ADM Reports Second Quarter 2024 Results, Affirms Full-Year EPS Guidance
ADM reported Q2 2024 results with EPS of $0.98 and Adjusted EPS of $1.03, along with net earnings of $486 million and adjusted net earnings of $508 million. Earnings before taxes were $596 million, down 47% from Q2 2023. Segment operating profit fell 37% to $1,014 million. The Ag Services & Oilseeds segment dropped 56% to $459 million. Carbohydrate Solutions rose 12% to $357 million, while Nutrition decreased 36% to $109 million. For H1 2024, earnings before taxes were $1,481 million, down 41% year-over-year, and adjusted segment operating profit decreased 30% to $2,338 million. Despite challenging market conditions, ADM affirms its full-year EPS guidance of $5.25 to $6.25.
ADM ha riportato i risultati del secondo trimestre 2024 con un EPS di $0,98 e un EPS aggiustato di $1,03, insieme a un utile netto di $486 milioni e un utile netto aggiustato di $508 milioni. Gli utili prima delle tasse sono stati di $596 milioni, in calo del 47% rispetto al Q2 2023. L'utile operativo per segmento è sceso del 37% a $1.014 milioni. Il segmento Servizi Ag e Semioli ha registrato un calo del 56%, scendendo a $459 milioni. Le Soluzioni Carboidratiche sono aumentate del 12% a $357 milioni, mentre la Nutrizione è diminuita del 36% a $109 milioni. Per il primo semestre del 2024, gli utili prima delle tasse sono stati di $1.481 milioni, in calo del 41% anno su anno, e l'utile operativo aggiustato per segmento è diminuito del 30% a $2.338 milioni. Nonostante le difficili condizioni di mercato, ADM conferma la sua guida sull'EPS per l'intero anno tra $5,25 e $6,25.
ADM reportó resultados del segundo trimestre de 2024 con un EPS de $0,98 y un EPS ajustado de $1,03, junto con ganancias netas de $486 millones y ganancias netas ajustadas de $508 millones. Las ganancias antes de impuestos fueron de $596 millones, una disminución del 47% en comparación con el Q2 2023. La utilidad operativa por segmento cayó un 37% a $1.014 millones. El segmento de Servicios Agrícolas y Semillas Oleaginosas bajó un 56% a $459 millones. Las Soluciones de Carbohidratos aumentaron un 12% a $357 millones, mientras que la Nutrición disminuyó un 36% a $109 millones. En el primer semestre de 2024, las ganancias antes de impuestos fueron de $1.481 millones, una disminución del 41% interanual, y la utilidad operativa ajustada por segmento disminuyó un 30% a $2.338 millones. A pesar de las difíciles condiciones del mercado, ADM reafirma su guía de EPS para el año completo de $5,25 a $6,25.
ADM은 2024년 2분기 실적을 발표하며 EPS가 $0.98, 조정 EPS가 $1.03로, 순이익이 $4억 8,600만 달러, 조정 순이익이 $5억 800만 달러라고 밝혔다. 세전 이익은 $5억 9,600만 달러로 2023년 2분기 대비 47% 감소했다. 세그먼트 운영 이익은 37% 감소하여 $10억 1,400만 달러에 이르렀다. 농업 서비스 및 식물성 기름 세그먼트는 56% 감소하여 $4억 5,900만 달러가 되었다. 탄수화물 솔루션은 12% 증가하여 $3억 5,700만 달러에 달했으며, 영양은 36% 감소하여 $1억 900만 달러로 떨어졌다. 2024년 상반기 동안 세전 이익은 $14억 8,100만 달러로 지난해 동기 대비 41% 감소했으며, 조정 세그먼트 운영 이익도 30% 감소하여 $23억 3,800만 달러에 달했다. 어려운 시장 환경에도 불구하고, ADM은 연간 EPS 가이드를 $5.25에서 $6.25로 유지하고 있다.
ADM a publié les résultats du deuxième trimestre 2024 avec un EPS de 0,98 $ et un EPS ajusté de 1,03 $, ainsi qu'un bénéfice net de 486 millions $ et un bénéfice net ajusté de 508 millions $. Les bénéfices avant impôts s'élevaient à 596 millions $, soit une baisse de 47 % par rapport au Q2 2023. Le bénéfice opérationnel par segment a chuté de 37 % à 1,014 milliard $. Le segment Services Agricoles et Oléagineux a baissé de 56 % à 459 millions $. Les Solutions Carbohydrates ont augmenté de 12 % à 357 millions $, tandis que la Nutrition a diminué de 36 % à 109 millions $. Pour le premier semestre 2024, les bénéfices avant impôts étaient de 1,481 milliard $, en baisse de 41 % d'une année sur l'autre, et le bénéfice opérationnel ajusté par segment a diminué de 30 % à 2,338 milliards $. Malgré des conditions de marché difficiles, ADM confirme son objectif d'EPS pour l'année complète de 5,25 $ à 6,25 $.
ADM berichtete über die Ergebnisse des zweiten Quartals 2024 mit einem EPS von 0,98 $ und einem bereinigten EPS von 1,03 $, sowie einem Nettogewinn von 486 Millionen $ und einem bereinigten Nettogewinn von 508 Millionen $. Die Erträge vor Steuern betrugen 596 Millionen $, was einem Rückgang von 47 % im Vergleich zum Q2 2023 entspricht. Der operative Gewinn nach Segment fiel um 37 % auf 1.014 Millionen $. Das Segment Agrarservices & Ölsaaten fiel um 56 % auf 459 Millionen $. Die Kohlenhydratsolutionen stiegen um 12 % auf 357 Millionen $, während die Ernährung um 36 % auf 109 Millionen $ abnahm. Für das erste Halbjahr 2024 lagen die Erträge vor Steuern bei 1.481 Millionen $, was einem Rückgang von 41 % im Jahresvergleich entspricht, und der bereinigte betriebliche Gewinn nach Segment sank um 30 % auf 2.338 Millionen $. Trotz herausfordernder Marktbedingungen bekräftigt ADM seine EPS-Prognose für das ganze Jahr von 5,25 $ bis 6,25 $.
