Core Viewpoint - Ingredion Incorporated (INGR) reported its Q4 and full-year results, which were positively received, leading to an increase in its share price for the day [1]. Group 1: Financial Performance - The company experienced mixed performance across different markets, with some performing well while others did not [1]. - Overall profitability was highlighted in the report, indicating a solid financial standing despite market variances [1].

Core Insights - Archer Daniels Midland Company (ADM) reported fourth-quarter 2025 results with revenues falling short of estimates and declining year over year, while earnings exceeded estimates but also decreased compared to the previous year [1][2]. Financial Performance - Adjusted earnings were 87 cents per share, surpassing the Zacks Consensus Estimate of 83 cents, but down from $1.14 per share in the same quarter last year [2] - Reported earnings for the quarter were 94 cents per share, down from $1.17 in the prior-year quarter [2] - Revenues decreased by 13.7% year over year to $18.6 billion, missing the consensus estimate of $22.3 billion [2] Segment Performance - Ag Services & Oilseeds revenues fell 16.9% year over year to $14 billion, while Carbohydrate Solutions revenues decreased 3.9% to $2.6 billion [3] - Nutrition segment revenues rose 0.7% year over year to $1.8 billion, with the Zacks Consensus Estimate for these segments being $17.7 billion, $2.6 billion, and $1.9 billion respectively [3] - Other Business revenues remained flat at $117 million compared to the prior-year period [3] Profitability Metrics - Gross profit decreased by 10.7% year over year to $1.2 billion, with a gross margin of 6.5% [4] - Selling, general and administrative expenses declined to $893 million from $943 million in the year-ago quarter [4] - Adjusted segmental operating profit was $821 million, down 22% from the previous year [4] Segmental Operating Profit Analysis - Adjusted operating profit for Ag Services & Oilseeds dropped 31% year over year to $444 million, primarily due to lower soybean export activity and unfavorable mark-to-market impacts [5] - Crushing subsegment's operating profit plunged 69% year over year due to weaker crush margins, despite higher global crush volumes [6] - Carbohydrate Solutions segment posted an operating profit of $299 million, reflecting a 6% decline from the year-ago period [8] Dividend and Future Guidance - ADM raised its quarterly dividend by 2% to 52 cents per share, marking the company's 94th consecutive year of uninterrupted dividends [14] - For 2026, ADM expects adjusted EPS in the range of $3.60-$4.25, with the lower end reflecting continued deferral of U.S. biofuel policy clarity [15] - The outlook for 2026 anticipates year-over-year operating profit growth in Ag Services & Oilseeds, while Carbohydrate Solutions' operating profit is expected to remain flat [16] Financial Position - As of December 31, 2025, ADM had cash and cash equivalents of $1.02 billion, long-term debt of $7.6 billion, and shareholders' equity of $34.7 billion [13] - The company generated $5.45 billion in cash from operating activities and paid out dividends totaling $987 million during 2025 [13]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $27 million on sales of $343.8 million for Q1 2026, representing a 7% increase in adjusted EBITDA compared to the prior year [5] - Gross margin improved by 200 basis points to 27.9% year-over-year, driven by early savings from Project Apollo and improved product mix [5][12] - Net sales declined by 5.2% to $343.8 million, primarily due to a $18 million revenue decline in the bakery business [5][11] Business Line Data and Key Metrics Changes - Food service segment net sales decreased by $19.7 million, or 8.3%, to $219.2 million, with $18 million of the decline attributed to the lower-margin bakery business [11] - Handheld sales in the food service segment declined by approximately $5 million, while soft pretzel sales increased by $3.6 million, or about 6.9% [11] - Retail segment net sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a $1.8 million increase in handheld volume [11] Market Data and Key Metrics Changes - The company experienced a dip in dollar sales in mid-November due to a pause in SNAP benefits, with the largest impact seen in frozen novelties [6] - Dippin' Dots sales increased by approximately 4% in Q1, supported by retail growth and expansion into theaters and amusement centers [9] - The company noted improved theater trends in January, primarily due to the success of the Avatar movie, with a promising movie slate for the remainder of the fiscal year [10] Company Strategy and Development Direction - The company is focused on higher-margin opportunities and operational excellence as part of its transformation