Q1 2024 Archer Daniels Midland Co Earnings Call

Operator: Good morning and welcome to the ADM first quarter 2024 earnings conference call. All lines have been placed on mute in a listen-only mode to prevent background noise. As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's call, Megan Britt, Vice President of Investor Relations for ADM. Ms. Britt, you may begin.

Good morning, and welcome to the ADM first quarter 2020 full earnings culture, that's cool.

Your lines have been placed on mute on a listen only mode to prevent background noise.

Linda This conference call is being recorded.

Brit: And I'd like to introduce your host for today's cool, making Brit Vice President Investor Relations for IBM Miss Britt you may begin.

Megan Britt: Hello and welcome to ADM's first quarter 2024 earnings conference call. Our prepared remarks today will be led by Juan Luciano, our Board Chair and Chief Executive Officer, and Ismael Roig, our Interim Chief Financial Officer.

Brit: Hello, and welcome to Adm's first quarter 'twenty 'twenty four earnings conference call.

Brit: Paired remarks today will be led by Juan Luciano Our board Chair and Chief Executive Officer, and his show ROIC, our interim Chief Financial Officer.

Megan Britt: We have prepared presentation slides to supplement our remarks on the call today, which are posted on the Investor Relations section of the ADM website and through the link to our webcast. 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 uncertainty.

Brit: We have prepared presentation slides to supplement our remarks on the call today, which are posted on the Investor Relations section of the AAM website and through the link to our webcast.

Brit: 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.

Brit: These statements and materials are based on many assumptions and factors that are subject to risks and uncertainties.

Megan Britt: 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.

Brit: 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.

Brit: 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 I'll now turn the call over to Juan.

Juan Ricardo Luciano: Thank you Megan.

Juan Ricardo Luciano: Today, ADM reported first quarter adjusted earnings per share of $1.46, adjusted segment operating profits of 1.3 billion dollars, and a trailing four-quarter average adjusted ROIC of 11.2 percent. Our first quarter operating cash flow before working capital was $900 million, in a year where the buildup of grain and oilseed supply is expected to create pressure on margins.

Juan Ricardo Luciano: <unk> reported first quarter adjusted earnings per share of $1.46.

Juan Ricardo Luciano: Adjusted segment operating profit of $1 $3 billion on a trailing four quarter adjusted auto IC of 11, 2%.

Juan Ricardo Luciano: Our first quarter operating cash flow before working capital was $900 million.

Juan Ricardo Luciano: In a year, where the buildup of grain and oilseeds supply is expected to create pressure on margins.

Juan Ricardo Luciano: Our teams are proactively taking action to manage through the cycle, driving structural earnings, ROIC, and cash flow generation. Our strong performance and disciplined management of our balance sheet continue to allow us to invest in our business and return cash to shareholders. Next slide.

Juan Ricardo Luciano: Teams are proactively taking actions to manage through this cycle that I, even a structure earnings otherwise see on cash flow generation.

Juan Ricardo Luciano: Or were the strong performance and disciplined management of our water balance sheets continue to allow us to invest in our business and return cash to shareholders next slide please.

Juan Ricardo Luciano: Last month, we laid out three priorities for value creation in 2024, one managing through the site. 2. Nutrition Recovery, and 3. Enhanced Return of Cash to Shareholders. We made progress on each of these priorities in the first quarter. Our efforts to manage through the cycle highlight ADM's ability to mitigate challenging headwinds while building structurally on enduring global trends such as sustainability, to share a few examples of progress in the first quarter.

Juan Ricardo Luciano: Last month, we laid out three priorities for value creation in 2024.

Juan Ricardo Luciano: One my initiatives through the cycle to nutritional recovery and three in the country return of cash to shareholders.

Juan Ricardo Luciano: We made progress on each of these priorities in the first quarter.

Juan Ricardo Luciano: Our efforts to manage through the cycle highlights <unk> ability to mitigate challenging headwinds while building the structure really on enduring global trends such as sustainability.

Juan Ricardo Luciano: To share a few examples of progress in the first quarter.

Juan Ricardo Luciano: We have been ramping up production at our Green Bison Joint Venture with Marathon, with increased volumes and utilization in ECHO, and we're expecting to be at sustained full-run rates for harvest this fall. We are continuing to evolve the carbohydrate solutions business through decarbonization, driving nearly 10% volume growth in bio solutions in Q1 while managing solid demand across the core business. Driven by increasing demand for sustainably sourced feedstocks and solutions, we are announcing today that we have not only exceeded our 2023 goal of 2 million acres in our regenerative ag programs, but we have also increased our 2025 average goal from 4 to 5 million acres.

Juan Ricardo Luciano: We have been ramping up production at our Green visor in joint venture with marathon with increased volumes and utilization in April.

Juan Ricardo Luciano: We would expect them to be a sustained full run rate for harvest. This fall.

Juan Ricardo Luciano: We're continuing to evolve the carbohydrate solutions business through decarbonization.

Juan Ricardo Luciano: Driving nearly 10% volume growth in bio solutions in Q1 was admonishing solid demand across the core business.

Juan Ricardo Luciano: Driven by increasing demand for sustainably sourced feedstocks and solutions. We are announcing today that we're not only exceeded our 'twenty to 'twenty three goal of 2 million acres I would regenerate there'd be odd programs. We have also increased our 2025.

Juan Ricardo Luciano: Go from four to 5 million acres.

Juan Ricardo Luciano: This growth highlights the leadership role ADM is playing across the renewable ag landscape, which is built upon the longstanding relationships we have with our more than 200,000 farmers. The Drive for Excellence program is focused on uncovering efficiency and effectiveness opportunities across ADM, taking action to improve outcomes and deliver cost-savings. To date, we have generated a pipeline of nearly 1,200 validated proposals, and many of these are already delivering results, for example. Colleagues in Thailand have developed a Chatbot to automate the processing of thousands of logistic transactions previously done with a manual process, reducing errors and dramatically improving operating performance.

Juan Ricardo Luciano: This growth highlights the leadership role ADM is playing across the region landscape, which is built upon the long standing relationships, we have with our more than 200000 farmers partners.

Juan Ricardo Luciano: Does that mean for excellence program is focused on uncovering efficiency and effectiveness opportunities across ADM thinking.

Juan Ricardo Luciano: Taking action to improve outcomes and deliver cost savings.

Juan Ricardo Luciano: To date, we have generated a pipeline of nearly 1200 validated proposals menu.

Juan Ricardo Luciano: Many of these are already delivering results.

Juan Ricardo Luciano: For example.

Juan Ricardo Luciano: Colleagues in Thailand had developed chest book to ultimate processing of thousands of logistic transactions previously done with the manual process, reducing errors and dramatically improving operating performance.

Juan Ricardo Luciano: Colleagues in Spain have released capacity in our Valencia extract facility by more than 35% by adjusting the extraction time. These projects, and more like this, will support us in achieving our aggressive cost savings objective of $500 million over the next two years, moving to nutrition. The team is focused on actions across all areas of plant recovery, and we've seen expected sequential improvement coming out of the fourth quarter. The impact of these actions will accelerate in the back half of the year, consistent with what we mentioned in the last earnings call. Let me provide a few examples of progress we're making across the targeted areas.

Juan Ricardo Luciano: Colleagues in Spain have released capacity in our balance sheet extracts facility by more than 35%.

Juan Ricardo Luciano: Just in the construction time.

Juan Ricardo Luciano: This project on more like these will support us in achieving our aggressive cost savings objective of $500 million over the next two years.

Juan Ricardo Luciano: Moving to nutrition.

Juan Ricardo Luciano: <unk> is focused on actions across all areas of plant recovery and we see an expected sequential improvement coming out of the fourth quarter.

Juan Ricardo Luciano: The impact of these actions will accelerate in the back half of the year consistent with what we mentioned in the last earnings call.

Juan Ricardo Luciano: Let me provide a few examples of progress, we're making across our targeted areas.

Juan Ricardo Luciano: Our focus on operations and the supply chain has helped us to overcome some of our demand fulfillment challenges, particularly in EMEA Flavors, where the team has rallied to adjust our fulfillment processes following the go-live of 1ADM and improve volumes delivered sequentially. We're leveraging our improved M&A playbook to support the integration of our most recent flavor acquisition and now forecast better results than the initial deal model estimate to increase speed, agility, and responsiveness to customer needs while delivering more wins across each market segment.

Juan Ricardo Luciano: Our focus on operations and supply chain has helped us debottleneck some of our demand fulfillment challenges, particularly in EMEA flavors, where the team has rallied to adjust our fulfillment processes. Following the go live of one ADM unimproved volumes delivered at that sequentially.

Juan Ricardo Luciano: We're leveraging our improved M&A playbook to support the integration of our most recent flavor acquisitions.

Juan Ricardo Luciano: Now forecast better results than the initial deal model estimates.

Juan Ricardo Luciano: To increase speed agility, and responsiveness to customer needs, while delivering more wins across each market segment, we have fine tuned our go to market and Coa organizations to best aligned to demand.

Juan Ricardo Luciano: We have fine-tuned our go-to market and COE organizations to best align to demand. Looking to our capital allocation efforts, we can maintain our balanced capital allocation approach while leveraging excess cash flow for enhanced returns to shareholders. We have returned a significant amount of cash to shareholders to date, as we have repurchased more than 20 million shares. As mentioned last month, our focus for excess capital deployment will remain centered on shareholders. In summary, we are making measurable progress across each of our three major priority areas in 2024, which is setting us up well to navigate the market headwinds we are facing this year and deliver in line with our expectations. I would like to turn the call over to Ismael for more detail on the first quarter financial results. Ismael?

Juan Ricardo Luciano: Looking to our capital allocation efforts, we have maintained our balanced capital allocation approach leveraging excess cash flow for enhanced returns to shareholders.

Juan Ricardo Luciano: We returned a significant amount of cash to shareholders to date, as we repurchased more than 20 million shares.

Juan Ricardo Luciano: As mentioned last month.

Juan Ricardo Luciano: Our focus for excess capital deployment will remain centered on the shareholders.

Juan Ricardo Luciano: In summary, we are making measurable progress across each of our three major priority areas in 2020 four.

Juan Ricardo Luciano: Which is setting us up well to navigate the market headwinds we are facing this year and delivered in line with our expectations.

Juan Ricardo Luciano: I would like to turn the call over to east smiles for more detail on the first quarter financial results a smile.

Ismael Roig: Juan, let's start on slide six, which provides overall segment operating profit and EPS for the first quarter of 2024. Adjusted segment operating profit was $1.3 billion for the first quarter, a 24% decrease versus the prior year. At a high level, operating profit was primarily down year over year in ag services and oil seeds and nutrition. In the other segment, which includes ADMIS and captive insurance, we had a 25% increase in operating profit. Adjusted earnings per share were $1.46 for the quarter.

East Smiles: Thank you Juan let's start on slide six which provides overall segment operating profit and EPS for the first quarter of 2024.

