Creating Value While Feeding the World

Transcription

1 1 Creating Value While Feeding the World CAGNY 2016 Ray Young Executive Vice President and Chief Financial Officer Vince Macciocchi President WILD Flavors and Specialty Ingredients

2 Safe Harbor Statement 2 Some of our statements constitute forward-looking statements that reflect management s current views and estimates of future economic circumstances, industry conditions, Company performance and financial results. These statements are based on many assumptions and factors that are subject to risk and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation, and you should carefully review the assumptions and factors in our SEC reports. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events.

3 3 AGRICULTURAL SERVICES OILSEEDS PROCESSING CORN PROCESSING WILD FLAVORS & SPECIALTY INGREDIENTS

4 ADM s Proven Core Model 4 Corn Oilseeds Wheat Source Transport Process Transform Distribute Market & Sell Financial strength and industry acumen underpin the chain and drive value Food Feed Fuel Industrial Setting the competitive standard Capture value across the chain

5 Ag Services: ADM is the Premier Global Ag Services Company 5 Origination of Crops For Internal Use For External Sales Regional Sales Exports Deliver to Customers Transportation Milling

6 Corn Processing: World s Largest Corn Processor 6 ~ 30 Different Products 14 corn processing plants in 7 countries 37 feed and premix facilities in 6 countries Grind capacity of 3.0 million bushels per day

7 Oilseeds Processing: World s Most Diversified Oilseeds Business 7 ~ 60 Different Products Meal Oil Other Processing Assets in 16 Countries Wilmar Equity Investment

8 WILD Flavors and Specialty Ingredients: World-Class Specialty Ingredient Business 8 Industry s Broadest Portfolio of On-Trend Ingredients Addressing: Nutrition Function Texture Taste Specialty Ingredients Market = $50B $30B Ingredients $20B Flavors Market Growing 5-6%

9 Adjusted Segment Operating Profit /2012 U.S. drought impact $ Billions 2.1 FY06 FY07 FY08 FY09 FY10 FY11 CY12 CY13 CY14 CY15 Oilseeds Processing Corn Processing Agricultural Services WILD Flavors & Specialty Ingredients Other Prior periods have been restated to conform to current year presentation, except for the elimination of the allocation of working capital interest in fiscal 2007, 2008, and In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30th

10 Priorities for Value Creation Driving Returns 2. Growing Earnings 3. Balanced Capital Allocation

11 Priorities for Value Creation Driving Returns Focus on Returns CCC Program Active Portfolio Management Managing ROIC over the cycle

12 Driving Returns Above Cost of Capital ROIC Objective: 200 BPS over WACC 12% Q4 CY15 Trailing 4Q Average Adjusted ROIC 7.3% Annual WACC 6.6% 12 10% 8% 6% 4% 2% 0% Q4 FY11 Q2 FY12 Q4 FY12 Q2 FY12.5 Q2 CY13 Q4 CY13 Q2 CY14 Q4 CY14 Q2 CY15 Q4 CY15 (1) Trailing 4Q Average Adjusted ROIC Annual WACC Long-Term WACC (1) For periods prior to Q1 CY14, Trailing 4Q average WACC is displayed

13 Priorities for Value Creation Growing Earnings Optimizing the Core Operational Excellence Strategic Growth

14 Earnings Trend History 14 $4.00 $ /2012 US drought impact $3.00 $2.90 $2.50 $2.00 $1.50 $1.65 FY06 FY07 FY08 FY09 FY10 FY11 CY12 CY13 CY14 CY15 2-Year Moving Average EPS (adj) Earnings and EPS net of specified items (including LIFO) In January 2013, ADM converted to a calendar year ending fiscal year. CY12 represents 12-months ending December 31, Prior FY s represent 12-months ending June 30th

15 Driving Earnings Growth over the Medium-Term 15 $1.00 to $1.50 Operational Excellence Execution of Key Projects WILD Flavors Acquisition & Synergies Share Repurchases Total Earnings Growth Potential

16 Priorities for Value Creation Balanced Capital Allocation CapEx Discipline Steadily Increasing Dividends, Payout Ratio

