Q2 2025 Archer-Daniels-Midland Co Earnings Call

August 5, 2025

I'd now like to introduce your host for today's call Megan Britt Vice President Investor Relations for ATM Miss Britt you may begin.

Welcome to the second quarter earnings conference call for ADM.

Our prepared remarks today will be led by Juan Luciano Chair of the board and Chief Executive Officer, and a niche part of law, our EVP and Chief Financial Officer.

We have prepared presentation slides to supplement our remarks on the call today, which are posted on the Investor Relations section of the ATM 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 condition company.

Performance and financial results.

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

ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation and the materials.

Unless otherwise required by law ADM assumes no obligation to update any forward looking statements due to new information or future events.

In addition, during today's call, we'll refer to certain non-GAAP or adjusted financial measures.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the investor Relations section of the AGM website.

I'll now turn the call over to Juan.

Thank you Megan.

Hello, and welcome to all who have joined the call.

Please turn to slide four.

Today <unk> reported adjusted earnings per share to three things.

Total segment operating profit was $830 million for the quarter.

Our trailing four quarter adjusted <unk> was six 9%.

Cash flow from operations before working capital changes was $1 $2 billion for the first half of the year.

The team focus has been on managing what we can control in a dynamic environment.

We continue to drive positive momentum in those areas in the second quarter.

Our carbohydrate solutions team again delivered steady results with a strong execution and disciplined risk punishment.

The nutrition team drove another quarter of sequential improvement led by our flavor on animal nutrition portfolios.

We also made important progress in getting our Decatur plant back online already ramping to our planned run rates.

Our surfaces on oilseeds performed in line with our expectations.

The team worked to offset lower margins this quarter through targeted organizational realignment and Eduardo consolidations, enabling us to be well positioned to take advantage of expected improved conditions in the second half of the year.

Across our global operations network, our efforts to improve operational resilience and delivered outstanding results.

We achieved our best performance limiting unscheduled and unplanned downtime in more than five years.

We're also proud to have been named one of Americas greatest workplaces in manufacturing.

The Testament to the tireless efforts of our colleagues across the ADM operations workforce.

The external environment became clear I think in some critical areas for our business throughout the quarter.

The U S administration drove positive toxin biofuel policies that are helping biofuel producers make better decisions about production rates of feedstock demand.

Also supporting an uplift in crush and biodiesel margins.

The agility, we managed the first half of 2025 demonstrates our team's ability to drive our strategy forward and manage the dynamics of the external environment, while focusing attention on the self help on execution excellence agenda, we outlined earlier in the year.

Let's take a closer look at our progress on key strategic objectives in the quarter.

Please turn to slide five.

We're making strong progress against the areas of self help we identified at the beginning of the year.

The balance of efforts across cost of punishment execution excellence targeted simplification strategic growth and capital discipline.

Providing an important foundation to work from.

Let me share a few examples of what we accomplished in the quarter.

We're continuing our portfolio management activities.

We've made decision to cease operations at certain facilities that no longer align with our long term goals, including several aes or no origination sites globally.

Both trans load facility in Florida.

On a core culture plant in Ecuador.

Pet and animal nutrition plant in Brazil, and to US it's no longer strategic to the specialty ingredients business, we focus on optimizing our network.

Network and aligning our asset base through the most critical parts of the business.

Ensuring we effectively managed uptime and production capacity.

And we announced our intention to move our Lubbock, Texas got us at plant into a joint venture.

As I mentioned earlier, we achieved a critical milestone in recognition in our Decatur facility.

Currently ramping up to plan production levels.

This will have a positive impact on cost within our specialty ingredients business as we move through the back half of the year.

Through a combination of these efforts and others throughout the first half of the year, we remain on track for our targeted $500 million to $750 million in aggregate cost savings over the next three to five years.

We're also continuing our capital discipline focus with an eye on returning capital to shareholders.

Following our Q1 earnings call, we announced our 374th consecutive quarterly dividend.

And while we've been keeping our efforts in cost and capital management at the forefront we have never stopped smart organic investments that provide us options to accelerate growth at the appropriate time.

Operator: 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, Investor Relations for ADM. Ms. Britt, you may begin.

[noise] Adm's integrated business model provides significant advantages to generate value across our entire production ecosystem.

We're also continuing our capital discipline focus with an eye on returning capital to shareholders.

A few examples include.

Megan Britt: Welcome to the second quarter earnings conference call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer, and Monish Patolawala, our EVP and Chief Financial Officer. 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 view 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 numerous risks and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation and the materials.

Repositioning co products from our operations into new solutions, such as converting fatty acid residues funding waste materials into biofuels.

Following our Q1 earnings call, we announced our 374th consecutive quarterly dividend.

Addressing a growing carbon economy through the expansion of our decarbonization capabilities and <unk> solutions.

And while we'll be keeping our efforts in cost and capital management at the forefront we have never stopped smart organic investments that provide us options to accelerate growth at the appropriate time.

And taking advantage of available capacity and nutrition plans to expand product lines and enter new markets.

Avm's integrated business model provides significant advantages to generate value across our entire production ecosystem.

All of these represent waste ADM can reduce waste accretively deploy capital and increase returns.

Examples include.

As we look to the back half of 2025 from an external perspective.

Repositioning co products from our operations into new solutions, such as converting fatty acid residues founding waste materials into biofuels.

We anticipate increasing biofuels and trade policy clarity that accelerates our ability to create positive economic opportunities and drive additional investments such as these throughout our business in the agriculture sector.

Addressing a growing carbon economy through the expansion of our decarbonization capabilities and <unk> solutions.

And taking advantage of available capacity and nutrition plans to expand product lines and enter new markets.

As public policy increasingly supports the agricultural sector.

Megan Britt: Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events. In addition, during today's call, we'll refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the Investor Relations section of the ADM website. I'll now turn the call over to Juan.

<unk> is poised to play a pivotal role in driving that progress.

All of these represent ways ADM can reduce waste accretively deploy capital and increase returns.

In the U S. For instance, as policies are finalized to accelerate the adoption of renewable fuels ADM is ready to lead.

As we look to the back half of 2025 from an external perspective.

Balances innovative solutions that opened new high value markets for American farmers and a strengthened the broader by euro economy.

We will also continue to shape our own path through the self help agenda that is already driving impact that help offset some of the market dynamics seen in the first half of the year.

Juan Luciano: Thank you, Megan. Hello and welcome to all who have joined the call. Please turn to slide 4. Today, ADM reported adjusted earnings per share of $0.93. Total segment operating profit was $830 million for the quarter. Our trailing four-quarter adjusted ROIC was 6.9%, and cash flow from operations before working capital changes was $1.2 billion for the first half of the year. The team focus has been on managing what we can control in a dynamic environment, and we continue to drive positive momentum in those areas in the second quarter. Our carbohydrate solutions team again delivered steady results with a strong execution and disciplined risk management. The nutrition team drove another quarter of sequential improvement, led by our flavors and animal nutrition portfolios. We also made important progress in getting our Decatur East plant back online, already ramping to our planned run rates.

As public policy increasingly supports the agricultural sector.

Because several external factors and self help effort will activate in the third and fourth quarters, we are tightening our expectations for adjusted earnings per share unexpected to land around affordable.

<unk> is poised to play a pivotal role in driving that progress.

In the U S. For instance, as policies are finalized to accelerate the adoption of renewable fuels ADM is ready to lead advances innovative solutions that opened new high value markets for American farmers and strengthen the broader by euro economy.

Sure for full year 2025.

We believe ADM is in a solid position to exit 2025 with operational momentum and.

We will also continue to shape our own path through the self help agenda that is already driving impact that help offset some of the market dynamics seen in the first half of the year.

And we are confident that our teams ability to execute against our strategy will set the company up for a strong finish to the year.

Launch into 2026.

With that let.

Because several external factors and self help effort will activate in the third and fourth quarters. We are tightening our expectations for adjusted earnings per share and expected to land around $4 per share for full year 2025.

Let me hand, it over to <unk> to share the deeper dive into the second quarter financial results and our 2025 outlook.

<unk>.

Thank you Kwon, please turn to slide six.

<unk> segment operating profit for the second quarter was $379 million down 17% compared to the prior year quarter as limited clarity on legislative and biofuel policy continued to impact margins in the segment.

We believe ADM is in a solid position to exit 2025 with operational momentum and.

And we are confident that our teams ability to execute against our strategy will set the company up for a strong finish to the year.

Juan Luciano: As services and all seats perform in line with our expectations, the team worked to offset lower margins this quarter through targeted organizational realignment and network consolidations, enabling us to be well-positioned to take advantage of expected improved conditions in the second half of the year. Across our global operations network, our efforts to improve operational resilience delivered outstanding results. We achieved our best performance in limiting unscheduled and unplanned downtime in more than five years. We're also proud to have been named as one of America's greatest workplaces in manufacturing, a testament to the tireless efforts of our colleagues across the ADM operations workforce. The external environment became clearer in some critical areas for our business throughout the quarter.

In the AG services sub segment operating profit was $113 million down 7% versus the prior quarter, driven primarily by lower global trade and South American origination results.

Launched into 2026.

With that let.

Let me hand, it over to <unk> to share the deeper dive into the second quarter financial results and our 2025 outlook.

Global trade results were lower relative to the same quarter last year, largely due to the lower trading volumes, partially related to the trade policy uncertainty as well as lower margins due to low commodity prices negative freight timing and currency impacts.

<unk>.

Thank you Juan please turn to slide six.

<unk> segment operating profit for the second quarter was $379 million down 17% compared to the prior year quarter and limited clarity on legislative and biofuel policy continued to impact margins in the segment.

South American origination results were lower primarily due to lower volume and margin stemming from the loss of operations of the key port facility in Brazil, and foreign exchange impacts.

In the AG services sub segment operating profit was $113 million down 7% versus the prior quarter, driven primarily by lower global trade and South American origination results.

North American origination results improved in the quarter due to higher margins and volume as well as from a timing benefit associated with receiving $19 million in proceeds from the USDA Grant earlier this year compared to in 2024.

Juan Luciano: The US administration drove positive tax and biofuel policies that are helping biofuel producers make better decisions about production rates and feedstock demand, while also supporting an uplift in crash and biodiesel margins. The agility in which we managed the first half of 2025 demonstrates our team's ability to drive our strategy forward and manage the dynamics of the external environment while focusing attention on the self-help and execution excellence agenda we outlined earlier in the year. Let's take a closer look at our progress on key strategic objectives in the quarter. Please turn to slide 5. We're making strong progress against the areas of self-help we identified at the beginning of the year. The balance of efforts across cost management, execution excellence, targeted simplification, strategic growth, and capital discipline are providing an important foundation to work from.

They have a net negative timing impacts of approximately $27 million year.

Year over year.

South American origination results were lower primarily due to lower volume and margin stemming from the loss of operations at our key port facility in Brazil, and foreign exchange impacts.

In the crushing sub segment operating profit was $33 million down 75% from the prior year quarter.

Consistent with our expectations for the quarter, both global soybean and canola crush execution margin, while lower than the prior year quarter.

North American origination results improved in the quarter due to higher margins and volumes as well as from a timing benefit associated with receiving $19 million in proceeds from the USDA Grant earlier this year compared to in 2024.

Global executed crush margins were approximately $7 per ton lower in soybeans compared to the prior year quarter and approximately $29 per ton lower in canola.

They have a net negative timing impacts of approximately $27 million year over year.

By region crush margins were down significantly in North America.

