Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q2 2020 Earnings Presentation
26 slides from Archer-daniels-midland's earnings presentation, Jul 30, 2020
Slide 1: Second Quarter 2020 Earnings Conference Call
Second Quarter 2020 Earnings Conference Call July 30, 2020
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement 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: Q2 Accomplishments
3 Q2 Accomplishments Confidential and proprietary business information of ADM. • $50M in AS&O capital • 1ADM: Launched • Continued destination reduction initiatives, procurement and contract marketing growth, extending including ongoing global spend applications product offerings in Asia, Latin orig
Slide 4: Q2 2020 Financial Highlights
4 Q2 2020 Financial Highlights Confidential and proprietary business information of ADM. (in millions except per share data and percentages) Quarter Ended June 30 2020 2019 Change Adjusted earnings per share (1) (2) $0.85 $0.60 $0.25 Total segment operating profit (unadjusted) (3) $813 $645 $168 Adj
Slide 5: Q2 Other and Corporate Results
5 Q2 Other and Corporate Results (In millions) Confidential and proprietary business information of ADM. Other Business • Other results up on improved Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 captive insurance performance $11 $47 $13 $11 $38 Corporate Charges • Unallocated corporate higher on compens
Slide 6: AS&O: Strong Performance, Led by Ag Services
6 AS&O: Strong Performance, Led by Ag Services Confidential and proprietary business information of ADM. Segment operating profit (in millions) • Ag Services substantially Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 higher on South America $362 $417 $739 $422 $413 origination, global trade results • Low
Slide 7: Carbohydrate Solutions: Similar to Prior Year
7 Carbohydrate Solutions: Similar to Prior Year Confidential and proprietary business information of ADM. Segment operating profit (in millions) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 • S&S down on lower food service $192 $182 $174 $68 $195 demand, mark-to-market losses on corn oil, partially offse
Slide 8: Nutrition: Significant Growth Continues
8 Nutrition: Significant Growth Continues Confidential and proprietary business information of ADM. Segment operating profit (in millions) Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 • Human Nutrition substantially $117 $118 $102 $142 $158 higher; favorable sales mix and margin expansion for NA flavors;
Slide 9: Strategy is Powering Results
9 Confidential and proprietary business information of ADM. Strategy is Powering Results
Slide 10: Upcoming Investor Events
10 Upcoming Investor Confidential and proprietary business information of ADM. Events (All events virtual) Barclays Global Consumer Staples Conference September 8 J.P. Morgan All Stars Conference September 15-16 Berenberg Food Ingredients & Chemicals Conference September 16
Slide 11: Additional Facts and Explanations
Additional Facts and Explanations
Slide 12: Industry Environment
12 Industry Environment Farmer Selling2 Confidential and proprietary business information of ADM. Spot Gross Current Q1 Call 2019/2020 Crop 2020/2021 Crop Crush Margins1 US$/MT US$/MT Year Year 5-Year Prior 5-Year Prior Soybeans Current Current Average Year Average Year US $15-$25 $20-$25 Corn Europ
Slide 13: ADM Additional Information
13 ADM Additional Information Confidential and proprietary business information of ADM. Processed Volumes by Quarter (000s of metric tons) Adjusted EBITDA(1)(2) by Segment (in millions) CY 19 CY 20 Trailing 4-Quarters Q1 Q2 Q3 Q4 Q1 Q2 Q2 20 Q2 19 Q2 20 Q2 19 Oilseeds 9,167 8,773 9,062 9,269 9,163 9
Slide 14: Financial Appendix
14 Financial Appendix
Slide 15: Q2 Adjusted Segment OP $804 million
