Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q2 2015 Earnings Presentation
23 slides from Archer-daniels-midland's earnings presentation, Aug 4, 2015
Slide 1: Second Quarter 2015 Earnings Conference Call
Second Quarter 2015 Earnings Conference Call August 4, 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 Demonstrated strength and value of our geographic and business-portfolio diversity • Robust ethanol demand, but record production limited margins • Sweeteners and starches delivered strong results • Another strong Oilseeds performance • WFSI had excellent quarter and continued pr
Slide 4: Q2 2015 Financial Highlights
4 Q2 2015 Financial Highlights (Amounts in millions except per share data and percentages) Quarter Ended June 30 Change Adjusted earnings per share 2015 2014 $0.60 $0.79 ($0.19) Adjusted segment operating profit $724 $835 ($111) Effective tax rate 27% 28% Trailing 4Q average adjusted ROIC 9.0% 7.8%
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended June 30 (Amounts in millions) 2015 2014 Change Agricultural Services $152 $184 ($32) Merchandising & Handling (excluding specified items) 41 115 (74) Milling and Other 67 42 25 Transportation (excluding specified item) 19 27 (8) Gain on
Slide 6: Cash Flow Summary: Strong Cash Flow Generation Supported $1.5 Billion Return of Capital in 1H15
6 Cash Flow Summary: Strong Cash Flow Generation Supported $1.5 Billion Return of Capital in 1H15 Six Months Ended June 30 (Amounts in millions) 2015 2014 Cash from operations before working capital charges $1,194 $1,052 Changes in working capital (787) (69) Purchases of property, plant and equipmen
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) June 30, 2015 June 30, 2014 Cash⁽¹⁾ $1,176 $1,996 Net property, plant and equipment 9,897 10,110 Operating working capital⁽²⁾ 8,282 11,024 - Total inventories 7,845 9,024 Total debt 6,923 5,622 - CP outstanding — — Shareholders’ Equity 18,558 20,219 M
Slide 8: Segment Operating Profit Demonstrates Power of Business Model
8 Segment Operating Profit Demonstrates Power of Business Model Segment operating profits in millions Excludes specified items and timing effects Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 • ROIC of 9.0% up 120bps year- $835 $941 $1,128 $883 $724 over-year • EVA up $238M, increasing >60% year-over-year
Slide 9: Ag Services: Lower NA Export Volumes and Margins, Late-Quarter Price Move
9 Ag Services: Lower NA Export Volumes and Margins, Late-Quarter Price Move Segment operating profits in millions Excludes specified items and timing effects Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 • More significant seasonal $184 $154 $421 $194 $127 decline in NA margins and volumes • Late-quarter
Slide 10: Corn: Sequential Improvement, Year-over-Year Decline
10 Corn: Sequential Improvement, Year-over-Year Decline Segment operating profits in millions Excludes specified items and timing effects Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 • Overall S&S volumes up 3% year- $268 $341 $281 $127 $188 over-year • Very good NA sweetener margins and volumes • Good d
Slide 11: Oilseeds: Another Solid Quarter
11 Oilseeds: Another Solid Quarter Segment operating profits in millions Excludes specified items and timing effects Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 • Great global soy crush $297 $348 $359 $483 $301 results • 1H soy crush record supported by switch capacity investments • Good throughput at S
Slide 12: WFSI: Excellent Performance in Second Reporting Quarter
12 WFSI: Excellent Performance in Second Reporting Quarter Segment operating profits in millions Excludes specified items and timing effects Includes WILD and SCI earnings starting Q4 2014 • WILD Flavors had strong results Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 $75 $65 $40 $68 $104 in North America
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 Events
15 Upcoming Investor Events Cleveland Research Ag Summit • Chicago, August 13 Farm Progress Show • Decatur, September 1-3 Credit Suisse Retail Round-up • Chicago, September 24
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 June 30 Change 2015 2014 Revenues $17,186 $21,494 ($4,308) Gross profit 964 1,172 (208) Selling, general and administrative expenses 519 426 93 Asset impairment, exit, and restructuring charges 31 31 — Eq
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended June 30 2015 2014 Reported earnings per share (fully diluted) $0.62 $0.81 Adjustments LIFO (credit)/charge 0.06 (0.07) Gain on acquisition/sale of assets (0.11) — Asset impairment charges 0.04 — Restructuring/relocation charges — 0.03 U.S. biodiesel credi
Slide 19: ROIC versus Long-Term WACC
19 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q2 CY15 Trailing 4Q Average Adjusted EVA $610M 12% Trailing 4Q Average Adjusted ROIC(1)(2) 9.0% Annual WACC 6.6% (1)(3) 10% Trailing 4Q Average ROIC 9.3% 8% 6% 4% 2% 0% Q2 Q2 Q2 Q2 Q2 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 Sept. 30, 2014 Dec. 31, 2014 Mar. 31, 2015 June 30, 2015 June 30, 2015 Net earnings attributable to ADM $ 747 $ 701 $ 493 $ 386 $ 2,327 Adjustments Interest expense 79 86 81 85 331 LIFO (3
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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