North America soybean crush margins were negatively impacted by higher crush rates and lower soybean oil demand stemming from biofuel policy uncertainty earlier in the quarter.

In the crushing sub segment operating profit was $33 million down 75% from the prior year quarter.

Consistent with our expectations for the quarter, both global soybean and canola crush execution margins, while lower than the prior year quarter.

North America Canola crush margins were approximately $50 per ton lower due to headwinds from trade policy and lower canola oil demand for biofuel production.

Juan Luciano: Let me share a few examples of what we accomplished in the quarter. We're continuing our portfolio management activities. We made decisions to cease operations at certain facilities that no longer align with our long-term goals, including several AS&O origination sites globally, a port transload facility in Florida, an aquaculture plant in Ecuador, a pet and animal nutrition plant in Brazil, and two assets no longer strategic to the specialty ingredients business. We focused on optimizing our AS&O network and aligning our asset base to the most critical parts of the business while ensuring we effectively manage uptime and production capacity. And we announced our intention to move our Lubbock, Texas, cotton seed plant into a joint venture. As I mentioned earlier, we achieved a critical milestone in recommissioning our Decatur East facility and are currently ramping up to plant production levels.

Global executed crush margins were approximately $7 per ton lower in soybeans compared to the prior year quarter and approximately $29 per ton lower in canola.

They are a net positive timing impacts of approximately $37 million year over year.

In our refined products and other sub segment operating profit was $156 million.

By region crush margins were down significantly in North America, North America, soybean crush margins were negatively impacted by higher crush rates and lower soybean oil demand stemming from biofuel policy uncertainty earlier in the quarter.

Up 14% compared to the prior year quarter as positive timing impacts offset lower biodiesel and refining margin.

In EMEA margins declined due to significantly lower biodiesel export volumes.

North America Canola crush margins were approximately $50 per ton lower due to headwinds from trade policy and law canola oil demand for biofuel production.

In North America positive timing impacts offset lower biodiesel and refining margins, which were negatively impacted by additional industry crush capacity and lower demand for vegetable oils due to biofuel policy uncertainty.

They are a net positive timing impacts of approximately $37 million year over year.

In the refined products and other sub segment operating profit was $156 million up 14% compared to the prior year quarter as positive timing impacts offset lower biodiesel and refining margins.

They are a net positive timing impacts of approximately $119 million year over year.

Equity earnings from the company's investment in Wilmar was $77 million up 13% compared to the prior year quarter.

In EMEA margins declined due to significantly lower biodiesel export volumes.

Juan Luciano: This will have a positive impact on costs within our specialty ingredients business as we move through the back half of the year. Through a combination of these efforts and others throughout the first half of the year, we remain on track for our targeted $500 to $750 million in aggregate cost savings over the next three to five years. We're also continuing our capital discipline focus with an eye on returning capital to shareholders. And following our Q1 earnings call, we announced our 374th consecutive quarterly dividend. And while we've been keeping our efforts in cost and capital management at the forefront, we have never stopped smart organic investments that provide us options to accelerate growth at the appropriate time. ADM's integrated business model provides significant advantages to generate value across our entire production ecosystem.

Turning now to slide seven.

For the second quarter carbohydrate solutions segment operating profit was $337 million down 6% compared to the prior year quarter.

In starches and sweeteners sub segment operating profit was $304 million down 6% compared to the prior year quarter.

They are a net positive timing impacts of approximately $119 million year over year.

In EMEA.

Sweeteners, and starches volumes and margins decline as higher corn costs due to crop quality issues continue to negatively impact results.

Equity earnings from the company's investment in Wilmar was $77 million up 13% compared to the prior year quarter.

In North America, Sweeteners, and starches results were up slightly as higher liquid sweetener and corn co product margins offset the negative impact of weaker arch margins and volumes and lower wet mill ethanol margins.

Turning now to slide seven.

For the second quarter carbohydrate solutions segment operating profit was $337 million down 6% compared to the prior year quarter.

In starches and sweeteners sub segment operating profit was $304 million down 6% compared to the prior year quarter.

Global wheat milling margins and volumes also improved relative to the prior year quarter, largely due to volume growth with key customers.

In EMEA.

Juan Luciano: A few examples include repositioning co-products from our operations into new solutions, such as converting fatty acid residues found in waste materials into biofuels, addressing a growing carbon economy through the expansion of our decarbonization capabilities in car solutions and taking advantage of available capacity in nutrition plants to expand product lines and enter new markets. All of these represent ways ADM can reduce waste, accretively deploy capital, and increase returns. As we look to the back half of 2025 from an external perspective, we anticipate increasing biofuels and trade policy clarity that accelerate our ability to create positive economic opportunities and drive additional investments such as these throughout our business and the agriculture sector. As public policy increasingly supports the agricultural sector, ADM is poised to play a pivotal role in driving that progress.

In the vantage corn processors sub segment operating profit was $33 million flat relative to the prior year quarter as higher ethanol volumes and improved risk management, largely offset lower ethanol margins.

Sweeteners, and starches volumes and margins decline as higher corn costs due to crop quality issues continue to negatively impact results.

In North America, Sweeteners, and starches results were up slightly as higher liquid sweetener and corn co product margins offset the negative impact of weaker starch margins and volumes and lower wet mill ethanol margin.

Overall ethanol EBITDA margins per gallon were positive in the quarter, though lower than the prior year quarter.

Turning to slide eight.

Global wheat milling margins and volumes also improved relative to the prior year quarter, largely due to volume growth with key customers.

In the second quarter Nutrition segment revenues were $2 billion.

Up approximately 5% compared to the prior year quarter.

The increase includes a $55 million benefit from a contract cancellation and health and wellness.

The full amount of which is not included in the nutrition segment operating profit.

Excluding this benefit human nutrition revenue was up approximately 4%.

Overall ethanol EBITDA margins per gallon were positive in the quarter, though lower than the prior year quarter.

Finally, driven by flavors growth, partially offset by headwinds related to supply challenges from Decatur East.

Turning to slide eight.

In the second quarter Nutrition segment revenues were $2 billion.

Animal nutrition revenue was down 2% as negative currency impacts and lower volumes offset mixed benefits.

Juan Luciano: In the US, for instance, as policies are finalized to accelerate the adoption of renewable fuels, ADM is ready to lead, advancing innovative solutions that open new high-value markets for American farmers and strengthen the broader bioeconomy. We will also continue to shape our own path through the self-help agenda that is already driving impacts that help offset some of the market dynamics seen in the first half of the year. Because several external factors and self-help efforts will activate in the third and fourth quarters, we are tightening our expectations for adjusted earnings per share and expect it to land around $4 per share for full year 2025.

Up approximately 5% compared to the prior year quarter.

Nutrition segment operating profit was $114 million for the second quarter up 5% versus the prior year quarter.

The increase includes a $55 million benefit from a contract cancellation and health and wellness.

The full amount of which is not included in the nutrition segment operating profit.

Human nutrition sub segment operating profit was $92 million.

Down 11% compared to the prior year quarter as improved performance in flavors was more than offset by declines in specialty ingredients and health and wellness.

Excluding this benefit human nutrition revenue was up approximately 4%.

Finally, driven by flavors growth, partially offset by headwinds related to supply challenges from Decatur East.

In specialty ingredients operating profit declined due to lower margins and impacts related to the indicators east plant.

Animal nutrition revenue was down 2% as negative currency impacts and lower volumes offset mix benefits.

In health and wellness higher margins from biotech and improved product mix were more than offset by reduced tolling margins from a contract cancellation.

Nutrition segment operating profit was $114 million for the second quarter up 5% versus the prior year quarter.

Animal nutrition sub segment operating profit of $22 million was higher than the prior year quarter due to higher margin supported by ongoing turnaround actions.

Juan Luciano: We believe ADM is in a solid position to exit 2025 with operational momentum, and we are confident that our team's ability to execute against our strategy will set the company up for a strong finish to the year and launch into 2026. With that, let me hand it over to Monish to share a deeper dive into second quarter financial results and our 2025 outlook. Monish.

Human nutrition sub segment operating profit was $92 million.

Down 11% compared to the prior year quarter as improved performance in flavors was more than offset by declines in specialty ingredients and health and wellness.

Please turn to slide nine.

For the first half of the company generated cash flow from operations before working capital of approximately $1 $2 billion down.

In specialty ingredients operating profit declined due to lower margins and impacts related to the Decatur East plant.

Down relative to the prior year period due to lower segment operating profit.

In health and wellness higher margins from biotech and improved product mix were more than offset by reduced tolling margins from a contract cancellation.

Monish Patolawala: Thank you, Juan. Please turn to slide 6. AS&O segment operating profit for the second quarter was $379 million, down 17% compared to the prior quarter, as limited clarity on legislative and biofuel policy continued to impact margins in the segment. In the Ag Services subsegment, operating profit was $113 million, down 7% versus the prior quarter, driven primarily by lower global trade and South American origination results. Global trade results were lower relative to the same quarter last year, largely due to the lower trading volumes, partially related to the trade policy uncertainty, as well as lower margins due to lower commodity prices, negative rate timing, and currency impacts. South American origination results were lower primarily due to lower volume and margins stemming from the loss of operations at a key port facility in Brazil and foreign exchange impacts.

We continued to make progress with our actions to ensure working capital excellence through stronger rigor on working capital planning inventory rationalization improvement of key account payable metrics and more timely collection of past due balances.

Animal nutrition sub segment operating profit of $22 million was higher than the prior year quarter due to higher margin supported by ongoing turnaround Maxim.

For example inventory decreased by $2 2 billion during the first half of this year as compared to a $1 4 billion decrease in the prior year period in part due to improved management of volumes.

Please turn to slide nine.

For the first half of the company generated cash flow from operations before working capital of approximately $1 $2 billion down relative to the prior year period due to lower segment operating profit.

Solid cash generation and a strong balance sheet remain important differentiators for the company.

We continued to make progress with our actions to ensure working capital excellence.

Our leverage ratio was two one times for the quarter end and we will continue to seek opportunities to further strengthen our balance sheet to enhance financial flexibility.

Stronger rigor on working capital planning inventory rationalization improvement of key account payable metrics and more timely collection of past due balances.

We are dedicated to organically investing in the business to elevate return and create long term value.

For example inventory decreased by $2 2 billion during the first half of this year as compared to a $1 4 billion decrease in the prior year period in part due to improved management of volumes.

To this end, we have been very prudent with our capex spending.

Year to date, we have invested $596 million in capital expenditures and have lowered our expected capex spend range to $1 3 billion to $1 $5 billion from 2025 down from previous expectations of $1 5 billion to $1 7 billion.

Monish Patolawala: North American origination results improved in the quarter due to higher margins and volumes, as well as from a timing benefit associated with receiving $19 million in proceeds from a USDA grant earlier this year compared to in 2024. There were net negative timing impacts of approximately $27 million year over year. In the crushing subsegment, operating profit was $33 million, down 75% from the prior quarter. Consistent with our expectations for the quarter, both global soybean and canola crush execution margins were lower than the prior quarter. Global executed crush margins were approximately $7 per ton lower in soybeans compared to the prior quarter and approximately $29 per ton lower in canola. By region, crush margins were down significantly in North America. North America soybean crush margins were negatively impacted by higher crush rates and lower soybean oil demand stemming from biofuel policy uncertainty earlier in the quarter.

Solid cash generation and a strong balance sheet remain important differentiator for the company.

Leverage ratio was two one times for the quarter end and we will continue to seek opportunities to further strengthen our balance sheet to enhance financial flexibility.