East Smiles: Adjusted segment operating profit was $1 3 billion for the first quarter a.

East Smiles: 24% decrease versus the prior year.

East Smiles: At a high level operating profit was primarily down year over year in AG services, and oilseeds and nutrition.

East Smiles: In the other segment, which includes <unk> and captive insurance, we had a 25% increase in operating profit.

East Smiles: Adjusted earnings per share were $1 46 for the quarter.

Ismael Roig: Lower pricing and execution margins, primarily driven by margin normalization in the ASNO business, led to a $1 per share decrease. This includes a lower mark-to-market impact in ASNO of approximately $0.38 per share. Our enhanced focus on operational excellence and improving the reliability of our assets, as well as the ramp-up of our Green Bison JV, led to volume improvement in the AS&O segment, resulting in a 20 cents per share increase in EPS versus the prior year.

East Smiles: Lower pricing and execution margins, primarily driven by margin normalization in the <unk> business led to a $1 per share decrease.

East Smiles: This includes lower mark to market impacts in <unk> of approximately 38 per share.

East Smiles: Our enhanced focus on operational excellence and improving the reliability of our assets as well as the ramp up of our Green Bison JV led to volume improvement in the <unk> segment, resulting in a <unk> 20 per share increase in EPS versus the prior year.

Ismael Roig: Lower manufacturing costs and input costs led to a $0.15 per share increase versus the prior year, partially offset by negative impacts associated with unplanned downtime at our Decatur East facility. Higher equity earnings, primarily related to Worldmar, contributed a $0.07 per share increase versus the prior year. Increased corporate costs related to the 180M implementation and legal fees drove a decrease of $0.11 per share versus the prior year. However, benefits from share repurchases more than offset negative impacts related to a higher adjusted income tax, leading to a 6 cents per share increase versus the prior year.

East Smiles: Lower manufacturing costs and input costs led to a <unk> 15 per share increase versus the prior year.

East Smiles: Partially offset by negative impacts associated with unplanned downtime at our Decatur East facility.

East Smiles: Higher equity earnings primarily related to wilmar attributed a seven cent per share increase versus the prior year.

East Smiles: Increased corporate costs related to the 100, ATM implementation and legal fees drove a decrease of 11 <unk> per share versus the prior year.

East Smiles: In other benefits from share repurchases more than offset negative impacts related to a higher adjusted income tax rate, leading to a <unk> <unk> per share increase versus the prior year.

Ismael Roig: Moving to slide 7, let's look at our segment performance for ASNO. For the first quarter, the ASNO team delivered $864 million in operating profit, reflecting increasing headwinds from lower commodity prices and ample supply. Although partially offset by improvements in process volumes and manufacturing costs as we enhance our focus on items within our control, the Act Services sub-segment operating profit was lower versus the prior year, primarily due to the stabilization of trade flows leading to lower global trade and risk management results. Slower farmer selling also negatively impacted export volumes and margins in South America.

East Smiles: Moving to slide seven let's look at our segment performance for <unk>.

East Smiles: For the first quarter, the <unk> team delivered $864 million in operating profit, reflecting increasing headwinds from lower commodity prices and ample supplies.

East Smiles: Partially offset by improvements in process volumes and manufacturing costs as we enhanced our focus on items within our control.

East Smiles: The AG services Subsegment operating profit was lower versus the prior year.

East Smiles: Primarily due to the stabilization of trade flows leading to lower global trade and risk management results.

East Smiles: Slower farmer, selling also negatively impacted export volumes and margins in South America.

Ismael Roig: Crushing subsegment operating profit for the quarter of $232 million was lower versus the prior year. Increased imports of used cooking oil and the anticipation of large South American supplies negatively impacted North American soy crush margins. More than offsetting the benefits from improved process volumes and lower manufacturing costs, there were positive mark-to-market timing impacts of approximately $40 million versus positive timing impacts of approximately $240 million in the first quarter of 2023.

East Smiles: Crushing sub segment operating profit for the quarter of $232 million was lower versus the prior year.

East Smiles: Increased imports of used cooking oil and the anticipation of large south American supplies negatively impacted north American soy crush margins more than offsetting the benefits from improved process volumes and lower manufacturing costs.

East Smiles: There were positive mark to market timing impacts during the quarter of approximately 40 million versus positive timing impacts of approximately $240 million in the first quarter of 2023.

Ismael Roig: Refined products and other subsegment results were $157 million. Results were driven by weaker North American refining margins due to the increased imports of used cooking oil, as well as negative mark-to-market timing impacts of approximately $30 million versus positive impacts of approximately $40 million in the prior year. Equity earnings from Willimar were $149 million during the first quarter, higher than the prior year. Moving to slide eight, let's look at a carbohydrate solution.

East Smiles: Refined products and other sub segment results were $157 million.

East Smiles: Results were driven by weaker North American refining margins due to the increased imports of used cooking oil as well as negative mark to market timing impact of approximately $30 million versus positive impacts of approximately $40 million in the prior year.

East Smiles: Equity earnings from Wilmar, where $149 million during the first quarter higher than the prior year.

East Smiles: Moving to slide eight let's look at our carbohydrate solutions.

Ismael Roig: For the first quarter of 2024, the carbohydrate solution segment operating profit was $248 million. The team executed well in a solid demand environment, as well as advanced our biosolutions platform with strong volume growth. Turning to the subsequent...

East Smiles: For the first quarter of 2020 for carbohydrate solutions segment operating profit was $248 million.

East Smiles: The team executed well in a solid demand environment as well as advance our bio solutions platform with strong volume growth.

East Smiles: Turning to the sub segments.

Ismael Roig: In the starches and sweeteners subsegment, strong starch and sweetener margins in North America were offset by pressured domestic ethanol margins due to strong industry production and elevated stocks, as well as moderating margins in the EMEA region. In the Vantage Corn Processing subsegment, strong export demand for sustainably certified ethanol supported both volumes and improved margins, leading to an improvement in year-over-year results Please turn to slide 9.

East Smiles: And the starches and sweeteners subsegment strong starches and sweeteners margins in North America were offset by pressure domestic ethanol margins due to strong industry production and elevated stocks as well as moderating margins in the EMEA region.

East Smiles: In the vantage corn processing sub segment strong export demand for sustainably certified ethanol supported both volumes and improved margins leading to an improvement in year over year results.

Speaker Change: Please turn to slide nine.

Speaker Change: Nutrition revenues were $1 8 billion for the quarter.

East Smiles: In the human nutrition Subsegment strong M&A revenue contributions from our recent acquisitions as well as price and mix benefits in flavors were partially offset by lower volumes in plant based proteins and normalizing pricing in the <unk> markets.

Ismael Roig: Nutrition revenues were $1.8 billion for the quarter. In the human nutrition subsegment, strong M&A revenue contributions from our recent acquisitions as well as price and mixed benefits in flavors were partially offset by lower volumes in plant-based proteins and normalizing pricing in the texturants market. Our animal nutrition subsegment had lower revenues versus the prior year, driven by lower pricing and mix.

East Smiles: Our animal nutrition sub segment had lower revenues versus the prior year, driven by lower pricing and mix.

East Smiles: Demand creation is remains strong and provided significant revenue pipeline opportunities, we anticipate steady improvement in demand fulfillment throughout the course of the year recovering a significant portion of volumes in the second half of the year.

East Smiles: Please turn to slide 10.

East Smiles: While we have room to grow on our commitment to restore the growth trajectory of the nutrition business. We believe Q1 was an important first step showing sequential improvement from a challenged fourth quarter evidenced progress in our operations.

Ismael Roig: Demand creation has remained strong and provided significant revenue pipeline opportunities. We anticipate steady improvement in demand fulfillment throughout the course of the year, recovering a significant portion of volumes in the second half of the year. Please turn to slide 10.

East Smiles: For the first quarter and nutrition segment operating profit was $84 million.

East Smiles: Human nutrition subsequent results of 76 million were lower than the prior year, driven primarily from headwinds in the specialty ingredients business due to higher fixed cost absorption at Decatur East and normalizing <unk> pricing.

Ismael Roig: While we have room to go on our commitment to restore the growth trajectory of the nutrition business, we believe Q1 was an important first step, showing sequential improvement from a challenged fourth quarter, demonstrating progress in our operation. For the first quarter, the nutrition segment operating profit was $84 million. Human nutrition subsegment results of 76 million were lower than the prior year, driven primarily from headwinds in the specialty ingredients business due to higher fixed cost absorption at Decatur East and normalizing texture and price. Animal nutrition subsegment results of $8 million were higher compared to the prior year, primarily driven by cost optimization efforts and lower commodity prices supporting margins. Please turn to slide 11.

East Smiles: Animal nutrition sub segment results of $8 million were higher compared to the prior year, primarily driven by cost optimization efforts and lower commodity prices supporting margins.

East Smiles: Please turn to slide 11.

East Smiles: For the first quarter other segment operating profit was $121 million up 25% compared to the prior year.

East Smiles: The improvement was largely driven by improved captive insurance results on higher program premiums and lower claim losses.

East Smiles: In corporate unallocated corporate cost increased versus the prior year on higher global technology investments to support digital transformation efforts as well as increased legal fees.

East Smiles: Other corporate was unfavorable compared to the prior year due to an investment valuation loss of approximately $18 million.

Ismael Roig: For the first quarter, other segment operating profit was $121 million, up 25% compared to the prior year. The improvement was largely driven by improved captive insurance results on higher program premiums and lower claim losses. In corporate, unallocated corporate costs increased versus the prior year on higher global technology investments to support digital transformation efforts, as well as increased legal fees. Other corporate was unfavorable compared to the prior year due to an investment valuation loss of approximately $18 million. Please turn to slide 12.

East Smiles: Please turn to slide 12.

East Smiles: With healthy cash flows and a strong balance sheet, we have maintained our balanced capital allocation approach, while leveraging excess cash flow for enhanced returns to shareholders.

East Smiles: We entered 2024 with momentum, which has allowed us to return $1 $3 billion to shareholders via repurchases during the quarter with $1 billion being executed through an accelerated share repurchase program.

East Smiles: We intend to actualize, the additional $1 billion of share repurchases approved last quarter throughout the remainder of the year.

East Smiles: We still anticipate capital expenditures will be held at a level aligned with depreciation and amortization focused largely on investments to secure reliability of asset performance through modernization and digitization efforts.

East Smiles: Now, let's transition to a discussion on our full year guidance on slide 13.

Ismael Roig: With healthy cash flows and a strong balance sheet, we have maintained our balanced capital allocation approach while leveraging excess cash flow for enhanced returns to shareholders. We entered 2024 with Momentum, which allowed us to return $1.3 billion to shareholders via repurchases during the quarter, with $1 billion being executed through an accelerated share repurchase program. We intend to actualize the additional $1 billion of share repurchases approved last quarter throughout the remainder of the year.

East Smiles: Our first quarter results were largely in line with expectations and in turn our 2020 for planning assumptions and EPS guidance remains unchanged.

