Archer-daniels-midland Company · NYSE:ADM
Archer-daniels-midland — Q1 2021 Earnings Presentation
51 slides from Archer-daniels-midland's earnings presentation, Apr 27, 2021
Slide 1: Unlocking Nature. Enriching Life. First Quarter 2021
Unlocking Nature. Enriching Life. First Quarter 2021
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement 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 performance and financial results. These statements and materials
Slide 3: Table of Contents
3 Table of Contents Unlock Enrich Invest The ADM Vision What We Do Financial Results Why Invest in ADM? How We Do It Why Invest in ADM? The ADM Edge Corporate Responsibility The ADM Plan
Slide 4: Unlock
4 Unlock The ADM Vision Why Invest in ADM? The ADM Edge The ADM Plan
Slide 5: Food is Fundamental
5 The ADM Vision Food is It sustains us, fulfills us and fuels our well-being. It’s the most basic need with the most critical impact. ADM is Fundamental. devoted to that impact every single day. We believe… Everyone has the right to Food derived from nature is Access to nutrition has the the food t
Slide 6: Why Invest in ADM?
6 Why Invest in ADM? Why Invest in ADM? From the seed of the idea to ADM Advantage the outcome of the solution, Unparalleled Industry-leading Leading-edge Focused on Unwavering ADM provides access to global portfolio of technical returns/EVA commitment nutrition worldwide. footprint ingredients and
Slide 7: ADM by the Numbers
7 The ADM Edge ADM by the Numbers FUNDAMENTALS FINANCIALS CREDENTIALS ~800 61 $64B $26B 1902 Facilities Innovation CY20 Revenue Market Cap Founded Centers as of 12/31/2020 321 200 $3.4B 89 ADM Food & Feed Countries Served CY20 Adjusted Consecutive NYSE Since 1924 Processing Locations Segment OP Year
Slide 8: Long-Term Strategy
8 The ADM Plan Long-Term Strategy Reduce costs Innovate new specialty and Increase the financial strength of ingredient products each business Implement 1ADM Enhance our talent, capabilities Divest those that don't meet Leverage technology to and geographic footprint’ returns expectations streamline
Slide 9: Tailored Strategy Focused on Targeted Growth, Returns and EVA
9 The ADM Plan Tailored Strategy Focused on Targeted Growth, Returns and EVA Adjusted ROIC Adjusted EVA @ 7% WACC 2013: Pre-Wild 6.6% $(110M) Delivered $10.4 to shareholders 2020 Q4: Trailing 4 Qtr Avg 7.7% $201M $573M EVA vs. 2020 Annual WACC of 5.75% through dividends and share repurchases since 2
Slide 10: Transforming the Portfolio
10 The ADM Plan Transforming the Portfolio Gleadell Acquisitions and JVs Morocco Eaststarch SA Groundnut Texoma Peanut Co 2014 2015 2016 2017 2018 2019 2020 2021 Divestitures Lactic Acid Brazil Crop Risk Cocoa Sugar GrainCorp Bolivia Oilseeds CIP Services Fertilizer Chocolate New Hope Ag Fund Sale
Slide 11: Readiness is Transforming How We Operate
11 The ADM Plan Readiness is Transforming How We Operate Run Rate Savings $1.3B Readiness is a reinvention of our business Achieved $1.3B by end from the bottom up. of 2020, exceeding original $1.2B target It provides a structure for ongoing continuous improvement that will give us the tools to deli
Slide 12: Enrich
12 Enrich What We Do How We Do It Corporate Responsibility
Slide 13: Serve Customers Across the Value Chain with Unmatched Products & Services
13 What We Do Serve Customers Across the Value Chain with Unmatched Products & Services Origination of Crops Processing Specialties Ag Services Oilseeds Nutrition Oilseeds Procure/Store Grain Vegetable Other Meal Oil Products Human Nutrition Ingredients Carbohydrate Solutions Animal Nutrition Local
