ADM Archer Daniels Midland Mar 2010 Presentation

8/14/2019 ADM Archer Daniels Midland Mar 2010 Presentation

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Vital to the World

March 3, 2010

John Rice Steve Mills Dwight Grimestad

EVP, Commercial & Production EVP & CFO VP, Investor Relations


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Safe Harbor Statement

Some of our comments constitute forward-looking statements that

reflect managements current views and estimates of future

economic circumstances, industry conditions, Company

performance and financial results.

e s a emen s are ase on many assump ons an ac ors,

including availability and prices of raw materials, market

conditions, operating efficiencies, access to capital and actions of

governments. Any changes in such assumptions or factors could

produce significantly different results. To the extent permitted

,

update any forward-looking statements as a result of new

information or future events.

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Table of Contents

Page

Global Trends 4

ADM Assets 5

ADMs Value Chain 6 9

Origination and Transportation 10 13

Oilseeds 14 21

Corn Processing 22 30

Cocoa and Wheat 31 34

Profitable Growth 35 41

A endix 42 54

3


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Global Trends Signal Growth Opportunity

Need for Energy Security

and Diversity

Growing Interest

Improvement

4


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ADMs Assets are Positioned for Global Growth

Sourcing facilities

Oilseed processing

Corn processing

Wilmar

Sourcing distribution

Processing distribution

5


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We are Leveraging our Value Chain and

Executin our Strate

VALUEADDEDCROPS

Expand the Size and Global Reach of our Core Model

OilseedsCorn

Cocoa

Food

Feed

PRODUCTS

SELL

Palm

Sugar

Industrials

Our Financial Strength and Industry Acumen Underpin the Chain and Drive Value

6


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We are Expanding Volumes and Diversifying

Feedstocks

VALUEADDEDCROPS


OilseedsCorn

Cocoa

Food

Feed

PRODUCTS

SELL

Palm

Sugar

Industrials

Expand Volumes and


Palm Sugar Biomass

7


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We are Growing the Size and Geographic

Reach of our Foot rint

VALUEADDEDCROPS


OilseedsCorn

Cocoa

Food

Feed

PRODUCTS

SELL

Palm

Sugar

Industrials

Origination, transportation Cocoa plants in U.S. andExpand Size and Geographic ReachExpand

Volumes and


network in U.S. and Brazil Five oceangoing vessels Oilseeds in Central Europe South American bott ling and

Ghana; acquired Schokinag Began production at Brazil

sugar ethanol plant Began operations at

Diversify Crops Palm Sugar Biomass

8

fertilizer blending Columbus ethanol plant


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We are Expanding Volumes and Diversifying our

Product Portfolio

VALUEADDEDCROPS


OilseedsCorn

Cocoa

Food

Feed

PRODUCTS

SELL

Palm

Sugar

Industrials


Expand Volumes and Origination, transportation Cocoa plants in U.S. and

Expand Size and Geographic ReachExpandVolumes and

Bioenergy Industrial Products Food Ingredients

network in U.S. and Brazil Five oceangoing vessels Oilseeds in Central

Europe South American bottling

Ghana; acquiredSchokinag Began production at

Brazil sugar ethanol plant Began operations at

Diversify Crops Palm Sugar Biomass

9


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Transportation Capabilities

10


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Our People use Industry Acumen and our Asset

Network to Create Value

1111


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Our Strategy is to Expand our Crop Origination and

Transportation Network; Grow Destination Business

Build on leadership position in the U.S. and South America

Selectively add elevators Improve elevator throughput

Grow origination footprint in Canada and Europe

xpan es na on mar e oppor un es n e as ,Asia and Africa

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We are Executing our Origination and

Trans ortation Strate Purchased five

Modernizing North

Adding barges and

America

xpan ng ouAmerican origination

13


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Oilseeds:

xpan ng rocess ngCapabilities

14


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Our Oilseeds Asset Base is Posit ioned to Meet

Growin Global Demand

Fertilizer

Origination

Biodiesel

Refining/Packing

Processing

1515


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In North America, Diverse Inputs and Broad