At the same time, we remain steadfast in our commitment to returning cash to shareholders and we returned $495 million to shareholders in the form of dividends during the first half of 2025.

We are dedicated to organically investing in the business to elevate return and create long term value.

To this end, we have been very prudent with our capex spending.

Turning to slide 10.

We have provided details to support our 2025 outlook.

With greater visibility regarding the third quarter and additional clarity on emerging policy tailwind, we have tightened our range and now expect adjusted earnings per share to be approximately $4 per share for the full year 2025.

At the same time, we remain steadfast in our commitment to returning cash to shareholders and we returned $495 million to shareholders in the form of dividends during the first half of 2025.

Tax and biofuel policy proposals introduced towards the end of the second quarter and beyond have now created market insight to incentivize higher bi fuel and renewable diesel production levels.

In June the Environmental Protection Agency released its first renewable volume obligation or RVO proposal for 2026, and 2027 with favorable provisions for domestic feedstock.

Turning to slide 10.

Monish Patolawala: North America canola crush margins were approximately $50 per ton lower due to headwinds from trade policy and lower canola oil demand for biofuel production. There were net positive timing impacts of approximately $37 million year over year. In the refined products and other subsegments, operating profit was $156 million, up 14% compared to the prior quarter, as positive timing impacts offset lower biodiesel and refining margins. In EMEA, margins declined due to significantly lower biodiesel export volumes. In North America, positive timing impacts offset lower biodiesel and refining margins, which were negatively impacted by additional industry crush capacity and lower demand for vegetable oils due to biofuel policy uncertainty. There were net positive timing impacts of approximately $119 million year over year. Equity earnings from the company's investment in Wilmar were $77 million, up 13% compared to the prior quarter. Turning now to slide 7.

We have provided details to support our 2025 outlook.

In July the tax reconciliation package signed by the administration improvement extended the 40 fives the biofuel producer tax credit for an additional two years through 2029 and clarified that the credit is limited to fuels created from North American feedstock.

Tax and biofuel policy proposals introduced towards the end of the second quarter and beyond have now created market insight to incentivize higher bio fuel and renewable diesel production levels.

With a favorable proposed RVO and Finalization of the 45 is the producer tax credit soybean oil has rallied and board crush margins have improved.

In June the Environmental Protection Agency released its first renewable volume obligation or RVO proposals for 2026, and 2027 with favorable provisions for domestic feedstock.

Combined with the focused actions of our teams on network consolidation and cost savings, we expect to be in a better position to capture opportunities as we enter the fourth quarter and move through the final months of the year.

Let me provide some color on several assumptions for the second half.

We are closely monitoring customer demand and have embedded expectations for lower volumes in certain pockets and geographies in our guidance.

With a favorable proposed RVO and Finalization of the 45 to the producer tax credit soybean oil has rallied and board crush margins have improved.

With policy developments coming at the end of the second quarter, we had already booked a portion of our third quarter business, which will limit our ability to take full advantage of higher expected margin on these developments in the third quarter.

Combined with the focused actions with our teams on network consolidation and cost savings, we expect to be in a better position to capture opportunities as we enter the fourth quarter and move through the final months of the year.

Monish Patolawala: For the second quarter, carbohydrate solutions segment operating profit was $337 million, down 6% compared to the prior quarter. In starches and sweeteners subsegment, operating profit was $304 million, down 6% compared to the prior quarter. In EMEA, sweeteners and starches volumes and margins declined as higher corn costs due to crop quality issues continued to negatively impact results. In North America, sweeteners and starches results were up slightly as higher liquid sweetener and corn co-product margins offset the negative impact of weaker starch margins and volumes and lower wet mill ethanol margins. Global wheat milling margins and volumes also improved relative to the prior quarter, largely due to volume growth with key customers. In the Vantage corn processor subsegment, operating profit was $33 million, flat relative to the prior quarter, as higher ethanol volumes and improved risk management largely offset lower ethanol margins.

We expect soybean crush margins in the third quarter to be in a similar range to the second quarter.

Let me provide some color on several assumptions for the second half.

We expect improved ethanol margins will primarily benefit our fourth quarter results that we project global soybean crush margins to be in the range of 60 to $70 per metric ton and global canola crush margins to be in the range of 55 to $65 per metric ton.

We are closely monitoring customer demand and have embedded expectations for lower volumes in certain pockets and geographies in our guidance.

We also expect improvement in AG services in the fourth quarter as we expect strong crops in North America, and a solid north American exports season supported by increased trade policy clarity.

We expect soybean crush margins in the third quarter to be in a similar range for the second quarter.

We expect carb solutions to continue to be impacted by softness in starts demand for paper and corrugated box and higher corn costs in EMEA related to corn quality issues.

Robust industry wide ethanol production is expected to sustained pressure on margins and we anticipate for the year 2025, a mid single digit decline in overall ethanol EBITDA margins compared to the prior full year.

We also expect improvement in AG services in the fourth quarter as we expect strong crops in North America, and a solid north American export season supported by increased trade policy clarity.

Anticipate continued improvement in nutrition through a focus on supply chain excellence and our Decatur is planned returning to planned full production.

Monish Patolawala: Overall, ethanol EBITDA margins per gallon were positive in the quarter, though lower than the prior quarter. Turning to slide 8. In the second quarter, nutrition segment revenues were $2 billion, up approximately 5% compared to the prior quarter. The increase includes a $55 million benefit from a contract cancellation in health and wellness, the full amount of which is not included in the nutrition segment operating profit. Excluding this benefit, human nutrition revenue was up approximately 4%, primarily driven by flavors growth, partially offset by headwinds related to supply challenges from Decatur East. Animal nutrition revenue was down 2% as negative currency impacts and lower volumes offset mixed benefits. Nutrition segment operating profit was $114 million for the second quarter, up 5% versus the prior quarter.

We expect carb solutions to continue to be impacted by softness in starts demand for paper and corrugated box and higher corn costs in EMEA related to corn quality issues.

Finally, just a reminder.

During the second half of 2024, we had $231 million in insurance proceeds with $96 million in the third quarter and the balance in the fourth quarter.

The third quarter insurance proceeds were largest in cob solution and will impact third quarter year over year comparisons in that segment.

To close we are making progress.

We anticipate continued improvement in nutrition through a focus on supply chain excellence and our Decatur is planned returning to planned full production.

My top priority coming to ADM was to remediate the material weakness.

And this quarter, we announced that we have successfully remediated the material weakness in internal controls for segment disclosures related to reporting pricing and measurement.

Finally, just a reminder, during the second half of 2024, we had $231 million in insurance proceeds with $96 million in the third quarter and the balance in the fourth quarter.

Going forward, we will continue to focus on broader initiatives that will enhance our transparency and compliance processes, while maintaining an effective operating environment.

Third quarter insurance proceeds were largest in comp solution and will impact third quarter year over year comparisons in that segment.

We are also aggressively acted on opportunities to improve operational performance and lower cost and we are seeing through these actions that our assets are running better and we are benefiting from the restored and ramping operations at our <unk> plant.

Monish Patolawala: Human nutrition subsegment operating profit was $92 million, down 11% compared to the prior quarter, as improved performance in flavors was more than offset by declines in specialty ingredients and health and wellness. In specialty ingredients, operating profit declined due to lower margins and impacts related to the Decatur East plant. In health and wellness, higher margins from biotics and improved product mix were more than offset by reduced stoling margins from a contract cancellation. Animal nutrition subsegment operating profit of $22 million was higher than the prior quarter due to higher margins supported by ongoing turnaround action. Please turn to slide 9. For the first half of the year, the company generated cash flow from operations before working capital of approximately $1.2 billion, down relative to the prior period due to lower segment operating profits.

To close we are making progress.

My top priority coming to ADM was to remediate the material weakness.

This quarter, we announced that we have successfully remediated the material weakness in internal controls for segment disclosures related to reporting pricing and measurement.

We also continue to work in a measured manner to simplify our portfolio to enhance focus on core competencies, while unlocking additional capex to drive value and position the company for long term success.

Going forward, we will continue to focus on broader initiatives that will enhance our transparency and compliance processes, while maintaining an effective operating environment.

In particular on cash we have delivered an improvement in working capital efficiency and we have taken actions to further optimize our capex.

These efforts position us and our ability to navigate the current dynamic environment and reinforce our confidence in delivering on our commitments.

Before I hand, it back to Juan <unk>.

We also continue to work in a measured manner to simplify our portfolio to enhance focus on core competencies, while unlocking additional capital to drive value and position the company for long term success.

I wanted to take a moment to thank all my ADM colleagues for their dedication and focus in delivering for our customers and helping to create long term value for our shareholders.

Back to you Juan.

In particular on cash we have delivered an improvement in working capital efficiency and we have taken actions to further optimize our capex.

Monish Patolawala: We continued to make progress with our actions to ensure working capital excellence through stronger rigor on working capital planning, inventory rationalization, improvement of key accounts payable metrics, and more timely collection of past due balances. For example, inventories decreased by $2.2 billion during the first half of this year as compared to a $1.4 billion decrease in the prior period, in part due to improved management of volume. Solid cash generation and our strong balance sheet remain important differentiators for the company. Our leverage ratio was 2.1 times for the quarter end, and we will continue to seek opportunities to further strengthen our balance sheet to enhance financial flexibility. We are dedicated to organically investing in the business to elevate returns and create long-term value. To this end, we have been very prudent with our CAPEX spending.

Thanks, Monish, let me wrap up by highlighting some of the ways. We are setting our business up for the back half of 2025 and into 2026.

These efforts position us and our ability to navigate the current dynamic environment and reinforce our confidence in delivering on our commitments.

Along with the positive signals, we see that are providing momentum.

Overall, we will continue to drive operational excellence through our focus on cost savings and cash and by simplifying our business through targeted portfolio optimization, including the recent examples I mentioned earlier in today's call.

Before I hand, it back to Juan I wanted to take a moment to thank all my ADM colleagues for their dedication and focus in delivering for our customers and helping to create long term value for our shareholders.

Incredible furthering solutions will continue to drive operational excellence and closely monitor both consumer sentiment and broader economic signals, whilst maintaining momentum around our decarbonization and cost reduction initiatives.

Back to you Juan.

Thanks, Monish, let me wrap up by highlighting some of the ways. We are setting our business up for the back half of 2025 and into 2026.

For the nutrition, the ramp up applicator east and optimized portfolio will support continued recovery of the business, while we focus on building upon our strong opportunity pipeline in segments like flavors and health and wellness.

Along with the positive signals, we see that are providing momentum.

Monish Patolawala: Year to date, we have invested $596 million in capital expenditures and have lowered our expected CAPEX spend range to $1.3 billion to $1.5 billion from 2025, down from previous expectations of $1.5 billion to $1.7 billion. At the same time, we remain steadfast in our commitment to returning cash to shareholders, and we returned $495 million to shareholders in the form of dividends during the first half of 2025. Turning to slide 10, we have provided details to support our 2025 outlook. With greater visibility regarding the third quarter and additional clarity on emerging policy tailwinds, we have tightened our range and now expect adjusted earnings per share to be approximately $4 per share for the full year 2025. Tax and biofuel policy proposals introduced towards the end of the second quarter and beyond have now created market insight to incentivize higher biofuel and renewable diesel production levels.

<unk> services on Oilseeds, our active network optimization and operations focus is positioning us with the agility to capture opportunities from improved market conditions in the back half of the year.