Slide 14: ADM Global Trends Program
14 What We Do ADM Global Trends Program Consumption Contemporary We’re tracking large, transformative global macro trends as Identity Wellness to understand their impact on consumer culture and behaviors, market opportunities and, ultimately, spaces for category growth. Our focus on trends has been
Slide 15: Ag Services and Oilseeds
15 Ag Services and Oilseeds
Slide 16: Ag Services and Oilseeds Overview
16 How We Do It: Ag Services and Oilseeds Ag Services and Oilseeds Overview Refined Products Ag Services Crushing & Other Wilmar Drivers of Profitability Drivers of Profitability Drivers of Profitability Drivers of Profitability Procure, store, dry/blend, transport and Crush a diverse set of oilseed
Slide 17: Footprint
17 How We Do It: Ag Services and Oilseeds Ag Services & Oilseeds Footprint Daily Grain Storage 433 ~18M MT Capacity (MMT) GERMANY Procurement and Global NETHERLANDS 12 Processing UKRAINE Storage Facilities Storage Capacity 2 Processing POLAND 2 Procurement 1 Procurement 7 Processing 1 Processing 10
Slide 18: Adjusted Operating Profit
18 How We Do It: Ag Services and Oilseeds Adjusted Operating Profit $2,500 $2,016 $1,723 $1,215 $1,229 $2,020 $1,935 $2,105 $2,000 $183 $372 $343 $267 $376 $200 $1,500 $370 $439 Millions $274 $586 $664 $154 $329 $466 $1,000 $650 $652 $298 $244 $580 $298 Wilmar $500 $204 $792 $828 RP&O $597 $657 $464
Slide 19: Carbohydrate Solutions
19 Carbohydrate Solutions
Slide 20: Carbohydrate Solutions Overview
20 How We Do It: Carbohydrate Solutions Carbohydrate Solutions Overview Starches & Sweeteners Vantage Corn Processors Starches Sweeteners Flours Corn Dry Mills Drivers of Profitability Drivers of Profitability Drivers of Profitability Drivers of Profitability Industrial starches Glucose, high fructo
Slide 21: Footprint
21 How We Do It: Carbohydrate Solutions Footprint Annual Corn Grind (MMT) Carbohydrate Solutions ~30 Different Products EMEAI 1 Owned Processing 23 Plants CANADA 8 Processing UNITED KINGDOM 11 38 7 Processing NA Corn Wheat 22 Additional Joint Venture Facilities in BULGARIA TURKEY Mexico, Hungary, Ru
Slide 22: Adjusted Operating Profit
22 How We Do It: Carbohydrate Solutions Adjusted Operating Profit $1,340 $823 $1,000 $1,083 $945 $644 $717 $1,400 $1,000 $719 $155 $40 $129 Millions $136 $600 $871 $928 $905 $753 $762 $621 $686 Bioproducts/ $200 Vantage Corn Processors (VCP) Starches & Sweeteners $0 ($109) ($45) ($200) CY14 CY15 CY1
Slide 23: Nutrition
23 Nutrition
Slide 24: Nutrition Overview
24 How We Do It: Nutrition Nutrition Overview Human Nutrition Animal Nutrition Flavors & Colors Specialty Ingredients Health & Wellness Drivers of Profitability Drivers of Profitability Drivers of Profitability Drivers of Profitability Natural flavors portfolio Specialty soy and pea proteins Nutriti
Slide 25: Complete Pantry of Ingredients and Solutions from Nature
25 How We Do It: Nutrition Complete Pantry of Ingredients and Solutions from Nature Color Nutrition Animal Consumer Colors From Nature Vegetable Powders Bioactives Natural Antioxidants Nutrition Insights Pulses Amino Acids Plant Extracts Additives Fibers Vitamins Functional Botanicals Texture Whole
Slide 26: Ingredient Systems: A Key ADM Differentiator
26 How We Do It: Nutrition Ingredient Systems: A Key ADM Differentiator Systems Customized blend of ingredients designed for Specialty Proteins Hydrocolloids Nutritional Polyols Probiotics & specific food or animal Manufacturer Edible Beans Supplements Enzymes nutrition applications & Peas Fiber Nut