East Smiles: We are raising our corporate net interest expense guidance from approximately 500 million to approximately $525 million as the federal reserve has signaled that the probability of interest rate cuts in 2024 has decreased.

East Smiles: Last month, we mentioned that the global grain and oilseed supply is expected to increase as anticipated improvements in weather, which support larger production levels in key South American countries with this we anticipate that commodity prices will continue to ease from the recent highs of the past two years and the <unk>.

Ismael Roig: We still anticipate capital expenditures will be held at a level aligned with depreciation and amortization, focusing largely on investments to secure reliability of asset performance through modernization and digitization efforts. Now, let's transition to a discussion on our full-year guidance on slide 13. Our first quarter results were largely in line with expectations, and in turn, our 2024 planning assumptions and EPS guidance remained unchanged. We are raising our corporate net interest expense guidance from approximately $500 million to approximately $525 million as the Federal Reserve has signaled that the probability of interest rate cuts in 2024 has decreased.

East Smiles: <unk> flows will adjusted at these locations.

East Smiles: As a result, we anticipate the global soybean crush margins would moderate in 2024 likely moving into a range of $35 per metric ton to $60 per metric ton.

East Smiles: During the first quarter the team executed well on a strong forward book supported by new demand.

East Smiles: Leading to executed soy crush margins of approximately $55 per metric ton.

East Smiles: As we look today, we see that the forward curve reflects the assumption of ample south American supplies and the return of Argentinian production, specifically in Q2 and Q3.

East Smiles: While the supply side, certainly has pushed forward curves to the lower end of that range in the near term we remain constructive from the demand side, we continue to expect vegetable oil demand growth from renewable diesel as law.

Juan Ricardo Luciano: Last month, we mentioned that the global grain and oilseed supply is expected to increase as anticipated improvements in weather would support larger production levels in key South American countries. With this, we anticipate that commodity prices will continue to ease from the recent highs of the past two years and that trade flows will adjust to the dislocation. As a result, we anticipate the global soybean crush margins will moderate in 2024, likely moving into a range of $35 per metric ton to $60 per metric ton.

East Smiles: Large facilities ramp up in Q2 and Q3, despite the increase in imports of used cooking oil.

East Smiles: From the soybean meal side, lower soybean meal prices are incentivizing demand supporting producer profitability and in turn leading to higher inclusion rates.

East Smiles: Now moving to the breakdown of expectations by segment for Q2 2024 on slide 14.

East Smiles: In <unk>, we anticipate the second quarter to be significantly lower versus elevated prior year levels.

Juan Ricardo Luciano: During the first quarter, the team executed well on a strong forward book supported by meal demand, leading to executed soy crush margins of approximately $55 per metric ton. As we look today, we see that the forward curves reflect the assumption of ample South American supplies and the return of Argentinian production, specifically in Q2 and Q3. While the supply side certainly has pushed forward curves to the lower end of that range in the near term, we remain constructive from the demand side.

East Smiles: We anticipate our average global soy crush margin to be towards the lower end of the guided range during the second quarter as the market balances strong soybean availability against increased crush capacity.

East Smiles: We still remain confident in our full year planning assumptions as we move through the seasonally lower middle of the year as the world pivots to South American production.

Juan Ricardo Luciano: We continue to expect vegetable oil demand growth from renewable diesel as large facilities ramp up in Q2 and Q3, despite the increase in imports of used cooking oil. On the soybean meal side, lower soybean meal prices are incentivizing demand, supporting producer profitability, and, in turn, leading to higher inclusion rates. Now moving to the breakdown of expectations by segment for Q2 2024 on slide 14. For ASNO, we anticipate the second quarter to be significantly lower versus elevated prior year levels.

East Smiles: In carbohydrate solutions, we anticipate the second quarter to be higher versus the prior year, driven by solid demand and margins in North American starches and sweeteners.

East Smiles: Partially offset by moderating margins in wheat milling and international corn milling after elevated results in the prior year period.

East Smiles: We anticipate solid demand for ethanol, both domestically and in the export markets similar to the prior year.

East Smiles: For nutrition, the second quarter is expected to be lower versus the prior year as we faced headwinds in specialty ingredients, we anticipate to see another quarter of sequential improvement as we continue to make progress in demand fulfillment.

East Smiles: Back to you.

Juan Ricardo Luciano: We anticipate our average global soy crush margin to be towards the lower end of the guided range during the second quarter as the market balances strong soybean availability against increased crush capacity. However, we still remain confident in our full-year planning assumptions as we move through the seasonally lower middle of the year as the world pivots to South American production. In carbohydrate solutions, we anticipate the second quarter to be higher versus the prior year driven by solid demand and margins for North American starches and sweeteners.

Speaker Change: Thank you Ishmael, please turn to slide 15.

Speaker Change: As you can see our team is continuing to improve execution excellence across our strategic and operational priorities, which requires a level of agility that is a hallmark of adm's workforce.

Speaker Change: We're focusing the organization on a combination of productivity and innovation to help offset increasingly challenging market conditions based on growing commodity supply.

Speaker Change: Our teams are looking for every opportunity to manage what we can control.

Speaker Change: Remaining nimble to adjust quickly to external circumstances, while advancing our strategy.

Juan Ricardo Luciano: Although partially upset by moderating margins in wheat milling and international corn milling after elevated results in the prior year period, we anticipate solid demand for ethanol, both domestically and in export markets, similar to the prior year. For nutrition, the second quarter is expected to be lower versus the prior year as we face headwinds in specialty ingredients. However, we anticipate another quarter of sequential improvement as we continue to make progress in demand fulfillment. Back to you.

Speaker Change: When we look ahead to the rest of the year our business priorities in 2024 with us in a position to manage through this cycle.

Speaker Change: Through the differentiation and evolution of our business models in AG services, and oilseeds anchor of solutions, our drive for Excellence program.

Speaker Change: The recovery of our nutrition business and continued focus on shareholder returns we have confidence in our outlook for the full year.

Speaker Change: Thanks for your time today, we look forward to taking your questions.

Juan Ricardo Luciano: Thank you, Ismael. Please turn to slide 15.

Speaker Change: Operator, please open the line for questions.

Juan Ricardo Luciano: As you can see, our team is continuing to improve execution excellence across our strategic and operational priorities, which requires a level of agility that is a hallmark of ADM's work. We're focusing the organization on a combination of productivity and innovation to help offset increasingly challenging market conditions based on growing commodity supply. Our teams are looking for every opportunity to manage what we can control, remaining nimble to adjust quickly to external circumstances while advancing our strategy.

Speaker Change: And Keith.

Speaker Change: Wonder if your line is now ask a question star followed by one on your telephone keypad.

Speaker Change: Yeah.

Speaker Change: Our first question for today comes from Andrew <unk> of BMO.

Speaker Change: Andrew Your line is now open. Please go ahead.

Andrew: Hey, good morning, Thanks for taking the question.

Andrew: Good morning, I guess I wanted to ask about the interplay good morning.

Andrew: Wanted to ask about the interplay between U S and South America.

Andrew: Our ops and timing and farmer selling in terms of the implications for crush margins and how you're thinking about that it just it seems like you've got some delayed farmer selling out of South America that could push out the.

Juan Ricardo Luciano: When we look ahead to the rest of the year, our business priorities in 2024 put us in a position to manage through this cycle. Through the differentiation and evolution of our business models in active services analysis and current solutions, our Drive for Excellence program, the recovery of our nutrition business, and continued focus on shareholder returns, we have confidence in our outlook for the full year. Thanks for your time today. We look forward to taking your questions. Operator, please open the line for questions.

Andrew: Timing to which that that crop comes to market and so I guess I'm just curious how youre thinking about the balance there and ultimately kind of the confidence that you have as we get into the back part of the year.

Andrew: Crush margins consistent with with your expectations. Thanks.

Speaker Change: Yes, Thank you Andrew.

Speaker Change: So what we're seeing in South America at the moment, Brazil has had a little bit of a better sell in the last couple of weeks.

Speaker Change: From a farmer perspective.

Speaker Change: Given that.

Operator: Thank you. As a reminder, if you'd like to ask a question, that's a star followed by one on the telephone keypad.

Speaker Change: With the harvest and also some of the devaluation of the real so so within the crush margins there for Q2, improving a little bit around our portfolio.

Andrew Strelzik: Hey, good morning. Thanks for taking the time to answer the question. I guess I wanted to ask about the interplay. Good morning. I wanted to ask about the interplay between U.S. and South American crops and timing and farmer selling in terms of the implications for crush margins and how you're thinking about that. It just, you know, we've got some delayed farmer selling out of South America that could push out the timing to which that crop comes to market. And so I guess I'm just curious how you're thinking about the balance there.

Speaker Change: In Argentina.

Speaker Change: <unk>, a little bit more difficult to read Argentina.

Speaker Change: With the economic plans and the uncertainty about how the government navigates through the difficult times. There are also a lot of even when the farmer may agree to sell there are some strikes like right. Now there are some strikes in Argentina are popping through every sector of the economy, so a little bit more difficult to predict but.

Speaker Change: The realities of that crop will come to the market and we're starting to see that in crush margins and you can see that so.

Speaker Change: With a smile.

Juan Ricardo Luciano: Yeah, thank you, Andrew. So what we're seeing in South America at the moment, Brazil has had a little bit of a better selling performance in the last couple of weeks, from the farmer perspective, given that with the harvest and also some of the devaluation of the real. So, we've seen the crash margins there for Q2 improving a little bit around our portfolio of products. In Argentina, it's a little bit more difficult to read, you know, Argentina, with the economic plans and the uncertainty about how the government will navigate through the difficult times. There are also a lot of, even when the farmer may agree to sell, there are some strikes, like right now; there are some strikes in Argentina that are happening through every sector of the economy.

Speaker Change: Breathing his remark is that.

Speaker Change: We highlighted a range of crush for the year, we operated in the first quarter, mostly in the higher part of that range. We will move in the second and third quarter has traditionally happened when South America is a big growth towards the low end of that range and then we see at the end of the year September one.

Speaker Change: When we have.

Speaker Change: Our crop here in the U S, where our margins will recover so that's the way we see this year.

Speaker Change: We continue to see.

Speaker Change: The strong mill demand.

Speaker Change: Soybean meal becomes cheaper and it gets more favorable in the inclusions, especially when we see some maybe both the amount of profitability from the poultry sector, so that bodes well for our demand.

Speaker Change: And we have a new <unk> plant coming on stream in the U S. Whether it's Q2 or Q4 that will bring like another half a million dollars memorial soybean oil demand for the U S and don't forget that Brazil increase their mandate to be 14, which represent another half a million tons of.