Incredible furthering solutions will continue to drive operational excellence and closely monitor both consumer sentiments on broader economic signals, whilst maintaining momentum around our decarbonization and cost reduction initiatives.

Additionally, we're closely monitoring global trade developments, particularly in relation to China and broader export market dynamics.

For the nutrition the ramp up of applicator is an optimized portfolio will support continued recovery of the business. While we focus on building upon our strong opportunity pipeline in segments like flavors and health and wellness.

We head into the critical U S harvest season later this year.

Factors will play an important role in shaping opportunities in the months ahead.

We are seeing selective market share increases that are offsetting the sluggish markets elsewhere, and we are sharpening our focus on good risk management practices.

And our services in oilseeds, our active network optimization and operations focus is positioning us with the agility to capture opportunities from improved market conditions in the back half of the year.

Looking to the fourth quarter of 2025 and onwards, we see several reasons for optimism.

Additionally, we're closely monitoring global trade developments, particularly in relation to China umbro their export market dynamics.

Clarity and biofuel policy or legislative support for agriculture, Arctic, creating a favorable environment for market access for our pharma partners.

We head into the critical U S curve. The season later this year.

And enhance ibm's ability to deliver economic value to the broader sector.

Factors will play an important role in shaping opportunities in the model.

The foundational work we've done in the first half of 2025 set up for a stronger operational momentum.

Monish Patolawala: In June, the Environmental Protection Agency released its first renewable volume obligation or RVO proposal for 2026 and 2027 with favorable provisions for domestic feedstock. In July, the tax reconciliation package signed by the administration improved and extended the 45(c) biofuel producer tax credit for an additional two years to 2029 and clarified that the credit is limited to fuels created from North American feedstock. With the favorable proposed RVO and finalization of the 45(c) producer tax credit, soybean oil has rallied and bold crush margins have improved. Combined with the focus actions of our teams on network consolidation and cost savings, we expect to be in a better position to capture opportunities as we enter the fourth quarter and move through the final months of the year. Let me provide some color on several assumptions for the second half.

We are seeing selected market share increases that are offsetting the sluggish markets elsewhere, and we are sharpening our focus on good risk management practices.

Our investments in innovative spaces, such as bulk biotics natural flavors and colors and decarbonization position us to capture growth in high potential markets.

Looking to the fourth quarter of 2025 and onwards, we see several reasons for optimism.

Clarity and biofuel policy or legislative support for agriculture, Arctic, creating a favorable environment for market access for our pharma partners.

We have recalibrated many variables as we navigate the current complexities and our confidence in Adm's resilient stems from the dedication and expertise of our team.

Our enhanced <unk> ability to deliver economic value to the broader sector.

Their ability to adapt to challenges and execute against our strategy has been evident throughout the year.

The foundational work we've done in the first half of 2025 set up for a stronger operational momentum.

We are a company built to endure cycles.

Our investments in innovative spaces, such as bulk biotics natural flavors and colors and decarbonization position us to capture growth in high potential markets.

Our unparalleled network combined with the ingenuity of our workforce and ensures we remain the source of strength for our farmers customers and partners.

As we move forward our focus on self help initiatives execution excellence and disciplined capital allocation will continue to drive value for our shareholders and position ADM for success in 2026 and beyond.

We have recalibrated many variables as we navigate the current complexities and our confidence in Adm's resilient stems from the dedication and expertise of our team.

Monish Patolawala: We are closely monitoring customer demand and have embedded expectations for lower volumes in certain pockets and geographies in our guidance. With policy developments coming at the end of the second quarter, we had already booked a portion of our third quarter business, which will limit our ability to take full advantage of higher expected margins from these developments in the third quarter. We expect soybean crush margins in the third quarter to be in a similar range to the second quarter. We expect improved AS&O margins will primarily benefit our fourth quarter results, where we project global soybean crush margins to be in the range of $60 to $70 per metric ton and global canola crush margins to be in the range of $55 to $65 per metric ton.

Their ability to adapt to challenges and execute against our strategy has been evident throughout the year.

With us.

Let's open the line for questions operator.

We are a company built to endure cycles.

Yes.

Thanks Keith.

Your line is ask a question. Please press star one on your telephone keypad.

Our unparalleled network combined with the ingenuity of our workforce and ensures we remain the source of strength for our farmers customers and partners.

<unk> question that you might.

Mike.

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

Please go ahead.

Hey, good morning, Thanks for taking the question.

You gave a lot of helpful color for the back half of the year, but.

I was hoping you could maybe a little bit more explicitly give us kind of the earnings split between <unk> and <unk> or at least.

With us.

Let's open the line for questions operator.

Monish Patolawala: We also expect improvement in ag services in the fourth quarter as we expect strong crops in North America and a solid North American export season supported by increased trade policy clarity. We expect carb solutions to continue to be impacted by softness in starch demands for paper and corrugated box and higher corn costs in EMEA related to corn quality issues. Robust industry-wide ethanol production is expected to sustain pressure on margins, and we anticipate for the year 2025 a mid-single-digit decline in overall ethanol EBITDA margins compared to the prior full year. We anticipate continued improvement in nutrition through a focus on supply chain excellence and our Decatur East plant returning to planned full production. Finally, just a reminder, during the second half of 2024, we had $231 million in insurance proceeds, with $96 million in the third quarter and the balance in the fourth quarter.

A bit more guide kind of at the total company company level.

Yes.

Thanks Keith.

If you'd like to ask a question. Please press star one on your telephone keypad.

I take that.

Does it make sense to as we start to think about 2026 annualized <unk> is kind of a starting point I know, it's a bit of a bigger quarter. So we can make some mental math adjustments around that but is there any reason why that kind of it doesn't make sense to you.

<unk> your question that's fine.

Mike.

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

Please go ahead.

Yeah.

Hey, good morning, Thanks for taking the question.

Alright, Thank you for the question.

You gave a lot of helpful color for the back half of the year, but.

As you said or are you implying in your question we see.

I was hoping you could maybe a little bit more explicitly give us kind of the earnings split between <unk> and <unk> or at least.

That is for ADM.

Improving and getting more clear as we go into the second half of course first half with a lot of headwinds second half with the benefits now of.

A bit more guide kind of at the total company company level.

I take that.

There's more clarity on <unk> and 40 Fives Z, we certainly see the potential for <unk>.

For soybean oil.

To be much more demand at that will be the preferred of feedstocks for North America.

Alright, Thank you for the question.

Unfortunately by the time this was announced we have already contracted most of our Q3. So you will see the impact for us mostly in Q4, so soar.

Monish Patolawala: The third quarter insurance proceeds were largest in carb solutions and will impact third quarter year-over-year comparisons in that segment. To close, we are making progress. My top priority coming to ADM was to remediate the material weakness. And this quarter, we announce that we have successfully remediated the material weakness in internal controls for segment disclosures related to reporting, pricing, and measurement. Going forward, we will continue to focus on broader initiatives that will enhance our transparency and compliance processes while maintaining an effective operating environment. We have also aggressively acted on opportunities to improve operational performance and lower costs, and we are seeing through these actions that our assets are running better and we are benefiting from the restored and ramping operations at our Decatur East plant.

As you said or.

Are you implying your question we see.

Perspective for ADM.

Improving and getting more clear as we go into the second half of course first half with a lot of headwinds.

So as such it's probably going to be something like I don't know $75 65 dipoles.

Split between Q3 and Q4.

With the benefits now of a little bit more clarity on <unk> and 40 <unk> Z.

If you think about.

Certainly see.

What are the things that we have in Q4 coming for US we continue with our improvement in cost position.

The potential for.

For soybean oil.

To be much more demanded that will be the preferred of feedstocks for North America.

We see an improvement in crush margins if all of these RVO numbers are finally confirm.

Unfortunately by the time this was announced we have already contracted most of our Q3. So you will see the impact for us mostly in Q4. So so.

We're going to see the benefits of our <unk> plant in nutrition being back into production.

And we are going to see better earnings from our services as we get into our export season, and probably from global trade perspective, as well. So we have high expectations from that quarter provided all these.

So as such it's probably going to be something like I don't know $75 65 Diebold.

Split between Q3 and Q4.

If you think about.

Ah.

Monish Patolawala: We also continue to work in a measured manner to simplify our portfolio to enhance focus on core competencies while unlocking additional capital to drive value and position the company for long-term success. In particular, on cash, we have delivered an improvement in working capital efficiency, and we have taken actions to further optimize our CAPEX. These efforts position us in our ability to navigate the current dynamic environment and reinforce our confidence in delivering on our commitment. Before I hand it back to Juan, I want to take a moment to thank all my ADM colleagues for their dedication and focus in delivering for our customers and helping to create long-term value for our shareholders. Back to you, Juan.

Our viewers are confirmed.

What are the <unk>.

In terms of 2026 travel it's too early but.

Things that we have in Q4 coming for US we continue with our improvement in cost position we are in.

Most of the time, we said.

The rate as we exit 2025 becomes the rate that we entered 2026.

An improvement in crush margins if all of these RVO numbers are finally confirmed.

That's going to be multiply by four to early to speculate at this point.

We're going to see the benefit of our plant nutrition being back into production.

Andrew a couple more data points too.

Funds, 0.13rd two third split Q3 Q4.

And we are going to see better earnings from our services as we get into our exports from them early from global trade perspective, as well. So we have high expectations from that quarter provided all of these.

Secondly, just as your modeling just remember last year, we had $230 million of insurance proceeds 96 of it was in Q3 and the balance was in Q4 and you can see the segments. So in Q3 cards will be the biggest impact on a year over year basis.

Our viewers are confirmed.

In terms of 2026, probably too early but.

Most of the time, we said that.

If crush margins don't move up with our replacement curve doesn't move up that's another 15 cent headwind.

The rate as we exit 2025 becomes the rate that we entered 2026.

That's going to be multiplied by four to early to speculate at this point.

Juan Luciano: Thanks, Monish. Let me wrap up by highlighting some of the ways we are setting our business up for the back half of 2025 and into 2026, along with the positive signals we see that are providing momentum. Overall, we will continue to drive operational excellence through our focus on cost savings and cash and by simplifying our business through targeted portfolio optimization, including the recent examples I mentioned earlier in today's call. In carbohydrate solutions, we'll continue to drive operational excellence and closely monitor both consumer sentiment and broader economic signals while maintaining momentum around our decarbonization and cost reduction initiatives. For nutrition, the ramp-up of Decatur East and optimized portfolio will support continued recovery of the business while we focus on building upon our strong opportunity pipeline in segments like flavors and health and wellness.

It doesn't move.

Corporate usually second half is usually higher than the first half due to some naturally seasonally.

Just Andrew a couple more data points to funds 0.13rd two third split Q3 Q4 seconds.

We will continue to drive our cost and cash initiatives that we have ethanol. When you think about ethanol, it's still lower on a year over year basis, while the second quarter was positive it was still lower than.

And the total spend last year and so we continue to see ethanol to be a little softer in the second half, but all of that is currently baked into our guide except of course, the headwind is if the replacement curve doesn't work and timing is another item that could move between quarters away at our Mark comes at the end of the year.

If crush margins don't move up with our replacement curve doesn't move up that's in.

Another 15 headwind if the curve doesn't move.

Corporate usually second half is usually higher than the first half due to some naturally seasonally.

Hopefully that answers your question.

Yes, that's very helpful. Thank you very much.

Shoulder.

Thanks Keith.

Question comes from Ben Theurer.

Your line is now open. Please go ahead.

