Archer-Daniels-Midland Company

Ladies and gentlemen, thank you for standing by and welcome to the Archer Daniels Midland Company Third Quarter 2019 Earnings Conference Call. All lines have been placed on listen-only mode to prevent background noise. As a reminder, this call is being recorded. I'd now like to introduce you to the host for today's call, Victoria De La Huerga, Vice President, Investor Relations for Archer Daniels Midland Company. Ms. De La Huerga, you may begin.

Thank you, Jack. Good morning, and welcome to ADM's third quarter earnings webcast. Starting tomorrow, a replay of today's webcast will be available at ADM.com. For those following the presentation, please turn to slide two, the company's safe harbor statement, which says that some of our comments 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 uncertainty. 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 report. 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. On today's webcast, our Chairman and Chief Executive Officer, Juan Luciano, will provide an overview of the quarter and important actions we are taking to meet our strategic goals. Our Chief Financial Officer, Ray Young, will review financial highlights and corporate results, as well as the drivers of our performance. Then, Juan will discuss our forward look. And finally, they will take your questions. Please turn to slide three. I will now turn the call over to Juan.

Thank you, Victoria. Good morning, everyone. Thank you all for joining us today. This morning, we reported third quarter adjusted earnings per share of 77 cents, down from 92 cents in the prior year quarter. Our adjusted segment operating profit was $764 million. Our team delivered solid results this quarter. We stayed focused on the levers we could control advancing our strategic plan despite the difficult external environment. North American grain export volumes and margins remained limited. Crash margins were far off their record high 2018 levels, and ethanol industry margins remained challenged. Despite all of this, we delivered a performance consistent with the perspectives we provided last quarter. including strong year-over-year growth in our nutrition business. Throughout the quarter, we continued to deliver on our strategic plan. In our optimized pillar, we are successfully capturing synergies offered by the mid-year combination of our ag services and oilseeds business. By looking at the combined value chain of the new business, we've identified a wide range of opportunities to improve capital efficiency. We've already executed more than $200 million of capital reduction initiatives. As part of our ongoing efforts to optimize our U.S. origination footprint, we completed our previously announced transaction with Cargill to exchange grain elevators in Illinois and Indiana. We also celebrated the opening of our new state-of-the-art mill in Mendota, Illinois, an important milestone in our ongoing process of replacing older, higher-cost plants with more efficient facilities. And as we anticipated earlier this year, we're starting to see the positive impact of the measures we took to improve the long-term reliability of our Decatur complex. In our Drive pillar, we are continuing to see growing benefits of the improved analytics, technologies, and processes we put in place after we launched Readiness last year. We're implementing innovative uses of AI, machine learning, and robotic process automation across the company to do everything from identifying and solving IT issues to reducing costs and improving efficiencies in our global business services center, to helping our customer-facing teams meet needs with more speed and flexibility. And the organizational redesign we completed in the first half of the year, including transforming our IT foundational services and centralizing our global operations organization, is delivering higher service levels at lower costs. In our expand pillar, a key element of our growth strategy is focusing on major global trends, trends that have the potential to fundamentally change markets and in which we are solidifying our global leadership position. The first of those game-changing trends is one we see in the headlines every day now, flexitarian data diets. ADM has a rich history as a leader in plant-based meat alternatives. Today, our full pantry of great tasting, innovative flavors, ingredients, and solutions make us the provider of choice for customers looking to grow with this fast-moving market. Our new plant protein facilities in Campo Grande, Brazil, and Enderling, North Dakota, are supporting the increased demand from our global customer base And in the third quarter, we entered into a partnership with the world's largest beef patty producer to co-develop and produce a 100% alternative protein burger that is now being offered in Brazil. Another major global trend is nutrition for health. We are capitalizing on our investments in biopolies and protecting with the goal of building a leadership position in science-based microbiome solutions for human and animal health. There are tremendous opportunities here, such as our recent announcement of promising results from clinical trials of our probiotics for skin health. Another growing trend is sustainable materials. Our longstanding expertise and technology in fermentation and our research and development capabilities give us industry-leading abilities to provide the renewable feedstocks that underpin the creation of innovative, sustainable products. Last year, in partnership with DuPont, we opened the world's first production facility for FDME, which has applications as a sustainable replacement for plastics. And last month, we announced an agreement with LG Chem to develop sustainable superabsorbent polymers. This is a growing area, and we plan to continue to expand our presence on it. Please turn to slide four. Readiness continues to underpin our strategic work and help drive our results. This quarter, our list of completed initiatives has grown to 280, which taken together will account for about $515 million in run rate benefits on an annual basis. We remain on target for our two-year goal of $1.2 billion in annual run rate benefits by the end of 2020. As of the end of the third quarter, readiness had contributed close to $200 million in 2019 in-year accrued results. We are confident we will reach our goal of $250 to $300 million of accrued benefits by the end of this year. Finally, more than half of our global workforce of 40,000 has now completed our Comprehensive Ability to Execute or A2E training since we began the program. This training is a critical part of readiness. It lays the foundation for the permanent culture change that we're working to instill to make our company better. In some ways, we're entering a new phase of readiness. We're moving on to more complex projects that will take longer to complete but will deliver more fundamental changes to how we run our company. And while external conditions in 2019 are impacting overall results, The benefits we're seeing from readiness are real, and more importantly, they are long-lasting. These changes will make ADM better for the long run. I'll discuss readiness more later. Now, Ray will take us through our business performance. Ray?