Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q4 2019 Earnings Presentation
27 slides from Archer-daniels-midland's earnings presentation, Jan 30, 2020
Slide 1: Fourth Quarter 2019 Earnings Conference Call
Fourth Quarter 2019 Earnings Conference Call January 30, 2020
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Confidential and proprietary business information of ADM. Some of our comments and materials in this presentation constitute forward-looking statements that reflect management’s current views and estimates of future economic circumstances, industry conditions, Company perform
Slide 3: 2019 Accomplishments
2019 Accomplishments 3 Confidential and proprietary business information of ADM. • Decatur complex and Golden • Launch of Ag Services & • Expanded leadership position Peanut improvement Oilseeds segment; in alternative proteins • NA Milling optimization, delivering on objectives working with Marfrig
Slide 4: Readiness: Making ADM Better
Readiness: Making ADM Better 4 Confidential and proprietary business information of ADM. Targets 650 Prioritized Initiatives 435 $1.2B Run Rate Savings by end of 2020 $815M $250-300M Accrued Benefits by end of 2019 $250M
Slide 5: Q4 2019 Financial Highlights
Q4 2019 Financial Highlights 5 Confidential and proprietary business information of ADM. (in millions except per share data and percentages) Quarter Ended Dec. 31 2019 2018 Change Adjusted earnings per share (1) (2) $1.42 $0.88 $0.54 Total segment operating profit (unadjusted) (3) $934 $786 $148 Adj
Slide 6: Q4 Other and Corporate Results
Q4 Other and Corporate Results (in millions) 6 Confidential and proprietary business information of ADM. Other • Other results significantly higher on Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 improved performance from both $(14) $14 $11 $47 $13 captive insurance and ADM Investor Services Corporate Ch
Slide 7: AS&O: Up Year-Over Year; Strong Results in RPO
AS&O: Up Year-Over Year; Strong Results in RPO 7 Confidential and proprietary business information of ADM. Segment operating profit (in millions) • Ag Services slightly lower; NA Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 export volumes and margins $615 $417 $362 $417 $739 lower on delayed harvest; SA
Slide 8: Carbohydrate Solutions: Similar to Q3
Carbohydrate Solutions: Similar to Q3 8 Confidential and proprietary business information of ADM. Segment operating profit (in millions) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • S&S up YOY on reduced $197 $96 $192 $182 $174 manufacturing costs, including benefits of Decatur improvements. Improving
Slide 9: Nutrition: Full-Year Results up 23 Percent
Nutrition: Full-Year Results up 23 Percent 9 Confidential and proprietary business information of ADM. Segment operating profit (in millions) Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 • Record year for WILD $62 $81 $117 $118 $102 • WFSI significantly higher YOY; Q4 sales up 8% on constant currency bas
Slide 10: New Corporate Identity Reflects Purpose, Evolution of Company
10 New Corporate Identity Reflects Confidential and proprietary business information of ADM. Purpose, Evolution of Company Confidence in strong results in 2020, years to come
Slide 11: Upcoming Investor Events
11 Upcoming Investor Confidential and proprietary business information of ADM. Events Morgan Stanley 2020 Chemicals, Agriculture, and Packaging Corporate Access Day New York, NY Feb. 13 Bank of America 2020 Global Agriculture and Materials Conference Ft. Lauderdale, FL Feb. 26-27 Exane BNP Paribas C
Slide 12: Additional Facts and Explanations
Additional Facts and Explanations
Slide 13: Supplementary Q4 Earnings Information
Supplementary Q4 Earnings Information 13 Confidential and proprietary business information of ADM. Sale of “CIP” Equity Investment Biodiesel Blender’s Tax Credit 2019 Effective Tax Rate Reconciliation • Legal Name: Compagnie Industrielle et • Retroactive Credit for 2018 and Effective Tax Rate 2019 I
Slide 14: Industry Environment
Industry Environment 14 Confidential and proprietary business information of ADM. Spot Gross Recent Q3 Call 19/20 Farmer 5-Year Crush Margins1 US$/MT US$/MT Selling1 Current Average Soybeans: Corn: US $25-$30 $15-$20 US 60% 57% Europe $30-$40 $7-$12 Brazil 13% n/a Exp: $20-$30 Exp: ~$0 Soybeans: Bra