And then the total spend last year and so we continue to see ethanol to be a little softer in the second half, but all of that is currently baked into our guide except of course, the headwind is if the replacement curve doesn't work and timing is another item that could move between quarters away at our Mark comes at the end of the year, but.

Good morning, Thank you very much.

Juan Luciano: In ag services and all seeds, our active network optimization and operations focus is positioning us with the agility to capture opportunities from improved market conditions in the back half of the year. Additionally, we're closely monitoring global trade developments, particularly in relation to China and broader export market dynamics as we head into the critical US harvest season later this year. These factors will play an important role in shaping opportunities in the months ahead. We are seeing selective market share increases that are offsetting sluggish markets elsewhere, and we're sharpening our focus on good risk management practices. Looking to the fourth quarter of 2025 and onwards, we see several reasons for optimism. Clarity in biofuel policy and legislative support for agriculture are creating a favorable environment for market access for our farmer-palmer and enhance ADM's ability to deliver economic value to the broader sector.

<unk>.

Congrats on the.

Our solid results for the second quarter I wanted to.

Dive into the outlook for the nutrition segment and to the back half, obviously with pick up to where east coming back as we look into this and kind of like kind of like an LTM run rate kind of called about $400 million operating income now in that segment, but clearly with all these headwinds.

That answers your question.

Yes, that's very helpful. Thank you very much.

Georgia.

Thank you our next.

Question comes from Ben Theurer of Barclays. Your line is now open. Please go ahead.

Or would you suggest us assuming has been kind of like that incremental costs that you called out for not having Decker tour east over the last couple of quarters and as we ramp through <unk> and then particularly into 2026, where do you think like kind of like a current run rate is.

Good morning, Thank you very much.

<unk> com.

Congrats on the.

Our solid results for the second quarter I wanted to.

Dive into the outlook for the nutrition segment and to the back half, obviously with <unk> coming back as we look into this and kind of like kind of like an LTM run rate kind of called about $400 million operating income now in that segment, but clearly with all these headwinds.

<unk> for that business.

On a standalone basis. Thank you.

Yes. Thank you for the question Ben.

Let me address nutrition, and how we should go and so nutrition continuous recovery.

We're very pleased with that.

Or would you suggest.

Just us assuming has been kind of like the incremental costs that you called out for not having pickets were east over the last couple of quarters and as we ramp through <unk> into <unk> and particularly into 2026, where do you think like kind of like a current run rate is for that business.

If I take it into pieces, if you take animal.

Juan Luciano: The foundational work we've done in the first half of 2025 sets us for stronger operational momentum. Our investments in innovative spaces such as postbiotics, natural flavors, and colors, and decarbonization position us to capture growth in high-potential markets. We have recalibrated many variables as we navigate the current complexities, and our confidence in ADM's resilience stems from the dedication and expertise of our team. Their ability to adapt to challenges and execute against our strategy has been evident throughout the year. We're a company built to endure cycles, and our unparalleled asset network, combined with the ingenuity of our workforce, ensures we remain a source of strength for our farmers, customers, and partners. As we move forward, our focus on self-help initiatives, execution excellence, and disciplined capital allocation will continue to drive value for our shareholders and position ADM for success in 2026 and beyond.

Nutrition.

Human nutrition is being driven by flavors.

<unk> revenue growth.

We are holding to our EBITDA margins. So we are very pleased with that.

Mostly driven by beverages.

In North America, but also a strength in Europe, and we have an opportunity to grow geographically as our plans and in Asia Pacific.

On a standalone basis. Thank you.

Yes. Thank you for the question Ben.

Let me address nutrition and how we should go in so nutrition continuous recovery.

Chris.

In terms of.

We're very pleased with that.

Health and wellness Biotics has grown so far 9% revenue. So that's going that's going very very well and.

If I take it in two pieces, if you take animal.

<unk> nutrition.

Human nutrition is being driven by flavors.

And we are very pleased with that and we will be releasing some data of studies that we perform in 2025, we're going to be or in the past that we would be releasing in 'twenty five 'twenty six that will give much more opportunities for us to penetrate more applications, especially in the heat treated post biotech area where ADM.

<unk> revenue growth.

We are holding to our EBITDA margins. So we are very pleased with that.

Mostly driven but beverages.

In North America, but also our strength in Europe, and we have an opportunity to grow geographically as our plans.

It's one of the leading companies.

In Asia Pacific.

In terms of suspicious ingredients was the headwinds for for the human nutrition part and as you said.

Chris.

In terms of.

Health and wellness Biotics has grown so far 9% revenue. So that's going that's going very very well.

Juan Luciano: With that, let's open the line for questions. Operator.

We have mentioned before the headwinds in terms of costs or having the Decatur plant.

Operator: Thank you. As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. If you'd like to remove your question, that's star followed by two. Our first question for today comes from Andrew Stromsic of BMO. Your line's now open. Please go ahead.

We are very pleased with that and we will be releasing some data of studies that we perform in 2025, we're going to be in the past that we were releasing in 'twenty five 'twenty six that will give much more opportunities for us to penetrate more applications, especially in the heat treated post biotech area, where ADM is.

It was about $20 million to $25 million per quarter that will be hopefully be behind us as we go into 2026.

So then you have the animal nutrition.

Animal nutrition side is been an improvement story, if you will a margin up story, if I remember I mentioned that from the time that.

Andrew Strelzik: Hey, good morning. Thanks for taking the question. You know, you gave a lot of helpful color for the back half of the year, but I was hoping you could maybe a little bit more explicitly give us kind of the earnings split between 3Q and 4Q or at least a little bit more guide kind of at the total company company level. And if I take that, does it make sense to, as we start to think about 2026, annualize 4Q as kind of a starting point? I know it's a bit of a bigger quarter, so we can make some mental math adjustments around that. But is there any reason why that kind of doesn't make sense to you? Thanks.

One of the leading companies.

From like three or four years ago, and they've been executing on that they've been executing for the last I think seven quarters, they've been presenting better results.

In terms of sufficient ingredients was the headwinds for <unk>.

For the human nutrition part and as you said.

We have mentioned before the headwinds in terms of costs or having the Decatur plant.

Based on sales felt the market. This is.

Relatively good market in the sense that all the protein customers and making money feed is relatively cheap right. Now so profitability is there and our portfolio is slightly shifting into more specialty products. As we go along so we are deemphasizing some of the commodities and emphasizing a little bit more.

It was about $20 million to $25 million per quarter that will be hopefully be behind us as we go into 2026.

So then you have the animal nutrition.

Animal nutrition side is been an improvement story, if you will a margin up story, but I mentioned that from the time good.

Juan Luciano: Well, I thank you for the question. As you said, or are you implying your question, we see the perspectives for ADM improving and getting more clear as we go into the second half. Of course, the first half has a lot of headwinds. The second half, with the benefits now of a little bit more clarity on RVOs and 45(c), we certainly see the potential for soybean oil to be much more demanded, and that would be the preferred feedstocks for North America. Unfortunately, by the time this was announced, we have already contracted most of our Q3, so you will see the impact for us mostly in Q4. So as such, it's probably going to be something in the, I don't know, 35, 65 type of split between Q3 and Q4.

Our innovation in those segments. So we feel good about that piece continues so.

From like three or four years ago, and they've been executing on that <unk> been executing for the last I think seven quarters, they've been presenting better results.

I think we are setting up well for continued growth into 2026.

Numbers wise a run rate.

Based on sales felt the market is.

I would like to venture at this point in time, but I think you can for sure adds about $100 million of specialty ingredient headwinds that we know what we're gonna hub.

In 2020, the plan so far is running well.

Since it started up by the team brought it back safely. So we're very proud of the team.

Our innovation in those segments. So we feel good about that piece continues so.

So so far so good.

Perfect. Thank you very much.

I think we are setting up well for continued growth into 2026.

Thank you Ben.

Okay.

Numbers wise a run rate.

Thank you. Our next question comes from Manav Gupta of UBS. Your line is now open. Please go ahead.

I'd like to venture at this point in time, but I think you can for sure.

About $100 million of specialty ingredients headwinds that we know what we're gonna hub in.

Juan Luciano: If you think about what are the things that we have in Q4 coming through us, we continue with our improvement in cost position. We're going to see an improvement in crush margins if all these RVO numbers are finally confirmed. We're going to see the benefit of our East plant in nutrition being back into production. And we're going to see better earnings from ag services as we get into our export season and probably from a global trade perspective as well. So we have high expectations for that quarter provided all these RVOs are confirmed. In terms of 2026, probably too early, but most of the time we said the rate at which we exit 2025 becomes the rate at which we enter 2026. Whether that's going to be multiplied by four, too early to speculate at this point.

Good morning, I, just wanted a little bit of a clarification I know you had been working very closely with the SEC responding to all of this <unk> and now basically you're putting out the statement that the material weakness is no longer there so.

In 2020, the plan so far is running well.

Since it started up back.

The team brought it back safely. So we're very proud of the team.

Are we to understand that you reached out to ACC youll give them what they wanted and then they did not come back with additional question. So at this point would it be fair to say that.

So so far so good.

Perfect. Thank you very much.

Thank you Pam.

Okay.

Thank you. Our next question comes from Manav Gupta of UBS. Your line is now open. Please go ahead.

Is okay with just where your financials are being constructed and what can also be done to make sure. This never happens again, if you could just talk about those things. Thank you.

Good morning, I, just wanted a little bit of a clarification I know you had been working very closely with SEC responding to all these queries and now basically you are putting out the statement that the material weakness is no longer there so.

Yes, Manav I think that two different <unk>.

Maybe I can make number one is yes, we did remediate the material weakness.

This quarter and the team did a really heavy job that created if you think it's 18 months that the company has worked on this.

Are we to understand that you reached out to ACC Youll gave them what they wanted and then they did not come back with additional question. So at this point would it be fair to say that.

Robust remediation plan. So we designed and implemented a lot of enhanced internal controls, especially in related to our intersegment policies pricing and measurement controls, which was the reason for the material weakness.

Monish Patolawala: Just Andrew, a couple more data points to Juan's point, one-third, two-third split Q3, Q4. Secondly, just as you're modeling, just remember last year we had 230 million of insurance proceeds. 96 of it was in Q3 and the balance was in Q4. And you can see the segments. So in Q3, carbs will be the biggest impact on a year-over-year basis. If crush margins don't move up or the replacement curve doesn't move up, that's another 15-cent headwind if the curve doesn't move. Corporate, usually second half is usually higher than the first half due to some naturally seasonal elements. We'll continue to drive our cost and cash initiatives that we have. Ethanol, when you think about ethanol, it's still lower on a year-over-year basis. While the second quarter was positive, it was still lower than than than the total than last year.

Is okay with the Australia financials are being constructed and what can also be done to make sure. This never happens again, if you could just talk about those things. Thank you.

Improved our training we upgraded talent, we have tested these controls in right and we've tested them over multiple periods and right now we believe these are effective.

Yes, Manav I think that two different.

Maybe I can make number one is yes, we did remediate the material weakness.

The way we do this manav just for your benefit as management test that they have the controls they tested and then at the end of the Navy consult with the audit committee as well as our auditors to make sure that what we are doing.

This quarter and the team did a really heavy job that created if you think it's 18 months that the company has worked on this.

Robust remediation plan. So we designed and implemented a lot of enhanced internal controls, especially in related to our intersegment policies pricing in measurement and controls which was the reason for the material weakness.

Has has robust internal control. So we are actively engaged our auditors while there while the artist will not be complete until the 10-K filed the auditors do have a obligation to make sure that what we have publicly disclosing is accurate as well as they feel good that our internal controls.