Juan Ricardo Luciano: So a little bit more difficult to predict. But the reality is, all that crop will come to the market. And we're starting to see that in crash margins. And you can see that

Juan Ricardo Luciano: So what Ismael was reading in his remark is that, you know, we highlighted a range of crashes for the year; we operated in the first quarter, mostly in the higher part of that range; we will move in the second and third quarters, as traditionally happens when South America has a big crop, towards the low end of that range. And then we see at the end of the year, September onward, when we have a crop here in the US where our margins will recover. So that's the way we see the year.

Speaker Change: Soybean oil so all in all I think that all that oil demand and the meal demand will be important too.

Speaker Change: Bring back.

Speaker Change: Crush margins.

Speaker Change: To the higher part of the range at the end of the quarter at the end of the year.

Speaker Change: Great. Thank you very much.

Speaker Change: Okay.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Ben <unk> of Stephens, Inc.

Ben: Your line is now open. Please go ahead.

Ben: Hey, good morning, everyone.

Ben: Hi, good morning, So I wanted to ask.

Ben: I wanted to ask.

Ben: In carbohydrate hydrate solution segment, you point to.

Juan Ricardo Luciano: We continue to see strong mill demand as soybean meal becomes cheaper and it gets more favor in the inclusions, especially when we see some maybe bottoming out of profitability from the poultry sector. So that bodes well for our demand. And we have new RGD plants coming in on the stream in the U.S., whether it's Q2 or Q4, that will bring another half a million tons of soybean oil demand for the U.S. And don't forget that Brazil increased their mandate to B14, which represents another half a million tons of soybean oil. So, all in all, I think that all that oil demand and meal demand will be important to bring back the crash margin set to the higher part of the range at the end of the day.

Speaker Change: A pretty robust outlook for the remainder of the year for starches and sweeteners in particular, you called out strong volumes.

Ben: Thats.

Ben: A bit of a.

Ben: Recovery from what we saw last year can you talk about some of the dynamics that youre seeing around volume and the pace of recovery that youre seeing in volume.

Ben: That makes you call out.

Ben: Sure.

Speaker Change: Yes, I would say.

Speaker Change: We've seen.

Speaker Change: Strong demand.

Speaker Change: I'd say I don't know stronger solid demand across all our segments margins has been good.

Speaker Change: We continue to get the lift on margins by the reduction in chemicals, the reduction in energy prices, a little bit better operations of our facilities.

Ben Bienvenu: Great. Thank you very much. Thank you. Our next question comes from Ben Bienvenu of Stephen's Inc. Your line is now open, please go ahead.

Speaker Change: And I would say the main difference maybe versus last year with last year that we have exceptional margins in international mailing and also in <unk>.

Ben Bienvenu: Hey, good morning, everyone. Morning, Ben. Good morning.

Ben Bienvenu: Thank you. Our next question comes from Ben Bienvenu of Stephen's Inc. Your line is now open, please go ahead. Hey, good morning, everyone.

Speaker Change: In the corn business in Europe, those have moderated a little bit, but there's still the business remain very strong.

Ismael Roig: Yeah, I would say we've seen [inaudible]. And I would say the main difference, maybe, versus last year was that last year we had exceptional margins in international milling and also in the corn business in Europe. Those have moderated a little bit, but the business remained very strong.

Speaker Change: So I would say all the sweeteners and starches contracted for the year, we are pleased with it and.

Speaker Change: And we expect.

Speaker Change: Strong exports to Mexico.

Speaker Change: Other countries pulling well.

Speaker Change: So I will I will say.

Speaker Change: We feel as strongly about having a Q2, that's going to be better than the last year or so.

Ismael Roig: So I would say all the sweeteners and starters contracted for the year; we're pleased with them, and we expect a strong export to Mexico and other countries pulling well. So I will say, you know, we feel strongly about having a Q2 that's going to be better than last year. So it's... All in all, the uncertainty continues to stay on the ethanol side, where we are cautiously optimistic that, you know, the maintenance seasons will balance inventories, if you will, and lift a little bit of margins there. But for the rest of the business, the rest of the business is operating very solidly.

Speaker Change: All in all the uncertainty continues to stay on the ethanol side, which we are cautiously optimistic that.

Speaker Change: The maintenance season.

Speaker Change: We'll balance inventories if you will at least a little bit of margins there, but for the rest of the business. The rest of the business is operating very solid.

Speaker Change: Okay, great. Thanks, so much.

Speaker Change: We'll do it.

Speaker Change: Thank you our next.

Speaker Change: Question comes from Tom Palmer of Citi.

Thomas Hinsdale Palmer: Your line is now open. Please go ahead.

Thomas Hinsdale Palmer: Good morning, Thanks for the question.

Thomas Hinsdale Palmer: Wanted to maybe dive in a little more on refined products you noted lower biodiesel margin expectation for the year and then in prepared remarks, some pressure from <unk>.

Thomas Hinsdale Palmer: Thank you. Our next question comes from Tom Palmer of City. Your line is now open, please go ahead.

Thomas Hinsdale Palmer: Imported used cooking oil.

Thomas Hinsdale Palmer: What are you seeing more of a regional basis.

Ismael Roig: Morning, thanks for the question. I wanted to maybe dive in a little more on refined products. You noted lower biodiesel margin expectations for the year and then in prepared remarks and pressure from imported used cooking oil. I guess, what do you see on more of a regional basis? When you think about those refined spreads, is this more pressure on the U.S. than other places? And then, you did have some timing gains a year ago. We saw a bit of an unwind in 1Q. Just any help on the expected progression of those as we move through 2024? Thanks. Yes.

Thomas Hinsdale Palmer: When we think about those refined spread more pressure U S and other places and then you did have some timing gains a year ago, we saw a bit of an unwind in <unk> just any help on.

Thomas Hinsdale Palmer: The expected progression of those as we move through two.

Thomas Hinsdale Palmer: <unk> 2024.

Thomas Hinsdale Palmer: Yes.

Speaker Change: So let me deconstruct a little bit the IPO Bart.

Speaker Change: Yes.

Speaker Change: The difference in Q1 <unk> results were lower significantly down last year that where we had a record year main reason for that is in North America as you describe the imports of used cooking oil.

Speaker Change:

Ismael Roig: Yes. So let me deconstruct the RPO part a little bit. The difference in Q1, so results were lower significantly than last year, where we had a record year. The main reason for that is North America, as you described, the imports of used cooking oil. [inaudible] We execute it on the strong biodiesel margins. I would say refining there is in line with the prior year. I would say we have additional volumes that offset a little bit lower refining premium.

Speaker Change: Negatively impacted North America refining margins.

Speaker Change: Actually in EMEA, our results were higher.

Speaker Change: We executed on a strong biodiesel margins.

Speaker Change: Sure.

Speaker Change: And.

Speaker Change: I would say.

Speaker Change: Refining there is in line with the prior year.

Speaker Change: I will say we had additional volumes.

Speaker Change: That offset a little bit lower refining premiums.

Ismael Roig: South American results in biodiesel and packages; margins are stronger in the current year, supported by the, as I said, increased biodiesel mandate. That's half a million tons per year of new demand that really impacted that. So overall, I think the dynamic will be similar for the second quarter, in which you will see refining margins lower in North America and, you know, crash margins and refining margins a little bit better in South America.

Speaker Change: South American results in biodiesel in packages margins are stronger in the quarter and the year.

Speaker Change: Sorted by the as I said the increase.

Speaker Change: Biodiesel mandate.

Speaker Change: $1 million per year of new demand that really impacted that.

Speaker Change: So.

Speaker Change: Overall, I think the dynamic will be similar for second quarter in which you would see refining margins lower and lower in North America and.

Speaker Change: Crush margins in refining margins, a little bit better in South America.

Ismael Roig: Thanks and any help on the timing of Warren. Oh, yeah, well, we're here already.

Speaker Change: Thanks, and just any help on the timing on one.

Speaker Change: Year over year there was.

Ismael Roig: Yeah, year over year, there was $72 million in negative net timing impacts in Q1. So we have a negative mark-to-market this quarter of $30 million versus the previous year, where we had a positive of $40 million. That's the arithmetic, if you will, of that.

Speaker Change: $72 million negative net timing impact in Q1.

Speaker Change:

Speaker Change: So we had the negative mark to market this quarter of $30 million versus a previous year, where we had a positive 42. So.

Speaker Change: The arithmetic, if you would love that.

Speaker Change: Okay.

Speaker Change: Yes.

Speaker Change: Thank you.

Speaker Change: Youre welcome.

Speaker Change: Thank you.

Speaker Change: Next question comes from Manav Gupta of UBS.

Ismael Roig: OK. Thank you. You're welcome. Thank you.

Manav Gupta: Your line is now open. Please go ahead.

Manav Gupta: Thank you. Our next question comes from Manav Gupta of UBS. If your lines don't open, please go ahead. Good morning, my only question.

Manav Gupta: Good morning. My only question is can you provide back to the full restart detailed east plant.

Manav Gupta: Being the restart regulatory or construction, if you could help us out with that thank you very much.

Manav Gupta: Yeah, Manav. Good morning.

Manav Gupta: Yes, good morning.

Juan Ricardo Luciano: Listen, there's a lot of activity going on there. But we have said, I think this is something we could make nutrition be a headwind during the whole year. We expect that plan to be operating in Q4. I cannot provide any more details or granularity on that as we're going through the whole project. But I would say as soon as we have more, more specifics, we will be updating all you guys on that. But at this point in time, I think you need to think that the headwinds for nutrition in specialty ingredients and a lot of that driven by this will carry through the year.

Manav Gupta: Listen.

Speaker Change: There is a lot of activity going on there, but we have said I think this is something we've got next administration is going to carry as a headwind during the whole year, we expect that planned reasonably to be operating in Q4 I cannot provide any more details.

Speaker Change: Ancillary fee on that as we're going through all the project, but I would say as soon as we have more more specifics that we will be updating you guys on that but at this point in time I think you need to think that the headwinds for nutrition and specialty ingredients and a lot of that driven by these will carry through the year.

Heather Jones: Thank you. Our next question comes from Heather Jones of Heather Jones Research. Your line is now open, please go ahead.

Speaker Change: Thank you so much.

Speaker Change: Youre welcome.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Heather Jones of Heather Jones Research your.

Heather Jones: Your line is now open. Please go ahead.

Speaker Change: Yes.

Heather Jones: Good morning, everyone. Thanks for taking the question. I was just hoping you could help me. Hi. Hi, good morning.

Heather Jones: Good morning, everyone. Thanks for taking my question.

Speaker Change: Okay.

Heather Jones: Hoping you can help me.

Speaker Change: Hi, good morning.

Heather Jones: I want to discuss the crush margin outlook a little more specifically on the soy side. So, thank you for the cadence information you provided earlier, but I just wanted to dig in a little bit more. So at present, the curve for the U.S. has margins below the range, and then on a cash basis, um, in certain regions, they're materially below that 35. So when I think about the rest of the year, are you assuming that regions like Brazil and Europe are going to provide a material uplift to offset the U.S., or do you think the increased soybean oil demand, et cetera, will make U So I'm just trying to think about how y'all are thinking about that.

