10-KPeriod: FY2024

Archer-Daniels-Midland Co Annual Report, Year Ended Dec 31, 2024

Filed February 20, 2025For Securities:ADM

Summary

Archer-Daniels-Midland Company (ADM) reported a significant decrease in earnings before income taxes for the year ended December 31, 2024, down 47% to $2.3 billion, primarily driven by lower pricing and execution margins, and a substantial impairment charge of $461 million related to its investment in Wilmar. Total segment operating profit also saw a decrease of 28%, mainly due to weaker performance in the Ag Services and Oilseeds and Nutrition segments. The company is actively managing its exposure to commodity price fluctuations and has completed several strategic acquisitions in the Nutrition segment, including Revela Foods, FDL, PT Trouw Nutrition Indonesia, and Totally Natural Solutions Ltd., aiming to bolster its presence in high-growth markets. Despite a challenging year impacted by macroeconomic headwinds, inflation, and specific segment pressures like depressed vegetable oil demand and uncertainty around tax credits, ADM maintained its focus on its strategic pillars of Productivity, Innovation, and Culture. The company also continues to invest in sustainability initiatives, including regenerative agriculture practices with a goal to enroll five million acres by the end of 2025. However, ADM identified a material weakness in its internal control over financial reporting related to segment disclosures, which is being addressed through remediation efforts. The company also faces ongoing investigations from the SEC and DOJ concerning intersegment sales, the outcomes of which remain uncertain.

Financial Highlights

55 data points
Beta

Revenue

$85.53B

6.8% Gross Margin

Net Income

$1.80B

2.1% Net Margin

EPS (Diluted)

$3.65

Total Assets

$53.27B

Cash & Equivalents

$611.00M

Free Cash Flow

$1.23B

Financial Statements
Beta
Revenue$85.53B
Cost of Revenue$79.75B
Gross Profit$5.78B
R&D Expenses$269.00M
SG&A Expenses$3.71B
Interest Expense$706.00M
Net Income$1.80B
EPS (Basic)$3.66
EPS (Diluted)$3.65
Shares Outstanding (Basic)492.00M
Shares Outstanding (Diluted)493.00M

Key Highlights

  • 1Earnings before income taxes decreased by 47% to $2.3 billion for the year ended December 31, 2024, largely due to lower pricing, execution margins, and a $461 million impairment on the Wilmar investment.
  • 2Total segment operating profit decreased by 28% to $4.2 billion, primarily impacted by weaker results in Ag Services and Oilseeds and Nutrition segments.
  • 3Revenues declined by 9.4% to $85.5 billion, driven by lower sales prices across most product categories, although sales volumes saw an increase.
  • 4The company completed several strategic acquisitions in the Nutrition segment: Revela Foods, FDL, PT Trouw Nutrition Indonesia, and Totally Natural Solutions Ltd., for an aggregate of $948 million.
  • 5ADM is actively pursuing sustainability goals, including a commitment to no-deforestation in supply chains by 2025 and a goal to enroll five million acres in regenerative agriculture programs by the end of 2025.
  • 6A material weakness in internal controls over financial reporting related to segment disclosures was identified, and management is implementing remediation steps.
  • 7The company is cooperating with ongoing investigations by the SEC and DOJ concerning intersegment sales, with uncertain outcomes.

Frequently Asked Questions

ADM experienced a significant decrease in earnings before income taxes, down 47% to $2.3 billion. This was primarily due to lower pricing and execution margins across its segments, compounded by a substantial $461 million impairment charge on its investment in Wilmar. While overall revenues decreased due to lower sales prices, the company saw increased sales volumes in several product categories.

ADM has identified a material weakness in its internal control over financial reporting related to segment disclosures, specifically concerning the accounting practices and procedures for intersegment sales. Management is implementing a remediation plan that includes enhancing accounting policies, improving documentation of pricing guidelines for intersegment sales, strengthening control design and documentation, and providing ongoing training to relevant personnel. The effectiveness of these measures will be subject to sustained testing over time.

The Ag Services and Oilseeds segment faced headwinds including depressed vegetable oil demand and uncertainty around tax credits, leading to lower margins. The Nutrition segment showed mixed demand, with some pressure from inflation on alternative proteins, although recovery was seen in other food and beverage categories. The Carbohydrate Solutions segment maintained steady margins with solid demand for starches and sweeteners, supported by strong ethanol exports.

ADM's strategy is focused on three pillars: Productivity (cost optimization, process standardization, technology adoption), Innovation (modernization, digitization, sustainability-driven innovation), and Culture (collaboration, agility, talent development). The company also made strategic acquisitions in its Nutrition segment to enhance its offerings and market reach.