Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $0.92 and total segment operating profit of $845 million for the third quarter [4] - The trailing four-quarter adjusted return on invested capital (ROIC) was 6.7% and cash flow from operations before working capital changes was $2.1 billion year to date [4] - Adjusted earnings per share expectations for the full year 2025 have been revised down to a range of $3.25-$3.50, down from approximately $4 per share [12][21] Business Line Data and Key Metrics Changes - The Services & Oilseeds (AS&O) segment operating profit was $379 million, down 21% compared to the prior year quarter, primarily due to the deferral of U.S. biofuel policy [14] - Ag Services subsegment operating profit increased by 78% to $190 million, driven by higher export activity in North America [14] - Carbohydrate Solutions segment operating profit was $336 million, down 26% year-over-year, primarily due to a decline in global demand for sweeteners and starches [16] - Nutrition segment revenues were $1.9 billion, up 5% year-over-year, with operating profit increasing by 24% to $130 million [18] Market Data and Key Metrics Changes - The company achieved the best total export volume for September since 2016, which helped offset some weakness in the cash business [7] - Global soybean and canola crush execution margins were significantly lower than the prior year quarter, particularly in North America [15] - Ethanol EBITDA margins per gallon for the quarter were approximately double compared to the prior year quarter, with volumes roughly flat [17] Company Strategy and Development Direction - The company is focusing on operational excellence, portfolio optimization, and cost savings through a self-help agenda, targeting $200 million-$300 million in cost savings for 2025 [9][21] - A joint venture with Alltech in Animal Nutrition aims to transition the business into higher-margin specialty ingredients, expected to commence operations in 2026 [9][40] - The company is investing in innovation, particularly in flavor systems for energy drinks and natural colors, as well as postbiotics [10] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging industry-wide operating environment but remains flexible and focused on long-term growth [4] - The deferral in U.S. biofuel policy has led to lowered expectations for full-year 2025, but management remains optimistic about 2026 due to potential improvements in market conditions [11][13] - The company is prepared for gradual improvements in margins as clarity on biofuel policies is expected [76] Other Important Information - The company has maintained a strong balance sheet and disciplined capital allocation, allowing for continued investments and shareholder returns [6] - The company has reduced inventory by $3.2 billion year to date, improving working capital efficiency [20] Q&A Session Summary Question: Can you help reconcile the sequential decline in the third quarter for crush? - Management explained that soybean crush rallied sharply post-RVO announcements but then moved lower due to various factors, including a decrease in U.S. acres and uncertainty about biofuels policy [30] Question: Can you clarify the insurance gains? - Management confirmed that insurance proceeds in the fourth quarter are expected to be funded half by captive insurance and half by third parties, with total proceeds lower than the previous year [35] Question: What are the benefits of the JV with Alltech? - The JV aims to pivot towards more specialty products in Animal Nutrition, combining the strengths of both companies to enhance operational improvements and synergies [40] Question: How does the company view the clarity on biofuel policy? - Management expressed optimism about the eventual clarity on biofuel policies, which is expected to positively impact margins and demand for domestic feedstocks [76] Question: What is the outlook for Ag Services? - Management noted that while Q3 was strong, the outlook for Q4 may be softer due to ongoing uncertainties regarding trade deals and farmer selling behavior [68]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $0.92 and total segment operating profit of $845 million for the third quarter [4] - The trailing four-quarter adjusted return on invested capital (ROIC) was 6.7% [4] - Cash flow from operations before working capital changes was $2.1 billion year to date, down by $254 million compared to the prior year [19][20] Business Line Data and Key Metrics Changes - Ag Services & Oilseeds (AS&O) segment operating profit was $379 million, down 21% year-over-year, primarily due to the deferral of U.S. biofuel policy [14] - AX services subsegment operating profit increased by 78% to $190 million, driven by higher export activity in North America [14] - Carbohydrate Solutions segment operating profit was $336 million, down 26% year-over-year, with starches and sweeteners subsegment profit down 36% due to declining global demand [16][17] - Nutrition segment revenues were $1.9 billion, up 5% year-over-year, with operating profit increasing by 24% to $130 million [18] Market Data and Key Metrics Changes - The company achieved the best total export volume for September since 2016, which helped offset some weakness in the cash business [7] - Global soybean and canola crush execution margins were significantly lower than the prior year quarter, particularly in North America [15] - Ethanol EBITDA margins per gallon for the quarter were approximately double compared to the prior year quarter [17] Company Strategy and Development Direction - The company is focused on operational excellence, portfolio optimization, and cost savings, targeting $200-$300 million in cost savings for 2025 [9][21] - A joint venture with Alltech in animal nutrition aims to transition the business into higher-margin specialty ingredients, expected to commence operations in 2026 [9][40] - The company is investing in innovation, particularly in flavor systems for energy drinks and postbiotics, to drive growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, anticipating a more constructive environment for the industry and American farmers, contingent on clarity regarding U.S. biofuel policy [13][46] - The company lowered its full-year 2025 adjusted earnings per share expectations to a range of $3.25 to $3.50, down from approximately $4 per share [12][21] - Management noted that the current operating environment is challenging, with uncertainty around biofuel policy impacting demand [11][27] Other Important Information - The company announced its 375th consecutive quarterly dividend [6] - Strong cash management has allowed the company to continue investing in areas of innovation [9] Q&A Session Summary Question: Can you help reconcile the sequential decline in the third quarter for crush versus previous quarters? - Management explained that soybean crush rallied sharply post-RVO announcements but then moved lower due to various factors, including uncertainty about biofuels policy [30] Question: Can you clarify the insurance gains and their funding sources? - Management confirmed that half of the insurance proceeds are funded by a captive insurer, with the other half expected from third parties [35] Question: What are the benefits of the joint venture with Alltech? - The joint venture aims to combine the strengths of both companies to pivot towards higher-margin specialty ingredients in animal nutrition, with production expected to start in 2026 [40] Question: How does the company view the clarity on biofuel policy? - Management indicated that clarity on biofuel policy is crucial for future margins and operational planning, with expectations for gradual improvements once policies are finalized [45][76] Question: What is the outlook for ag services in the fourth quarter? - Management noted that while Q3 was strong, the outlook for Q4 is more subdued due to ongoing uncertainties in trade and biofuel policies [66]