Product Portfolio Create Value

Gums Refine

Lecithin

SterolsRaw

Material

CrudeOil

Transesterification BiodieselRefine

Interesterification Shortening

am nSunflower

CanolaFlax

Cottonseed

Hydrogenation Margarine

Oil

PeanutPalm Oil Oil

Protein

RefineSoy Flour/

Cotton Flour

Process

Protein

SoyConcentrate

Soy Isolate

1616

Cotton

LintCellulose

Refine


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We serve Europe using Local Softseeds as well as

Im orted So beans and Processed Products

Gums Refine Lecithin

Transesterification BiodieselRefine

RawMaterial

Sunflower Glycerin

CrudeOil

Interesterification Shortening

Hydrogenation Margarine

apeseeSoybeanPalm Oil

Process Oil

rote n

Refine

1717

oyConcentrate


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We Participate in Growing Asian Markets

throu h our Strate ic Partner

equ y s a e n s a slargest agricultural processor

ea on oar o rec ors

Supply and sales agreements

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Oilseeds Strategies are Regionally Focused

North America

- Grow value-added business

- Expand destination feed business South America

- Grow origination and logistics capabilities

- Ex and rocessin ca acities

Europe and India

-

- Increase processing capacities and flexibility

20

- -


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We are Increasing Processing Capacity and

Efficienc for Lon -Term Demand North America

- Expanding crushing capacities,

refining, low-trans production

- Added fertilizer blending capacity

-

- Expanding biodiesel capacity

- Acquired processing plants in CzechRepublic and southern Germany

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Corn Processing:

Expanding Processing/Transforming Capabilities

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ADM has a Competitive Advantage in Corn Processing

Dry Mill

Wet Mill

Corn Joint Ventures

2323


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Corn Processing Production Flexibili ty Enhances Value

Starch

,

Dextrose (Liquid and Crystalline), Maltodextr in

, , ,

Sorbitol (Liquid and Crystalline)

Propylene Glycol, Ethylene Glycol

Isosorbide Pilot Scale

Lysine, Threonine, Astaxanthin

Corn Oil

Ethyl Lactate

Food and Industrial StarchesGluten Feed

Gluten Meal

Additional Products

PHA (bioplastic) Q1CY10

24


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Our Broad Product Line Serves a WideRange of Markets

2525


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We are Well-Positioned to Serve the Growing Ethanol Market

ADM Plants

2626


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Ethanol Demand Exceeds RFS Requirements

14

16

Actual

10

12

ns

RFS

6

8

Bil

lionGall

2

4

0

1H07 2H07 1H08 2H08 1H09 2H09 2010 2015

Calendar Year

27

Source: EIA


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HFCS Remains an Important Product and an

Attractive Alternative to Su ar HFCS has broader functionality than sucrose

Relative to sugar, HFCS saves the food industrybillions of dollars each year

Nutritionally, HFCS is the same as sugar or honey

flagging brands generallyhave not benefitted from

no-HFCS marketing

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Our Strategy is to Leverage our Processing

Ex ertise and Diversif Feedstocks Increase the diversity of our product

por o o

Industrial chemicals

Advanced biofuels

ex rose p m ze e ex y o our process ng

operations

Build or acquire carbohydrate processingin key regions around the world

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We are Increasing Processing Capacity

and Efficienc

Corn

O eratin Columbus dr mill

Expanding Decatur swing capacitybetween ethanol and corn syrups

Completed construction of Clintonand Columbus co-gen plants

row ng pro uc por o o

Reducing plant production costs

ugar Producing ethanol at first Brazilian mill

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Cocoa and Wheat:

Expanding Processing /Transforming Capabilities

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We are a Leader in Cocoa Processing

Processing Plant

3232

W th L di Fl Mill i N th A i


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We are the Leading Flour Miller in North America,

and a Leader in the UK

Wheat & Durum Milling

Dry Corn Milling

Milo & Sorghum Millingu gur ng

Rice Milling

Dry Sweeteners

3333


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Cocoa and Milling Strategies Target Profit Growth

Cocoa: Gain efficiencies from the integration ofSchokinag, Ghana and Hazelton, PA.

