Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q1 2019 Earnings Presentation
22 slides from Archer-daniels-midland's earnings presentation, Apr 26, 2019
Slide 1: First Quarter 2019 Earnings Conference Call
First Quarter 2019 Earnings Conference Call April 26, 2019
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: First Quarter Accomplishments
3 First Quarter Accomplishments • Peanut and tree nut • Focus on simplification of • Expansion of UK footprint rationalization business origination footprint • Closure of older wheat flour • Expand Global Business • Launch of GrainBridge mills Services • Global citrus additions • Continued optimizat
Slide 4: Readiness Accelerates Targets
44 Readiness Accelerates Targets 650 Prioritized Initiatives 185 $1.2B Run Rate $375M 40,000 Participation in ADM Ability to Execute Training ~3,400
Slide 5: Q1 2019 Financial Highlights
5 Q1 2019 Financial Highlights Quarter Ended Mar. 31 (Amounts in millions except per share data and percentages) 2019 2018 Change Adjusted earnings per share (1) (2) $0.46 $0.68 -$0.22 Adjusted segment operating profit (1) (3) $608 $717 -$109 Trailing 4Q average adjusted ROIC (1) 7.8% 6.4% +140bps A
Slide 6: Segment Operating Profit and Corporate Results
6 Segment Operating Profit and Corporate Results Quarter Ended Mar. 31 (Amounts in millions) 2019 2018 Change Total Segment Operating Profit(1) $ 611 $ 704 $ (93) Specified items: (Gains) loss on sales of assets and businesses (12) — (12) Impairment and restructuring charges 9 13 (4) Adjusted Segmen
Slide 7: Funded Significant Acquisitions in 2019
7 Funded Significant Acquisitions in 2019 Three Months Ended Mar. 31 (Amounts in millions) 2019 2018 Cash from operations before working capital changes $466 $553 Changes in working capital(1) (723) (1,769) Purchases of property, plant and equipment (198) (196) Net assets of businesses acquired (1,8
Slide 8: Maintained Solid Balance Sheet
8 Maintained Solid Balance Sheet (Amounts in millions) Mar. 31, 2019 Mar. 31, 2018 Cash⁽¹⁾ $935 $797 Net property, plant, and equipment 10,299 10,123 Operating working capital⁽²⁾ 8,175 9,167 - Total inventories 8,946 9,820 Total debt 9,884 9,000 - CP outstanding 1,350 1,400 Shareholders’ Equity 18,9
Slide 9: Q1 Adjusted Segment OP $608 million
9 Q1 Adjusted Segment OP $608 million Adjusted segment operating profit (in millions) Excludes specified items Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 $717 $924 $861 $860 $608* Origination Oilseeds Carbohydrate Solutions Nutrition Other *Segment operating profit as reported was $611M
Slide 10: Origination: Good Execution in Extreme Conditions
10 Origination: Good Execution in Extreme Conditions Segment operating profit (in millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 • Approximately $30M impact from $46 $191 $131 $184 $76 severe weather • Solid margins on NA corn and soybean exports • Transportation: higher results despite high wate
Slide 11: Oilseeds: Solid Performance in Healthy Demand Environment
11 Oilseeds: Solid Performance in Healthy Demand Environment Segment operating profit (in millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 • C&O up significantly; strong $349 $341 $347 $431 $341 performance on higher executed crush margins and record crush volumes • RPBO: YOY variance impacted by p
Slide 12: Carbohydrate Solutions: Weather Impacts, Weak Ethanol Environment
12 Carbohydrate Solutions: Weather Impacts, Weak Ethanol Environment Segment operating profit (in millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 • Approximately $30M impact from $213 $247 $288 $197 $96 severe weather • EMEA industry conditions negatively impacting S&S • Bioproducts down on weak e
Slide 13: Nutrition: Continued Strong Growth in WFSI, Weaker Animal Nutrition
13 Nutrition: Continued Strong Growth in WFSI, Weaker Animal Nutrition Segment operating profit (in millions) Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 $96 $114 $67 $62 $81 • WFSI: profit growth in all three businesses; sales 11% higher YOY on constant currency basis; 21% OP growth • Animal Nutrition
Slide 14: Advancing Growth and Driving Returns
14 Advancing Growth and Driving Returns Business Harvesting Growth Turnarounds Investments Marshall Increasing Accelerating, Repurposing Targets for Increasing Ethanol 2019-20 Neovia Subsidiary CapEx Efficiency Synergies Strong Back Half, Solid Full Year For 2019
Slide 15: Upcoming Investor Events
15 Upcoming Investor Events BMO Farm to Market Conference May 15-16 New York, NY Stifel Cross Sector Insight Conference June 10-12 Boston, MA
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 Mar. 31 (Amounts in millions except per share data) 2019 2018 Change Revenues $15,304 $15,526 ($222) Gross profit 928 889 39 Selling, general and administrative expenses 659 513 146 Asset impairment, exit
Slide 18: Adjusted Earnings Per Share (EPS)
18 Adjusted Earnings Per Share (EPS) (Amounts in millions except per share data) Quarter Ended Mar. 31 2019 2018 Pre-tax After-tax Per share Pre-tax After-tax Per share Earnings and EPS (fully diluted) as reported $ 315 $ 233 $ 0.41 $ 464 $ 393 $ 0.70 Adjustments LIFO (credit)/charge 1 1 — (8) (6) (
Slide 19: ROIC versus WACC
19 ROIC versus WACC Q1 CY19 (1)(2) LT ROIC Objective: 10% Trailing 4Q Average Adjusted ROIC Annual WACC 7.8% 6.75% Trailing 4Q Average Adjusted EVA $288M 11% Long-Term WACC 7.0% Trailing 4Q Average ROIC (1)(3) 7.0% 10% 9% 8% 7% 6% 5% 4% Q1 Q1 Q1 Q1 Q1 CY15 CY16 CY17 CY18 CY19 Trailing 4Q Average ROI
Slide 20: Return on Invested Capital
20 Return on Invested Capital Adjusted ROIC Earnings(1) (Amounts in millions) Four Quarters Quarter Ended Ended June 30, 2018 Sep. 30, 2018 Dec. 31, 2018 Mar. 31, 2019 Mar. 31, 2019 Net earnings attributable to ADM $ 566 $ 536 $ 315 $ 233 $ 1,650 Adjustments Interest expense 89 87 97 101 374 LIFO ch
Slide 21: Processed Volumes (by commodity)
21 Processed Volumes (by commodity) Metric Tons Processed (000s) 2014 2015 2016 2017 2018 Oilseeds 32,208 33,817 33,788 34,733 36,308 Corn 23,668 23,126 22,273 22,700 22,343 55,876 56,943 56,061 57,433 58,651 CY17 CY18 CY19 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Oilseeds 8,818 8,519 8,265 9,131 9,047 9,075 9,18
Slide 22: Notes: Non-GAAP Reconciliation
22 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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