- Adjusted EPS of $1.03
- Carbohydrate Solutions segment profit grew by 12% to $357 million
- Affirmed full-year EPS guidance of $5.25 to $6.25
- Earnings before taxes down 47% to $596 million
- Segment operating profit down 37% to $1,014 million
- Ag Services & Oilseeds segment profit fell 56% to $459 million
- Nutrition segment profit down 36% to $109 million
Insights
ADM's Q2 2024 results present a mixed picture, with some concerning trends but also signs of resilience. The reported EPS of $0.98 and adjusted EPS of $1.03 represent significant year-over-year declines of 42% and 46% respectively. This substantial drop in earnings is primarily attributed to challenging market conditions, particularly in the Ag Services & Oilseeds segment.
The Ag Services & Oilseeds segment saw a 56% decline in operating profit, driven by slower farmer selling in South America, shifts in export competitiveness and more balanced global supply-demand conditions. This segment's performance is important for ADM and its weakness is a key factor in the overall earnings decline.
On a more positive note, the Carbohydrate Solutions segment showed resilience with a 12% increase in operating profit. This was driven by strong starches and sweeteners margins, higher volumes and improved ethanol export demand. This segment's performance helped partially offset weakness elsewhere.
The Nutrition segment experienced a 36% decline in operating profit, primarily due to unplanned downtime at a key facility and a normalizing texturants market. This is an area of concern as ADM has been focusing on growing its nutrition business.
Despite these challenges, ADM maintained its full-year adjusted EPS guidance of
The company's focus on cash flow and shareholder returns is evident in its continued share repurchases, which contributed
ADM's Q2 results reflect broader market dynamics affecting the agricultural commodities sector. The significant decline in the Ag Services & Oilseeds segment highlights the impact of large South American crops and shifts in global trade patterns. This has led to more balanced supply-demand conditions, pressuring margins across the industry.
The performance of the Carbohydrate Solutions segment is noteworthy. The strong demand for ethanol exports suggests a potential shift in global energy markets, possibly driven by efforts to reduce carbon emissions in transportation fuels. This trend could benefit ADM and other ethanol producers if it continues.
In the Nutrition segment, the normalizing texturants market indicates a potential cooling of demand that surged during the pandemic. This could be a broader trend affecting companies in the food ingredients space.
ADM's maintained guidance despite the challenging quarter suggests potential improvements in market conditions. Key factors to watch include:
- Global crop production and farmer selling patterns
- Changes in international trade flows, particularly for soybeans and corn
- Ethanol demand, both domestic and international
- Recovery in the nutrition ingredients market
The company's performance in the second half of 2024 will be important in determining whether it can meet its full-year guidance. Investors should closely monitor these market trends and ADM's ability to navigate them effectively.
ADM's Q2 results underscore the cyclical nature of the agricultural commodities business and the impact of global supply-demand dynamics. The significant decline in the Ag Services & Oilseeds segment is particularly telling:
1. South American crop impact: The smaller crop in Mato Grosso, Brazil, led to slower farmer selling. This highlights the importance of regional crop yields in global supply chains.
2. Shift in export competitiveness: Increased supply from Brazil and Argentina shifted export competitiveness away from North American origins. This demonstrates the delicate balance in global grain trade and how regional surpluses can quickly alter trade flows.
3. Soybean crush margins: The decrease in global soybean crush margins reflects a more balanced supply-demand picture, but also points to the impact of increased imports of used cooking oil, which is affecting soybean oil values.
4. Biodiesel margins: Lower LCFS (Low Carbon Fuel Standard) and RIN (Renewable Identification Number) values impacted biodiesel margins. This suggests potential changes in renewable fuel policies or market dynamics that warrant closer attention.
Looking ahead, ADM's expectation of improved margin opportunities through the remainder of the year implies potential tightening in supply-demand balances. However, the company's performance will largely depend on global crop production, trade policies and the evolution of renewable fuel markets.
Reported EPS of
Second Quarter 2024 Highlights
-
Net earnings of
$486 million $508 million -
Earnings before taxes of
$596 million $1,014 million $1,021 million -
Trailing four-quarter average return on invested capital (ROIC) of
8.9% , trailing four-quarter average adjusted return on invested capital (ROIC)1 of9.7%
“ADM delivered solid results in the quarter, in spite of challenging market conditions, and we are pleased with the progress we are making against our 2024 priorities and strategic initiatives,” said Chair of the Board and CEO Juan Luciano.
“In Ag Services & Oilseeds, while large South American crops and shifts in farmer selling behaviors impacted results in the second quarter, we expect improved margin opportunities through the remainder of the year. In Carb Solutions, the team delivered solid results driven by favorable Starches & Sweeteners and ethanol margin environments, and we expect continued strong performance. And our actions to recover profitability in the Nutrition segment delivered sequential improvement in the quarter and set us up for continued increases moving forward. With solid performance and continued strong cash flow, we have returned significant cash to shareholders through our repurchase efforts through the first two quarters.
“In the second half of the year, improvements in both crush and ethanol, our efforts in operational excellence, the focus on our key priorities, and our team’s agility give us confidence in our full-year expectations, despite uncertainties in the external environment.”
