Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q4 2023 Earnings Presentation
32 slides from Archer-daniels-midland's earnings presentation, Mar 12, 2024
Slide 1: Fourth Quarter and Full Year 2023 Earnings Conference Call
Proprietary business information of ADM. Fourth Quarter and Full Year 2023 Earnings Conference Call March 12, 2024 Proprietary business information of ADM.
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Proprietary business information of ADM. This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve substantial risks and uncertainties. All statements, other tha
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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 United States, and should
Slide 4: Delivered strong full year results in a challenging environment
PRIVILEGED AND CONFIDENTIAL |DRAFT Delivered strong full year results in a Proprietary business information of ADM. challenging environment FY2023 (Unless otherwise stated) Adjusted Earnings Adjusted Segment TRAILING 4-QUARTER Per Share1,2 Operating Profit1,3 Adjusted ROIC1 $6.98 $6.2B 12.2% Reporte
Slide 5: Multi-year track record of delivering above 2025 strategic metrics
Multi-year track record of delivering above Proprietary business information of ADM. 2025 strategic metrics Adjusted EPS 1,2 Adjusted ROIC1 Cumulative Share Repurchases (Billions) Focused strategy to drive higher structural $7.85 2025 $5B Target earnings $6.98 $7 and return on 13.6% $4.12 invested c
Slide 6: Clear priorities for the year ahead
Clear priorities for the year ahead FY 2024 Proprietary business information of ADM. Strategic Initiatives Operational Changes Enhanced Return of Cash to • Destination marketing growth • New operational leadership and Shareholders • Increase direct farmer buying organizational structure • 11% divide
Slide 7: Total Consolidated Operating Profit and Earnings Per Share
Total Consolidated Operating Profit and Earnings Per Share Full Year 2023 versus Prior Year Proprietary business information of ADM. Second highest earnings per share in the company history Adjusted Segment Operating Profit 1,2 Adjusted Earnings Per Share1,3 (in millions of dollars) (dollars per sha
Slide 8: Ag Services & Oilseeds Operating Profit
Ag Services & Oilseeds Operating Profit Proprietary business information of ADM. Full Year 2023 versus Prior Year Higher processed volumes and South American origination volumes partially offset lower crush margins Segment Operating Profit (in millions of dollars) • Reduced origination volumes out o
Slide 9: Carbohydrate Solutions Operating Profit
Carbohydrate Solutions Operating Profit Proprietary business information of ADM. Full Year 2023 versus Prior Year Strong S&S, wheat milling, and ethanol margins partially offset higher costs Segment Operating Profit (in millions of dollars) • Strong pricing and mix benefit in Sweeteners & Starches o
Slide 10: Nutrition Revenue
Nutrition Revenue Proprietary business information of ADM. Full Year 2023 versus Prior Year Market headwinds and operational challenges pressured volumes offsetting price/mix and currency benefits Segment Revenue • Overall, Nutrition revenue declined (in millions of dollars) 6%, as lower sales volum
Slide 11: Nutrition Operating Profit
Nutrition Operating Profit Full Year 2023 versus Prior Year Proprietary business information of ADM. Lower volumes and several negative one-time items offset price/mix gains Segment Operating Profit • Market headwinds negatively impacted (in millions of dollars) volumes, more than offsetting benefit
Slide 12: Other Business and Corporate
Other Business and Corporate Full Year 2023 versus Prior Year Proprietary business information of ADM. Other Business Segment Operating Profit Corporate and Other Costs (in millions of dollars) (in millions of dollars) • ADMIS performance supported by higher interest rates • Increased spend related
Slide 13: Cash Flow from Operations and Cash Deployment
Cash Flow from Operations and Cash Deployment Proprietary business information of ADM. Full Year 2023 versus Prior Year Strong cash flow allows funding for strategic growth and acceleration of cash return Cash from Operations Before Working Capital 1 Cash Deployment (in billions of dollars) (in bill
Slide 14: Consolidated Outlook
Consolidated Outlook Proprietary business information of ADM. FY 2024 Metric 2023 2024 Guidance1 Adjusted EPS1,3 $6.98 $5.25 – $6.25 Corporate Costs* $1.6 billion ~$1.8 billion Corporate Net Interest Expense $431 million ~$500 million Capital Expenditures $1.5 billion ~$1.3 billion Depreciation & Am
Slide 15: Segment Outlook
Segment Outlook Proprietary business information of ADM. Q1 2024 and FY 2024 Operating Profit Q1 2024 FY 2024 Full Year Planning Assumptions Expect to be Expect to be • Anticipate easing global supply environment with another year of strong lower versus prior lower versus South American crops year p
Slide 16: Proprietary business information of ADM.
Proprietary business information of ADM. | 16 Proprietary business information of ADM.