initiatives under Project Apollo [5][41] - A new $50 million share repurchase authorization was announced, reflecting confidence in the business and commitment to returning cash to shareholders [7] - The company aims to achieve a $20 million run-rate operating income once all Project Apollo initiatives are fully activated [7][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the early benefits of Project Apollo and the potential for low single-digit growth for the full year, despite a 3% headwind from SKU rationalization [25][26] - The company anticipates that commodity pricing will be more favorable this year compared to the previous year, which faced significant headwinds [32] - Management remains confident in the ability to deliver the full benefits of Project Apollo and drive long-term value creation [41] Other Important Information - The company generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures during the quarter [17] - Operating expenses increased by $95.4 million, including $6.1 million in non-recurring plant closure costs [14] Q&A Session Summary Question: Sales and Project Apollo - Analyst inquired about the full-year sales expectations considering the SKU rationalization impact and the company's long-term growth objectives [19] - Management responded that they expect low single-digit growth for the year, despite the SKU rationalization headwind [25][26] Question: Cost Savings from Project Apollo - Analyst asked about the $20 million annual run rate for cost savings from Project Apollo and the timeline for achieving it [28] - Management indicated that they expect to reach the full run rate in Q2, with significant progress already made [29] Question: Commodity Environment and Gross Margin - Analyst requested an update on commodity costs and their impact on gross margin moving forward [31] - Management noted that commodity pricing is expected to be more favorable this year, contributing to gross margin improvements [32]

Financial Data and Key Metrics Changes - Adjusted EBITDA for the first quarter was $27 million on sales of $343.8 million, representing a 7% increase in adjusted EBITDA compared to the prior year [5] - Gross margin improved by 200 basis points to 27.9% versus the prior year, driven by early savings from Project Apollo and improved product mix [5][12] - Net sales declined by 5.2% to $343.8 million, primarily due to a decline in the bakery business [5][11] Business Line Data and Key Metrics Changes - Food service segment net sales declined by $19.7 million, or 8.3%, to $219.2 million, with $18 million of the decline attributed to the lower-margin bakery business [11] - Handheld sales in the food service segment declined approximately $5 million, while soft pretzel sales increased by $3.6 million, or about 6.9% [11] - Retail segment net sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a $1.8 million increase in handheld volume [11] Market Data and Key Metrics Changes - The company experienced a dip in dollar sales in mid-November coinciding with a pause in SNAP benefits, impacting frozen novelties the most [6] - Dippin' Dots sales were up approximately 4% in the first quarter, fueled by retail growth and theater expansion [9] - The company anticipates incremental distribution gains across regional and national customers in fiscal 2026 [9] Company Strategy and Development Direction - The company is focused on higher-margin opportunities and operational excellence as part of its strategic direction [41] - Project Apollo is expected to deliver $20 million in run-rate operating income once fully implemented, with significant progress already made [7][29] - The company is committed to returning cash to shareholders, having completed a $42 million share repurchase and announced a new $50 million repurchase authorization [7][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the theater performance for the balance of fiscal 2026, despite a disappointing box office performance in the first quarter [10] - The company expects to achieve low single-digit growth for the entire year, factoring in the impact of SKU rationalization [25][26] - Management believes commodity pricing will be more favorable this year compared to the previous year, which faced significant headwinds [32] Other Important Information - Operating expenses increased by $95.4 million, including non-recurring plant closure costs [14] - The effective tax rate was 27%, with reported earnings per diluted share at $0.05 compared to $0.26 last year [17] - The company generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures during the quarter [17] Q&A Session Summary Question: Sales and SKU Rationalization Impact - Analyst inquired about the full-year sales expectations considering the SKU rationalization impact of about 3 