Speaker Change: Sure.

Speaker Change: I wanted to discuss the crush margin outlook, a little more specifically on the soy side.

Speaker Change: Thank you for the cadence information you provided earlier, but I just wanted to dig in a little bit more so.

Speaker Change: Yes.

Speaker Change: The curve.

Speaker Change: For the U S has margins below that range and then our cash bonuses.

Speaker Change: In certain regions there are materially below that 35.

Speaker Change: So when I think about the rest of the year.

Speaker Change: Assuming that regions like Brazil, and Europe are going to go.

Speaker Change: Material up.

Speaker Change: To offset the U S or is it.

Speaker Change: Thanks, Bill increased soybean oil demand et cetera, well make U S margins materially better than the curve is indicating that question just trying to think about how you think about that.

Juan Ricardo Luciano: Yes. Heather, good, good to hear from you. Listen.

Speaker Change: Yes.

Speaker Change: Good to hear from you listen.

Juan Ricardo Luciano: The way we're seeing it at the moment, so North America, as we said, Q2 and probably Q3 will move to the lower part of the range. Then, as we come through the year and we get more beans here in the US and we get more renewable green diesel volume coming from probably a billion gallons more of capacity that's coming, we think that that and inclusion rates will drive Q4 higher. In the Q2, Q3 area, if you will, we see right now crash margins in Brazil have gotten better across all our plants, not only the domestic ones but also the export ones.

Speaker Change: The way, we're seeing it at the moment, So North America, as we said Q2, and probably Q3 will move to the lower part of the range.

Speaker Change: And then as we come through the year and we get more beans here in the U S and we get more renewable green diesel volume coming from probably 1 billion gallons more of capacity that is coming we think that that and inclusion rates will drive.

Speaker Change: Q4 higher.

Speaker Change: In the in the Q2 Q3 area if you will.

Speaker Change: We see right now.

Speaker Change: Cash margins in Brazil have gotten better across all our plants not only the domestic ones, but also the export lines. So.

Juan Ricardo Luciano: So as the farmer has been selling a little bit more, as you get more through the harvest there in Latin America, you know, farmers start to move a little bit more volume. In Brazil, it was helped by the devaluation. So we saw that easing the pressure that we have on getting beans and helping crash markets.

Speaker Change: As the farmer has been selling.

Speaker Change: Selling a little bit more as you get more through the harvest there in Latin America.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: Farmers start to move a little bit more volume in Brazil was helped by the devaluation. So we saw that esim.

Speaker Change: Easing the pressure that we have in getting being helping crush margins.

Juan Ricardo Luciano: In Europe, we expect it to be around $40 per ton. So it's a little bit in the middle of the pack. China, we don't have a lot of visibility in China, but it seems to be the most popular spot in China at the moment. So it's a little bit hand-to-mouth over there. In general, as I said, we see, for ADM at least, a big correction going into the second quarter, also a soft third quarter, and then we start to see it coming back up in the Q4, but mostly the curve of the US, if you will, with a little bit of moderation provided by the other areas.

Speaker Change: Europe, we expect it to be around.

Speaker Change: $40 per ton, so is a little bit.

Speaker Change: No.

Speaker Change: In the middle of the pack, China, we don't have a lot of visibility in China, but it seems to be very spot in China at the moment. So.

Speaker Change: It's a little bit.

Speaker Change: Miles over there so.

Speaker Change: Sure.

Speaker Change: In general as I said, we see for ADM at least the big correction going into the second quarter.

Speaker Change: Also a soft third quarter and then we start to see.

Speaker Change: Coming back up into Q4.

Speaker Change: Mostly the curve of the U S. If you will with a little bit more that Asia provided by the other areas.

Heather Jones: Okay, thanks so much. I appreciate it. Thank you.

Speaker Change: Okay. Thanks, so much I appreciate it.

Speaker Change: Thank you Heather.

Salvator Tiano: Thank you. Our next question comes from Salvatore Tiano from Bank of America. Your line is now open. Please go ahead.

Speaker Change: Thank you. Our next question comes from Salvator Tiano from Bank of America.

Salvator Tiano: Your line is now open. Please go ahead.

Salvator Tiano: Okay.

Salvator Tiano: I wanted to ask a little bit about ethanol. Specifically, it seems like your commentary on ethanol was a little bit different between starches and sweeteners and VCP. You talked about lower ethanol margins in the former and better ethanol demand margins, etc., in VCP. Can you clarify why these ethanol margins from the two different types of mills diverged and also, specifically, what are you seeing on the ethanol export front and why is it benefiting VCP more than starches and sweeteners?

Salvator Tiano: I wanted to ask a little bit.

Salvator Tiano: The ethanol line specifically.

Salvator Tiano: It sounds like your commentary on ethanol will be different between starches and sweeteners.

Salvator Tiano: BCP.

Salvator Tiano: It sounded like you talked about lower ethanol margins.

Salvator Tiano: In the former.

Salvator Tiano: Better ethanol demand margins et cetera, it would be so.

Salvator Tiano: So can you clarify why I guess ethanol margins from two different types of mills diverged in also.

Salvator Tiano: Specifically what are you seeing all of the ethanol export Trump.

Speaker Change: And why is benefiting BCP more of them.

Speaker Change: Sweeteners.

Ismael Roig: Yeah. Yeah, the reference.

Speaker Change: Yes.

Ismael Roig: Yeah. Yes, the reference we made to that is because the BCP results were helped by stronger export demand for sustainably certified ethanol. And we get a premium for sustainably certified ethanol, so that supports volumes and margins. In general, ethanol is a very cheap oxygenate, so it's getting a lot of demand from the rest of the world. So exports are expected to be north of 1.5 billion gallons. And blending demand inside the U.S. domestically has been good; it's just that this is a time of the year in which the plants have produced a lot.

Speaker Change: Yes, the reference we made to that is because.

Speaker Change: BCP results were.

Speaker Change: But by stronger export demand for sustainably certified ethanol and we get a premium for.

Speaker Change: Sustainably certified ethanol, so thats supported volumes on margins in general ethanol.

Speaker Change: General Salvator ethanol is.

Speaker Change: Very cheap oxygenate. So is it getting a lot of demand from the rest of the world. So exports are expected to be north of $1 5 billion gallons. So.

Speaker Change: Blending demand inside the U S. Domestically has been good. It's just that this is a time of the year in which the plants have produced a lot higher.

Ismael Roig: I always said plants are exothermic, so in a time of cold temperatures, they produce a lot, and that's a time when we drive the list. So now we're going into the maintenance period of those plants, and I think that inventories for the industry will come, we hope they will come a little bit more into balance, and we expect that to lead to higher driving miles during the summer to balance margins a little bit better. But we expect exports to remain very healthy for the whole year.

Speaker Change: We said the plans are exothermic, so in a time of cold temperatures they produce a lot and thats the time, where we drive the list. So now we're going into more of the maintenance period of those plans and I think that inventories for the industry will come hope, we hope will come a little bit more into balance and we expect that.

Speaker Change: Two higher driving miles during the summer to balance margins, a little bit better, but we expect for the whole year two for exports to remain very healthy.

Benjamin M. Theurer: Thank you. Our next question comes from Ben Theurer of Barclays. Your line is now open, please go ahead.

Speaker Change: Thank you very much.

Speaker Change: Youre welcome.

Speaker Change: Thank you our next.

Speaker Change: Next question comes from Ben Theurer of Barclays. Your.

Speaker Change: Your line is now open. Please go ahead.

Juan Ricardo Luciano: I just wanted to follow up on some of the initiatives you're doing within the nutrition business. Juan, you talked about it at the beginning as it relates to simplification and portfolio optimization. As you've looked through the assets, and obviously, it's been volatile here and somewhat soft, obviously, impacted by some of the one-time items, but as you think about nutrition going forward and past some of the issues with the plant downtime, etc., how do you want to structure this?

Benjamin M. Theurer: Thank you very much and good morning, one Israel.

Benjamin M. Theurer: I just wanted to follow up on some of the initiatives you are doing within the nutrition business and one you talked about it at the beginning as it relates to like just simplification portfolio optimization. So as you.

Juan Ricardo Luciano: Through the assets in August.

Benjamin M. Theurer: It's been volatile here and somewhat soft obviously impacted by some of the onetime items, but as you think about nutrition Gulf going forward and pass some of the issues with the plan.

Benjamin M. Theurer: Downtime et cetera, how do you want to structure. This business, where do you want to take it to what do you think is going to be the nutrition call. It maybe 2.0 version in two to three Years' time, what what's the contribution animal human how should we think about this.

Juan Ricardo Luciano: Where do you want to take it? What do you think the nutrition, call it maybe 2.0 version, in two to three years' time? What's the contribution? Animal, human, how should we think about it?

Juan Ricardo Luciano: Yeah, a good question. Listen.

Megan Britt: Yes.

Speaker Change: Good question listen.

Juan Ricardo Luciano: If you see the sequential improvement that we have had right now, we're taking a lot of the one-offs we received last year or even in Q4 out of the picture, if you will. Some of them completely, some of them they're going to continue to improve as the business improves, you know, the reliability of our supply, if you will.

Speaker Change: If you see the sequential improvement that we have right now is we're taking a lot of the one off so we received last year or even in Q4 out of the picture. If you will some of them completely some of them. They are going to continue to improve as the business improve.

Juan Ricardo Luciano: The reliability of our supply if you will.

Speaker Change: I would say.

Juan Ricardo Luciano: In the short term, you need to be able to see through some of the headwinds that we will get in revenue because of the correction of raw materials. So there are some parts of the nutrition business, what we call specialty ingredients, if you will, that are related to proteins or emulsifiers. Those things tend to correct revenue because they are related to soy or corn at the end of the day. So they moderate.

Juan Ricardo Luciano: In the short term you need to be able to see through some of the headwinds that we will get in revenue because of the correction of raw materials. So there are some parts of the nutrition business, what we call. Our specialty ingredients. If you will that were related to proteins or emulsifiers dosing.

Juan Ricardo Luciano: Things tend to correct revenue because they are related to soy or core at the end of the day so they moderate.

Juan Ricardo Luciano: And that business is a business that, excuse me, from a volume perspective, there is a reshuffle of the demand for plant-based proteins. And there is a lot of exciting stuff that the industry is doing. Listen, there are a lot of emerging technologies, novel ingredients, and new culinary techniques that will come to revitalize that demand over time, but that's a shift that we're going through, and you're not going to see that in 2024. But that's something that, long-term, we still believe in that piece.

Speaker Change: And that business is a business that.

Juan Ricardo Luciano: Excuse me from a volume perspective.

Juan Ricardo Luciano: <unk>.

Juan Ricardo Luciano: There is a reshuffle of the demand in terms of.

Juan Ricardo Luciano: Plant based proteins.

Speaker Change: And there is a lot of exciting stuff that the industry is doing listen there is a lot of emerging technologies novel ingredients and new culinary techniques that will come to.