Second Quarter and First Half 2024 Results
2Q 2024 Results Overview |
|
|
|
($ in millions except per share amounts) |
|
||
|
|
Earnings Before Taxes |
EPS (as reported) |
GAAP |
|
|
|
vs. 2Q 2023 |
|
(47)% |
(42)% |
|
|
|
|
|
Segment Operating Profit1 |
Adjusted Segment Operating Profit1 |
Adjusted EPS1 |
NON-GAAP |
|
|
|
vs 2Q 2023 |
(34)% |
(37)% |
(46)% |
1H 2024 Results Review
($ in millions except per share amounts) |
|
||
|
|
Earnings Before Taxes |
EPS (as reported) |
GAAP |
|
|
|
vs. 1H 2023 |
|
(41)% |
(37)% |
|
|
|
|
|
Segment Operating Profit1 |
Adjusted Segment Operating Profit1 |
Adjusted EPS1 |
NON-GAAP |
|
|
|
vs 1H 2023 |
(28)% |
(30)% |
(37)% |
1 Non-GAAP financial measures; see pages 6, 8, 13, and 14 for explanations and reconciliations. |
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Summary of Second Quarter and First Half 2024
For the second quarter ended June 30, 2024, earnings before taxes were
Earnings before taxes were
Earnings before taxes were
2Q 2024 Segment Overview
($ in millions, except where noted) |
2Q 2024 |
2Q 20232 |
% Change |
Adjusted Segment Operating Profit1 |
|
|
(37)% |
Segment Operating Profit: |
|
|
|
Ag Services & Oilseeds |
459 |
1,054 |
(56)% |
Carbohydrate Solutions |
357 |
319 |
|
Nutrition |
109 |
169 |
(36)% |
Other |
96 |
86 |
|
|
|
|
|
1H 2024 Segment Overview
($ in millions, except where noted) |
1H 2024 |
1H 20232 |
% Change |
Adjusted Segment Operating Profit1 |
|
|
(30)% |
Segment Operating Profit: |
|
|
|
Ag Services & Oilseeds |
1,323 |
2,265 |
(42)% |
Carbohydrate Solutions |
605 |
598 |
|
Nutrition |
193 |
307 |
(37)% |
Other |
217 |
183 |
|
|
|
|
|
1 Non-GAAP financial measure; see pages 6 and 8 for explanation and reconciliation. |
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2 2023 Ag Services & Oilseeds, Carbohydrate Solutions, and Nutrition segment operating profits have been revised to reflect immaterial error corrections with no change to total Adjusted Segment Operating Profit. See Note 13, Segment Information of the Company’s consolidated financial statements included in the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. |
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Ag Services and Oilseeds Summary
AS&O segment operating profit was
For the first half of 2024, AS&O delivered
2Q 2024 AS&O Overview
($ in millions, except where noted) |
2Q 2024 |
2Q 2023 |
% Change |
Segment Operating Profit |
|
|
(56)% |
Ag Services |
122 |
380 |
(68)% |
Crushing |
132 |
224 |
(41)% |
Refined Products and Other |
137 |
362 |
(62)% |
Wilmar |
68 |
88 |
(23)% |
|
|
|
|
1H 2024 AS&O Overview
($ in millions, except where noted) |
1H 2024 |
1H 2023 |
% Change |
Segment Operating Profit |
|
|
(42)% |
Ag Services |
354 |
728 |
(51)% |
Crushing |
445 |
651 |
(32)% |
Refined Products and Other |
307 |
689 |
(55)% |
Wilmar |
217 |
197 |
|
|
|
|
|
Carbohydrate Solutions Summary
Carbohydrate Solutions segment operating profit was
For the first half of 2024, Carbohydrate Solutions segment operating profit of
2Q 2024 Carbohydrate Solutions Overview
($ in millions, except where noted) |
2Q 2024 |
2Q 2023 |
% Change |
Segment Operating Profit |
|
|
|
Starches and Sweeteners |
323 |
301 |
|
Vantage Corn Processors |
34 |
18 |
|
|
|
|
|
1H 2024 Carbohydrate Solutions Overview
($ in millions, except where noted) |
1H 2024 |
1H 2023 |
% Change |
Segment Operating Profit |
|
|
|
Starches and Sweeteners |
584 |
614 |
(5)% |
Vantage Corn Processors |
21 |
(16) |
|
|
|
|
|
Nutrition Summary
Nutrition segment operating profit was
For the first half of 2024, Nutrition segment operating profit of
2Q 2024 Nutrition Overview
($ in millions, except where noted) |
2Q 2024 |
2Q 2023 |
% Change |
Segment Operating Profit |
|
|
(36)% |
Human Nutrition |
103 |
185 |
(44)% |
Animal Nutrition |
6 |
(16) |
|
|
|
|
|
1H 2024 Nutrition Overview
($ in millions, except where noted) |
1H 2024 |
1H 2023 |
% Change |
Segment Operating Profit |
|
|
(37)% |
Human Nutrition |
179 |
323 |
(45)% |
Animal Nutrition |
14 |
(16) |
|
|
|
|
|
|
|
|
|
Other and Corporate Summary
For the second quarter and first half, Other segment operating profit was
In Corporate for the second quarter, unallocated corporate costs increased on higher global technology investments to support digital transformation efforts, increased legal fees, and increased securitization fees. Other Corporate was favorable compared to the prior year period resulting from foreign currency hedges.