Improved our training we upgraded talent.

Tested these controls in right and we've tested them over multiple periods and right now we believe these are effective.

Monish Patolawala: And so we continue to see ethanol to be a little softer in the second half. But all of that is currently baked into our guide except, of course, the headwind if the replacement curve doesn't work. And timing is another item that could move between quarters or where our mark comes at the end of the year. But hopefully, that answers your question.

So based on all of that that we have made sure that our controls are working we as management feel that the material weakness has been remediated and as I said, it's in consultation with our auditors and the audit Committee.

The way we do this manav just for your benefit as management tests that they have the controls they tested and then at the end of the Navy consult with the audit committee as well as our auditors to make sure that what we are doing.

I would say going forward. We will continue this journey. So we will continue to keep focusing on broader initiatives that will enhance our transparency and compliance processes, while continuing to maintain an effective operating.

Has has robust internal control. So we are actively engaged our auditors while there while the audit will not be complete until the 10-K file the auditors do have a obligation to make sure that what we have publicly disclosing is accurate as well as they feel good that our internal controls.

Various Analysts: Yep, that's very helpful. Thank you very much.

Monish Patolawala: Thank you. Our next question comes from Ben Durer of Barclays. Your line's now open. Please go ahead.

So hopefully I answered your question Manav. This is yes.

This is based on a robust remediation plan and we have tested it and we feel that over the last few quarters that would be our controls have been effective and that's why we felt that.

Various Analysts: Yeah, good morning. Thank you very much, Juan, Monish. Congrats on the solid results for the second quarter. I wanted to dive into the outlook for the nutrition segment into the back half. Obviously, with Decatur East coming back, as we look into this and kind of like have like an LTM run rate, kind of call it about 400 million operating income now on that segment. But clearly, with all these headwinds, what would you suggest us assuming has been kind of like that incremental cost that you called out for not having Decatur East over the last couple of quarters? And as we ramp this through 3Q into 4Q and then particularly into 2026, where do you think like kind of like a current run rate is for that business on a standalone basis? Thank you.

Have been met so based on all of that that we have made sure that our controls are working we as management feel that the material weakness has been remediated and as I said, it's in consultation with our auditors and the audit Committee.

We are in a position to remediate the material weakness this quarter.

Thank you so much.

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

So hopefully I answered your question Manav. This is yes. This is based on a robust remediation plan and we have tested it and we feel that over the last few quarters that our controls have been effective and that's why we felt that we have.

Thanks for the question.

I had a two part question on crush and first part was just a clarification I'm wondering when you say if the replacement curve doesn't move up from here are you referring to physical.

And in a position to remediate the material weakness this quarter.

And then secondly, more a big picture question, yes, the RVO Srs play out as benign Lee as expected.

Thank you so much.

Just wondering the benefits to your biodiesel business, but more importantly to your global crush business.

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

Juan Luciano: Yeah, thank you for the question, Ben. Let me address nutrition and how is it going. So nutrition continues recovery. We're very pleased with that. If I take it into pieces, if you take animal, human nutrition, human nutrition is being driven by flavors, strong revenue growth. We are holding to our EBITDA margins, so we are very pleased with that. Mostly driven by beverages in North America, but also a strength in Europe. And we have an opportunity to grow geographically as our plants in Asia-Pacific are increasing output. In terms of health and wellness, biotics has grown so far 9% revenue, so that's going very, very well. And we are very pleased with that. And we will be releasing some data of studies that we perform in 2025.

When we think about how that business is doing in 'twenty two 'twenty three how would you think about.

Thanks for the question.

Two part question on crush first part was just a clarification I'm wondering when you say.

Our ADM business and going into 'twenty six 'twenty seven.

That plays out.

The replacement curve doesn't move up from here are you referring to physical.

Mr Policy picture plays out as we're expecting.

And then secondly, more a big picture question.

Yeah.

So just a quick one Heather to answer your question when we think about the replacement curve. Yes, we do look at board crush spread at the end of the day margins have to show up on the cash side and that's the curve that I've mentioned, so we are combining both and thats, what I came up with the.

Yes, the RVO Sru's play out as benign Lee as expected.

Just wondering the benefits to your biodiesel business, but more importantly to your global crush business.

When we think about how that business is doing in 'twenty two 'twenty three how would you think about.

Matt that I gave you know that'll move every day, depending on how markets more but this is where we are at this point in time.

Our ADM business and going into 'twenty six 'twenty seven.

Yes.

On the Big picture perspective.

That plays out.

As you said <unk> has been very positive for soybean oil and gas certainly.

It's the best policy picture plays out as we're expecting.

Increased demand.

Yeah.

Theyre going to be adjustments.

Juan Luciano: We're going to be, or in the past, we were releasing in '25 and '26, that will give much more opportunities for us to penetrate more applications, especially in the heat-treated postbiotic area where ADM is one of the leading companies. In terms of specialty ingredients, it was the headwinds for the human nutrition part. And as you said, we have mentioned before the headwinds in terms of cost for having the Decatur plant down was about $20 to $25 million per quarter. That will hopefully be behind us as we go into 2026. So then you have the animal nutrition. The animal nutrition side has been an improvement story, if you will, a margin-up story. Remember I mentioned that from the time that from like three or four years ago. And they've been executing on that. They've been executing for the last, I think, seven quarters.

So just a quick one Heather to answer your question when we think about the replacement curve. Yes, we do look at board crush spread at the end of the day margins have to show up on the cash side. That's the curve that I've mentioned, so we are combining both and thats, what I came up with.

If you think about at this point in time or in the first half, we would export and soybean oil.

And we probably won't do that in some of our customers are already some of our food customers are we are already offering different mixes of products of course, we have been at oil and cotton oil and rapeseed oil and we have many different blends because soybean oil will be a preferred feedstock for biofuels. So so I think we.

Matt that I gave you know that'll move every day, depending on how markets more but this is where we are at this point in time.

Yes.

On the Big picture perspective.

As you said <unk> has been very positive for soybean oil and Doug can certainly.

We will adjust and we will maximize the profitability for the envelope. If you think about where the margins will fall. So I think initially we will probably have to see rins popping up.

Increased demand there.

Going to be adjustments if.

If you think about at this point in time or in the first half, we would export and soybean oil.

We will see.

Probably the benefits laying in the crush because we're going to have these very strong legs.

In terms of oil, but also in biodiesel I think refining will probably be a little bit squeezed refining margins because of all the pretreatment capacity and we'll have to see how many people run. This pretreatment capacity. So many of the refineries come on the stream, but thats the way, we see we feel very calm.

Juan Luciano: They've been presenting better results based on self-help. The market is a relatively good market in the sense that all the protein customers are making money. Feed is relatively cheap right now, so profitability is there. And our portfolio is slightly shifting into more specialty products as we go along. So we are deemphasizing some of the commodities and emphasizing a little bit more our innovation in those segments. So we feel good about that piece continues. So I think we are setting up well for continued growth into 2026. Numbers-wise, or run rate, I wouldn't like to venture at this point in time, but I think you can for sure add about $100 million of specialty ingredient headwinds that we're not going to have in 2026. The plant so far is running well since it started up back.

We'll adjust and we will maximize the profitability for the envelope. If you think about where the margins will fall. So I think initially we will probably have to see rins popping up.

First of all that.

The business the places where we have.

Where you have Brazil, and Youre going to have it be 14 to 15, and then the progression of increase in that.

We will see.

Probably the benefits laying in the crush because we're going to have these very strong legs.

The U S will have their <unk> and then in Europe, Germany has a bullish the double accounting, which also is going to be homegrown rapeseed oil. So all in all you can see about 6 million tons of extra.

In terms of oil, but also in biodiesel I think refining will probably be a little bit squeezed refining margins because of all the pre treatment capacity and we'll have to see how many people run. This pretreatment capacity. So many of the refineries come on the stream, but that's the way we see it we feel very calm.

Extra feedstocks coming into the <unk>.

The biofuel area that you asked about.

<unk>.

$800000.

Portable debt.

Of growth in the food.

The places where we have.

It gives a very good perspective for these you will see.

Josh where you have Brazil, and Youre going to have it be 14 to 15, and then the progression of increase in that.

Oil is taking about 50% of the share of the crash.

U S will have the <unk> and then in Europe, Germany has a bullish the double accounting, which also is going to be room for rapeseed oil. So all in all you can see about 6 million tons of extra.

Which hasn't happened in quite a while.

Juan Luciano: The team brought it back safely, so we're very proud of the team. So so far, so good.

Every time that happens of course Mark.

Margins pop up so we will have to put pencil to all that when the <unk> are done.

Various Analysts: Perfect. Juan, thank you very much.

Juan Luciano: Thank you, Ben.

But I think if all of this is confirmed.

Extra feedstocks coming into the.

Operator: Thank you. Our next question comes from Manav Gupta of UBS. Your line's now open. Please go ahead.

These are are kept in check.

Into the biofuel area that you asked about.

I think it plays very well for ABM going forward.

No.

$800000.

Of growth in the food.

Thank you so much.

Manav Gupta: Monish, I just want a little bit of a clarification. I know you had been working very closely with SEC responding to all these queries, and now basically you're putting out a statement that the material weakness is no longer there. So am I, are we to understand that you reached out to SEC, you gave them what they wanted, and then they did not come back with additional questions? So at this point, would it be fair to say that SEC is okay with your way your financials are being constructed? And what can also be done to make sure this never happens again if you could just talk about those things? Thank you.

It gives a pretty good perspective for these you will see.

Oil, taking about 50% of the share of the crash.

Our next question comes from <unk> Sharma of Stephens. Your line is now open. Please go ahead.

Which hasn't happened in quite a while.

Every time that happens of course.

Good morning, and thanks for the question.

Pop up so we will have to put pencil to all that when the <unk> are done.

Was wondering if maybe we could get a little bit more detail on the network optimization plan.

But I think if all of this is confirmed.

These are are kept in check.

You mentioned some detail in your prepared remarks, including some facilities that you had shut down in different geographies, but you also mentioned that there is there is some room to go and so was.

I think it plays very well for ABM going forward.

Thank you so much.

Monish Patolawala: Yes, Manav, I think there are two different points that maybe I can make. Number one is, yes, we did remediate the material weakness this quarter, and the team did a really heavy job. They had created, if you think, it's 18 months that the company has worked on this. Robust remediation plan, so we designed and implemented a lot of enhanced internal controls, especially related to our intersegment policies, pricing, and measurement controls, which was the reason for the material weakness. We improved our training. We upgraded talent. We have tested these controls, and we've tested them over multiple periods. And right now, we believe these are effective. The way we do this, Manav, just for your benefit, is management tests it. They have their controls. They test it.

Just wondering.

Our next question comes from <unk> Sharma of Stephens. Your line is now open. Please go ahead.

No.

Sure.

Where do you see the most room for kind of.

Further optimization is more AG services' processing.

Good morning, and thanks for the question.

Just love a little bit of color there.

Was wondering if maybe we could get a little bit more detail on the network optimization plan I know you mentioned some detail in your prepared remarks, including some facilities that you had shut down in different geographies, but you also mentioned that there is there is some room to go and so was.

And then also.

How does this sort of optimize your processing.

China Opex should we be looking at should we be looking at like a $5 per metric ton improvement or.

How should we think about it from a.

Our crush perspective.

Hey, just wondering.

Yes.

Yes. Thank you.

We're.

Sure.

Yes, I think that the.

Where do you see the most room for kind of.

