World Grain - February 2021 - 10

NEWS REVIEW

ADM 'pillar' strategy working
as income climbs
CHICAGO, ILLINOIS, US - Strong operating profit
across its three major business units helped Archer Daniels
Midland (ADM) deliver a 28% increase in year-over-year
income in fiscal 2020.
Net income at ADM in the year ended Dec. 31, 2020, totaled $1.77 billion, equal to $3.15 per share on the common
stock, up from $1.38 billion, or $2.44 per share, in fiscal
2019. In the fourth quarter, earnings totaled $687 million,
or $1.22 per share, up 36% from $504 million, or 90¢ per
share, in the same period a year ago.
Revenues in fiscal 2020 eased slightly to $64.36 billion
from $64.66 billion. The year-over-year decline came despite stronger sales in the fourth quarter, which increased
10% to $17.98 billion from $16.33 billion a year ago.
" The team managed a wide variety of risks superbly, and
we achieved our strategic initiatives, exceeding our $500
million to $600 million guidance and driving our ability
to deliver a steady, sustainable earnings growth, " Juan R.
Luciano, president and chief executive officer, said during
a Jan. 26 conference call with analysts.
Luciano pointed to several success stories within its three
" pillars " strategy of optimize the core, drive efficiency and
grow strategically.
As part of the optimize pillar, he said ADM has adapted and innovated to keep its work environment safe from
COVID-19, maintaining operations to support the global
food value chain and delivering for customers to provide nutrition around the world. He highlighted efforts by
the company's Ag Services and Oilseeds team to deliver
more than $300 million in capital reduction initiatives,
and said the company remains focused on finding ways
to enhance the return structure of that business from digital technologies.
In the drive pillar, ADM's new organizational structures
and business processes, including its centers of excellence
and 1ADM business transformation project, are helping
drive better decision-making and operational excellence,
Luciano said.
" We continued our work to support our planet and its
natural resources, " he said. " We achieved our 15x20 environmental goals ahead of schedule and launched Strive

35, an even more ambitious plan to reduce greenhouse gas
emissions, energy, water and waste by 2035. "
Within the company's growth pillar, ADM's Nutrition
team exceeded its Neovia synergy targets and delivered
them ahead of schedule, Luciano said, adding that the company also expanded its plant-based protein capabilities,
including the launch of its PlantPlus Foods joint venture.
Operating profit in the Ag Services and Oilseeds segment
increased 9% in fiscal 2020 to $2.11 billion, while profit
in the fourth quarter rose 13% to $834 million. Within the
segment, ag services operating profit surged 65% yearover-year to $828 million, while crushing profit fell 20%
to $466 million and refined products and other decreased
25% to $439 million.
" (The Ag Services and Oilseeds team) achieved multiple records, including an all-time-high in global crush
volumes, " said Ray G. Young, chief financial officer. " In
addition, we're proud of the team that brought our reserve
export facility back online safely and ahead of schedule despite dealing with multiple severe weather events this year. "
Elaborating on the Ag Services and Oilseeds segment,
Luciano said ADM expects 2021 to be " a very, very strong
year " for the unit, one in which the company flexes its capabilities. He said the company expects continued strong
soybean crush as well as a recovery in softseed crush after
several years of softness.
Year-over-year operating profit in the Carbohydrate
Solutions segment rose 11% in fiscal 2020 to $717 million,
while fourth-quarter profit increased 20% to $208 million.
" Considering the impact of lockdowns in both driving
miles and the foodservice sector, we're extremely proud of
our Carbohydrate Solutions team for delivering full-year
results of $717 million, 11% higher than 2019, " Young said.
" The team achieved record-high operating profits from
starches in the year. They acted decisively by temporarly
idling production at our two (Vantage Corn Processor) dry
mill plants, helping address industry supply and demand
balances. And the wheat milling business's modernization
and optimization plan, including a new state-of-the-art mill
in Mendota, Illinois, US, helped power a significant improvement over full-year 2019 for that business. "

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World Grain - February 2021

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