Archer-Daniels-Midland Company

Good morning and welcome to the ADM first quarter 2023 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, Megan Britt, Vice President, Investor Relations for ADM. Ms. Britt, you may begin.

Thank you, Bailey. Hello and welcome to the first quarter earnings webcast for ADM. Starting tomorrow, a replay of this webcast will be available on our investor relations website. Please turn to slide two. Some of our comments and materials may 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. 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 discuss our first quarter results provide ADM's perspective on the current market backdrop, and share progress highlights on our strategic priorities for the year. Our Chief Financial Officer, Vikram Luther, will review the drivers of our financial performance at the segment level and review our cash generation and capital allocation results. Juan will have some closing remarks, and then he and Vikram will take your questions. Please turn to slide three. I'll now turn the call over to Juan.

Thank you, Megan, and thanks to all those joining us for the call today. This morning, ADM reported strong first quarter adjusted earnings per share of $2.09, with an adjusted segment operating profit of $1.7 billion, and a trailing four-quarter average adjusted ROIC of 14%. Our performance demonstrates once again the advantage of ADM's uniquely integrated value chain and broad portfolio. along with the team's ability to respond nimbly to opportunities aligned to the three enduring trends of food security, health and well-being, and sustainability. All of this was achieved in a fluid economic environment where ripple effects are being felt from both inflationary and recessionary pressures, shifts in global demand and trade activity, and the ongoing war in Ukraine. Our team continues to find ways to rise above these challenges and meet our customers' needs for consistency, quality, and innovation at every turn across our business units. We have wrapped up Q1 with a strong balance sheet, healthy cash flows, and we are on track for our 2023 and long-term strategic growth plans. And we continue to pursue growth opportunities and increase shareholder returns in alignment with our disciplined capital allocation framework. This quarter, we also announced several exciting milestones in our continued growth and innovation strategy, including the opening of the world's first probiotic and postbiotic production facility in Valencia, Spain, which increases our global production capacity by a factor of five. agreements with ADM Ventures partners, Brightseed and Believer Meats to advance innovations in gut microbiome and cell-based meat, respectively, and our definitive agreement with Tallgrass to pave the way for carbon capture from ADM's Columbus, Nebraska complex, furthering our decarbonization agenda. Beyond the financial highlights of the quarter, we are proud to be named one of Fortune's most admired companies for the 15th year running, and to receive our fourth consecutive Ethisphere Award as one of the world's most ethical companies. It's an honor to be recognized externally, and it continues to demonstrate that ADM's culture and people are the engine behind our operational and financial success. As we look back on the quarter, I'd like to review it in the context of the 2023 framing we discussed in Q4's call and provide a few brief updates. Slide four, please. In January, we reviewed several factors that underpinned our confident outlook for 2023, and these same factors will continue to shape our performance throughout the year. The supply and demand situation remains fundamentally solid, with some normalization of supply alongside shifts in both the product driving demand and the origins providing supply. Supply and transportation constraints in the Black Sea region, severe drought in Argentina, the record Brazilian crop, and a resurgence of demand in China post-lockdown have allowed our team to take full advantage of our global footprint. Growth-based food demand remains resilient across key geographies, and with it we are seeing solid volumes and strong operating margins across vegetable oils, flavors, sweeteners, starches, and wheat milling. Demand for biodiesel and renewable green diesel is robust, driving continued strong growth crush margins. The strong biofuels demand and continued expectation for growth supports our investment in new crash capacity, like the additional 150,000 bushels per day from our Spiritwood North Dakota facility, scheduled to come online in time for the 2023 harvest. Nutrition's growth trajectory for the year remains on course. with a double-digit increase in our human nutrition pipeline compared to this point in 2022. As noted, we expect this growth to be significantly weighted to the back half of the year as we manage through some destocking impacts in beverage, lower margins in amino acids, and the broader demand fulfillment challenges we discussed in the last quarter. It's important to recognize that our team delivered strong Q1 results despite constantly evolving microeconomic conditions. ADM's ability to remain agile and apply the principles of productivity and innovation continues to position us well in a dynamic external environment. Let me take a moment to dig deeper into examples of how we are applying our productivity playbook across the organization and how decarbonization is helping us find paths for both innovation and growth. Slide five, please. From a productivity perspective, we have continued to focus attention on automation within many of our key operations facilities. Automation not only accelerates the modernization of our manufacturing footprint, it is helping us deliver significant savings at the enterprise level. Whether we are reducing chemicals usage, delivering yield improvements, or supporting operational reliability, Our automation program now has a plan to scale cost improvements across our most critical operational assets over the next several years. Eight of our plans are currently underway, and we expect that most of these will complete their automation implementation by year-end. And we're seeing operational and financial impacts immediately following implementation. Our most recent implementation in Cedar Rapids is already generating millions of dollars in efficiencies in just the first few months, confirming the double-digit returns we expect to see from this project. As a whole, the impact on operating profit is significant, with a target run rate of approximately $200 million per year when implementations are complete, at more than 70 facilities over the next seven years. This is only one example of productivity measures we're undertaking to ensure ADM maintains agility given the levels of uncertainty in the external environment. Each of our businesses and functions is identifying opportunities to drive efficiency at scale while maintaining a focus on growth. Our decarbonization journey continues to move at a rapid pace and is allowing us to showcase innovation in action. Our advantaged position in alternative fuels production has prepared us for the demand cycle that continues to rise across biodiesel and renewable diesel. We continue to explore strategic options to convert ethanol into sustainable aviation fuel. The multi-billion dollar addressable opportunity represented by SAF alone highlights the criticality of access to low carbon feedstocks at a scale exponentially higher than what is available today. This is why we are prioritizing the decarbonization of our Decatur complex as the first critical step in unlocking significant value. Last year, we announced one of the world's First, ultra-low emissions power plants would be built adjacent to our Decatur processing complex, supplying ADM with low-emission steam and electricity. This leverages our world-class facility that has been successfully sequestered in CO2 for more than a decade. ADM is a pioneer in carbon capture and sequestration, and we are extending that expertise with a plan to triple the number of CCS wells in the Decatur area and sequester up to 7 million metric tons of CO2 per year. This positions ADM as a clear leader in the ability to supply customers with low carbon feedstocks and accelerate the decarbonization of their own value chains. And we think this is just the beginning. I'll speak more about how we are defining that next phase as we wrap up. Now, I would like to turn the call over to Vikram to talk about our business performance. Vikram?