percentage points [19] Response - Management indicated that despite the SKU rationalization, they expect low single-digit growth for the year, supported by new business and innovation [25][26] Question: Project Apollo Cost Savings - Analyst asked about the $20 million annual run rate for Project Apollo and what needs to happen to achieve it [28] Response - Management believes they will reach the $20 million run rate starting in Q2, with most of the work related to plant consolidation already completed [29] Question: Commodity Environment and Gross Margin - Analyst requested an update on commodity costs and their impact on gross margin moving forward [31] Response - Management noted that commodity pricing is expected to be more favorable this year, contributing to gross margin improvements [32]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q1 2026 was $27 million on sales of $343.8 million, representing a 7% increase in adjusted EBITDA compared to the prior year [5] - Gross margin improved by 200 basis points to 27.9% versus the prior year, driven by early Apollo savings and improved product mix [5][12] - Net sales declined by 5.2% to $343.8 million, primarily due to a decline in the bakery business [5][11] Business Line Data and Key Metrics Changes - Food service segment net sales declined by $19.7 million, or 8.3%, to $219.2 million, with $18 million of the decline attributed to the lower-margin bakery business [11] - Handheld sales in the food service segment declined approximately $5 million, while soft pretzel sales increased by $3.6 million, or about 6.9% [11] - Retail segment net sales increased by $1.2 million, or 2.6%, to $45.9 million, driven by a $1.8 million increase in handheld volume [11] Market Data and Key Metrics Changes - Sales in the quarter were impacted by the government shutdown and the pause in SNAP benefits, with a noted dip in dollar sales in mid-November [6] - Dippin' Dots sales increased approximately 4% in Q1, fueled by retail growth and theater expansion [9] - The company saw improved theater trends in January, primarily from the success of the Avatar movie [10] Company Strategy and Development Direction - The company is focused on higher-margin opportunities and operational excellence as part of its transformation initiatives under Project Apollo [5][38] - A new $50 million share repurchase authorization was announced, demonstrating confidence in the business and commitment to returning cash to shareholders [7] - The innovation pipeline remains robust, with several new products set to launch in Q2 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving low single-digit growth for the full year despite a 3% impact from SKU rationalization [22] - The company anticipates achieving a $20 million annual run rate in cost savings from Project Apollo by Q2 [25][26] - Commodity pricing is expected to be more favorable this year compared to the previous year, which faced significant headwinds [29] Other Important Information - The effective tax rate was 27%, and on a reported basis, earnings per diluted share was $0.05 compared to $0.26 last year [15] - The company generated approximately $36 million in operating cash flow and invested $19 million in capital expenditures during the quarter [15] Q&A Session Summary Question: Sales and Project Apollo - Inquiry about the full-year sales expectations considering SKU rationalization and underlying growth objectives [17] - Management indicated that they expect low single-digit growth for the year despite the SKU impact [22] Question: Cost Savings from Project Apollo - Follow-up on the $20 million annual run rate for cost savings and the timeline for achieving it [25] - Management confirmed that they expect to reach the full run rate in Q2 [26] Question: Commodity Environment and Gross Margin - Question regarding the current commodity environment and its impact on gross margin [27] - Management noted that commodity pricing is expected to be more favorable this year, contributing to gross margin improvements [29]

Core Insights - The company reported an earnings recovery with adjusted EBITDA of $27 million on sales of $343.8 million for Q1 2026, marking a 7% increase in adjusted EBITDA year-over-year [5][12] - Despite a 5.2% decline in net sales, the company is focusing on higher-margin opportunities, particularly through its Project Apollo transformation initiatives [6][31] - The gross margin improved by 200 basis points to 27.9%, driven by operational improvements and a better product mix [5][12] Financial Performance - Adjusted EBITDA for Q1 2026 was $27 million, up from $25.3 million in the previous year [15] - Net sales decreased to $343.8 million, primarily due to a $19.7 million decline in the foodservice segment, with $18 million attributed to the