In Corporate for the first half, unallocated corporate costs increased versus the prior year on higher global technology investments to support digital transformation efforts, increased legal fees, and increased securitization fees. Other Corporate was unfavorable compared to the prior year period due to investment valuation losses of approximately
Outlook
The company affirms its previously provided EPS guidance for the full year. ADM continues to expect adjusted earnings per share2 in the range of
______________________________________
2Forecasted GAAP Earnings Reconciliation: ADM is not presenting forecasted GAAP earnings per diluted share or a quantitative reconciliation to forecasted adjusted earnings per share in reliance on the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K. ADM is unable to predict with reasonable certainty and without unreasonable effort the impact of any impairment and timing of restructuring-related and other charges, along with acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to our Consolidated Statements of Earnings. |
Conference Call Information
ADM will host a webcast today, July 30, 2024, at 8 a.m. Central Time to discuss financial results and provide a company update. To listen to the webcast, go to www.adm.com/webcast. A replay of the webcast will also be available for an extended period of time at www.adm.com/webcast.
About ADM
ADM unlocks the power of nature to enrich the quality of life. We’re an essential global agricultural supply chain manager and processor, providing food security by connecting local needs with global capabilities. We’re a premier human and animal nutrition provider, offering one of the industry’s broadest portfolios of ingredients and solutions from nature. We’re a trailblazer in health and well-being, with an industry-leading range of products for consumers looking for new ways to live healthier lives. We’re a cutting-edge innovator, guiding the way to a future of new consumer and industrial solutions. And we're a leader in sustainability, scaling across entire value chains to help decarbonize the multiple industries we serve. Around the globe, our innovation and expertise are meeting critical needs while nourishing quality of life and supporting a healthier planet. Learn more at www.adm.com.
Cautionary Note Regarding Forward-Looking Statements
This press release 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 release, are forward-looking statements. You can identify forward-looking statements by the fact they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “outlook,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. All forward-looking statements are subject to significant risks, uncertainties and changes in circumstances that could cause actual results and outcomes to differ materially from the forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, without limitation, those that are described in the Company’s most recent Annual Report on Form 10-K and in other documents that the Company files or furnishes with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Except to the extent required by law, ADM does not undertake, and expressly disclaims, any duty or obligation to update publicly any forward-looking statement after the date of this announcement, whether as a result of new information, future events, changes in assumptions or otherwise.
Non-GAAP Financial Measures
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
Adjusted net earnings and Adjusted earnings per share (EPS). Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described in the reconciliation tables below. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described in the reconciliation tables below. Management believes that Adjusted net earnings and Adjusted EPS are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. These non-GAAP financial measures are not intended to replace or be alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s diluted shares outstanding for each respective period in order to arrive at an adjusted EPS amount for each specified item.
Segment operating profit and adjusted segment operating profit. Segment operating profit is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit is segment operating profit excluding specified items as more fully described in the reconciliation tables below. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under
Adjusted Return on Invested Capital (ROIC). Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested capital. Adjusted ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense on borrowings and specified items. Adjusted invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities and other specified items. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance. Management uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted ROIC to its weighted average cost of capital (WACC). Adjusted ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP financial measures and are not intended to replace or be alternatives to GAAP financial measures.
