015 Sept. 30, 2015 Dec. 31, 2015 Dec. 31, 2015 Net earnings attributable to ADM $ 493 $ 386 $ 252 $ 718 $ 1,849 Adjustments Interest expense 81 85 69 73 308 LIFO (2
Slide 22: Segment OP Comparatives Introducing New WFSI Segment
22 Segment OP Comparatives Introducing New WFSI Segment Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Year Ended Mar. 31, 2014 Jun. 30, 2014 Sep. 30, 2014 Dec. 31, 2014 Dec. 31, 2014 As Pro As Pro As Pro As Pro As Pro (Amounts in millions) Reported Forma Reported Forma Reported Forma Reported Forma Re
Slide 23: Processed Volumes
23 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 Milling and Cocoa 7,179 7,156 7,023 7,226 7,318 7,150 60,221 62,935 63,360 62,682 63,194 64,093
Slide 24: Notes: Non-GAAP Reconciliation
24 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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