Milling: Improve efficiencies of existing facilities

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Focusing on Profitable Growth

35


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Our Diversified Portfol io Drives Earnings Growth

FY08 FY09* 6 mo FY10

Oilseed Processing Ag ServicesCorn Processing Other

36

* Other results in FY09 were a loss of $6M

A D d f E i G h


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A Decade of Earnings Growth

$2,500

mounts n m ons

$1,500

,

1,305

2,2912,156

1,385

$1,000

301 383512 460

569

973 1,049

$0

$500

6 months

Earnings, as reported(1)

37

(1)Adjusted for LIFO

ADM i C itt d t P fit bl G th


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ADM is Committed to Profitable Growth

We will target opportunities that leverage the valuechain and enhance shareholder returns

We will grow through:-

- Expanding current facilities

- Building new assets in targeted markets

Investments must su ort lon -term strate and

internal goals

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Fi i l R t


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Financial Returns

16%

20%

$16

$20

12%$12

Base($B)

8%$8

NetAsset

0%$0

Q209 Q309 Q409 Q110 Q210(2)(2) (2)

Fixed Investment Working Capital/Other Liabilities Trailing 4 quarter RONA %

Trailing 4 quarter ROE % Annualized quarterly RONA % Annualized quarterly ROE %

Trailing 4 quarter ROIC %

(1)

(1)(1)

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(1)Adjusted for LIFO(2)FY2009 restated - see notes on page 54

ADM Vit l t th W ld


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ADM: Vital to the World

Global trends offeropportunity for growth

Our global asset base is

Our people enhance thevalue of our global assets

ur us ness por o o sdiverse and strong

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Vital to the World


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ppen x

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Financial Highlights


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Financial Highlights(Amounts in millions, except per share data and percentages)

2009 2008 Change 2009 2008 Change

December 31

Quarter Ended

December 31

Six Months Ended

Segment operating profit(1) $ 970 $ 815 19% $1,744 $1,991 (12%)

Net earnings attributable to ADM(2)

$ 567 $ 578 (2%) $1,063 $1,623 (35%)Earnings per share(2) $ 0.88 $ 0.90 (2%) $ 1.65 $ 2.52 (35%)

Effective tax rate 28.4% 29.1% 29.5% 29.4%

LIFO impact per share (net of tax)(1) $ (0.05) $ 0.12 $ (0.17) $ 0.02 $ 0.56 $ (0.54)

Q2FY10 Net Earnings and Earnings Per Share Analysis

$567 $34 $601

FY10 Year-to-Date Net Earnings and Earnings Per Share Analysis

$1,063 $(14) $1,049

As reported LIFO Adjusted forspecified items

EPS $0.88 $0.05 $0.93

(1)As reported LIFO Adjusted for

specified items

EPS $1.65 $(0.02) $1.63

(1)

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(1) Non-GAAP measure; (2) FY2009 restated - see notes on page 54

Statement of Earnings Summary


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Statement of Earnings Summary(Amounts in millions, except per share data and percentages) Quarter Ended Six Months Ended

2009 2008(1)

Change 2009 2008(1)

ChangeNet sales and other

operating income

Gross profit 1,053 1,212 (13%) 2,026 3,079 (34%)

December 31 December 31

(18%)37,833$30,834$(5%)16,673$15,913$

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Selling, general and

administrative expenses

Other (income) expense - net (89) 58 (253%) (187) 30 (723%)

(5%)7467126%337358

Earnings before taxes 784 817 (4%) 1,501 2,303 (35%)

Income taxes 223 238 (6%) 443 678 (35%)

Net earnings including noncontrolling interests 561 579 (3%) 1,058$ 1,625$ (35%)

Less: Net earnings (losses) attributable

to noncontrolling interests-(6) 1 - (5) 2

Net earnings attributable to ADM

Earnings per share 0.88$ 0.90$ (2%) 1.65$ 2.52$ (35%)