ADM presents guidance of forecasted adjusted EPS for the full year 2024 in this release. ADM is not able to present forecasted GAAP EPS or a quantitative reconciliation to forecasted adjusted EPS in reliance on the unreasonable efforts exemption provided under Item 10(e)(1)(i)(B) of Regulation S-K. ADM is unable to predict with reasonable certainty and without unreasonable effort the impact of any impairment and timing of restructuring-related and other charges, along with acquisition-related expenses and the outcome of certain regulatory, legal and tax matters. The financial impact of these items is uncertain and is dependent on various factors, including timing, and could be material to ADM’s consolidated statements of earnings.
Financial Tables Follow
Source: Corporate Release
Source: ADM
Segment Operating Profit, Adjusted Segment Operating Profit (both non-GAAP financial measures) and Corporate Results (unaudited) |
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Quarter ended |
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Six months ended |
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June 30 |
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June 30 |
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(In millions) |
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2024 |
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2023 |
|
Change |
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2024 |
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2023 |
|
Change |
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Earnings before income taxes |
$ |
596 |
|
$ |
1,132 |
|
$ |
(536 |
) |
|
$ |
1,481 |
|
$ |
2,529 |
|
$ |
(1,048 |
) |
Corporate Unallocated |
|
418 |
|
|
393 |
|
|
25 |
|
|
|
844 |
|
|
715 |
|
|
129 |
|
Segment Operating Profit |
$ |
1,014 |
|
$ |
1,525 |
|
$ |
(511 |
) |
|
$ |
2,325 |
|
$ |
3,244 |
|
$ |
(919 |
) |
Specified items: |
|
|
|
|
|
|
|
||||||||||||
(Gain) loss on sales of assets |
|
— |
|
|
(11 |
) |
|
11 |
|
|
|
— |
|
|
(12 |
) |
|
12 |
|
Impairment, restructuring charges and contingency provisions |
|
7 |
|
|
114 |
|
|
(107 |
) |
|
|
13 |
|
|
121 |
|
|
(108 |
) |
Adjusted Segment Operating Profit |
$ |
1,021 |
|
$ |
1,628 |
|
$ |
(607 |
) |
|
$ |
2,338 |
|
$ |
3,353 |
|
$ |
(1,015 |
) |
|
|
|
|
|
|
|
|
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Segment Operating Profit: |
|
|
|
|
|
|
|
||||||||||||
Ag Services and Oilseeds |
$ |
459 |
|
$ |
1,054 |
|
$ |
(595 |
) |
|
$ |
1,323 |
|
$ |
2,265 |
|
$ |
(942 |
) |
Ag Services |
|
122 |
|
|
380 |
|
|
(258 |
) |
|
|
354 |
|
|
728 |
|
|
(374 |
) |
Crushing |
|
132 |
|
|
224 |
|
|
(92 |
) |
|
|
445 |
|
|
651 |
|
|
(206 |
) |
Refined Products and Other |
|
137 |
|
|
362 |
|
|
(225 |
) |
|
|
307 |
|
|
689 |
|
|
(382 |
) |
Wilmar |
|
68 |
|
|
88 |
|
|
(20 |
) |
|
|
217 |
|
|
197 |
|
|
20 |
|
|
|
|
|
|
|
|
|
||||||||||||
Carbohydrate Solutions |
$ |
357 |
|
$ |
319 |
|
$ |
38 |
|
|
$ |
605 |
|
$ |
598 |
|
$ |
7 |
|
Starches and Sweeteners |
|
323 |
|
|
301 |
|
|
22 |
|
|
|
584 |
|
|
614 |
|
|
(30 |
) |
Vantage Corn Processors |
|
34 |
|
|
18 |
|
|
16 |
|
|
|
21 |
|
|
(16 |
) |
|
37 |
|
|
|
|
|
|
|
|
|
||||||||||||
Nutrition |
$ |
109 |
|
$ |
169 |
|
$ |
(60 |
) |
|
$ |
193 |
|
$ |
307 |
|
$ |
(114 |
) |
Human Nutrition |
|
103 |
|
|
185 |
|
|
(82 |
) |
|
|
179 |
|
|
323 |
|
|
(144 |
) |
Animal Nutrition |
|
6 |
|
|
(16 |
) |
|
22 |
|
|
|
14 |
|
|
(16 |
) |
|
30 |
|
|
|
|
|
|
|
|
|
||||||||||||
Other Business |
$ |
96 |
|
$ |
86 |
|
$ |
10 |
|
|
$ |
217 |
|
$ |
183 |
|
$ |
34 |
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Corporate Results |
$ |
(418 |
) |
$ |
(393 |
) |
$ |
(25 |
) |
|
$ |
(844 |
) |
$ |
(715 |
) |
$ |
(129 |
) |
|
|
|
|
|
|
|
|
||||||||||||
Interest expense - net |
|
(128 |
) |
|
(125 |
) |
|
(3 |
) |
|
|
(238 |
) |
|
(228 |
) |
|
(10 |
) |
Unallocated corporate costs |
|
(292 |
) |
|
(262 |
) |
|
(30 |
) |
|
|
(596 |
) |
|
(510 |
) |
|
(86 |
) |
Other |
|
6 |
|
|
(1 |
) |
|
7 |
|
|
|
6 |
|
|
23 |
|
|
(17 |
) |
Specified items: |
|
|
|
|
|
|
|
||||||||||||
Gain (loss) on debt conversion option |
|
— |
|
|
1 |
|
|
(1 |
) |
|
|
— |
|
|
6 |
|
|
(6 |
) |
Expenses related to acquisitions |
|
(4 |
) |
|
(3 |
) |
|
(1 |
) |
|
|
(4 |
) |
|
(3 |
) |
|
(1 |
) |
Restructuring charges |
|
— |
|
|
(3 |
) |
|
3 |
|
|
|
(12 |
) |
|
(3 |
) |
|
(9 |
) |
Segment operating profit, a non-GAAP financial measure, is ADM’s consolidated income from operations before income tax excluding corporate items. Adjusted segment operating profit, a non-GAAP financial measure, is segment operating profit excluding specified items. Management believes that segment operating profit and adjusted segment operating profit are useful measures of ADM’s performance because they provide investors information about ADM’s business unit performance excluding corporate overhead costs as well as specified items. Segment operating profit and adjusted segment operating profit are not measures of consolidated operating results under |
|||||||||||||||||||
Consolidated Statements of Earnings (unaudited) |