Juan Ricardo Luciano: Revitalize that demand over time, but thats the shift that we're going through and you are not going to see that in 2024, but thats something that long term, we still believe in that in that piece right now in the present time flavor. We continue to see strong demand for flavor, whether is in North America or whether it's in <unk>.

Juan Ricardo Luciano: Right now, at this time, we continue to see strong demand for flavor, whether it's in North America or whether it's in Europe. To the extent that we can release our supply constraints, we will be able to capitalize more on that. And the U.S. has been doing better, faster than maybe Europe, and we're correcting those things in Europe. But we feel strongly about that. On the health and wellness perspective, biotics continue to excel. Biotics have increased OP by like 100% in the first quarter. So we're doing very well.

Juan Ricardo Luciano: To the extent that we can release, our supply constraints, we will be able to capitalize more on that and U S has been doing better faster than maybe Europe, and we're correcting those things in Europe, but we feel strongly about that.

Juan Ricardo Luciano: <unk>.

Juan Ricardo Luciano: <unk>.

Juan Ricardo Luciano: On the Hilton wellness perspective buyer.

Speaker Change: Biotics continued to excel biotechs have increased by like 100%.

Juan Ricardo Luciano: In the first quarter, so we're doing very well.

Juan Ricardo Luciano: We're getting some headwinds from the fibers perspective, but I think that's a matter of competitive materials. But over time, fiber has a very positive prognosis, as all of us are trying to incorporate more protein and fiber into our diets and reduce fats and sugar. That's where the world nutrition trends are moving. And then when you think about the animal nutrition side, animal nutrition is probably the most undervalued, if you will, story, given its potential. Because we are doing a lot of self-help, and that self-help continues to be seen in the P&L.

Juan Ricardo Luciano: We're getting some headwinds from the fibers perspective, but I think that's a matter of competitive materials, but overtime fibers is a very has a very positive prognosis as all of us are trying to incorporate more protein in five years in our diet and reduced fat and sugar.

Juan Ricardo Luciano: The world.

Juan Ricardo Luciano: Nutrition trends our movie and then when you think about the animal nutrition side.

Juan Ricardo Luciano: Animal nutrition is probably the more.

Speaker Change: Under value if you will the story given their potential because.

Juan Ricardo Luciano: We are doing a lot of self help and self help continues to be seen in the P&L, but some of the protein sector issues.

Juan Ricardo Luciano: But some of the protein sector issues have impacted the demand there. I would say in nutrition, in the animal nutrition areas, where we're probably going to see more of the refinement of the portfolio, if you will, just because there is unevenness across sectors in terms of our ability to achieve the right returns over the long term. So in some parts of the sectors, it's more like self-help. In other parts, it's more innovation-driven.

Juan Ricardo Luciano: Have impacted the demand there.

Juan Ricardo Luciano: I would say they are in nutrition in the animal nutrition area, where we're probably going to see more of the refinement of the of the portfolio. If you will just because of the unevenness across sectors in terms of our ability to achieve the right returns and the long term so in <unk>.

Juan Ricardo Luciano: And part of the sector is more like self help and other part is more innovation driven and even if you go to things like pet where the demand is very strong there are pieces of the world that are doing exceptionally well for us like Mexico. There are places where demand is very strong like in North America, but maybe we need.

Juan Ricardo Luciano: And even if you go to things like pets, where the demand is very strong, there are pieces of the world that are doing exceptionally well for us, like Mexico. There are pieces where demand is very strong, like in North America, but maybe we need to fix some supply issues. And there are parts of the world, like, maybe South America, where structurally it's a little bit more difficult to make money.

Juan Ricardo Luciano: To fix some supply issues and there are parts of the world like maybe like South America, where structurally becomes a little bit more difficult to make money. So we are applying different recipes to the different parts of the world.

Juan Ricardo Luciano: So we are applying different recipes to different parts of the world. But I still see a very complete nutrition business, if you will, going forward, more focus on maybe fewer platforms, fewer customers to be able to execute our pipeline faster. Maybe in the past, we had a big pipeline with a percentage of conversion that we expect it to be higher on and maybe a more focused, concentrated pipeline. That's the.

Juan Ricardo Luciano: But I still see a very complete nutrition business. If you will going forward more focus on.

Juan Ricardo Luciano: On the maybe fewer platforms fewer customers to be able to execute our pipeline faster maybe in the past we have a big pipeline with the percentage of conversion.

Juan Ricardo Luciano: That we expect it to be higher on it may be a more focused concentrated pipeline. That's the way I tend to think about.

Juan Ricardo Luciano: Can I offer a compliment to you? Okay. Very complete.

Speaker Change: Can I offer a complementary company. Thank you very much.

Speaker Change: I just wanted to offer you a compliment review on <unk> comments with regard to animal nutrition, but I think it also applies to the broader portfolio, which is.

Ismael Roig: I just wanted to offer you a complementary view on Juan's comments with regard to animal nutrition, but I think it also applies to the broader portfolio, which is... I fully agree with Juan in the sense that the base business, animal nutrition, is now experiencing the benefits of the cost improvement program that we put in place, and we've seen that evolution quarter on quarter. But to Juan's observations: on a going forward basis, you will see a business that is looking to become more focused on the specialty side of its portfolio.

Ismael Roig: Fully fully agree with one in the sense that.

Ismael Roig: The base business animal nutrition is now experiencing the benefits of the cost improvement programs that we put in place and we've seen that evolution quarter on quarter.

Ismael Roig: But two observations on a going forward basis, you will see a business that is looking to become more focused on the specialty side of its portfolio. That's why I alluded to at the beginning part of the revenue calculation for the platform. It's partly impacted by the fact that there is a.

Ismael Roig: As Juan alluded to at the beginning, part of the revenue calculation for the platform is partly impacted by the fact that there is a soy meal commodity component to some of the products that are produced over time. But it's a business that will evolve to become more specialty focused, more higher margin focused. So I think it bodes well for the growth and margin structure of that business as we look forward into 2025.

Ismael Roig: Soybean meal commodity component to some of the products that are produced over time.

Ismael Roig: As a business that will evolve to become more specialty focus more higher margin focus so I think it bodes well for the growth and margin structure of that business as we look forward into 2025.

Steven Haynes: Thank you. Our next question comes from Steven Haynes of Morgan Stanley. Your line is now open, please go ahead.

Speaker Change: Thank you.

Steven Haynes: Thank you.

Steven Haynes: Thank you.

Steven Haynes: Thank you. Our next question comes from Steven Haynes of Morgan Stanley.

Steven Haynes: Your line is now please.

Ismael Roig: Hey, thanks for taking my question. Maybe just two quick follow-ups on nutrition. So I think your revenue was down slightly and based on your kind of prior comments about there being some price component, you know, where your volumes, I guess, organic volumes positive in the quarter, that would be the first one. And then the second question is on the full year. You mentioned that the recent M&A is kind of coming in ahead of your deal model expectations. How much operating profit contribution are you baking into the full year guide from M&A? Thank you.

Steven Haynes: Please go ahead.

Steven Haynes: Okay.

Ismael Roig: Hey, Thanks for taking my question, maybe just two quick follow ups on nutrition.

Ismael Roig: So I think your revenue was down slightly.

Ismael Roig: And based on your prior comments.

Ismael Roig: About there being some price component.

Ismael Roig: What are your volumes I guess organic volumes positive in the quarter.

Ismael Roig: That would be the first one and then the second question is on the full year.

Ismael Roig: You mentioned that the recent M&A is kind of coming in ahead of your.

Ismael Roig: Kind of deal model expectations.

Ismael Roig: How much operating profit contribution or are you baking into the full year guide from M&A. Thank you.

Ismael Roig: Thank you, Steven. So, let me say that we are very pleased with the two M&As. The two M&As contributed to revenue in the first quarter, not yet to OP because of startup costs and all that. But we still expect revenue, even despite the headwinds that I mentioned before, relative to commodity prices moderating in some of our less specialty categories. We expect revenue growth to be in the range of mid-single digits for the full year. We expect OP, or Operating Profit, to be a little bit better than that, given that our costs should be down year over year. So what was the other question? Yes, in terms of overall rep.

Ismael Roig: Yes.

Speaker Change: Thank you Steven.

Ismael Roig: So let me say, we are very pleased with the two M&A that to M&A has contributed to.

Ismael Roig: Revenue in the first quarter not year, two <unk> because of startup costs and all that.

Ismael Roig: But we.

Ismael Roig: We still expect.

Ismael Roig: Revenue, even despite the headwinds that I mentioned before relative to commodity prices moderating in some of our less specialty categories.

Ismael Roig: We expect revenue growth to be in the range of high single mid single digit for the full year.

Ismael Roig: We expect probably obese to do operating profit to be a little bit better than that given that.

Ismael Roig: Our cost should be down year over year.

Ismael Roig: So.

Ismael Roig: What was the other question.

Ismael Roig: Yes, in terms of overall volume... Volume was a compliment question, sir. Overall, we've seen volume hold up well. The exception to that would be obviously the specialty ingredients business and specifically the impact of the Decatur East plant. But all of the other elements of our business have generally performed well volume-wise. So you've seen a bit of a deterioration in volume on a revenue basis, but you have seen a general improvement, except for the SI business, when it comes to volume.

Ismael Roig: Yes in terms of overall.

Ismael Roig: Volume.

Ismael Roig: Volume was a complementary question Sir.

Ismael Roig: Overall, we've seen volume hold up well.

Ismael Roig: The exception to that would be all.

Ismael Roig: Obviously, the specialty ingredients business and specifically the impacts of the vacated east plant.

Ismael Roig: But all of the other elements of our business have generally performed well volume wise, so you've seen a bit of a deterioration of the volume on a revenue basis, but you have seen a general.

Ismael Roig: Generally improvement except for the ESI business when it came to volumes.

Adam Samuelson: Thank you. Our next question comes from Adam Samuelson of Goldman Sachs. Your line is now open, please go ahead.

Adam Samuelson: Great. Thank you.

Adam Samuelson: Thank you. Our next question comes from Adam Samuelson of Goldman Sachs.

Adam Samuelson: Your line is now open. Please go ahead.

Adam Samuelson: Yes, thank you. Good morning, everyone. Good morning, Adam.

Adam Samuelson: Yes. Thank you good morning, everyone.

Adam Samuelson: Good morning.

Adam Samuelson: So I guess I got two questions, maybe first as we think about the outlook for the year and where you've talked about improvement in soy meal demand and inclusion ratios later in the year can you maybe help us a bit more specific just that doesn't seem to you what's implied by the curves.

Juan Ricardo Luciano: So, I guess I have two questions, maybe first, as we think about the outlook for the year and where you talked about improvement in soy meal demand and inclusion ratios later in the year. Can you help us be a bit more specific? That doesn't seem to be what's implied by the curves. Most forecasts on poultry supply in different parts of the world don't really project a sizable uptick in production, so could you just help us a little bit on the areas where you're actually seeing that or getting that signal from your feed customers?