Slide 27: Footprint
27 How We Do It: Nutrition Footprint Nutrition Human Nutrition CANADA UNITED KINGDOM NETHERLANDS 61 5 Processing 1 Processing 2 Processing Customer Innovation Centers BELGIUM 1 Processing GERMANY 5 Processing POLAND 46 FRANCE 2 Processing Processing Facilities 13 Processing SPAIN SWITZERLAND 23 UNIT
Slide 28: Revenue and Adjusted Operating Profit
28 How We Do It: Nutrition Revenue and Adjusted Operating Profit Revenue Adjusted Operating Profit $2,660 $3,590 $3,520 $3,520 $3,790 $5,680 $5,799 $258 $323 $273 $311 $339 $418 $574 $6,000 $600 $5,000 $500 $112 $2,930 $2,988 Millions Millions $4,000 $400 $42 $1,220 $21 $3,000 $1,140 $1,060 $1,160 $
Slide 29: Sustainability and Corporate Responsibility
29 Sustainability and Corporate Responsibility
Slide 30: Environmental and Sustainability Highlights
30 Sustainability and Corporate Responsibility Environmental and Sustainability Highlights At ADM, we know that the health of our Sustainability Goals natural resources is critical to our future, and that our commitments to sustainable practices will result in a stronger ADM and a Material Topic Des
Slide 31: Responsible Sourcing Goals and KPIs
31 Sustainability and Corporate Responsibility Responsible Sourcing Goals and KPIs Palm Action Plans Sustainable Agriculture Material Topic Milestone UN SDG Alignment SASB Alignment Type Description of Goal SDG Alignment SASB Alignment Maintain traceability scores of at least 98% of • Environmental
Slide 32: Embedding ADM's Sustainable Strategy in the Agriculture Value Chain
32 Sustainability and Corporate Responsibility Embedding ADM’s Sustainable Strategy in the Agriculture Value Chain
Slide 33: Social Initiatives
33 Sustainability and Corporate Responsibility Social Initiatives ADM continuously works to improve the lives of our stakeholders, including the communities in which we operate as well as our vast and diverse employee base. Helping Communities Promoting Ensuring Through ADM Cares Employee Diversity
Slide 34: ADM's Independent and Diverse Board
34 Sustainability and Corporate Responsibility ADM’s Independent and Diverse Board Juan Luciano Donald Felsinger Michael Burke Terrell Crews Age 58 Age 72 Age 56 Age 64 Appointed 2014 Appointed 2009 Appointed 2018 Appointed 2011 Chairman, President & CEO, ADM Fmr. Chairman, President & CEO, Chairman
Slide 35: ADM's Independent and Diverse Board
35 Sustainability and Corporate Responsibility ADM’s Independent and Diverse Board Statistics Responsibilities Nominating & Compensation & Succession Corporate Governance • Assesses potential risks associated • Authority to assign oversight of specific with compensation decisions 55% 91% areas of ri
Slide 36: Invest
36 Invest Financial Results Why Invest in ADM?
Slide 37: Adjusted Segment Operating Profit and Adjusted EPS
37 Financial Results Adjusted Segment Operating Profit Adjusted Earnings Per Share $3.7 $2.9 $2.6 $2.7 $3.4 $3.1 $3.4 $4.00 $4.0 $3.59 $0.1 $3.50 $3.50 $0.3 $0.1 $0.1 $0.6 $3.23 $0.3 $3.0 $0.1 $0.1 $0.4 $3.24 $1.3 $0.3 $0.1 $3.00 $0.1 $0.9 $0.3 $0.7 $0.3 $0.6 $0.8 $2.61 Billions $2.0 $1.0 $1.1 $2.50
Slide 38: Adjusted Segment Operating Profit
38 Financial Results Adjusted Segment Operating Profit Adjusted Operating Profit CY17 CY18 CY19 CY20 Total (in millions) 2,674 3,632 3,082 3,448 Ag Services & Oilseeds 1,229 2,020 1,935 2,105 Ag Services 451 657 502 828 Crushing 204 650 580 466 RP&O 244 370 586 439 Asia 329 343 267 372 Carbohydrate
Slide 39: Adjusted EBITDA
