Archer-Daniels-Midland Company

Good morning, and welcome to the ADM first quarter 2021 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, Chris. Good morning, and welcome to ADM's first 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 report 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 highlight some of our accomplishments. Our Chief Financial Officer, Ray Young, will review the drivers of our performance as well as corporate results and financial highlights. 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. This morning, I'm pleased to share with you results that demonstrate an outstanding start to 2021, building on our momentum from a record 2020. We reported first quarter adjusted earnings per share of $1.39, more than double the year-ago period. Adjusted segment operating profit was $1.2 billion, 86% higher than the first quarter of 2020, and our sixth consecutive quarter of year-over-year adjusted OP growth. Our trailing four-quarter average adjusted ROIC was 9%, 375 basis points higher than our 2021 annual WAC, and significantly higher than the 7.6% in the year-ago period. And our trailing four-quarter adjusted EBITDA was about $4.2 billion, 19% higher than the prior year period. I'm proud of our team, and they continue to deliver sustained, strong growth powered by their continued advancement of the strategic transformation of our business outstanding execution and excellent risk management, and commitment to serving the evolving needs of our customers in new and innovative ways. I'd like to take a moment now to highlight some of the trends, developments, and accomplishments from the first floor. Turn to slide four, please. First, we are encouraged by many of the demand indicators we are seeing. From a geographic perspective, China was one of the first countries to emerge from COVID-related restrictions, and we are continuing to see significant export demand driven by its economic recovery. In the U.S., meat production is strong as exports and retail sales remain robust, and restaurant dining expands. Vaccine rollout has been slower in EMEA, but is accelerating now. and so we're optimistic that demand will recover there as the year progresses. Of course, some countries like Brazil and India are still in the midst of the pandemic, and demand there may be slower to come back. From a product perspective, expectation of a progressive recovery in global food service will support demand for sweeteners, flour, and other ingredients in 2021. And we're seeing a strong demand for beverages, alternative proteins, and nutritional supplements, including expected sales growth of 12% for plant protein ingredients this year. In summary, recovery from COVID and demand improvements are occurring at varying paces depending on geography and products. Complete recovery will extend over multiple years, but we are seeing clear trends that are favorable for our broad portfolio. Please turn to slide five. Another area in which we're seeing positive demand indications is ethanol in the U.S. About a year ago, we made the difficult decision to idle ethanol production at our dry mills in Cedar Rapids, Iowa, and Columbus, Nebraska. We committed that we will not restart those facilities until we saw economic and market factors that would point to a sustainable recovery. As we move through the winter and into spring, we saw industry inventories falling almost 10% during the quarter, ending almost 20% lower year over year on March 31st. Mobility and driving miles increasing as COVID-related restrictions eased, with recent gasoline consumption getting closer to pre-pandemic levels. Support from the EPA for the renewable fuel standard and China resuming purchases of U.S. ethanol in the first half of 2021. With all of these factors supporting demand growth and improving industry margins, we decided to restart production. At the same time, we are continuing to work with interested parties to complete the monetization of our dry mill ethanol assets. From a portfolio management perspective, we're still committed to reducing our exposure to vehicle-fueled ethanol. And as demand continues to grow for the wide range of innovative alternative products that can come from natural sources like corn, we expect to see additional interest from other parties involved in biomaterials and sustainable aviation fuel. Slide six, please. One of the ways we are meeting growing and evolving demand is by introducing new technologies and innovations across our value chain. In Q1, our Covantis joint venture celebrated the commercial launch of its revolutionary blockchain platform to modernize the global agriculture ocean shipping industry. Similarly, in the U.S., we've led an effort with industry partners to launch the Barch Digital Transformation Project, which uses new technologies to replace outdated, inefficient processes on our inland waterways. We're also innovating to meet the demand for sustainable solutions. Over the last year, as growth of e-commerce drove demand for packaging, our BioSolutions team worked proactively with customers to apply our corn-based, native and modified starches to help increase the number of times cardboard boxes can be recycled. In Europe, our animal nutrition teams are using lifecycle analysis of the complete supply chain from crops and ingredients to final animal products like milk, eggs, and meat to help develop new feed supplements that improve animal health and reduce environmental impact, including greenhouse gas emissions. We're also continuing to innovate to improve the customer experience. Last year, as travel was restricted, we launched new technologies designed to take our customers on collaborative virtual journeys that allowed us to share consumer insights, emerging trends, and product solution opportunities, including real-time tasting. Now, as parts of the world reopen, we are continuing to expand our innovating customer capabilities. In March, we opened our completely renovated customer innovation center in Beijing, expanding our ability to support technical innovation and creation. And earlier this month, we were proud to celebrate the opening of a new cutting-edge plant-based customer innovation lab at our research hub in Singapore. These new facilities will propel our abilities to work with customers to create tailor-made solutions to meet evolving and growing consumer needs in the region. Slide seven, please. Finally, I want to speak about the very important issue of sustainability. Our commitment to sustainability spans our value chain. It includes our work with growers to implement responsible farming practices including the 13 million acres we've enrolled in sustainable farming programs globally in recent years. It encompasses our STRIVE 35 goals to reduce the environmental impact of our processing operations, exemplified by the recent announcement of our partnership to help advance the proposed revolutionary zero-emission power facility utilizing our carbon capture and storage facility adjacent to our operations indicator, Illinois. Sustainability is a key driver of our expanding portfolio of environmentally responsible plant-derived products and our efforts to reduce hunger and support the communities in which we live and work. One critical pillar of our sustainability work for us and our customers is increasing the traceability of our supply chain. We joined the Brazilian Soy Moratorium in 2006. And in 2015, we introduced our first comprehensive no deforestation policy. Since then, we made impressive progress, including achieving 99% traceability to milk in our farm supply chain, and full traceability to farm for direct suppliers in 25 key municipalities in the Brazilian Cerrado. Now we are taking our efforts to a new level. Last month, we announced our new policy to protect forests, biodiversity, and communities. As part of this ambitious plan, we aim to achieve full traceability throughout our direct and indirect South American soy supply chains by 2022 and have deforestation-free supply chains around the world by 2030. I am proud of the work our team is doing to deliver on our sustainability commitments and capabilities. We know they are a key driver of consumer decisions and business success. But more importantly, they are one of the ways in which we are living up to our purpose and enriching the quality of life around the world. I come back later to talk about the next steps in our journey and our strategy. But now, I'd like to turn the call over to Ray, who will take us through our business performance.