lower-margin bakery business [6][12] - The company incurred $1 million in product disposal costs during the quarter, which impacted gross profit [29] Project Apollo and Strategic Initiatives - Project Apollo is expected to yield $20 million in annual run rate operating income once fully implemented, with $3 million in net savings realized in Q1 [7][24] - The company is in the ramp-up phase of Project Apollo, with plant consolidations expected to be completed by the end of Q2 2026 [7][24] - SKU optimization efforts related to Project Apollo are anticipated to result in a 3% decline in sales for fiscal 2026 [6][19] Market and Product Performance - The company experienced a 6.9% increase in pretzel sales in the food service segment, reflecting strong demand for its Bavarian formulas [8][12] - Retail segment net sales increased by 2.6% to $45.9 million, driven by a $1.8 million increase in handheld volume [13] - Dippin' Dots sales grew approximately 4% in Q1, supported by retail growth and expansion into theaters and amusement centers [9][12] Shareholder Returns and Financial Health - The company completed a share repurchase authorization, buying back $42 million worth of stock, and announced a new $50 million repurchase authorization [8][18] - The balance sheet remains strong with approximately $67 million in cash and no long-term debt, alongside $210 million of borrowing capacity under its revolving credit facility [17]

Financial Data and Key Metrics Changes - Net sales for Q4 2025 were $1.8 billion, down 2% year-over-year, with gross profit dollars decreasing by 4% and gross margin slightly lower at 24.5% [17][18] - Full-year net sales were $7.2 billion, down 3% compared to the previous year, while gross profit dollars increased by 2%, and gross margin improved to 25.3% [19][20] Business Line Data and Key Metrics Changes - Texture and Healthful Solutions net sales increased by 1% for the full year, driven by a 4% sales volume growth, while operating income rose by 16% [21][22] - Food and Industrial Ingredients LATAM reported a 4% decline in net sales, but operating income increased to $493 million, achieving a record operating income margin of 21.1% [22] - Food and Industrial Ingredients US/Canada saw a 7% decline in net sales, with a 4% decrease in sales volume primarily due to operational challenges at the Argo facility [23] Market Data and Key Metrics Changes - Clean label ingredient volumes grew significantly in Q4 and throughout the year, particularly in Asia-Pacific and US/Canada, highlighting its importance in meeting consumer preferences [5] - In LATAM, brewing adjunct volume demand began to recover, but challenges persisted in the confectionery and paper sectors, leading to overall volume declines [6][57] Company Strategy and Development Direction - The company is focused on driving profitable growth through solutions and clean label offerings, with a strong pipeline and growth momentum expected in 2026 [11][31] - Strategic capital investments, such as the starch modernization project in Indianapolis, aim to enhance production efficiency and capacity [8][14] - The company is transitioning its operational excellence strategy towards long-term enterprise productivity, with a commitment to cost competitiveness [14][31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged unforeseen challenges in 2025 but highlighted record operating income and margins, demonstrating resilience in a volatile environment [9][15] - For 2026, the company anticipates low single-digit growth in net sales and operating income, with expectations of continued volume demand and challenges from manufacturing inflation [25][26] Other Important Information - The company repurchased $224 million of outstanding shares and paid $211 million in dividends, marking the 11th consecutive annual dividend increase [24] - A CFO transition is underway, with Jim Gray set to retire in March 2026, prompting a search for his successor [16] Q&A Session Summary Question: Impact of Argo facility on volume decline - Management indicated that the Argo facility's operational challenges had a $16 million impact in Q4 and a total of $40 million for 2025, with expectations of recovery in 2026 [34][35][36] Question: Texture and Healthful Solutions pricing and margin expectations - Management noted that while pricing was slightly down, they anticipate covering raw material cost changes and expect volume gains year-over-year, though manufacturing cost inflation may hold gross margins flat [72][74] Question: LATAM business volume movements - Management clarified that Q4 net sales were up 1%, with brewing adjunct volume declines being the primary driver of volume decreases, while food and beverage volumes showed positive growth [56][57] Question: Breakdown of food versus beverage sales in Mexico - Management estimated that brewing adjunct and beverages account for about 40% of sales, with food and industrial products making up the remainder [91][92] Question: Expectations for Argo recovery in 2026 - Management projected that approximately $20 million of the Argo impact could be recovered in the second half of 2026, with ongoing challenges expected in Q1 [98][99]

