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.
2
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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
Expand the Size and Global Reach of our Core Model
OilseedsCorn
Cocoa
Food
Feed
PRODUCTS
SELL
Palm
Sugar
Industrials
Expand Volumes and
Our Financial Strength and Industry Acumen Underpin the Chain and Drive Value
Palm Sugar Biomass
7
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We are Growing the Size and Geographic
Reach of our Foot rint
VALUEADDEDCROPS
Expand the Size and Global Reach of our Core Model
OilseedsCorn
Cocoa
Food
Feed
PRODUCTS
SELL
Palm
Sugar
Industrials
Origination, transportation Cocoa plants in U.S. andExpand Size and Geographic ReachExpand
Volumes and
Our Financial Strength and Industry Acumen Underpin the Chain and Drive Value
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
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
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
12
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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
19
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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
21
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Corn Processing:
Expanding Processing/Transforming Capabilities
22
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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
28
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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
29
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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
30
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Cocoa and Wheat:
Expanding Processing /Transforming Capabilities
31
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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
34
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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
38
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)
39
(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
40
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Vital to the World
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ppen x
42
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)
43
(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%)
44
(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)$
45
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$
47
(1)FY2009 restated - see notes on page 54
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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
51
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$
52
(1)FY2009 restated - see notes on page 54
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