567$ 578$ (2%) 1,063 1,623 (35%)

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(1)FY2009 restated - see notes on page 54

Segment Operating Profit Summary


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Segment Operating Profit Summary

moun s n m ons

2009 2008 Change 2009 2008 Change

Oilseeds ProcessingCrushing & Origination 193$ 187$ 328$ 526$

December 31Quarter Ended Six Months Ended

December 31

, ,

Asia 83 46 162 111

352 319 33$ 636 829 (193)$

Corn Processing

Sweeteners & Starches 171 140 365 205

Bioproducts 119 (111) 113 (58)

290 29 261 478 147 331

Agr icultural Services

Merchandising & Handling 103 385 260 770

Trans ortation 47 77 65 120

150 462 (312) 325 890 (565)

OtherProcessing 159 51 266 154

Financial 19 (46) 39 (29)

(1)Non-GAAP measure - see notes on page 54

Total Segment Operating Pro fit(1) 970$ 815$ 155$ 1,744$ 1,991$ (247)$

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Our Balance Sheet is Strong


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Our Balance Sheet is Strong

(Amounts in millions)

December 31 June 30

2009 2009

Cash 1,634$ 1,555$

Net property, plant and equipment 8,636 7,950

Operating working capi tal(2) 9,621 9,372

- Total inventories 9,126 7,782

Total debt 7,865 7,996

-

Shareholders' equity 14,795 13,653

(1)Cash = cash and cash equivalents and short-term marketable securities(2)Current assets (excluding cash and cash equivalents and short-term marketable securities) less current

liabilities (excluding short-term debt and current maturities of long-term debt)(3)FY2009 restated - see notes on page 54

46

Cash Flow Summary


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Cash Flow Summary

2009 2008(1)

Cash from o erations before workin ca ital chan es 1 660 1 572

December 31

Changes in working capital (280) 4,293

Purchases of property, plant and equipment (939) (1,069)

Business disposals - 237

Marketable securities 198 (737)

Debt increase/(decrease) - net (166) (2,612)

Dividends (180) (167)

Stock buyback - (100)

Other 26 45

Increase in cash and cash e uivalents 262$ 1 438$

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Corn Processings Diversified Product


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Portfolio Enhances Value

60,000 MT/day capacity in North America

- ,

Leading positions in

- corn sweeteners

- ethanol- starches and amino acids

- Eastern Europe

50

- Mexican HFCS

We are a Leading Flour Miller in the U.S. and U.K.


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and a Leading Global Cocoa Processor

27,000 MT/day Flour Milling capacity

- North America/Caribbean

-

3,000 MT/day Chocolate and Cocoa Beanrocess ng capac y

- NA, SA, Europe, Africa, and Asia

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LIFO Adjusted RONA Assets FY2010


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j(Amounts in millions)

Four Quarter

Mar 31, 2009(1)

Jun 30, 2009(1)

Sep 30, 2009 Dec 31, 2009 Average

Quarter Ended

, , , , ,

Goodwill 493 532 531 524 520

Net PP&E 7,583 7,950 8,366 8,636 8,134Fixed Investment 10,445 10,941 11,456 11,853 11,174

Receivables 7,236 7,311 6,600 7,075 7,055

Inventories 7,840 7,782 7,139 9,126 7,972

LIFO adjustment (net of tax) 133 166 119 153 143

Prepaid expenses 430 330 313 366 360Other assets 594 607 606 637 611

Accounts payable (6,450) (5,786) (5,812) (6,832) (6,220)

Accrued expenses (2,663) (2,695) (2,431) (2,301) (2,523)

Other liabilities (1,466) (1,478) (1,534) (1,766) (1,561)

Working Capital/Other Liabilities 5,654 6,237 5,000 6,458 5,837

Total LIFO adjusted RONA Assets 16,099$ 17,178$ 16,456$ 18,311$ 17,011$

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Documents

ADM Archer Daniels Midland Mar 2010 Presentation