10-QPeriod: Q3 FY2014

Archer-Daniels-Midland Co Quarterly Report for Q3 Ended Sep 30, 2014

Filed November 5, 2014For Securities:ADM

Summary

Archer-Daniels-Midland Co. (ADM) reported solid financial results for the nine months ended September 30, 2014, with net earnings attributable to controlling interests increasing to $1,547 million, up from $968 million in the prior year period. This growth was driven by significant improvements across its Corn Processing and Agricultural Services segments, which saw operating profit rise by 71% and 101% respectively. Revenues for the nine months decreased by 8% to $60.3 billion, largely due to lower commodity prices, but volumes showed a modest increase, indicating underlying operational strength. The company also highlighted strong cash flow generation, with operating activities providing $4.4 billion. ADM's liquidity remains robust, with $4.9 billion in cash, cash equivalents, and short-term marketable securities, and $6.7 billion in unused lines of credit, underscoring its financial flexibility. A significant event during the quarter was the completion of the $3.0 billion acquisition of Wild Flavors GmbH, which is expected to expand ADM's offerings in the flavors and specialty ingredients market.

Financial Highlights

50 data points
Beta

Revenue

$18.12B

8.1% Gross Margin

Net Income

$747.00M

4.1% Net Margin

EPS (Diluted)

$1.14

Total Assets

$41.82B

Cash & Equivalents

$4.54B

Free Cash Flow

$3.23B

Financial Statements
Beta
Revenue$18.12B
Cost of Revenue$16.65B
Gross Profit$1.47B
SG&A Expenses$451.00M
Interest Expense$79.00M
Net Income$747.00M
EPS (Basic)$1.15
EPS (Diluted)$1.14
Shares Outstanding (Basic)650.00M
Shares Outstanding (Diluted)653.00M

Key Highlights

  • 1Net earnings attributable to controlling interests increased by 60% to $1,547 million for the nine months ended September 30, 2014, compared to $968 million in the prior year period.
  • 2Segment operating profit saw a substantial increase of 41% to $2,652 million for the nine months ended September 30, 2014, driven by strong performance in Corn Processing and Agricultural Services.
  • 3Revenues for the nine months decreased 8% to $60.3 billion, primarily due to lower average commodity prices, though volumes saw a slight increase.
  • 4The company completed the significant acquisition of Wild Flavors GmbH for approximately $3.0 billion, expanding its portfolio into flavors and specialty ingredients.
  • 5Operating cash flow remained strong at $4.4 billion for the nine months ended September 30, 2014.
  • 6ADM maintained a healthy liquidity position with $4.9 billion in cash, cash equivalents, and marketable securities, and $6.7 billion in available credit lines.
  • 7Inventories decreased significantly by $3.4 billion from December 31, 2013, to $8.0 billion as of September 30, 2014.

Frequently Asked Questions

ADM's revenues decreased by 8% to $60.3 billion for the nine months ended September 30, 2014, compared to $65.7 billion in the same period of 2013. This decline was primarily attributed to lower average sales prices related to decreased underlying commodity costs, partially offset by higher sales volumes in certain segments and a notable increase in the 'Other' segment.

The acquisition of Wild Flavors GmbH, completed on October 1, 2014, for approximately $3.0 billion enterprise value, was a significant subsequent event. While the financial results of Wild Flavors will be consolidated starting in Q4 2014, the company incurred $0.1 billion in foreign exchange hedging losses related to this acquisition during the third quarter of 2014.

ADM maintained a strong liquidity position as of September 30, 2014. The company reported $4.9 billion in cash, cash equivalents, and short-term marketable securities. Additionally, ADM had access to $6.7 billion in lines of credit, of which $6.6 billion was unused, indicating substantial financial flexibility.

The Corn Processing segment saw a significant increase in operating profit of 71% to $906 million, driven by improved performance in both Sweeteners and Starches and Bioproducts. The Agricultural Services segment also performed strongly, with operating profit up 101% to $671 million, largely due to improved Merchandising and Handling results. The Oilseeds Processing segment showed a modest increase in operating profit of 3% to $1,023 million.