15 Q2 Adjusted Segment OP $804 million Confidential and proprietary business information of ADM. Adjusted segment operating profit (1,2) (in millions) Excludes specified items Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 $682 $764 $1,028 $643 $804* Ag Services and Oilseeds Carbohydrate Solutions Nutritio
Slide 16: Segment Operating Profit and Corporate Results
Segment Operating Profit and Corporate Results 16 Quarter Ended June 30 (Amounts in millions) 2020 2019 Change (1) Total Segment Operating Profit $ 813 $ 645 $ 168 Confidential and proprietary business information of ADM. Specified items: (Gains) loss on sales of assets and businesses (23) — (23) Im
Slide 17: Balance Sheet Highlights
17 Balance Sheet Highlights Confidential and proprietary business information of ADM. (Amounts in millions) June 30, 2020 June 30, 2019 Cash (1) $1,203 $853 Net property, plant, and equipment 9,833 10,245 Operating working capital (2) 8,540 7,804 - Total inventories 7,626 8,294 Total debt 9,173 9,41
Slide 18: Cash Flow Highlights
18 Cash Flow Highlights Confidential and proprietary business information of ADM. Six Months Ended June 30 (Amounts in millions) 2020 2019 Cash from operations before working capital changes $1,611 $1,016 Changes in working capital (1) 409 (116) Purchases of property, plant, and equipment (360) (383
Slide 19: GAAP Statement of Earnings Summary
19 GAAP Statement of Earnings Summary Confidential and proprietary business information of ADM. (Amounts in millions except per share data) Quarter Ended June 30 2020 2019 Change Revenues $16,281 $16,297 ($16) Gross profit 1,108 972 136 Selling, general and administrative expenses 638 602 36 Asset i
Slide 20: Adjusted Earnings Per Share (EPS)
20 Adjusted Earnings Per Share (EPS) (Amounts in millions except per share data) Confidential and proprietary business information of ADM. Quarter Ended June 30 2020 2019 Pre-tax After-tax Per share Pre-tax After-tax Per share Earnings and EPS (fully diluted) as reported $ 552 $ 469 $ 0.84 $ 274 $ 2
Slide 21: ROIC versus WACC
ROIC versus WACC 21 Q2 CY20 LT ROIC Objective: 10% Confidential and proprietary business information of ADM. (1)(2) Trailing 4Q Average Adjusted ROIC 8.1 % Annual WACC 5.75 % Trailing 4Q Average Adjusted EVA $683M Long-Term WACC 7.0 % 11% Trailing 4Q Average ROIC (1)(3) 6.9 % 10% 9% 8% 7% 6% 5% 4% Q
Slide 22: Return on Invested Capital
22 Return on Invested Capital Confidential and proprietary business information of ADM. Adjusted ROIC Earnings(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Sep. 30, 2019 Dec. 31, 2019 Mar. 31, 2020 June 30, 2020 June 30, 2020 Net earnings attributable to ADM $ 407 $ 504 $ 391 $ 469 $
Slide 23: Adjusted EBITDA, Four Quarters Ended June 30, 2020
23 Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)(1) Four Quarters Ended June 30, 2020 Confidential and proprietary business information of ADM. Adjusted EBITDA(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Sep. 30, 2019 Dec. 31, 2019 Mar. 31, 202
Slide 24: Adjusted EBITDA, Four Quarters Ended June 30, 2019
24 Adjusted Earnings Before Taxes, Interest, and Depreciation and Amortization (EBITDA)(1) Four Quarters Ended June 30, 2019 Confidential and proprietary business information of ADM. Adjusted EBITDA(1) (Amounts in millions) Fourth Quarters Quarter Ended Ended Sep. 30, 2018 Dec. 31, 2018 Mar. 31,2019
Slide 25: 2019 Segment OP and Adjusted Segment OP Comparatives
25 2019 Segment OP and Adjusted Segment OP(1,2) Comparatives with VCP in Carbohydrate Solutions (in millions) Confidential and proprietary business information of ADM. Qtr. Ended Qtr. Ended Qtr. Ended Qtr. Ended Year Ended Mar. 31, 2019 Jun. 30, 2019 Sep. 30, 2019 Dec. 31, 2019 Dec. 31, 2019 As As A
Slide 26: Notes: Non-GAAP Reconciliation
26 Notes: Non-GAAP Reconciliation 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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