Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q4 2016 Earnings Presentation
22 slides from Archer-daniels-midland's earnings presentation, Feb 7, 2017
Slide 1: Fourth Quarter 2016 Earnings Conference Call
Fourth Quarter 2016 Earnings Conference Call February 7, 2017
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: Chairman's Perspective
3 Chairman’s Perspective • Capitalized on improved environment, delivering stronger fourth quarter performance • Continued to advance strategic and capital plans ◦ Executed acquisitions, organic growth, and portfolio management initiatives ◦ Exceeded annual target for run-rate savings ◦ Returned $1.
Slide 4: Q4 2016 Financial Highlights
4 Q4 2016 Financial Highlights Quarter Ended Dec. 31 (Amounts in millions except per share data and percentages) 2016 2015 Change Adjusted earnings per share (1) (2) $0.75 $0.65 $0.10 Adjusted segment operating profit (1) (3) $827 $633 $194 Effective tax rate 32% (2)% Trailing 4Q average adjusted RO
Slide 5: Segment Operating Profit and Corporate Results
5 Segment Operating Profit and Corporate Results Quarter Ended Dec. 31 (Amounts in millions) 2016 2015 Change Agricultural Services $237 $219 $18 Merchandising & Handling (excluding specified items) 126 100 26 Milling and Other (excluding specified item) 62 61 1 Transportation (excluding specified i
Slide 6: Balanced use of cash between CapEx, M&A and return of capital to shareholders
6 Balanced use of cash between CapEx, M&A and return of capital to shareholders Years Ended Dec. 31 (Amounts in millions) 2016 2015 Cash from operations before working capital charges $2,060 $2,232 Changes in working capital (585) 238 Purchases of property, plant and equipment (882) (1,125) Net asse
Slide 7: Balance Sheet Highlights
7 Balance Sheet Highlights (Amounts in millions) Dec. 31, 2016 Dec. 31, 2015 Cash⁽¹⁾ $915 $1,348 Net property, plant and equipment 9,758 9,853 Operating working capital⁽²⁾ 7,384 7,074 - Total inventories 8,831 8,243 Total debt 6,931 5,877 - CP outstanding — — Shareholders’ Equity 17,181 17,915 Memo:
Slide 8: Adjusted Segment Operating Profit of $827 million
8 Adjusted Segment Operating Profit of $827 million Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 • Q4 results up over 30% vs. year- $633 $573 $573 $650 $827* ago quarter due to market conditions and actions to imp
Slide 9: Ag Services: Earnings Up Year-Over-Year
9 Ag Services: Earnings Up Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 • Strong global demand for U.S. $214 $76 $57 $195 $245* commodities in improved margin environment • Transportation performed
Slide 10: Corn: Earnings Up Year-Over-Year
10 Corn: Earnings Up Year-Over-Year Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 • Sweeteners & Starches up, $126 $129 $163 $214 $255* capping strong year • Eaststarch operations continued to contribute to results
Slide 11: Oilseeds: Comparable to Year-Ago Quarter
11 Oilseeds: Comparable to Year-Ago Quarter Adjusted segment operating profit (in millions) Excludes specified items and timing effects Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 • Ample substitute proteins $229 $261 $235 $145 $239* continued to constrain soybean crush margins • In Brazil, short crop l
Slide 12: WFSI: Down vs. Year-Ago Quarter
12 WFSI: Down vs. Year-Ago Quarter Adjusted segment operating profits (in millions) Excludes specified items and timing effects • Continued strong performance Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 $47 $70 $94 $73 $38* from WILD Flavors • Specialty Ingredients continued weakness impacting overall W
Slide 13: Driving Value Creation
13 Driving Value Creation Strengthen our Existing Managing Costs to Fueling Future Operations Grow Margins Growth • Almost $700m in • More than $300m in • Ukraine sunseed monetizations in 2016, new run-rate cost expansion incl. $285m from sale savings in 2016, of GNC stake exceeding $275m target • A
Slide 14: Looking Ahead
Looking Ahead
Slide 15: Upcoming Investor Events
15 Upcoming Investor Events BMO WFSI Field Trip Cranbury, NJ February 28 Bank of America Global Agriculture and Chemicals Conference 2017 Ft. Lauderdale, FL March 1 and 2
Slide 16: Appendix
Appendix
Slide 17: GAAP Statement of Earnings Summary
17 GAAP Statement of Earnings Summary Quarter Ended Dec. 31 (Amounts in millions except per share data) 2016 2015 Change Revenues $16,501 $16,445 $56 Gross profit 1,026 865 161 Selling, general and administrative expenses 470 489 (19) Asset impairment, exit, and restructuring charges 19 104 (85) Equ
Slide 18: Adjusted Earnings Per Share
18 Adjusted Earnings Per Share Quarter Ended Dec. 31 2016 2015 Earnings per share (fully diluted) as reported $ 0.73 $ 1.19 Adjustments LIFO (credit)/charge — 0.01 Gains on sales of assets/revaluations — (0.70) Impairment, restructuring, and settlement charges 0.03 0.24 Post-retirement benefit curta
Slide 19: ROIC versus Long-Term WACC
19 ROIC versus Long-Term WACC ROIC Objective: 200 BPS over WACC Q4 CY16 (1)(2) Trailing 4Q Average Adjusted ROIC 5.9 % 12% Annual WACC 6.6 % Trailing 4Q Average Adjusted EVA ($172M) 10% Trailing 4Q Average ROIC (1)(3) 6.0 % 8% 6% 4% 2% 0% Q4 Q4 Q4 Q4 Q4 FY12 FY13 CY14 CY15 CY16 Trailing 4Q Average R
Slide 20: Return on Invested Capital
20 Return on Invested Capital Adjusted ROIC Earnings(3) (Amounts in millions) Four Quarters Quarter Ended Ended Mar. 31, 2016 June 30, 2016 Sep. 30, 2016 Dec. 31, 2016 Dec. 31, 2016 Net earnings attributable to ADM $ 230 $ 284 $ 341 $ 424 $ 1,279 Adjustments Interest expense 70 65 78 80 293 LIFO 14
Slide 21: Processed Volumes
21 Processed Volumes Metric Tons Processed (000s) Fiscal Year Calendar Year 2012 2012 2013 2014 2015 2016 Oilseeds Processing 31,161 31,820 31,768 32,208 34,260 33,788 Corn Processing (1) 24,618 24,517 23,688 23,668 23,126 22,273 55,779 56,337 55,456 55,876 57,386 56,061 CY15 CY16 Q1 Q2 Q3 Q4 Q1 Q2
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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