10-QPeriod: Q1 FY2022

Archer-Daniels-Midland Co Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 26, 2022For Securities:ADM

Summary

Archer-Daniels-Midland Co. (ADM) reported a strong first quarter for 2022, with significant increases in revenues and net earnings compared to the same period in the prior year. Revenues surged by 25% to $23.7 billion, driven by higher sales prices across its key segments, particularly in Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. Net earnings attributable to controlling interests more than doubled, reaching $1.05 billion, or $1.86 per diluted share, up from $689 million, or $1.22 per diluted share, in Q1 2021. The company's performance was bolstered by favorable market conditions, including tight global supply chains, strong demand for its products, and elevated commodity prices, although these same factors also led to increased costs. Despite geopolitical uncertainties, such as the conflict in Ukraine, ADM demonstrated resilience. The company maintained a strong liquidity position and continued to invest in its strategic growth initiatives focused on productivity and innovation.

Financial Highlights

48 data points
Beta

Revenue

$23.65B

8.0% Gross Margin

Net Income

$1.05B

4.5% Net Margin

EPS (Diluted)

$1.86

Total Assets

$64.87B

Cash & Equivalents

$1.08B

Free Cash Flow

-$1.42B

Financial Statements
Beta
Revenue$23.65B
Cost of Revenue$21.75B
Gross Profit$1.90B
SG&A Expenses$829.00M
Interest Expense$92.00M
Net Income$1.05B
EPS (Basic)$1.86
EPS (Diluted)$1.86
Shares Outstanding (Basic)566.00M
Shares Outstanding (Diluted)568.00M

Key Highlights

  • 1Revenue increased by 25% to $23.7 billion, primarily due to higher sales prices across all segments.
  • 2Net earnings attributable to controlling interests surged by 53% to $1.05 billion ($1.86 per diluted share) from $689 million ($1.22 per diluted share) in the prior year.
  • 3Segment operating profit increased by 39% to $1.54 billion, reflecting strong performance in Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition.
  • 4The Ag Services and Oilseeds segment saw revenues rise 22% to $18.3 billion, driven by higher sales prices and robust demand.
  • 5Carbohydrate Solutions revenues grew 51% to $3.4 billion, supported by higher sales prices and volumes.
  • 6Nutrition segment revenues increased 23% to $1.9 billion, benefiting from higher sales prices and volumes.
  • 7The company maintained a strong liquidity position with $9.3 billion in total available liquidity, comprising cash and unused lines of credit.

Frequently Asked Questions

ADM's revenue increased by 25% to $23.7 billion primarily due to higher sales prices across its key segments, especially in Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. This was driven by strong global demand and tight supply conditions for agricultural commodities and products.

While ADM has operations in Ukraine and Russia, their direct impact on consolidated revenues was less than 0.1%. However, the conflict contributed to tighter global commodity stocks, increased price volatility, and disruptions in supply chains, which indirectly benefited ADM through higher commodity prices and strong market demand in other regions, despite also increasing input costs.

ADM's strategic transformation is focused on two pillars: Productivity and Innovation. Productivity efforts include optimizing procurement, supply chain, and operations, implementing business transformation programs, and increasing the use of technology. Innovation activities involve enhancing customer experience, sustainability-driven innovation, and pursuing organic growth and strategic acquisitions.

ADM maintained a strong liquidity position with $9.3 billion in total available liquidity, including cash and unused credit lines. The company relies on cash generated from operations and access to credit markets. It also has a robust balance sheet with significant shareholders' equity and well-managed debt levels, ensuring financial flexibility for operations and growth initiatives.