Archer-Daniels-Midland Co. Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Portfolio Optimization: Executed over 20 projects for portfolio optimization, achieving ~$200 million in cost savings and commenced joint venture with Altek.
• Plant Efficiency: Addressed plant efficiency issues, reduced unplanned downtime, restored Decatur East plant, and achieved safety milestone with lowest injury rate in company history.
• Decarbonization: Reached decarbonization milestone with Columbus, Nebraska corn milling plant connected to Tallgrass dryblazer pipeline.
• Business Performance: Advanced Nutrishna's recovery, improved execution, and increased revenue; generated strong cash flow with $1.5 billion cash flow benefit from inventory reduction; closed government investigations related to intersegment sales

Segment Performance

• AS and O Segment: Fourth quarter operating profit was $444 million, down 31% year-over-year; full-year operating profit was $1.6 billion, 34% lower than 2024. Ag Services subsegment had Q4 operating profit of $174 million, down 31% year-over-year; full-year down 11%. Crushing subsegment Q4 operating profit was $66 million, 69% lower year-over-year; full-year down 81%. Refined Products and Other subsegment Q4 operating profit was $119 million, down 2% quarter-over-quarter; full-year down 4%.
• Carbohydrate Solutions Segment: Q4 operating profit was $299 million, down 6% year-over-year; full-year operating profit was $1.2 billion, 12% lower than 2024. Starches and Sweeteners Q4 operating profit was $256 million, down 16% year-over-year; full-year down 21%. Vantage Corn Processors Q4 operating profit was $43 million, up 187% year-over-year; full-year up $119 million compared to 2024.
• Nutrition Segment: Q4 revenues were $1.8 billion, flat year-over-year. Human Nutrition revenue increased 5%, while Animal Nutrition revenue decreased 4%. Nutrition segment operating profit was $178 million in Q4, down 11% year-over-year. Human Nutrition operating profit was $56 million, down 10% quarter-over-quarter; full-year $319 million, down 2% year-over-year. Animal Nutrition operating profit was $22 million in Q4, down 15% year-over-year; full-year $98 million, up 66% compared to 2024

Guidance

• 2026 adjusted EPS range: $3.60 to $4.25.
• Factors influencing guidance: timing of US biofuel policy clarity, size of RVO requirement and SRE offset, robust ethanol export opportunities, continued growth in nutrition, and corporate expenses.
• Crush margins in 2026 expected to be similar to 2025; ethanol margins to offset softness in starches and sweeteners.
• Plan to invest approximately $1.3 billion to $1.5 billion in capital expenditures in 2026

Risks

• Uncertainty around US biofuel policy clarity and its impact on operating rates and processing.
• Consumer behavior shifts affecting demand for starches, sweeteners, and ultra-processed foods.
• Fluctuations in corn costs and crop quality issues impacting SNS volumes and margins.
• Dependence on timely implementation and adoption of RVO and related policies

Question and Answer

• Q: Manav Gupta on renewable diesel margins and RVO impact A: Juan Luciano discussed timing of policy clarity, RINs, and global biofuel opportunities
• Q: Ben Theurer on nutrition segment fulfillment and 2026 outlook A: Juan Luciano talked about flavor growth, specialty ingredients recovery, and plant stabilization
• Q: Heather Jones on CRUSH performance disparity A: Juan Luciano and Monish Patolawala discussed manufacturing cost increases and cost optimization plans
• Q: Andrew Strelzik on guidance assumptions and crush margins A: Monish Patolawala explained dependence on RVO timing and demand factors
• Q: Pooran Sharma on starches and sweeteners demand softness A: Juan Luciano discussed GLP-1 impact, consumer prudence, and industrial applications
• Q: Tom Palmer on guidance items and AS & O trends A: Monish Patolawala talked about tax rate, corporate expenses, and ag services/outlook
• Q: Salvator Tiano on EPS run rate and long-term outlook A: Monish Patolawala emphasized multiple factors influencing long-term projections
• Q: Steven Haynes on carb solutions guide and 45c impact A: Juan Luciano discussed contract season, margin vs volume, and 45c potential
• Q: Matthew Blair on ethanol exports and E15 A: Juan Luciano talked about global ethanol opportunities, E15 potential, and diversified model