Performance improvement around operations as one of the things that we highlighted early in the year, we're going to focus on and we are delivering on that im very proud of the improvements of the team.

Further optimization is that more AG services' processing.

Monish Patolawala: And then at the end of the day, we consult with the audit committee as well as our auditors to make sure that what we're doing has robust internal control. So we have actively engaged our auditors. While the audit will not be complete till the 10K is filed, the auditors do have an obligation to make sure that what we are publicly disclosing is accurate as well as they feel good that our internal controls have been met. So based on all of that, that we have made sure that our controls are working, we as management feel that the material weakness has been remediated. And as I said, it's in consultation with our auditors and the audit committee. I would say going forward, we will continue this journey.

Well have a little bit of color there.

And then also.

We were preparing our footprint for all these potential RVO improvements and the ability to have to crush at full rates going forward. So thankfully we have the means to do that and we needed to have the plants in good shape. So we spend a lot of time optimizing the network I'm pleased to report as we said in our prepared remarks.

How does this sort of optimize your processing.

Opex should we be looking at should we be looking at like a $5 per metric ton improvement or how should we think about it from.

Our crush perspective.

Yes. Thank you.

<unk> that some of our unscheduled downtime.

Yes, I think that the.

Performance improvement around operations as one of the things that we highlighted early in the year, we're going to focus on and we are delivering on that I'm very proud of the improvements of the team.

On rates that we haven't seen since 2000, so it has been.

2020.

It's been it's been very good in that regard I would say.

We were preparing our footprint for all these potential RVO improvements and the ability to have to crush at full rates going forward. So thankfully, we have the beans to do that and we needed to have the plants in good shape. So we spend a lot of time optimizing the network I'm pleased to report as we said in our prepared remarks.

Monish Patolawala: So we will continue to keep focusing on broader initiatives that will enhance our transparency and compliance processes while continuing to maintain an effective operating environment. So hopefully, I answered your question, Manav. This is based on a robust remediation plan, and we have tested it, and we feel that over the last few quarters that these controls have been effective. And that's why we felt that we are in a position to remediate the material weakness this quarter.

Selectively we tend to look at that we have many plans that we tend to look instead of having individual plans and pockets of that we tend to look at the network and what optimizations can we do to keep plants or expanding plants that are that have lower cost position and may be retiring plants that have a challenge cost position.

<unk> that some of our unscheduled downtime.

We do that across the portfolio we've done it in milling, we do it in.

On rates that we haven't seen since 2000, so it has been.

In Oilseeds and AG services in AG services, we constantly shifting the elevators that we own at times, we sell them at times with trading without or with swabs and for others at times, we we shut them down or we sell them.

2020.

Manav Gupta: Thank you so much.

It's been it's been very good in that regard I would say.

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

Selectively we tend to look at that we have many plans and we tend to look instead of having individual plans and focus of that we tend to look at the network and what the optimization is can we do to keep plants or expanding clients that are that have lower cost position and may be retiring plants that have it.

The same happened with the facilities, we announced that <unk> shut down.

Heather Jones: Hi. Thanks for the question. I had a two-part question on crush. The first part was just a clarification. Wondering, when you say if the replacement curve doesn't move up from here, are you referring to physical? And then secondly, more a big-picture question. If the RVO SREs play out as benignly as expected, just wondering the benefits to your biodiesel business, but more importantly, to your global crush business. When we think about how that business was doing in '22, '23, how would you think about how ADM would be positioned going into '26 and '27 if that plays out, you know, if the policy picture plays out as we're expecting? Thank you.

We announced in the joint venture of <unk>, which is for cottonseed oil so youre going to see that no spectacular announcements, but continue our continued trickle down of optimization, we have a large footprint and we have targets to optimize our cost base.

Challenge cost position.

We do that across the portfolio we've done it in milling, we do it.

Oilseeds and AG services in AG services, we constantly shifting the elevators that we own at times, we sell them at times with trading without or with swabs and for others.

We're going to disclose and right now I want to see more stability of that around rates and and and we still have a few things that we need to get done before before maybe we give those numbers but.

Times, we we shut them down or we sell them.

The same happened with the facilities, we announced that <unk> shut down.

Needless to say, we're very happy with how.

We announced in the joint.

Our plants are operating in the face of again, hopefully a few years, so very high crush rates.

Joint venture of <unk>, which is for cottonseed oil so youre going to see that no spectacular announcement by the continue.

<unk> trickle down of optimization, we have a large footprint and we have targets to optimize our cost base.

Alright, thank you.

Monish Patolawala: So just a quick one, Heather, to answer your question. When we think about the replacement curve, yes, we do look at board crush, but at the end of the day, margins have to show up on the cash side, and that's the curve that I mentioned. So we're combining both, and that's where I came up with the math that I gave you. Now, that'll move every day depending on how markets move, but this is where we are at this point in time.

Thank you.

Question comes from Steven Haynes of Morgan Stanley.

We're going to disclose and right now I want to see more stability around rates and.

Your line is now open. Please go ahead.

And we still have a few things that we need to get done before before maybe we give those numbers but.

Hi, good morning, Thanks for taking my question.

To come back to something on the RVO It seems like since the proposal.

Needless to say, we're very happy with how.

Rd margins have kind of remained pressured in almost all the value has kind of a crude back to the crush complex. So would be curious to hear some thoughts on why you think that is.

Our plants are operating in the face of again, hopefully a few years, so very high crush rates.

Juan Luciano: Yeah, Heather, on the big-picture perspective, as you said, the RVOs have been very positive for soybean oil, and that can certainly increase demand. There are going to be adjustments. If you think about at this point in time, or in the first half, we were exporting soybean oil, and we probably won't do that. And some of our customers are already, some of our food customers, we are already offering different mixes of products. Of course, we have peanut oil and cotton oil and rapeseed oil, and we have many different blends because soybean oil will be a preferred feedstock for biofuels. So I think that we will adjust and we will maximize the profitability for the envelope. If you think about where the margins will fall, so I think initially we will probably have to see RIMS popping up.

And whether or not you would expect that to kind of remain that way.

Alright, thank you.

Thank you.

Yes.

Question comes from Steven Haynes of Morgan Stanley.

This is a very difficult period that you need to understand we were giving an indication of what it may happen, but then there are a lot of rumors one day on the others.

Your line is now open. Please go ahead.

Hi, good morning, Thanks for taking my question.

Our shift in these because.

I wanted to come back to something on the RVO. It seems like since the proposal.

The whole numbers have not been confirmed so although we feel optimistic about the future. We are in an uncertain period until the final numbers are clarified what are the final RVO.

Rd margins have had.

Kind of remained pressured in almost all the value has kind of a crude back to the crush complex. So.

Right.

<unk>.

I'd be curious to hear some thoughts on why you think that is and whether or not you would expect that to kind of remain that way. Thank you.

So I would say.

We shouldn't take a lot of Skus from right now what's happening I think that.

We know what's happening with industry crush margins when oil in the past have taken about $50, 52% of the Av.

Yes.

This is a very difficult period, you need to understand we were giving an indication of what it may happen. But then there are a lot of rumors one day and the others are shift in these because.

Juan Luciano: We will see probably the benefits landing in the crush because we're going to have these very strong legs in terms of oil, but also in biodiesel. I think refining will probably be a little bit of a squeeze, refining margins because of all the pretreatment capacity. And we will have to see how many people run these pretreatment capacities, how many of the refineries come on a stream. But that's the way we see it. We feel very comfortable that the business, the places where we have crush, where you have Brazil and you're going to have a B14 to B15 and then the progression of increasing that, the US will have the RVOs. And then in Europe, Germany has abolished the double counting, which also is going to be good for rapeseed oil.

The garage.

So I wouldn't read that much right now until we get more clarity.

The whole numbers have not been confirmed so although we feel optimistic about the future. We are in an uncertain period until the final numbers are clarified what are the final RVO.

Still this is still a forecast and I think you need to see.

We have produced very little.

To comply with the mandates in the first half as an industry. So we will have to pick up those rates in the second in the second half when we when all this clarity Steven So we see accelerated production and youre going to see it rains reacting first or so at this point in time, there is still I mean, they are much bigger and much higher than.

Right.

I'm.

So I would say.

We shouldn't take a lot of Skus from right now what's happening I think that.

We know what's happening with industry crush margins when oil in the past have taken about $50, 52% of the of the garage.

They were last year.

So I wouldn't read that much right now until we get more clarity.

<unk>.

They moved from 42.

15, or 16 or whatever they are so.

Still this is still a forecast and I think you need to see.

Juan Luciano: So all in all, you can see about 6 million tons of extra feedstocks coming into the biofuel area that you add about, you know, 800,000 tons of growth in the food. It gives a very good perspective for this. You will see oil taking about 50% of the share of the crush, which hasn't happened in quite a while. And every time that happens, of course, margins pop up. So we'll have to put pencil to all that when the RVOs are done. But I think if all this is confirmed and the SREs are kept in check, I think it plays very well for ADM going forward.

We still have room to go there. So I think that we are watching it closely as I said in the meantime, we're getting ready there is a big crop coming our plants are ready to crush so when we have the indication we are well positioned to do so.

We have produced very little.

To comply with the mandates in the first half of an industry. So we will have to pick up those rates in the second one in the second half when we when all this clarity given so we see accelerated production and youre going to see if rins react in first or so at this point in time, there is still I mean, they are much bigger and much higher.

Thank you.

Okay.

Thanks Keith.

Question comes from it sounds little Tillman of Bank of America Your.

Than they were last year.

<unk>.

They moved from 42.

Your line is now open. Please go ahead.

15, or 16 or whatever they are so.

Yes. Thank you.

Firstly, if you can I may have misunderstood there makes it before if you can clarify will be $100 million benefit from the Decatur.

<unk> 26 versus 25 four.

Or the eventual benefits which includes 225.

Heather Jones: Thank you so much.

Thank you.

But my primary question means.

Okay.

On high fructose corn syrup.

Yeah.

Operator: Thank you. Our next question comes from Purn Sharma of Stevens. Your line is now open. Please go ahead.

Thanks Keith.

We also the news a few weeks ago about Coca Cola potentially shifting away to cane sugar and I'm. Just wondering if you kind of help us better understand how big this business is for you in terms of perhaps and it seems like volume revenues.

Our next question comes from Salvator Tiano of Bank of America.

Eitan. Please go ahead.

Andrew Strelzik: Good morning, and thanks for the question. I was wondering if maybe we could get a little bit more detail on the network optimization plan. I know you mentioned some detail in your prepared remarks, including some facilities that you had shut down in different geographies, but you also mentioned that there's some room to go. And so was A, just wondering, you know, where do you see the most room for kind of your further optimization? Is it more ag services, processing? We'd just love a little bit of color there. And then also, you know, how does this optimize your processing kind of OPEX? Should we be looking at like a $5 per metric ton improvement, or how should we think about it from a crush perspective?

Yes. Thank you.

Firstly, if you can.

I may have misunderstood there makes it before if you can clarify a little bit.

As well as.

What is the risk if other companies follow suit to the industry.

Medium benefit from Decatur.

Yeah.

Stock is up 26 versus 25 four.

Yes.

Or the eventual benefits, which includes 225 tailwind.

So.

What's the first question.

Tailwind, but my primary question means.

Yes.

Sure.

On the high fructose corn syrup.

Could you clarify.

Sure.

We also the news a few weeks ago about Coca Cola potentially shifting away to cane sugar and I'm. Just wondering if you can help us a little bit better understand how big this business is for you in terms of perhaps and it seems like volume revenues EBIT.