Juan Ricardo Luciano: Most forecasts on poultry supply in different parts of the world.

Juan Ricardo Luciano: Really projected sizable.

Juan Ricardo Luciano: Uptick in production. So could you just help us a little bit on the areas, where you're actually seeing that are getting getting that signal from your from your feed customers and then an unrelated question.

Juan Ricardo Luciano: And then, an unrelated question, as I think about some of the cost actions and productivity savings that you've targeted for this year and next, I would love if you could give a bit more specificity to the areas where the $500 million is really coming from, both in terms of the category of spend but also whether they're in the operating segments or in corporate unallocated as we think about the outlook for the next couple of years.

Juan Ricardo Luciano: About some of the cost actions and productivity savings that you've targeted for this year and next would love if you could maybe be a bit more.

Juan Ricardo Luciano: Specificity to the <unk>.

Juan Ricardo Luciano: Areas, where the $500 million.

Juan Ricardo Luciano: Are really coming from both in terms of the category of spend but also.

Juan Ricardo Luciano: Whether they are in the operating segments or in corporate unallocated as we think about the project on the outlook for next couple of years. Thank you.

Juan Ricardo Luciano: Yeah, sure. Adam, listen, I think what you need to realize, so first of all, we are early in the year, of course, and we're making predictions for Q4. So this is a transition period for the industry, if you will. We're going from a couple of years of tight supplies to ample supplies. So we're seeing here a customer base that is very uncovered, if you will, a farmer selling that is a little slow.

Speaker Change: Yes sure.

Speaker Change: Adam listen I think what you need to realize so first of all we are early in the year of course, and we're making predictions on that on our Q4 so.

Juan Ricardo Luciano: This is this is a transition period for the industry. If you will we're going from a couple of years, so tight supplies to ample supplies. So we are seeing here.

Juan Ricardo Luciano: The customer base that is very uncovered if you will.

Juan Ricardo Luciano: Farmers selling that.

Juan Ricardo Luciano: It's a little slow.

Juan Ricardo Luciano: And we're going to go through that transition. On top of that, you have a protein industry that was in unprofitable territory, if you will, and still is, for certain, for beef or some parts of pork. But now we seem to have bottomed and seen growth trends, so we see that in different parts of the world, whether it's in Thailand, in Turkey, in other parts of the world. I think the main issue is that pricing is doing its effect.

Juan Ricardo Luciano: And.

Juan Ricardo Luciano: And we're going to go through that transition on top of that you have.

Juan Ricardo Luciano: Proteins industry that was in.

Juan Ricardo Luciano: Unprofitable territory, if you will in <unk> for certain for if you will beef or some pirates support but now we seem to have bottomed.

Juan Ricardo Luciano: And seeing the growth trends in.

Juan Ricardo Luciano: Imposed three so we see that in different parts of the world, where there is in Thailand, and Turkey and other parts of the world but.

Juan Ricardo Luciano: I think the main issue is.

Juan Ricardo Luciano: Is that pricing is doing this effect so youll see some trade flows changing we see some soybean oil being exported out of the U S. As we see.

Juan Ricardo Luciano: So you see some trade flows changing. We see some soybean oil being exported from the US. As we see used cooking oil coming into the US, we're starting to see more, you know, maybe Brazil becoming less of an exporter of soybean oil. You know, maybe more competition in meal, but the US is still very competitive in meal. So I think that we will have to see all that shift during the year.

Juan Ricardo Luciano: Used cooking oil coming into the U S. We're starting to see more.

Juan Ricardo Luciano: Maybe Brazil, becoming less of an exporter of soybean oil.

Juan Ricardo Luciano:

Juan Ricardo Luciano: Maybe more.

Juan Ricardo Luciano: More competition in meals, but the U S is still very competitive and meal.

Juan Ricardo Luciano: So I think that.

Juan Ricardo Luciano: We will have to see all that shift during the year, what we are seeing as well.

Juan Ricardo Luciano: What we are seeing is we're looking at our customers, we're looking at our book. We just think that, again, with a billion gallons more of RGD capacity in the US, with 500,000 tons more soybean oil coming from the biodiesel mandate in Brazil, that would be a very big determinant of crash margins for the EU. With that, I think Ismael will cover the Drive for Excellence profitability. Yes, but on the Adam, on the Drive for Excellence...

Juan Ricardo Luciano: Looking at our customers who are looking at.

Juan Ricardo Luciano: Our book.

Juan Ricardo Luciano: We're just saying that again with 1 billion gallons more of RGD capacity in.

Juan Ricardo Luciano: In the U S with 500000 ton more soybean oil coming from the biodiesel mandate in.

Juan Ricardo Luciano: In Brazil.

Juan Ricardo Luciano: That will be a big determinant of crush margins for the year.

Ismael Roig: With that I think Ishmael will cover that.

Ismael Roig: Drive for excellence profitability, yes.

Ismael Roig: Adam on the drive for excellence, we're actually quite encouraged by.

Ismael Roig: Yes, but on the, Adam, drive for excellence, we're actually quite encouraged by the progress. As Juan mentioned during his remarks, we have more than 1,200 initiatives, but they can be grouped into substantial areas or themes of effort and focus. Working on plant process optimization, working on business process optimization, also very important for supply chain and demand fulfillment, which is part of the challenges that we've had in nutrition.

Ismael Roig: And by the progress as Juan mentioned during the remarks, we have more than 200 initiatives, but they can be grouped into a.

Ismael Roig: Substantial areas, where themes of effort and focus.

Ismael Roig: Working on plan process optimization working on business process optimization also very important on supply chain and demand fulfillment.

Ismael Roig: As part of the challenges that we've had in nutrition. So this would be the large buckets that we're working on.

Ismael Roig: So these would be the large buckets that we're working on. And we've seen the platform progress very well. And we have at least about a third of the 500 million already for 2024. So we're very encouraged about the ability of these trifectas to impact 2024 already in the measure that I've just outlined.

Ismael Roig: And.

Ismael Roig: We've seen the platform progress very well and we have at least.

Ismael Roig: About a third a line of sight of.

Ismael Roig: Of the $500 million already for 2024, so we're very encouraged about the ability of these of the strive for excellence impacting 2024 already in in the measures that I've just outlined.

Adam Samuelson: All right, great. That's all helpful. I'll pass it on. Thank you.

Speaker Change: Alright, great. That's all helpful. I'll pass it on thank you.

Benjamin Shelton Bienvenu: Thank you. Our next question comes from Ben Callow of Baird. Your line is now open, please go ahead.

Speaker Change: Thank you.

Adam Samuelson: Our next question comes from Ben Cohen of pad.

Benjamin Shelton Bienvenu: Your line is now open. Please go ahead.

Benjamin Shelton Bienvenu: Hi, good morning. Thanks for taking my question. Just, how do we think about, or do you think about the dynamic of the plunger's tax credit changing over to a producer's tax credit and the carbon intensity being a factor for overall soil oil demand in the U.S. next year? Thank you.

Benjamin Shelton Bienvenu: Okay.

Speaker Change: Hi, good morning, Thanks for taking my question.

Benjamin Shelton Bienvenu: Just.

Benjamin Shelton Bienvenu: How do we think about or do you think about the dynamic.

Benjamin Shelton Bienvenu: The blenders tax credit changing over to a producers tax credit.

Benjamin Shelton Bienvenu: Okay.

Benjamin Shelton Bienvenu: Carbon intensity factor.

Benjamin Shelton Bienvenu: Overall.

Benjamin Shelton Bienvenu: Baird.

Benjamin Shelton Bienvenu: The U S next year. Thank you.

Juan Ricardo Luciano: Yeah, thank you, Ben, for the question. So.

Speaker Change: Yes. Thank you Ben for the question so.

Juan Ricardo Luciano: As you know, the $1 blender stack credit will expire at the end of 2024 and transition to a production tax credit. And this will be administered by the US Treasury. They issued guidance, I think, at the end of last year that will allow the use of grid LCA modeling in addition to CORSIA. Of course, we favor including grid. We were successful in GRID being officially included. You know, we're still.

Speaker Change: As you know the $1 blenders tax credit will expire at the end of 'twenty, four and transition to a production tax credit.

Juan Ricardo Luciano: <unk>.

Juan Ricardo Luciano: And this will be administered by the U S Treasury.

Juan Ricardo Luciano: The issue guidance on I think at the end of last year that will allows the use of great LCA model. In addition to course here.

Juan Ricardo Luciano: Of course, we favor including great.

Juan Ricardo Luciano: Sure.

Juan Ricardo Luciano: We're successful in being officially included.

Juan Ricardo Luciano:

Juan Ricardo Luciano: We're still.

Juan Ricardo Luciano: We're still delayed in the EPA ruling on that, so I think that we have been doing a lot of advocacy and encouraging government officials to... make sure that we remove this uncertainty out of the equation here. I think that a transition without guidance on whether crop-based biofuels will generate credits will create a very difficult price discovery mechanism in the coming months as participants are trying to look to begin locking 2025 volumes.

Juan Ricardo Luciano: We're still delays in the EPA ruling on that so.

Juan Ricardo Luciano: I think that we have been doing a lot of advocacy and encouraging government officials to.

Juan Ricardo Luciano: Make sure that we have removed this uncertainty.

Juan Ricardo Luciano: Of the equation here.

Juan Ricardo Luciano: I think the transition without guidance.

Juan Ricardo Luciano: Whether the crop based biofuels will generate credits will create a very difficult price discovery mechanism in the coming months.

Juan Ricardo Luciano: Participants are trying to look.

Juan Ricardo Luciano: To begin locking two.

Juan Ricardo Luciano: 2025 volumes so.

Juan Ricardo Luciano: So I think that's an important clarification that needs to happen. These are industries that are investing in the U.S., and I think that providing regulatory certainty is very important for those investments to come to fruition on time and as expected.

Juan Ricardo Luciano: I think that's an important clarification that needs to happen.

Juan Ricardo Luciano: These are industries that are investing in the U S and I think that providing regulatory certainty are very important for those investments to come to fruition on time and as expected.

Juan Ricardo Luciano: Thank you. Just a follow-up there. What are you seeing with renewable diesel refineries and producers in terms of them transitioning to using waste fats or other materials? Thank you.

Speaker Change: Thank you.

Juan Ricardo Luciano: Or what are you seeing with renewable diesel.

Juan Ricardo Luciano: For refiners producers.

Juan Ricardo Luciano: In terms of transitioning.

Juan Ricardo Luciano: Two two.

Juan Ricardo Luciano: <unk>.

Juan Ricardo Luciano: Scott.

Juan Ricardo Luciano: Materials.

Juan Ricardo Luciano: Yeah, I think that, listen, that there is a reality in the world that palm oil production is. So we know that the U.S. and renewable green desert was going to meet, to have to be met with a lot of feedstocks, of which soybean oil is an important component, but of course, the industry is trying to gather every kind of feedstock that they can find. And there is an inventory of used cooking oil.