39 Financial Results Adjusted EBITDA Adjusted Segment EBITDA CY17 CY18 CY19 CY20 Total (in millions) 3,064 3,634 3,482 3,660 Ag Services & Oilseeds 1,620 2,410 2,311 2,469 Carbohydrate Solutions 1,415 1,282 974 1,029 Nutrition 450 486 642 802 Other 69 92 117 61 Corporate (490) (636) (562) (701)
Slide 40: Processed Volumes
40 Financial Results Processed Volumes By Year 2014 2015 2016 2017 2018 2019 2020 Total (000’s of metric tons) 55,876 56,943 56,061 57,433 58,651 58,350 54,450 Oilseeds 32,208 33,817 33,788 34,733 36,308 36,271 36,565 Corn 23,668 23,126 22,273 22,700 22,343 22,079 17,885 By Quarter CY19 CY20 Q1 Q2 Q
Slide 41: ROIC vs WACC
41 Financial Results ROIC vs WACC LT ROIC Objective: 10% 11% 10% Q4 CY20 9% Trailing 4Q Average 7.7% Adjusted ROIC 8% 7.7% Trailing 4Q 6.7% 7% Average ROIC 6.7% 6% Annual WACC 5.75% 5% Trailing 4Q Average $573M 4% Adjusted EVA Q4'15 Q4'16 Q4'17 Q4'18 Q4'19 Q4'20 Long-Term WACC 7.0% Trailing 4Q Avera
Slide 42: Strong Balance Sheet
42 Financial Results Strong Balance Sheet Balance Sheet Highlights (in millions) Dec 31 Dec 31 Dec 31 Other Key Data 2018 2019 2020 Net Investment In: Book Value Cash & Cash Equivalents $1,997 $852 $667 $20.0B $36.01 Operating Working Capital $7,505 $7,970 $10,481 Book Value Book Value Per Share as
Slide 43: Cash from Operations and Balanced Capital Allocation
43 Financial Results Cash from Operations Before Balanced Capital Working Capital Changes Allocation Framework $3.0 70% 60–70% 60% in strategic M&A $2.4 or return of capital to shareholders 50% $1.8 Billions 40% $3.1 30–40% $2.7 $2.7 30% reinvested Capex $1.2 $2.3 $2.2 $2.1 2.3 $1.9 20% $0.6 10% $0.
Slide 44: Capital Expenditures and M&A
44 Financial Results Capital Expenditures and M&A $2.0 Capex and D&A M&A $3.0 $2.8 $1.5 $2.5 $2.0 $2.0 Billions $1.0 $1.0 Billions $1.0 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.9 $0.8 $0.8 $1.5 $1.0 $0.5 $1.9 $1.6 $1.2 $1.5 $0.9 $0.9 $1.1 $0.9 $1 $0.8 $0.8 $0.8 $0.5 $0.5 $0.5 $0.2 $0.2 $0.2 $0.2 $0.1 $
Slide 45: Steadily Increasing Dividends
45 Financial Results Steadily Increasing Dividends Annual Dividends Per Share Dividends & Share Repurchases $2.5 Dividend Payout Ratio: Historical: 20-30% Medium Term: 30-40% $2.0 $2.0 $1.5 $1.2 Billions USD $1.0 $1.44 $1.48 $1.0 $1.34 $1.40 $1.28 $0.8 $0.8 $1.20 $0.7 $0.8 $0.8 $1.12 $0.7 $0.7 $0.96
Slide 46: Balance Sheet Strength-Solid Investment Grade
46 Financial Results Balance Sheet Strength-Solid Investment Grade Debt Metrics Available Liquidity (Billions) 50% 5.0 $20.0 4.0 15.2 32% 25% 3.0 $10.0 7.3 1.9 2.0 0% 1.0 $0.0 Q4'12 Q4'13 Q4'14 Q3'15 Q4'16 Q4'17 Q4'18 Q4'19 Q4'20 Q4'12 Q4'13 Q4'14 Q4'15 Q4'16 Q4'17 Q4'18 Q4'19 Q4'20 Net Debt / Total
Slide 47: Why Invest in ADM?
47 Why Invest in ADM? Why Invest in ADM? From the seed of the idea to ADM Advantage the outcome of the solution, Unparalleled Industry-leading Leading-edge Focused on Unwavering ADM provides access to global portfolio of technical returns/EVA commitment nutrition worldwide. footprint ingredients and
Slide 48: Appendix
48 Appendix
Slide 49: Summary of Specified Items Excluded in Adjusted Earnings
49 Financial Results Summary of Specified Items Excluded in Adjusted Earnings 1 Year Ended Year Ended Year Ended Year Ended CY CY CY CY CY CY CY CY CY 2009 2010 2011 2012 2012 2013 2014 2015 2016 2017 2018 2019 2020 Earnings as Reported 1,684 1,930 2,036 1,223 1,375 1,342 2,248 1,849 1,279 1,595 1,8
Slide 50: Notes: Non-GAAP Reconciliation
50 Financial Results 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
Slide 51: Thank You
Thank You
Archer-Daniels-Midland Company — Q1 2021 Earnings Presentation on 6ix