Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q3 2015 Earnings Presentation
23 slides from Archer-daniels-midland's earnings presentation, Nov 3, 2015
Slide 1: Third Quarter 2015 Earnings Conference Call
Third Quarter 2015 Earnings Conference Call November 3, 2015
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: CEO's Perspective
3 CEO’s Perspective Team executed well in environment similar to second quarter • Large South American crop, strong U.S. dollar limited North American exports • Tight supplies kept sweeteners and starches results solid • Weak industry ethanol margins • Good global meal demand supported soy crushing
Slide 4: Q3 2015 Financial Highlights
4 Q3 2015 Financial Highlights (Amounts in millions except per share data and percentages) Quarter Ended Sept. 30 Change Adjusted earnings per share 2015 2014 $0.60 $0.86 -$0.26 Adjusted segment operating profit $684 $941 -$257 Effective tax rate 31% 28% Trailing 4Q average adjusted ROIC 8.3% 8.7% -
Slide 5: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results Quarter Ended Sept. 30 (Amounts in millions) 2015 2014 Change Agricultural Services $149 $310 ($161) Merchandising & Handling (excluding specified item) 57 64 (7) Milling and Other 61 55 6 Transportation 31 35 (4) Gain on acquisition (2) — 156 (156) Cor
Slide 6: Cash Flow Summary: Strong Cash Flow Generation and Asset Sales Supported $2.3 Billion Return of Capital
6 Cash Flow Summary: Strong Cash Flow Generation and Asset Sales Supported $2.3 Billion Return of Capital Year-To-Date Nine Months Ended Sept. 30 (Amounts in millions) 2015 2014 Cash from operations before working capital charges $1,487 $1,947 Changes in working capital (389) 2,477 Purchases of prop
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) Sept. 30, 2015 Sept. 30, 2014 Cash⁽¹ $1,137 $4,887 ⁾Net property, plant and equipment 9,900 9,995 Operating working 7,910 8,196 capital⁽²⁾ - Total inventories 7,428 8,034 Total debt 6,782 5,541 - CP outstanding 870 — Shareholders’ Equity 17,878 20,261
Slide 8: Segment Operating Profit of $684 million
8 Segment Operating Profit of $684 million Segment operating profits in millions Excludes specified items and timing effects Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 • Operating profits similar to $941 $1,128 $883 $724 $684 Q2, amid similar conditions • ROIC of 8.3%, above WACC • EVA of $428 million
Slide 9: Ag Services: Similar to Year-Ago, but Starkly Different Conditions
9 Ag Services: Similar to Year-Ago, but Starkly Different Conditions Segment operating profits in millions Excludes specified items and timing effects Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 • Robust global demand, but a $154 $421 $194 $127 $149 well-supplied market limited merchandising opportuniti
Slide 10: Corn: Sequentially Similar, Year-over-Year Decline
10 Corn: Sequentially Similar, Year-over-Year Decline Segment operating profits in millions Excludes specified items and timing effects Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 • Strong sweetener demand $341 $281 $127 $188 $165 supported margins and volumes • Domestic S&S shipments flat, but exports
Slide 11: Oilseeds: Yet Another Solid Quarter
11 Oilseeds: Yet Another Solid Quarter Segment operating profits in millions Excludes specified items and timing effects Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 • Meal demand supported soy crush $348 $359 $483 $301 $276 margins and volumes in N.A. • Weak global vegoil demand reduced softseed margins
Slide 12: WFSI: Macroeconomic Headwinds Pressured Results
12 WFSI: Macroeconomic Headwinds Pressured Results Segment operating profits in millions Excludes specified items and timing effects Includes WILD and SCI earnings starting Q4 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 • Strong dollar and weakness $65 $40 $68 $104 $70 in emerging markets affected
Slide 13: Delivering the Scorecard, Driving Results
13 Delivering the Scorecard, Driving Results Optimize the Core Drive Operational Expand Strategically Efficiencies Ag Services ✓ Complete ACTI integration ❑ Inventories (capital ❑ Diversify & expand trade & origination territory ✓ Build Global Trade Desk (GTD) reduction) ❑ Leverage ADM brand equity
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Upcoming Investor Event
15 Upcoming Investor Event Citi & J.P. Morgan Chicago Food Field Trip • Chicago, November 11
Slide 16: Appendix
Appendix
Slide 17: GAAP Statement of Earnings Summary
17 GAAP Statement of Earnings Summary (Amounts in millions except per share data) Quarter Ended Sept. 30 Change 2015 2014 Revenues $16,565 $18,117 ($1,552) Gross profit 1,089 1,470 (381) Selling, general and administrative expenses 511 451 60 Asset impairment, exit, and restructuring charges 65 — 65
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended Sept. 30 2015 2014 Reported earnings per share (fully diluted) $0.41 $1.14 Adjustments LIFO (credit)/charge (0.07) (0.30) Gain on acquisition/sale of assets (0.04) (0.15) Asset impairment charges 0.06 — Wild-related charges — 0.10 Loss on debt extinguishm
Slide 19: ROIC versus Long-Term WACC
19 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q3 CY15 Trailing 4Q Average Adjusted EVA $428M 12% Trailing 4Q Average Adjusted ROIC(1)(2) 8.3% Annual WACC 6.6% (1)(3) 10% Trailing 4Q Average ROIC 8.0% 8% 6% 4% 2% 0% Q3 Q3 Q3 Q3 Q3 FY11 FY12 CY13 CY14 CY15 Trailing 4Q Average ROIC Tr
Slide 20: Return on Invested Capital
20 Return on Invested Capital Adjusted ROIC Earnings(3) (Amounts in millions) Four Quarters Quarter Ended Ended Dec. 31, 2014 Mar. 31, 2015 June 30, 2015 Sept. 30, 2015 Sept. 30, 2015 Net earnings attributable to ADM $ 701 $ 493 $ 386 $ 252 $ 1,832 Adjustments Interest expense 86 81 85 69 321 LIFO (
Slide 21: Segment OP Comparatives Introducing New WFSI Segment
21 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 22: Processed Volumes
22 Processed Volumes Fiscal Year Calendar Year 2010 2011 2012 2012 2013 2014 Oilseeds 29,095 29,630 31,161 31,820 31,768 32,208 Corn 19,618 23,412 24,618 24,517 23,688 23,668 Milling and Cocoa 7,291 7,179 7,156 7,023 7,226 7,318 56,004 60,221 62,935 63,360 62,682 63,194 CY13 CY14 CY15 Q1 Q2 Q3 Q4 Q1
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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