Slide 17: Appendix
17 Appendix
Slide 18: Total Consolidated Operating Profit and Earnings Per Share (Q4)
Total Consolidated Operating Profit and Earnings Per Share Fourth Quarter 2023 versus Prior Year Quarter Proprietary business information of ADM. Earnings declined due to lower margins, equity earnings, and one-time items Adjusted Segment Operating Profit 1,2 Adjusted Earnings Per Share1 (in million
Slide 19: Ag Services & Oilseeds Operating Profit (Q4)
Ag Services & Oilseeds Operating Profit Proprietary business information of ADM. Fourth Quarter 2023 versus Prior Year Quarter Higher processed volumes partially supported earnings even as crush margins and Wilmar earnings declined Segment Operating Profit (in millions of dollars) • Lower originatio
Slide 20: Carbohydrate Solutions Operating Profit (Q4)
Carbohydrate Solutions Operating Profit Fourth Quarter 2023 versus Prior Year Quarter Proprietary business information of ADM. Lower manufacturing costs and higher ethanol volumes supported higher operating profit Segment Operating Profit (in millions of dollars) • Lower input costs more than offset
Slide 21: Nutrition Revenue (Q4)
Nutrition Revenue Fourth Quarter 2023 versus Prior Year Quarter Proprietary business information of ADM. Nutrition revenue declined due to lower volume despite strong price/mix Segment Revenue (in millions of dollars) • Nutrition revenue declined ~7% as lower sales volumes were partially offset by h
Slide 22: Nutrition Operating Profit (Q4)
Nutrition Operating Profit Fourth Quarter 2023 versus Prior Year Quarter Proprietary business information of ADM. Market headwinds and one-time items led to a sharp decline in operating profit Segment Operating Profit (in millions of dollars) • Operational challenges related to ERP system implementa
Slide 23: Other Business Results and Corporate
Other Business Results and Corporate Proprietary business information of ADM. Fourth Quarter 2023 versus Prior Year Quarter Other Business Segment Operating Profit Corporate and Other Costs (in millions of dollars) (in millions of dollars) • In other, one-time impacts of $57 million related to valua
Slide 24: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results Proprietary business information of ADM. Quarter Ended Dec. 31 Year Ended Dec. 31 (Amounts in millions) 2023 2022 Change 2023 2022 Change Total Segment Operating Profit $ 1,235 $ 1,611 $ (376) $ 5,900 $ 6,549 $ (649) Specified items: (Gain) loss on sale
Slide 25: Balance Sheet Highlights
Balance Sheet Highlights Proprietary business information of ADM. Decem ber 31 (Amounts in millions) 2023 2022 Cash (1) $ 1,368 $ 1,037 Net property, plant, and equipment 10,508 9,933 Operating working capital (2) 9,843 11,627 - Total inventories 11,957 14,771 Total debt 8,365 9,180 - CP outstanding
Slide 26: Cash Flow Highlights
Cash Flow Highlights Proprietary business information of ADM. Years Ended Dec. 31 (Amounts in millions) 2023 2022 Cash from operations before working capital changes $ 4,727 $ 5,010 Changes in working capital (267) (1,532) Purchases of property, plant, and equipment (1,494) (1,319) Net assets of bus
Slide 27: GAAP Statement of Earnings Summary
GAAP Statement of Earnings Summary Proprietary business information of ADM. Quarter Ended Dec. 31 Year Ended Dec. 31 (Amounts in millions except per share data) 2023 2022 Change 2023 2022 Change Revenues $ 22,978 $ 25,939 $ (2,961) $ 93,935 $ 101,556 $ (7,621) Gross profit 1,740 1,762 (22) 7,513 7,5
Slide 28: Reconciliation of Adjusted Earnings Per Share (EPS)
Reconciliation of Adjusted Earnings Per Share (EPS) Proprietary business information of ADM. Quarter Ended Dec. 31 Year Ended Dec. 31 2023 2022 2023 2022 In millions Per share In millions Per share In millions Per share In millions Per share Net earnings and EPS (fully diluted) as reported $ 565 $ 1
Slide 29: ROIC versus WACC
ROIC versus WACC Q4 CY23 Proprietary business information of ADM. Trailing 4Q Average Adjusted ROIC(1)(2) 12.2 % LT ROIC Objective: 10% Annual WACC 8.00 % Trailing 4Q Average Adjusted EVA $1.4B Long-Term WACC 7.0 % Trailing 4Q Average ROIC (1)(3) 11.3 % 1. Non-GAAP measure - see notes on page 3 2. A
Slide 30: Reconciliation of Return on Invested Capital
Reconciliation of Return on Invested Capital Proprietary business information of ADM. Adjusted ROIC Earnings (1) (Amounts in millions) Four Quarters Quarter Ended Ended M ar. 31, 2023 Jun. 30, 2023 Sep. 30, 2023 Dec. 31, 2023 Dec. 31, 2023 Net earnings attributable to ADM $ 1,170 $ 927 $ 821 $ 565 $
Slide 31: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA)(1) Four Quarters Ended December 31, 2023 Proprietary business information of ADM. Adjusted EBITDA (1) (Amounts in millions) Four Quarters Quarter Ended Ended M ar. 31, 2023 Jun. 30, 2023 Sep. 30, 2
Slide 32: Reconciliation of Adjusted Net Debt to Total Debt and Adjusted EBITDA
Reconciliation of Adjusted Net Debt to Total Debt and to Adjusted EBITDA Proprietary business information of ADM. Adjusted Net Debt Decem ber 31 (Amounts in millions) 2023 2022 Short-term debt $ 105 $ 503 Current maturities of long-term debt 1 942 Long-term debt 8,259 7,735 Total Debt 8,365 9,180 Ca
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