Slide 15: ADM Additional Information
ADM Additional Information 15 Confidential and proprietary business information of ADM. Processed Nutrition Q-o-Q Y-o-Y Volumes by Growth Q4 19 Growth FY 19 Growth Year (000s of Calendar Year WFSI metric tons) 2014 2015 2016 2017 2018 2019 Revenue (GAAP) $640M 6.5% $2,745M 6.8% Adjusted OP $83M 40.7
Slide 16: Financial Appendix
16 Financial Appendix
Slide 17: Q4 Adjusted Segment OP $1,028 million
Q4 Adjusted Segment OP $1,028 million 17 Confidential and proprietary business information of ADM. Adjusted segment operating profit (1,2) (in millions) Excludes specified items Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 $860 $608 $682 $764 $1,028* Ag Services and Oilseeds Carbohydrate Solutions Nutrit
Slide 18: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results 18 Quarter Ended Dec. 31 (Amounts in millions) 2019 2018 Change (1) Total Segment Operating Profit $ 934 $ 786 $ 148 Confidential and proprietary business information of ADM. Specified items: (Gains) loss on sales of assets and businesses — 8 (8) Impair
Slide 19: Cash Flow Highlights
Cash Flow Highlights 19 Confidential and proprietary business information of ADM. Years Ended Dec. 31 (Amounts in millions) 2019 2018 Cash from operations before working capital changes $2,286 $2,672 Changes in working capital (1) (57) $382 Purchases of property, plant, and equipment (828) ($842) Ne
Slide 20: Balance Sheet Highlights
Balance Sheet Highlights 20 Confidential and proprietary business information of ADM. (Amounts in millions) Dec. 31, 2019 Dec. 31, 2018 Cash (1) $852 $2,003 Net property, plant, and equipment 10,106 9,953 Operating working capital (2) 7,970 7,499 - Total inventories 9,170 8,813 Total debt 8,881 8,38
Slide 21: GAAP Statement of Earnings Summary
GAAP Statement of Earnings Summary 21 Confidential and proprietary business information of ADM. (Amounts in millions except per share data) Quarter Ended Dec. 31 2019 2018 Change Revenues $16,329 $15,947 $382 Gross profit 1,169 1,053 116 Selling, general and administrative expenses 654 558 96 Asset
Slide 22: Adjusted Earnings Per Share (EPS)
Adjusted Earnings Per Share (EPS) 22 Confidential and proprietary business information of ADM. (Amounts in millions except per share data) Quarter Ended Dec. 31 2019 2018 Pre-tax After-tax Per share Pre-tax After-tax Per share Earnings and EPS (fully diluted) as reported $ 496 $ 504 $ 0.90 $ 312 $ 3
Slide 23: ROIC versus WACC
ROIC versus WACC 23 LT ROIC Objective: 10% Q4 CY19 Confidential and proprietary business information of ADM. (1)(2) Trailing 4Q Average Adjusted ROIC 7.5 % Annual WACC 6.75 % Trailing 4Q Average Adjusted EVA $213M Long-Term WACC 7.0 % 11% Trailing 4Q Average ROIC (1)(3) 6.0 % 10% 9% 8% 7% 6% 5% 4% Q
Slide 24: Return on Invested Capital
Return on Invested Capital 24 Confidential and proprietary business information of ADM. Adjusted ROIC Earnings(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Mar. 31, 2019 June 30, 2019 Sep.30,2019 Dec. 31, 2019 Dec. 31, 2019 Net earnings attributable to ADM $ 233 $ 235 $ 407 $ 504 $ 1
Slide 25: 2018 Segment OP and Adjusted Segment OP Comparatives with New Segments
2018 Segment OP and Adjusted Segment OP(1,2) Comparatives with 25 New Segments (in millions) Confidential and proprietary business information of ADM. Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Year Ended Mar. 31, 2018 Jun. 30, 2018 Sep. 30, 2018 Dec. 31, 2018 Dec. 31, 2018 As As As As As As As As
Slide 26: 2019 Segment OP and Adjusted Segment OP as Currently Reported vs Old Segments
2019 Segment OP and Adjusted Segment OP(1,2) as Currently 26 Reported vs Old Segments Confidential and proprietary business information of ADM. Quarter Ended Quarter Ended Quarter Ended Quarter Ended Year Ended March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019 December 31, 2019 Previ
Slide 27: Notes: Non-GAAP Reconciliation
Notes: Non-GAAP Reconciliation 27 Confidential and proprietary business information of ADM. 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 Un
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