Core Insights - Archer Daniels Midland Company (ADM) is focused on optimizing its organizational and operational structure across Human and Animal Nutrition, managing productivity and innovation while addressing food security, health, and wellbeing trends [1][2] - The company is making targeted investments to bolster growth and differentiation, including plant digitization and decarbonization solutions [4][5] Financial Performance - In Q2 2025, ADM's Nutrition segment saw a 4.5% increase in revenues year over year, with a 5% rise in operating profit, driven by strong growth in Flavors and Animal Nutrition portfolios [3][10] - The Zacks Consensus Estimate for ADM's 2025 earnings per share (EPS) indicates a year-over-year decline of 15.8%, while 2026 shows a growth of 21.3% [11] Strategic Initiatives - ADM is expanding its alternative protein capabilities and adapting to changing consumer nutritional preferences as part of its strategic pillars [2] - The company aims to achieve $500-$750 million in cost savings over the next three to five years through operational improvements and efficiency initiatives [5][10] Market Position - ADM's shares have gained 24.5% year to date, outperforming the industry's growth of 6.7% [8] - The company trades at a forward price-to-earnings ratio of 13.5X, slightly below the industry average of 13.84X [9]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $0.70 and total segment operating profit of $747 million for the quarter [5] - Trailing fourth quarter adjusted return on invested capital (ROIC) was 7% and cash flow from operations before working capital changes was $439 million [5][24] - Overall cash flow from operations decreased compared to the prior quarter due to lower total segment operating profit [24] Business Line Data and Key Metrics Changes - The Carbohydrate Solutions segment operating profit was $240 million, down 3% year-over-year [20] - The Nutrition segment revenues were $1.8 billion, down 1% year-over-year, while operating profit increased by 13% to $95 million [22][23] - The Ag Services and Oilseeds segment operating profit was $412 million, down 52% compared to the prior year quarter [16] Market Data and Key Metrics Changes - The Ag Services sub-segment operating profit was $159 million, down 31% due to lower North American origination export volumes [17] - Global trade results were lower compared to the same quarter last year, largely due to negative timing impacts [17] - Equity earnings from the company's investment in Wilmar were $72 million, down 52% compared to the prior year quarter [20] Company Strategy and Development Direction - The company is focused on cost savings of $500 million to $750 million over the next three to five years, including workforce reductions and a review of third-party consulting spend [9] - Strategic decisions include the closure of the Cursea, South Carolina crush facility and the exit from domestic trading operations in China and Dubai [10] - The company is advancing automation and digitization across its global manufacturing network to improve reliability and efficiency [11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the team's ability to navigate an uncertain external landscape while focusing on execution and cost management [12][31] - The company remains cautious about the second half outlook for crush margin improvement due to current domestic crush replacement margins being below expectations [26] - Management highlighted the importance of clarity on Renewable Volume Obligations (RVOs) to support strong U.S. demand for crop-based vegetable oils [34] Other Important Information - The company returned $247 million to shareholders in the form of dividends during the quarter [25] - The Decatur East facility is expected to be fully operational by the end of the second quarter, with an anticipated impact of $25 million per quarter for Nutrition once fully operational [99] Q&A Session Summary Question: Expectations for RVO and its impact on 2025 outlook - Management indicated that strong RVOs are crucial for the biofuel outlook and expect margins to improve in the second half of the year [40][41] Question: Specific RVO numbers and positive outcomes for ADM - Management mentioned that the industry requires approximately €25 billion in biomass-based biodiesel and conventional biodiesel to support internal consumption and export markets [51][52] Question: Strength in RPO despite a weak environment - Management acknowledged that while RPO was better in the short run, overall expectations remain lower due to biodiesel margin pressures and increased refining capacity [58][59] Question: Trade flow shifts and impact of tariffs - Management noted that the impact of tariffs has not been significant in Q1, with most products exempt from export tariffs to Mexico and Canada [64][66] Question: Signs of rationalization in the soy crush industry - Management speculated that the industry may see plant shutdowns when demand is low, but emphasized the importance of clarity on RPO mandates for future capacity [73][74] Question: Commercialization of Argentine crops - Management expects Argentine farmers to become more regular in commercializing crops as they take advantage of government tax benefits before they expire [79] Question: Volume growth expectations for Starches and Sweeteners - Management reiterated guidance for slightly lower volumes than last year, with some weakness noted in specific markets [82][84] Question: Ethanol margins and performance - Management highlighted good risk management in ethanol operations, with expectations for margins to improve over the year [90] Question: Contribution from Decatur once fully operational - Management confirmed that the Decatur plant's impact will be felt in the second half of the year, with an expected contribution of $25 million per quarter [99]

First Quarter 2025 Earnings Conference Call May 6, 2025 Proprietary business information of ADM. Proprietary business information of ADM. Proprietary business information of ADM. 2 Cautionary Note Regarding Forward-Looking Statements 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 than statements of historical fact included in this presentation, are forwa ...