Financial Data and Key Metrics Changes - The company reported fourth quarter adjusted earnings per share of $0.87 and full-year adjusted earnings per share of $3.43, with total segment operating profit of $821 million for the fourth quarter and $3.2 billion for the full year [5][12] - The trailing fourth quarter adjusted return on invested capital (ROIC) was 6.3%, and cash flow from operations before working capital changes was $2.7 billion for 2025 [5][22] - The company achieved approximately $200 million in cost savings through portfolio optimization and simplification initiatives [8] Business Line Data and Key Metrics Changes - The Ag Services and Oilseeds (AS&O) segment operating profit for the fourth quarter was $444 million, down 31% year-over-year, and for the full year, it was $1.6 billion, a decrease of 34% compared to 2024 [14] - The Carbohydrate Solutions segment operating profit for the fourth quarter was $299 million, down 6% year-over-year, and for the full year, it was $1.2 billion, down 12% compared to 2024 [18] - The Nutrition segment revenues were $1.8 billion for the fourth quarter, remaining relatively flat year-over-year, with human nutrition revenue increasing by 5% and animal nutrition revenue decreasing by 4% [19] Market Data and Key Metrics Changes - The company noted that the operating environment throughout 2025 was challenging, but improvements in global trade relations and U.S. biofuel policy clarity are expected to support a more constructive market environment in 2026 [11][12] - The company anticipates positive economic opportunities for the industry and American farmers, which should drive additional long-term investments [11] Company Strategy and Development Direction - The company is focused on five key growth areas: enhanced nutrition, biotics, biosolutions, precision fermentation, and decarbonization, each with different growth profiles and timelines for value creation [9][10] - The company aims to optimize its results in what is expected to be a more constructive operating environment, with a focus on disciplined capital allocation and cost savings [30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the importance of timing regarding U.S. biofuel policy clarity and its potential positive impact on operations [33][34] - The company expects adjusted EPS for 2026 to be in the range of $3.60-$4.25, reflecting growth over 2025 [12][27] Other Important Information - The company paid its 376th consecutive quarterly dividend during the fourth quarter [6] - The company has made significant progress in improving working capital efficiency, realizing a $1.5 billion cash flow benefit from inventory reduction [22] Q&A Session Summary Question: Comments on the RVO and its impact on operating rates - Management acknowledged the difficulty in providing guidance due to external factors but expressed optimism about the positive impact of RVO clarity on operating rates and margins [33][34] Question: Update on Nutrition segment performance and customer recovery - Management clarified that while the Nutrition segment faced challenges, there was strong performance in flavors and a recovery in specialty ingredients, with ongoing efforts to regain market share [41][42] Question: Insights on crush margins and demand - Management indicated that the crush margins are influenced by various factors, including RVO policy and consumer demand, and emphasized the need for careful monitoring of market conditions [58][60] Question: Discussion on Starches and Sweeteners demand - Management noted that demand softness is attributed to various factors, including consumer behavior changes and pricing pressures, but emphasized efforts to offset these challenges [65][66]

Fourth Quarter and Full Year 2025 Earnings Call Jim Zallie President and CEO James Gray Executive Vice President and CFO 3 Non-GAAP Financial Measures This presentation provides information about adjusted diluted earnings per share ("adjusted EPS"), adjusted operating income, adjusted effective income tax rate, and other financial measures (collectively, the "non- GAAP financial measures") which are not measurements of financial performance calculated in accordance with U.S. generally accepted accounting pr ...

Archer Daniels Midland logged lower fourth-quarter profit and revenue, hurt by a challenging operating environment marked by trade and policy uncertainty. ...