Speaker Change: Thank you.

Speaker Change: Yes, I think that.

Juan Ricardo Luciano: Listen.

Juan Ricardo Luciano: There is a reality in the world that.

Juan Ricardo Luciano: Palm oil production is.

Juan Ricardo Luciano: Is.

Juan Ricardo Luciano: Flat and not being able to cope with demand. So we know that the U S. A renewal or green diesel was going to meet to meet to have to be met with a lot of feedstocks, which soybean oil is an important component but of course the industry is trying to gather every kind of fit.

Juan Ricardo Luciano: So that they can find.

Juan Ricardo Luciano: There was inventory of used cooking oil the U S is imported a lot of that.

Juan Ricardo Luciano: The U.S. has imported a lot of that, but, you know, still, it's not going to be enough because how much are you going to grow the U.S. cook oil supply and the used cook oil inventory around the world to supply, as I said, an industry that's going to have a billion gallon more capacity this year? So we still expect that we are adjusting to these temporary imports of used cooking oil, but we still expect that soybean oil will recover its percentage of the used from maybe 30% to again the 40% we used.

Juan Ricardo Luciano: But.

Juan Ricardo Luciano: It's still it's not going to be enough because how much is youre going to grow the U S. Cuco used cooking oil inventory around the world to supplier.

Juan Ricardo Luciano: As an industry is going to have 1 billion.

Juan Ricardo Luciano: <unk> gala in more capacity this year, so we still expect that.

Juan Ricardo Luciano: We are adjusting to these temporary imports of.

Juan Ricardo Luciano: Used cooking oil, but we still expect that soybean oil will recover there as a percentage of the.

Juan Ricardo Luciano: Of the us from maybe 30% to again to 40% we used to be.

Salvator Tiano: Thank you. Our next question comes from Salvatore Tiano of Bank of America. Your line is now open, please go ahead.

Salvator Tiano: Thank you.

Salvator Tiano: Youre welcome.

Salvator Tiano: Thank you our next.

Salvator Tiano: Question comes from Alberto <unk> of Bank of America.

Salvator Tiano: Your line is now open. Please go ahead.

Salvator Tiano: Can you help us understand the Green Bison contribution now? So, for example, the process volume growth that you showed, roughly how much came from that? And also, I believe you had the 10 million non-controlling interest loss. Well, I guess the JV, among others, had a loss. So, how much, I guess, of that was the Green Bison JV? And at which point do you expect it to return to turn into a profitable JV on a net income basis? So, for that NCI line,

Speaker Change: Yes. Thank you I just had a follow up so.

Salvator Tiano: As we look a little bit into a couple of items can you help us understand the green by some contribution now for example.

Salvator Tiano: Processed volume growth that you showed.

Salvator Tiano: Roughly how much came from that and also I believe you had the 10 million.

Salvator Tiano: Non controlling interest loss.

Salvator Tiano: Yes.

Salvator Tiano: The JV among others other loss.

Salvator Tiano: So how much I guess of that.

Salvator Tiano: The green bars from Jay Z and at which point do you expect it to return to.

Salvator Tiano: Turning to our profitable JV on a net income basis, so far youre right.

Salvator Tiano: The NCI line.

Juan Ricardo Luciano: Yes, Salvatore, maybe I can give you what I have on the top of my mind, but we were very pleased with the increase in volumes of oilseeds or in crush during the first quarter. It was a 9% increase. Part of that was Spirit Wood coming online, and part of that was our plant improvements in general across the footprint. Part of that was Paraguay and Ukraine also coming to crush them, so that all happened at different points in the quarter. So I don't have a full recollection of what happened to what volume at any part of the quarter.

Salvator Tiano: Okay.

Juan Ricardo Luciano: Yes.

Speaker Change: I'll give you what they have at the top of my mind, but.

Juan Ricardo Luciano: We were very pleased with the increase in volumes in oilseeds crush during the first quarter. It was 9% increase part of that was spirit, what's coming coming online part of that where our plants improvements in general across the footprint part of that was.

Juan Ricardo Luciano: Paraguay and Ukraine also coming to crush so thats all happened at different points in the quarter. So I don't have as full recollection of what happened to what that volume at any part of the quarter.

Juan Ricardo Luciano: The Green Bison Joint Venture will be a contributor to profits during 2024. So it's ramping up. It's going to get to full capacity very soon. So it will be a meaningful contributor. I don't have on the top of my head what the contribution was for the first quarter.

Juan Ricardo Luciano: Green <unk> joint venture will be a contributor to profits during 2024.

Juan Ricardo Luciano: So is ramping up is going to get is going to get to.

Juan Ricardo Luciano: Full capacity very soon so it will be a meaningful contributor I don't I don't have top of my head.

Speaker Change: What was the contribution on first quarter to be honest.

Salvator Tiano: Okay, perfect. Thank you very much.

Speaker Change: Okay perfect. Thank you very much.

Speaker Change: You're welcome.

Heather Jones: Thank you. Our next question comes from Heather Jones of Heather Jones Research. Your line is now open, please go ahead.

Salvator Tiano: Thank you. Our next question comes from James of Heather Jones Research.

Heather Lynn Jones: Your line is open. Please go ahead.

Heather Jones: Hi, thank you for taking the follow up. Just wanted to ask really quickly what exactly are you doing for the dry mills as far as sustainability sourcing and the doubling of your region's acreage? Is that related to like proactively getting ahead of this EU deforestation regime or more stringent carb requirements? Just wondering what's driving that.

Heather Jones: Alright. Thank you for taking the follow up just wanted to ask really quickly.

Heather Jones: What exactly youre doing that part of the dry mills as far as sustainability foreseen.

Heather Jones: And the doubling of your region acreage is that related to light proactively getting ahead of this EU deforestation regime or more stringent.

Heather Jones: Requirement is just wondering what's driving that.

Juan Ricardo Luciano: Yeah, so, so Heather in At CARB solutions, we have a whole decarbonization strategy. Actually, across ADM, we have a decarbonization strategy driven partly by our Strive 35 goals that we need to decarbonize ourselves, partly driven by our customers and the need for either evading scope 3 emissions from the side of our customers, but also by providing some low carbon intensity characteristics of some of our products that are also commanding a premium out there.

Speaker Change: Yes so.

Juan Ricardo Luciano: So heather in.

Juan Ricardo Luciano: <unk> solutions, we have a whole decarbonization strategy actually across ADM, we have ethical organization strategy driven partly by our to drive 35 goals that we need to decarbonize, our cells part driven by our customers and the need for either.

Juan Ricardo Luciano: About abating scope three emissions from the size of our customers, but also by providing some.

Juan Ricardo Luciano: Low carbon intensity characteristics of some of our products that also commanding a premium out there. So what are we doing we are working on an increase in our carbon capture and sequestration, we're going to go from two wells.

Juan Ricardo Luciano: So what are we doing? We are working on increasing our carbon capture and sequestration. We're going to go from two wells, one well, and one experimental well, but let's say two wells to seven wells, so we're going to be able to significantly increase our capacity, and let me remind you we have already captured four and a half million tons of CO2 in the last, you know, 10 years that we've been operating, so that has been successful.

Juan Ricardo Luciano: Well on one experimental well, but let's say two wells to seven wells, So we're going to be able to increase significantly our capacity.

Juan Ricardo Luciano: Let me remind you we have already.

Juan Ricardo Luciano: Capture $4 5 million tonnes of Cotwo in the last 10 years that we've been operating so that has been successful for the dry mill specifically, what we're doing is we are building pipelines to bring that to our carbon capture and sequestration units indicator. We have one pipeline that has been.

Juan Ricardo Luciano: For the dry mills specifically, what we're doing is we are building pipelines to bring that to our carbon capture and sequestration units indicator. We have one pipeline that has been, that is being, you know, ongoing project, and we are looking for solutions for the other dry mills. So that's what is happening. The second part of the question, Heather, I was just wondering about the region.

Juan Ricardo Luciano: And that has been ongoing projecting we are looking for solutions for their other dry mills. So thats what is happened in the second part of your question Heather.

Juan Ricardo Luciano: Sure.

Juan Ricardo Luciano: <unk>.

Juan Ricardo Luciano: Not remember I was just wondering on the region.

Juan Ricardo Luciano: Yeah, on the region's acreage, I'm just wondering if that's doubling in anticipation of like the EU deforestation regime or more stringent CARB standards? Just wondering what's driving that, or is it all voluntary?

Heather Lynn Jones: Oh, yes.

Juan Ricardo Luciano: Yeah on the region <unk>, just wondering is that doubling in anticipation of the egfr dosing regime or more stringent carb standards. Just just wondering whats driving that or is that all voluntary market.

Juan Ricardo Luciano: , and David C.. .. ....

Juan Ricardo Luciano: Yeah, I would say there is excitement on both sides. There is excitement on the farmer side to adhere to all these practices.

Juan Ricardo Luciano: Clark.

Speaker Change: Yes, I would say there is excitement on both sides. There is excitement on the farmers' side to adhere to all these practices.

Juan Ricardo Luciano: But there's also a lot of demand pulled from the customer side in terms of we continue to sign contracts for more of these as people need again to have an answer to their scope three. So, this has been We have been setting goals, and we have been meeting those goals, and increasing those goals. Now we have expanded that to include Europe and Latin America, and we continue to see demand for these activities around the world. And to be honest, the team has been doing an excellent job. So I think that this program should be perceived as the leading program in the world.

David: But theres also a lot of demand pool from the customer side in terms of we continue to sign contracts for more of these as people need to again.

Juan Ricardo Luciano: Or an answer to their scope three so.

Juan Ricardo Luciano: So this has been.

Juan Ricardo Luciano: We have been setting goals and we have been beating those goals and increase in those goals now we have expanded that because.

Juan Ricardo Luciano: Europe, and Latin America and.

Juan Ricardo Luciano: We continue to see demand for these activities around the world.

Juan Ricardo Luciano: To be honest the team has been doing an excellent job. So I think that this program is perceived as a leading program in the world there.

Heather Jones: Right. Okay. Thank you so much.

Speaker Change: Thank you Heather.

Speaker Change: Okay. Thank you so much.

Juan Ricardo Luciano: Thank you. At this time, we currently have no further questions, so I'll hand you over to Juan Luciano for any further remarks.

Speaker Change: Thank you.

Juan Ricardo Luciano: Tom We currently have no further questions.

Juan Ricardo Luciano: Come back talk Juan Luciano for any further remarks.

Juan Ricardo Luciano: Okay, thank you. Thank you, everybody, for joining us today and for your interest in ADM. And have a great day.

Juan Ricardo Luciano: Okay. Thank you. Thank you everybody for joining us today and for your interest in ADM and have a great day. Thank.

Operator: Thank you for joining today's call. You may now disconnect your lines.

Speaker Change: Thank you.

Speaker Change: Thank you for Sean Thanks call you May now disconnect your lines.

Operator: [music].