Yeah.

Decatur cost us basically when it was shut down about 20% to $25 million per quarter. So Decatur is back up now.

So you should consider that the start in Q4 for the full quarter, that's going to be an impact of run rate from from that moment on work and then hopefully if it continues to run and nothing happens you will put that into but I will say for 2025, you should consider that we have like three quarters of.

As well as.

What is the risk if other companies follow suit to the industry.

Yes.

So.

What's the first question.

Yes.

Sure.

That cost is still with us because the plant is ramping up and we still probably have inventory of material that we have bought that needs to go and run through the cost of goods sold.

If you can clarify.

Good for them.

Juan Luciano: Yeah, thank you. Yeah, I think that the performance improvement around operations is one of the things that we highlighted early in the year we were going to focus on, and we are delivering on that. I'm very proud of the improvements of the team. We were preparing our footprint for all these potential RVO improvements and the ability to have to crush at full rates going forward. So thankfully, we have the beans to do that, and we needed to have the plants in good shape. So we spent a lot of time optimizing the network. I'm pleased to report, as we said in our prepared remarks, that some of our unscheduled downtime is, you know, on rates that we haven't seen since 2000. So it's been 2020, I'm sorry, not 2000. It's been very good in that regard.

Yes.

Decatur cost us basically when it was shut down about $20 million to $25 million per quarter. So Decatur is back up now.

On the high fructose corn syrup listen this is.

We have relationships here in this market that go back decades.

With the key players and we've.

We have relationship at every level and at this point in time, we have no indication of any changes in their order pattern or the projections nor.

We have seen any any volume changes based on any announcements. So I would say in that regard we are not planning on.

Cost is still with us because the plant is ramping up and we still probably have inventory of material that we have bought that needs to go and run through the cost of goods sold.

On any change.

I would say.

This business has been working on.

On the high fructose corn syrup listen this is.

What we call the fight for the grind, we make more than 22 products in our wet mills and if you think about it does consider has been a slightly declining one or one 5% since I've been here, so and we've been managing to have a card solution business. It is very stable.

We have relationships here in this market that go back decades.

Juan Luciano: I will say selectively, we tend to look at, we have many plans, and we tend to look instead of having individual plans and pockets of that, we tend to look at the network and what optimizations can we do to keep plans or expanding plans that have lower cost position and maybe retiring plans that have a challenged cost position. We do that across the portfolio. We've done it in milling. We do it in all seats and ag services. In ag services, we constantly shift in the elevators that we own. At times, we sell them. At times, we trade them with that or we swap them for others. At times, we shut them down or we sell them. The same happened with the facilities. We announced the Kershaw shutdown. We announced in the joint venture of Lubok, which is for cotton seed oil.

With the key players and.

We have relationship at every level and at this point in time, we have no indication of any changes in their order pattern or the projections nor.

We have seen any any volume changes based on any analysis. So I would say in that regards we are not planning on any changes.

Based on optimization product mix development of new products like when we highlight buyer.

<unk> solutions product like glucose.

I would say.

For fermentation. So there are a lot of opportunities for us to do.

This business has been working on.

This is a big market and we plan to continue to supply, but we've been servicing the beverage industry again for multiple decades, and we've always been very.

Flexible in adjusting to the to the conditions and at times.

With.

Natural colors or flavors at times is with high fructose corn syrup at times is with other solutions to reduce sweetness. So.

Based on optimization product mix development of new products like when we highlight buyers.

Juan Luciano: So you're going to see that no spectacular announcement, but a continued trickle down of optimizations. We have a large footprint, and we have targets to optimize our cost base. I'm not going to disclose them right now. I want to see more stability of the run rates, and we still have a few things that we need to get done before maybe we give those numbers. But needless to say, we're very happy with how our plants are operating in the face of, again, hopefully a few years of very high crush rates.

We will continue to be a major player in that but at this point in time.

<unk> solutions product like glucose.

For fermentation. So there are a lot of opportunities for us to do.

To tell you there is no change in our volumes in high fructose considered.

This is a big market and we plan to continue to supply, but we've been servicing the beverage industry again for multiple decades, and we've always been very.

Thank you very much one Keith I wanted to just one I wanted to add on on the specialty ingredients Decatur East.

John mentioned, the operating improvement is a 20% to 25 at the same time, we have seen higher insurance premiums and of course, we'll have to see where utility.

<unk> flexible and adjusting to the to the conditions and at times.

With.

Natural colors or flavors at times is with high fructose corn syrup at times is with other solutions to reduce sweetness. So.

Ross et cetera, keep going and driving the cost out that the team is doing so just keep that in mind at the end when we come to 2026 will give you the right guidance.

We will continue to be a major player in that but at this point in time I want to tell you. There is no change in our volumes in high fructose considered.

Various Analysts: Great. Thank you.

Salvator.

I would say in terms in terms of the segments in beverage and snacks on all of that.

Operator: Thank you. Our next question comes from Stephen Haynes of Morgan Stanley. Your line is now open. Please go ahead.

Thank you very much just one Keith I wanted to just one I wanted to add on on the specialty ingredients Decatur East.

Mentioned in our prepared remarks, we've seen some pockets of sluggish demand that I think that you can tell that there is a consumer out there that there is a little bit more stressed.

Various Analysts: Good morning. Thanks for taking my question. I wanted to come back to something on the RVO. It seems like, you know, since the proposal, RD margins have kind of remained pressured and almost all the value has kind of accrued back to the crush complex. So I'd be curious to hear some thoughts on, you know, why you think that is and whether or not you would expect that to kind of remain that way. Thank you.

And as Juan mentioned, the operating improvement is the 20 to 25 at the same time, we have seen higher insurance premiums and of course, we'll have to see where utility costs et cetera, keep going and driving the cost out that the team is doing so just keep that in mind at the end when we come to 2026 will give you the right guidance.

And maybe making more.

Prudent choices with their spending so I would say across ADM, where there isn't a snag. Some suite that we have seen pockets of softness that I think our team has been very good to neutralize and navigate around but.

There is some.

Salvator, maybe you think you would say in terms in terms of the segments in beverage and snacks on all of that.

Some cautious from a consumer perspective.

Juan Luciano: Yeah. Well, this is a very difficult period you need to understand. We were given an indication of what it may happen. But then there are a lot of rumors one day or the other that are shifting this because the whole numbers have not been confirmed. So although we feel optimistic about the future, we are in an uncertain period until the final numbers are clarified. What are the final RVOs? How are we going to treat SREs? So I would say we shouldn't take a lot of cues from right now what's happening. I think that we know what happened with industry crush margins when oil in the past had taken about 50, 52 percent of the crush. So I wouldn't read that much right now until we get more clarity. This is still a forecast.

Yeah.

Thank you very much.

Youre welcome.

Mentioned in our prepared remarks, we've seen some pockets of sluggish demand that I think that you can tell that there is a consumer out there that there is a little bit more stressed.

Thank you.

As Tom retirement, you have no further questions for sustained so that concludes today's conference call. Thank you all for joining you may now disconnect your lines.

And maybe making more.

Prudent choices with their spending so I would say across ADM, whether it is in the snacks and suite that we have seen pockets of softness that I think our team has been very good to neutralize and navigate the wrong, but.

There is some.

Im cautious from a consumer perspective.

Thank you very much.

Youre welcome.

Thank you.

Tom returning you have no further questions for sustained so that concludes today's conference call.

You all for joining you may now disconnect your lines.

Juan Luciano: And I think you need to see, we have produced very little to comply with the mandates in the first half as an industry. So we will have to pick up those rates in the second half when all this clarity is given. So we see accelerated production, and you're going to see RIMS reacting first. So at this point in time, there's still, I mean, they are much bigger than much higher than they were last year. They moved like from 40 cents to, you know, $1.15 or $1.16 or whatever they are. So, but we still have rooms to go there. So I think that we're watching it closely. As I said, in the meantime, we're getting ready. There is a big crop coming. Our plants are ready to crush. So when we have the indication, we are well positioned to do so.

Yeah.

Okay.

[music] accordingly.

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

Various Analysts: Yes, thank you. Firstly, if you can, I may have misunderstood or missed it before. If you can clarify a little bit, the 100 million benefit from the Decatur restart, is that 26 versus 25 or the eventual benefits, which includes 2025 tailwinds? But my primary question is on high fructose corn syrup. You know, we also had the news a few weeks ago about Coca-Cola potentially shifting away into cane sugar. And I'm just wondering if you can help us a little bit better understand how big this business is for you in terms of perhaps anything with volume, revenues, EBIT, as well as what is the risk if other companies follow suit to the industry?

Juan Luciano: Yes, Salvatore. So what's the first question?

Various Analysts: Oh, yeah.

Operator: Oh, the Decatur, if you can clarify that.

Juan Luciano: Yeah, yeah, sorry for that. Yeah. Decatur cost us basically when it was shut down about $20 to $25 million per quarter. So Decatur is back up now. So you should consider that starting Q4 for a full quarter, that's going to be an impact of run rate from that moment onward. And then hopefully, if it continues to run and nothing happens, you will put that into it. But I would say for 2025, you should consider that we have like three quarters of that cost still with us because the plant is ramping up and we still probably have inventory of material that we have bought that needs to go and run through the cost of goods sold. On the high fructose corn syrup, listen, we have relationships here in this market that go back decades with the key players. And we have relationships at every level.

Juan Luciano: And at this point in time, we have no indication of any changes in their order pattern or their projections, nor we have seen any volume changes based on any announcements. So I would say, you know, in that regard, we are not planning on any change. I would say that this business has been working on what we call the fight for the grind. We make more than 22 products in our wet mill. And if you think about it, high fructose corn syrup has been a slightly declining 1 or 1.5% since I've been here. So, and we've been managing to have a carb solution business that is very stable. There is an optimization, product mix, development of new products, like when we highlight bio solutions, products like glucose for fermentation. So there are a lot of opportunities for us to do.

Juan Luciano: This is a big market, and we plan to continue to supply it. But we've been servicing the beverage industry again for multiple decades, and we've always been very flexible and adjusting to the conditions. And at times, it's with natural colors or flavors. At times, it's with high fructose corn syrup. At times, it's with other solutions to reduce sweetness. So we will continue to be a major player in that. But at this point in time, I want to tell you, there's no change in our volumes in high fructose corn syrup.

Monish Patolawala: Thank you very much. Just one piece I wanted to, just one I wanted to add on the specialty ingredients Decatur East. You know, as Juan mentioned, the operating improvement is a 20 to 25. You know, at the same time, we have seen higher insurance premiums. And of course, you know, we'll have to see where utility costs, etc., keep going and driving the cost out that the team is doing. So just keep that in mind. At the end, when we come to 2026, we'll give you the right guidance.

Juan Luciano: Salvatore, maybe also I would say in terms of the segments in beverage and snacks and all that, we mentioned in our prepared remarks, we've seen some pockets of sluggish demand that I think that you can tell that there is a consumer out there that there is a little bit more stressed and maybe making more prudent choices with their spending. So I would say across ADM, whether it's on snacks, on sweets, we have seen pockets of softness that I think our team has been very good to neutralize or navigate around. But there is some cautiousness from a consumer perspective.

Various Analysts: Thank you very much.

Juan Luciano: You're welcome.

Operator: Thank you. At this time, we currently have no further questions for us today. So that concludes today's conference call. Thank you all for joining. You may now disconnect your lines.

Q2 2025 Archer-Daniels-Midland Co Earnings Call

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