Archer-Daniels-Midland Company

Good morning, and welcome to the ADM Third 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 De La Huerga, Vice President, Investor Relations for ADM. Ms. De La Huerga, you may begin.

Thank you, Amy. 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 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 uncertainties. 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 and our outlook. Vince Michocki, senior vice president and president of our nutrition segment, will give an update on our nutrition business and its future growth. 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 third quarter adjusted earnings per share of 89 cents. up from 77 in the prior year quarter. Adjusted segment operating profit was $849 million, up 11% year-over-year, and our trailing four-quarter adjusted ROIC was 8.3%. Our strategic initiatives have continued to enable our teams around the world to demonstrate their expertise and skills. And I'm proud of how our colleagues are supporting customers and driving strong results. The team has done a great job handling the daily and sometimes hourly challenges that have come our way in 2020. That resiliency allows us to deliver outstanding results today while we simultaneously continue our strategic work to make our company better and advance our growth and transformation. Let me share with you some of our accomplishments. In our optimized pillar, our Ag Services and Oilsits team continued this work to enhance returns, delivering another $100 million in invested capital reductions in the third quarter. Since 2017, Ag Services and Oilsits has improved its capital position by exiting from no longer strategic assets including 71 grain origination locations, six oilseeds facilities, 14 golden peanut and tree nuts locations, and seven ocean-going vessels. We've also seen firsthand how our improvement initiatives have helped drive business continuity. In addition to the pandemic, in recent months, we've seen multiple hurricanes in the U.S. Gulf and the derecho storm that swept across the Midwest. Despite those events, thanks to our teams and our operational excellence, we have continued to serve our customers and fulfill our purpose without significant interruption. In our drive pillar, we are continuing to accelerate our 1ADM business transformation, expanding the deployment of our procurement, contract labor, and sales and marketing modules which are helping us drive efficiencies and growth and will provide us with a trove of data to support enhanced analytics and decision making. Our Decatur corn complex ongoing strong performance from grind to gluten and germ yield to workplace safety continues to demonstrate the benefits of our centralized operations organization. Our supply chain center of excellence is delivering as well. Using our enhanced processes and tools, as well as integrated planning between commercial supply chain and operations, we recently piloted changes at the nutrition facility that are on track to unlock a 20 plus percent increase in production capacity at that location and have already resulted in enhancements in customer service without additional capital spending. We'll be rolling these kinds of improvements out to other locations. In our expand pillar, we're continuing to harvest our investments. For example, year-to-date, our Algar agro acquisition has tripled its year-over-year operating profit. In a very short time, Algar has grown to be an important component of the South American business. We've successfully expanded production of high quality USP grade alcohol in Peoria and Clinton to meet high demand for hand sanitizer. We announced the construction of a new state of the art production facility in Spain that will dramatically expand our ability to meet growing demand for probiotics and other consumer products to support health and wellness. We also signed a long-term agreement with Japanese startup Spiber Inc. This project taps into our innovative spirit and capabilities, creating value from across our supply chain, from the corn we buy to the dextrose we make to the science and manufacturing technology we have invested in. And it meets a critical need in the marketplace for both consumer and industrial products, that come from sustainable sources. Our transformation and growth and our confidence in the future will not be possible without readiness. By the end of the third quarter, our team identified and executed on readiness initiatives that unlocked almost $1.2 billion in run rate benefits. And now, I'm pleased to announce that we are on track to achieve $1.3 billion by the end of the year. Readiness encompasses and supports our entire company. It drives the strategic imperatives that help us fulfill our purpose, such as sustainability. We're advancing our sustainability efforts on many fronts, such as our STRIVE 35 goals to improve our performance on greenhouse gases energy, water, and waste. Readiness creates growth enablers. For example, we're continuing to elevate our commercial excellence with innovative tools like our consumer insight programs and virtual customer technologies. And of course, readiness is one of the key elements powering the growth algorithm we laid out at the beginning of the year. Because of its success, along with tremendous progress in our harvest and improve initiatives, we now expect to meet or exceed the high end of our $500 to $600 million goal for targeted improvements in 2020. So before I turn to Ray, I'd like to say that it's our pleasure to welcome Vince today on this call. In 2014, we started a new journey with the acquisition of wild flavors and the launch of a full-service nutrition business, offering customers a broad array of products and services. I could not be more proud of the growth we have seen since then. Nutrition has delivered its fifth consecutive quarter of 20-plus percent year-over-year OP growth. Revenue is up 5.7 percent on a currency-adjusted basis for the first nine months of the year. And in the years since we acquired Wild, we are nearly tripled OP in the flavors business. As we've been getting more and more questions about that business and its growth potential, we decided that it was the perfect time to update and explain the business further. But before we get to Vince, though, I'll turn it over to Ray to take us through our business performance.