|||||||||||||||
|
Quarter ended |
|
Six months ended |
||||||||||||
|
June 30 |
|
June 30 |
||||||||||||
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
(in millions, except per share amounts) |
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Revenues |
$ |
22,248 |
|
|
$ |
25,190 |
|
|
$ |
44,095 |
|
|
$ |
49,262 |
|
Cost of products sold (1) |
|
20,852 |
|
|
|
23,307 |
|
|
|
41,040 |
|
|
|
45,299 |
|
Gross profit |
|
1,396 |
|
|
|
1,883 |
|
|
|
3,055 |
|
|
|
3,963 |
|
Selling, general, and administrative expenses (2) |
|
907 |
|
|
|
841 |
|
|
|
1,858 |
|
|
|
1,722 |
|
Asset impairment, exit, and restructuring costs |
|
7 |
|
|
|
60 |
|
|
|
25 |
|
|
|
67 |
|
Equity in (earnings) losses of unconsolidated affiliates |
|
(152 |
) |
|
|
(151 |
) |
|
|
(364 |
) |
|
|
(325 |
) |
Interest and investment income |
|
(140 |
) |
|
|
(142 |
) |
|
|
(263 |
) |
|
|
(276 |
) |
Interest expense (3) |
|
187 |
|
|
|
180 |
|
|
|
353 |
|
|
|
327 |
|
Other (income) expense - net (4) |
|
(9 |
) |
|
|
(37 |
) |
|
|
(35 |
) |
|
|
(81 |
) |
Earnings before income taxes |
|
596 |
|
|
|
1,132 |
|
|
|
1,481 |
|
|
|
2,529 |
|
Income tax expense (benefit) (5) |
|
115 |
|
|
|
204 |
|
|
|
281 |
|
|
|
429 |
|
Net earnings including noncontrolling interests |
|
481 |
|
|
|
928 |
|
|
|
1,200 |
|
|
|
2,100 |
|
|
|
|
|
|
|
|
|
||||||||
Less: Net earnings (losses) attributable to noncontrolling interests |
|
(5 |
) |
|
|
1 |
|
|
|
(15 |
) |
|
|
3 |
|
Net earnings attributable to ADM |
$ |
486 |
|
|
$ |
927 |
|
|
$ |
1,215 |
|
|
$ |
2,097 |
|
|
|
|
|
|
|
|
|
||||||||
Diluted earnings per common share |
$ |
0.98 |
|
|
$ |
1.70 |
|
|
$ |
2.41 |
|
|
$ |
3.82 |
|
|
|
|
|
|
|
|
|
||||||||
Average diluted shares outstanding |
|
493 |
|
|
|
546 |
|
|
|
503 |
|
|
|
549 |
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes a contingency loss provision of |
|||||||||||||||
(2) Includes acquisition-related expenses of |
|||||||||||||||
(3) Includes (gains) losses related to the mark-to-market adjustment of the conversion option of the exchangeable bond issued in August 2020 of |
|||||||||||||||
(4) Includes net (gains) losses related to the sale of certain assets of |
|||||||||||||||
(5) Includes the tax expense impact of specified items and tax discrete items totaling |
|||||||||||||||
Summary of Financial Condition (unaudited) |
||||||
|
|
June 30,
|
|
June 30,
|
||
|
|
(in millions) |
||||
Net Investment In |
|
|
|
|
||
Cash and cash equivalents |
|
$ |
764 |
|
$ |
1,426 |
Operating working capital |
|
|
9,827 |
|
|
10,898 |
Property, plant, and equipment |
|
|
10,628 |
|
|
10,127 |
Investments in affiliates |
|
|
5,557 |
|
|
5,665 |
Goodwill and other intangibles |
|
|
6,970 |
|
|
6,542 |
Other non-current assets |
|
|
2,581 |
|
|
2,479 |
|
|
$ |
36,327 |
|
$ |
37,137 |
Financed By |
|
|
|
|
||
Short-term debt |
|
$ |
2,312 |
|
$ |
125 |
Long-term debt, including current maturities |
|
|
8,248 |
|
|
8,545 |
Deferred liabilities |
|
|
3,306 |
|
|
3,188 |
Temporary equity |
|
|
302 |
|
|
304 |
Shareholders’ equity |
|
|
22,159 |
|
|
24,975 |
|
|
$ |
36,327 |
|
$ |
37,137 |
Summary of Cash Flows (unaudited) |
||||||||
|
|
Six months ended |
||||||
|
|
June 30 |
||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
(in millions) |
||||||
Operating Activities |
|
|
|
|
||||
Net earnings |
|
$ |
1,200 |
|
|
$ |
2,100 |
|
Depreciation and amortization |
|
|
566 |
|
|
|
521 |
|
Asset impairment charges |
|
|
10 |
|
|
|
46 |
|
(Gains) losses on sales/revaluation of assets |
|
|
9 |
|
|
|
(32 |
) |
Other - net |
|
|
(93 |
) |
|
|
(145 |
) |
Other changes in operating assets and liabilities |
|
|
(524 |
) |
|
|
(1,591 |
) |
Total Operating Activities |
|
|
1,168 |
|
|
|
899 |
|
|
|
|
|
|
||||
Investing Activities |
|
|
|
|
||||
Purchases of property, plant and equipment |
|
|
(690 |
) |
|
|
(614 |
) |
Net assets of businesses acquired |
|
|
(936 |
) |
|
|
— |
|
Proceeds from sale of business/assets |
|
|
16 |
|
|
|
17 |
|
Investments in affiliates |
|
|
(8 |
) |
|
|
(6 |
) |
Other investing activities |
|
|
6 |
|
|
|
(8 |
) |
Total Investing Activities |
|
|
(1,612 |
) |
|
|
(611 |
) |
|
|
|
|
|
||||
Financing Activities |
|
|
|
|
||||
Long-term debt borrowings |
|
|
— |
|
|
|
500 |
|
Long-term debt payments |
|
|
— |
|
|
|
(662 |
) |
Net borrowings (payments) under lines of credit |
|
|
2,208 |
|
|
|
(371 |
) |
Share repurchases |
|
|
(2,327 |
) |
|
|
(1,001 |
) |
Cash dividends |
|
|
(503 |
) |
|
|
(494 |
) |
Other |
|
|
(39 |
) |
|
|
(103 |
) |
Total Financing Activities |
|
|
(661 |
) |
|
|
(2,131 |
) |
Effect of exchange rate on cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
|
(14 |
) |
|
|
(3 |
) |
Increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents |
|
|
(1,119 |
) |
|
|
(1,846 |
) |
Cash, cash equivalents, restricted cash, and restricted cash equivalents - beginning of period |
|
|
5,390 |
|
|
|
7,033 |
|
Cash, cash equivalents, restricted cash, and restricted cash equivalents - end of period |
|
$ |
4,271 |
|
|
$ |
5,187 |
|
Segment Operating Analysis (unaudited) |
|||||||||||
|
Quarter ended |