17 Balanced Capital Allocation Framework 17 80% 60% 40% 20% % of Operating Cash Flow Spend: 60%-70% in strategic M&A or return of capital to shareholders 30%-40% reinvested in Capex 0% Historic Medium-Term

18 CapEx Discipline 18 $1.9 $1.6 Billions $1.2 $1.2 $0.9 $0.9 $1.1 $1.0 FY09 FY10 FY11 CY12 CY13 CY14 CY15 CY16* (Projected)

19 Steadily Increasing Dividends 19 Annual Dividends per Share 96 $1.12 $ CY09 CY10 CY11 CY12 CY13 CY14 CY15 CY16 (Q1 Annualized)

20 Steadily Increasing Dividend Yields 20 $60 4.0% $50 3.5% $40 3.0% $30 2.5% $20 2.0% $10 1.5% $0 1.0% 02/09/ /09/ /09/ /09/ /09/ /09/2016 ADM Share Price Div Yield

21 Balance Sheet Strength 21 50% Net Debt/Total Capital 15.0 Available Liquidity ($Billions) % 20% % Q Q Net debt is calculated as short-term debt plus long-term debt, including current maturities less cash and cash equivalents and short-term marketable securities. Total capital excludes cash from L/T debt 0.0 Q Q Total Liquidity with RMI Liquidity Available Liquidity available includes commercial paper and other sources of available credit capacity

22 2016 Priorities: With Current Headwinds Increased Focus on Areas in our Control 22 >$200M Savings in 2015 $275M target in 2016 Operational Excellence Portfolio Management Address Lower Returning Assets Dry Mill Strategic Review Bolt-ons Targeted Growth Reduce Invested Capital Reduce Asset Intensity Opportunistic M&A $1B Multi-Year Program

23 ADM Disciplined Capital Allocation Framework Earnings and EVA Growth 23 Balance Sheet Strength Portfolio and Footprint

24 24 Innovation in a Dynamic Marketplace Vince Macciocchi Senior Vice President President, WILD Flavors and Specialty Ingredients

25 WILD Flavors and Specialty Ingredients (WFSI) Extends ADM s Advantaged Portfolio into $50B Specialty Ingredients Space 25

26 WFSI Combines Legacy ADM Specialty Ingredients and Acquired Capabilities 26

27 A Premier Specialty Ingredients Provider With Global Reach 27

28 Industry s Broadest Portfolio of On-Trend Ingredients 28 Addressing nutrition, function, texture and taste Specialty Proteins Flavors & Extracts Nuts, Seeds, & Ancient Grains Edible Beans & Peas Nutritional Supplements Polyols Colors Fiber Mint Emulsifiers Hydrocolloids Ingredient Systems

29 Ingredient Systems: A Key WFSI Differentiator 29

30 We Serve as an Extension of Our Customer s Resources 30 A single partner for all needs, from individual ingredients to turnkey, customized solutions Consumer/Market Insights Product Development Commercialization Supply Management Capabilities in new-product innovation, cost-optimization create value for customers outsourcing their R&D needs.

31 Supporting a Range of Products for Our Customers Who Sell Through a Variety of Channels 31 Beverages Baked Goods Health & Nutrition Personal Care Dairy & Ice Cream Confections Channel partners include: Entrepreneurs/startups Regional CPG accounts Direct Sales accounts Private-label Foodservice Multinational CPG Snacks Meats & Meals

32 Our Strategy to Achieve $10B in Sales 32 Defend and Grow Sales Optimize the Core Drive Operational Efficiencies Expand Strategically Enhance Talent & Capabilities

33 Excellent Results in First Year as a Combined Organization 33 Earnings and synergies Achieved $0.10 accretion target More than $40M in cost synergies ahead of schedule Active pipeline of >750 revenue-synergy projects Global and cross-business unit wins Organic Growth, M&A Completion of non-gmo lecithin in Germany, India Customer Innovation Center in Cranbury, N.J. Savory flavors Eatem Foods Additional specialty commodities capabilities California Gold Almonds Non-GMO, gluten-free, organic ingredients Harvest Innovations

34 Summary 34 A premier global ingredient company with exceptional capabilities, talent and value propositions Supporting customer and consumer needs in a dynamic marketplace First year as a combined organization delivered strong results Projecting 15-20% growth in operating profit in 2016

35 Q&A 35