Archer-Daniels-Midland Company

Good morning, and welcome to the ADM Second Quarter 2020 Earnings Conference Call. All lines have been placed on a listen-only mode to prevent background noise. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's call, Victoria DeLaurego, Vice President, Investor Relations for ADM. Ms. DeLaurego, you may begin.

Thank you, Amy. Good morning and welcome to ADM's second 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 and materials 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 and materials 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 reports. 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 and our outlook. Then, Juan will make some final comments, after which they will take your questions. Please turn to slide three. I will now turn the call over to Juan.

Thank you, Victoria. Last night, we reported second quarter adjusted earnings per share of 85 cents, up from 60 cents in the prior year quarter. Adjusted segment operating profit was $804 million, and our trailing four-quarter adjusted ROIC was 8.1%. I continue to be proud of how our team is performing under challenging and dynamic circumstances. We are fulfilling our purpose by providing high-quality nutrition around the globe, and we are doing it while remaining true to our values, protecting the health and safety of our colleagues, fostering a positive including culture both within and outside of ADM and safeguarding our environment. Around the globe, ADM colleagues have continued serving our customers and supporting the global food supply chain with no notable disruptions to our operations. Our results are a testament to their dedication. as well as the resilience of our business model and the transformation we have made in our company. Through good times and challenging times, we have kept a strong and steady focus on our strategy. We're not done, but we can be proud of where we are today. Let me share with you some of our accomplishments from the quarter. In our optimized pillar, Our Ag Services and Oilsits team continued their work to enhance the return structure of the business, identifying and executing on almost $50 million in capital reduction initiatives, including the ongoing optimization of our global origination footprint and the decision to exit two Golden Peanut and Three Nuts businesses. We took further steps to optimize our North American milling operations with the announced closure and sale of our Los Angeles flour mill and the sale of office space in Kansas City. And finally, as we previously announced, we made a difficult but important decision to temporarily idle our BCP dry mills in Cedar Rapids and Columbus. which has helped to right-size industry ethanol stocks. In our drive pillar, we continue to advance our 1ADM business transformation with the launch of several new technologies, including applications to more efficiently manage spend and cash flow for our non-commodity purchases and contract labor services. We'll be continuing to deploy new 1ADM technologies in the second half of this year. And we expanded our ambitious efforts to make our operations more efficient and environmentally friendly, adding to our previously announced greenhouse gas and energy reduction goals with new commitments to reduce water intensity by a further 10% and achieve a 90% landfill diversion rate by 2035. In our expand pillar, Our global destination marketing model continues to grow in export volumes and new markets as ADM extended its product offerings in Asia, Latin America, and Europe. We announced that we're introducing high-quality USP-grade ethanol production in Clinton to complement production at our Peoria facility as we continue to meet customer demand for hand sanitizers. And we announced another expansion of our leadership position in the fast-growing plant-based protein market with the creation of Plant Plus Foods, a joint venture with Marfrig that will offer a variety of plant-based food products for customers and consumers across North and South America. Readiness continues to deliver excellence in execution. and its value has never been more clear than over the past few months. Revenue initiatives like consolidation of businesses, centralization of activities, and simplification and improvement of processes have significantly enhanced our resilience and agility, helping us continue to serve customers and keep our operations running through fast-changing environments. We are never done improving. and our team has continued to identify and deliver on readiness initiatives. At the end of the second quarter, readiness had allowed us to unlock a total of just over $1 billion in run rate benefits on an annual basis since the program began. And based on our strong progress, we are on track to exceed our $1.2 billion goal by end of 2020. Now, Ray will take us through our business performance before I come back to offer some final comments before we answer questions. Ray, please.