|
Six months ended |
||||||||
|
June 30 |
|
June 30 |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
(in ‘000s metric tons) |
||||||||||
Processed volumes (by commodity) |
|
|
|
|
|
|
|
||||
Oilseeds |
|
8,872 |
|
|
8,783 |
|
|
18,259 |
|
|
17,410 |
Corn |
|
4,482 |
|
|
4,448 |
|
|
8,890 |
|
|
8,842 |
Total processed volumes |
|
13,354 |
|
|
13,231 |
|
|
27,149 |
|
|
26,252 |
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
||||
|
Quarter ended |
|
Six months ended |
||||||||
|
June 30 |
|
June 30 |
||||||||
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||
|
(in millions) |
||||||||||
Revenues |
|
|
|
|
|
|
|
||||
Ag Services and Oilseeds |
$ |
17,333 |
|
$ |
19,844 |
|
$ |
34,552 |
|
$ |
38,423 |
Carbohydrate Solutions |
|
2,894 |
|
|
3,381 |
|
|
5,577 |
|
|
6,918 |
Nutrition |
|
1,908 |
|
|
1,853 |
|
|
3,744 |
|
|
3,706 |
Other Business |
|
113 |
|
|
112 |
|
|
222 |
|
|
215 |
Total revenues |
$ |
22,248 |
|
$ |
25,190 |
|
$ |
44,095 |
|
$ |
49,262 |
Adjusted Earnings Per Share
|
|||||||||||||||||||||
|
Quarter ended June 30 |
|
Six months ended June 30 |
||||||||||||||||||
|
2024 |
2023 |
|
2024 |
2023 |
||||||||||||||||
|
In millions |
Per share |
In millions |
Per share |
|
In millions |
Per share |
In millions |
Per share |
||||||||||||
Net earnings and fully diluted EPS |
$ |
486 |
$ |
0.98 |
$ |
927 |
|
$ |
1.70 |
|
|
$ |
1,215 |
$ |
2.41 |
$ |
2,097 |
|
$ |
3.82 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||||
Loss (gain) on sales of assets and businesses (a) |
|
— |
|
— |
|
(8 |
) |
|
(0.02 |
) |
|
|
— |
|
— |
|
(9 |
) |
|
(0.02 |
) |
Impairment, restructuring charges and contingency provisions (b) |
|
5 |
|
0.01 |
|
93 |
|
|
0.17 |
|
|
|
23 |
|
0.04 |
|
98 |
|
|
0.18 |
|
Expenses related to acquisitions (c) |
|
3 |
|
0.01 |
|
2 |
|
|
— |
|
|
|
3 |
|
0.01 |
|
2 |
|
|
— |
|
Loss (gain) on debt conversion option (d) |
|
— |
|
— |
|
(1 |
) |
|
— |
|
|
|
— |
|
— |
|
(6 |
) |
|
(0.01 |
) |
Tax adjustment (e) |
|
14 |
|
0.03 |
|
21 |
|
|
0.04 |
|
|
|
17 |
|
0.03 |
|
3 |
|
|
0.01 |
|
Sub-total adjustments |
|
22 |
|
0.05 |
|
107 |
|
|
0.19 |
|
|
|
43 |
|
0.08 |
|
88 |
|
|
0.16 |
|
Adjusted net earnings and adjusted EPS |
$ |
508 |
$ |
1.03 |
$ |
1,034 |
|
$ |
1.89 |
|
|
$ |
1,258 |
$ |
2.49 |
$ |
2,185 |
|
$ |
3.98 |
|
(a) |
|
Prior quarter and YTD gain of |
(b) |
Current quarter and YTD charges of |
|
(c) |
Current quarter and YTD expenses of |
|
(d) |
Prior quarter and YTD gain on debt conversion option of |
|
(e) |
Tax expense (benefit) adjustment due to certain discrete items totaling |
|
|
||
Adjusted net earnings reflects ADM’s reported net earnings after removal of the effect on net earnings of specified items as more fully described above. Adjusted EPS reflects ADM’s fully diluted EPS after removal of the effect on EPS as reported of specified items as more fully described above. Management believes that Adjusted net earnings and Adjusted EPS are useful measures of ADM’s performance because they provide investors additional information about ADM’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. These non-GAAP financial measures are not intended to replace or be alternatives to net earnings and EPS as reported, the most directly comparable GAAP financial measures, or any other measures of operating results under GAAP. Earnings amounts described above have been divided by the company’s diluted shares outstanding for each respective period in order to arrive at an adjusted EPS amount for each specified item. |
||
Return on Invested Capital and Adjusted Return on Invested Capital A non-GAAP financial measure (unaudited) |
|||||||||||||||||||
ROIC Earnings (in millions) |
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
Four Quarters |
|||||||||||
|
Quarter Ended |
|
Ended |
||||||||||||||||
|
Sep. 30, 2023 |
|
Dec. 31, 2023 |
|
Mar. 31, 2024 |
|
June 30, 2024 |
|
June 30, 2024 |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net earnings attributable to ADM |
$ |
821 |
|
|
$ |
565 |
|
|
$ |
729 |
|
|
$ |
486 |
|
|
$ |
2,601 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest expense |
|
97 |
|
|
|
109 |
|
|
|
115 |
|
|
|
135 |
|
|
|
456 |
|
Tax on interest |
|
(23 |
) |
|
|
(26 |
) |
|
|
(27 |
) |
|
|
(32 |
) |
|
|
(108 |
) |
Total ROIC Earnings |
$ |
895 |
|
|
$ |
648 |
|
|
$ |
817 |
|
|
$ |
589 |
|
|
$ |
2,949 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Total ROIC Earnings |
$ |
895 |
|
|
$ |
648 |
|
|
$ |
817 |
|
|
$ |
589 |
|
|
$ |
2,949 |
|
Other Adjustments |
|
59 |
|
|
|
155 |
|
|
|
21 |
|
|
|
22 |
|
|
|
257 |
|
Total Adjusted ROIC Earnings |
$ |
954 |
|
|
$ |
803 |
|
|
$ |
838 |
|
|
$ |
611 |
|
|
$ |
3,206 |
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Invested Capital (in millions) |
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|||||||
|
Quarter Ended |
|
Trailing Four |
||||||||||||
|
Sep. 30, 2023 |
|
Dec. 31, 2023 |
|
Mar. 31, 2024 |
|
June 30, 2024 |
|
Quarter Average |
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Equity (1) |
$ |
25,228 |
|
$ |
24,132 |
|
$ |
23,219 |
|
$ |
22,148 |
|
$ |
23,682 |
|
+ Interest-bearing liabilities (2) |
|
8,346 |
|
|
8,370 |
|
|
9,995 |
|
|
10,576 |
|
|
9,322 |
|
Total Invested Capital |
$ |
33,574 |
|
$ |
32,502 |
|
$ |
33,214 |
|
$ |
32,724 |
|
$ |
33,004 |
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Invested Capital |
$ |
33,574 |
|
$ |
32,502 |
|
$ |
33,214 |
|
$ |
32,724 |
|
$ |
33,004 |
|
Other Adjustments |
|
59 |
|
|
155 |
|
|
21 |
|
|
22 |
|
|
64 |
|
Total Adjusted Invested Capital |
$ |
33,633 |
|
$ |
32,657 |
|
$ |
33,235 |
|
$ |
32,746 |
|
$ |
33,068 |
|
|
|
|
|
|
|
|
|
|
|
||||||
Return on Invested Capital |
|
|
|
|
|
|
|
|
8.9 |
% |
|||||
Adjusted Return on Invested Capital |
|
|
|
|
|
|
|
|
9.7 |
% |
|||||
(1) Excludes noncontrolling interests |
|||||||||||||||
(2) Includes short-term debt, current maturities of long-term debt, finance lease obligations, and long-term debt |
|||||||||||||||
ROIC is ROIC earnings divided by invested capital. ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense on borrowings. Invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities. |
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Adjusted ROIC is Adjusted ROIC earnings divided by adjusted invested capital. Adjusted ROIC earnings is ADM’s net earnings adjusted for the after-tax effects of interest expense on borrowings, and specified items. Adjusted invested capital is the sum of ADM’s equity (excluding noncontrolling interests) and interest-bearing liabilities adjusted for the after-tax effect of specified items. Adjusted ROIC on a trailing four quarter average basis is equal to the average trailing four quarters of adjusted ROIC earnings divided by the average trailing four quarters of adjusted invested capital. Management believes Adjusted ROIC is a useful financial measure because it provides investors information about ADM’s returns excluding the impacts of specified items and increases period-to-period comparability of underlying business performance. Management uses Adjusted ROIC to measure ADM’s performance by comparing Adjusted ROIC to its weighted average cost of capital (WACC). Adjusted ROIC, Adjusted ROIC earnings and Adjusted invested capital are non-GAAP financial measures and are not intended to replace or be alternatives to GAAP financial measures. |
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Adjusted Earnings Before Interest, Taxes, and Depreciation and Amortization (EBITDA)
|
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The tables below provide a reconciliation of net earnings to adjusted EBITDA for the trailing four quarters ended June 30, 2024. |
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|
|
|
|
|
|
|
|
|
Four Quarters |
|||||||||
|
Quarter Ended |
|
Ended |
|||||||||||||||
|
Sep. 30, 2023 |
|
Dec. 31, 2023 |
|
Mar. 31, 2024 |
|
June 30, 2024 |
|
June 30, 2024 |
|||||||||
|
|
|
|
|
(in millions) |
|
|
|
|
|||||||||
Net earnings |
$ |
821 |
|
$ |
565 |
|
|
$ |
729 |
|
|
$ |
486 |
|
|
$ |
2,601 |
|
Net earnings (losses) attributable to noncontrolling interests |
|
3 |
|
|
(23 |
) |
|
|
(10 |
) |
|
|
(5 |
) |
|
|
(35 |
) |
Income tax expense |
|
207 |
|
|
192 |
|
|
|
166 |
|
|
|
115 |
|
|
|
680 |
|
Interest expense |
|
97 |
|
|
109 |
|
|
|
115 |
|
|
|
135 |
|
|
|
456 |
|
Depreciation and amortization |
|
261 |
|
|
277 |
|
|
|
280 |
|
|
|
286 |
|
|
|
1,104 |
|
EBITDA |
|
1,389 |
|
|
1,120 |
|
|
|
1,280 |
|
|
|
1,017 |
|
|
|
4,806 |
|
(Gain) loss on sales of assets and businesses |
|
2 |
|
|
(7 |
) |
|
|
— |
|
|
|
— |
|
|
|
(5 |
) |
Impairment and restructuring charges and contingency provisions. |
|
71 |
|
|
172 |
|
|
|
18 |
|
|
|
7 |
|
|
|
268 |
|
Railroad maintenance expense |
|
26 |
|
|
39 |
|
|
|
— |
|
|
|
4 |
|
|
|
69 |
|
Expenses related to acquisitions |
|
3 |
|
|
1 |
|
|
|
— |
|
|
|
4 |
|
|
|
8 |
|
Adjusted EBITDA |
$ |
1,491 |
|
$ |
1,325 |
|
|
$ |
1,298 |
|
|
$ |
1,032 |
|
|
$ |
5,146 |
|
|
|
|
|
|
|
|
|
|
|
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EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA, adjusted for specified items. The Company calculates adjusted EBITDA by removing the impact of specified items and adding back the amounts of income tax expense, interest expense on borrowings, and depreciation and amortization to net earnings. Management believes that EBITDA and adjusted EBITDA are useful measures of the Company’s performance because they provide investors additional information about the Company’s operations allowing better evaluation of underlying business performance and better period-to-period comparability. EBITDA and adjusted EBITDA are non-GAAP financial measure and are not intended to replace or be an alternative to net earnings, the most directly comparable GAAP financial measure. |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20240730432957/en/
Media Contact
Brett Lutz
media@adm.com
312-634-8484
Investor Relations
Megan Britt
Megan.Britt@adm.com
872-257-8378
Source: ADM
FAQ
What was ADM's EPS for Q2 2024?
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How did ADM's Nutrition segment perform in Q2 2024?
