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2024 Feedstuffs Feed Ingredient Analysis Table
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Targeted cost savings actions include expected workforce reduction of 600-700 roles globally in 2025.
February 4, 2025
ADM, a global player in the agricultural supply chain and human and animal nutrition, reported financial results for the fourth quarter and full year ended Dec. 31, 2024. For the full year, net earnings were $1.8 billion, and earnings per share were $3.65.
Board chair and chief executive officer Juan Luciano commented, “With softer market conditions and policy uncertainty around the world going into 2025, we are focused on improving our operational performance, accelerating costs savings and simplifying our portfolio. As part of that effort, we are announcing targeted actions to deliver $500-750 million in cost savings over the next several years. This represents a continuation of ADM’s commitment to drive simplification and better align our resources to deliver long-term sustainable growth.
“We will also maintain our disciplined and balanced approach to capital allocation, including prioritizing selective strategic investments with strong return potential and returning cash to shareholders,” he added. “In line with this, we are announcing a 2% increase in our quarterly dividend.”
For the 2024 fourth quarter, earnings before income taxes (EBIT) were $667 million, down 9% versus the prior year quarter. Earnings per share on a GAAP basis were $1.17, up 10% from the year-ago quarter, and adjusted earnings per share were $1.14, down 16%. Total segment operating profit was $1.051 billion, down 16% from the prior year quarter.
For the full year, EBIT fell 47% year over year to $2.3 billion. Earnings per share on a GAAP basis were $3.65 and adjusted earnings per share were $4.74, both lower than the prior year. Total segment operating profit was down 28% versus the prior year to $4.2 billion and excluded specified items of $480 million primarily related to the Wilmar investment impairment, Nutrition trade name impairments and gain on asset sales.
Nutrition segment operating profit was $88 million during the fourth quarter of 2024, an increase versus an operating loss of $10 million in the prior fourth quarter.
Human Nutrition subsegment operating profit was $62 million, compared to a loss of $25 million in the prior year’s quarter.
Results were higher due to the lapping of previously disclosed non-recurring negative impacts from the prior year, higher volumes and improved mix and strong performance by recent mergers and acquisitions, partially offset by higher costs. During the quarter, there were also negative impacts due to higher costs of goods sold associated with the termination of an unfavorable supply agreement. The current quarter also included $46 million of insurance proceeds related to the partial settlement of the Decatur East claim.
In the Animal Nutrition subsegment, operating profit was $26 million, up relative to the prior year quarter, as cost optimization actions and lower input costs supported higher margins.
For the full year, Nutrition segment operating profit was $386 million, down 10% from the prior year.
Human Nutrition subsegment operating profit of $327 million was 22% lower than the prior year, driven primarily by negative impacts related to unplanned downtime at Decatur East and lower texturants pricing. The full year also included $71 million of insurance proceeds related to the partial settlement of the Decatur East claim.
Animal Nutrition subsegment operating profit of $59 million was higher compared to the prior year as cost optimization efforts and lower input costs supported higher margins.
Ag Services and Oilseeds (AS&O) segment operating profit was $644 million during the fourth quarter of 2024, down 32% compared to the 2023 quarter.
The Ag Services subsegment operating profit was 19% higher versus the prior year quarter, due to higher origination volumes and margins in North America, supported by improved river conditions. The subsegment also had benefits from positive timing impacts, as well as higher destination marketing volumes and margins in global trade.
The Crushing subsegment operating profit was down 46% versus the previous fourth quarter as increased industry run rates, higher manufacturing costs and biofuel and trade policy uncertainty drove lower executed crush margins in North America, partially offset by higher margins and volumes in EMEA. There were immaterial net mark-to-market timing effects during the quarter compared to approximately $35 million of net positive impacts in the prior year’s quarter. The current quarter also included $52 million of insurance proceeds for the partial settlement of the Decatur East and West claim.
The Refined Products and Other (RPO) subsegment operating profit was 57% lower versus the prior year quarter, as biofuel and trade policy uncertainty, increased pretreatment capacity and higher imports of used cooking oil negatively affected margins in Europe and North America. Softer demand from food customers in North America negatively impacted refining margins compared to the prior year. During the quarter, there were approximately $50 million of net negative mark-to-market timing effects compared to approximately $5 million of net positive impacts in the prior year quarter.
Equity earnings from the company’s investment in Wilmar were approximately 20% lower versus the prior year period.
For the full year, the AS&O segment operating profit was $2.4 billion, down 40% compared to 2023.
In the Ag Services subsegment, operating profit was 39% lower than the prior year, as slower farmer selling and higher logistics costs related to industry take-or-pay commitments negatively impacted the South American origination environment.
In the Crushing subsegment, operating profit was $844 million, down 35% from the prior year, as ample supplies out of South America drove more balanced supply and demand conditions, leading to lower crush margins. For 2024, there were approximately $20 million of net positive mark-to-market timing effects, compared to approximately $185 million in the prior year. The full year also included $76 million of insurance proceeds for the partial settlement of the Decatur East and West claims related to incidents in 2023.
The RPO subsegment operating profit was $552 million, 58% lower versus the prior year, as increased pretreatment capacity at renewable diesel facilities and higher imports of used cooking oil drove significantly lower biodiesel and refining margins. For 2024, there were approximately $195 million of net negative mark-to-market timing effects, compared to approximately $235 million of net positive impacts in the prior year.
Equity earnings from the investment in Wilmar were $336 million in 2024, approximately 11% higher than the prior year.
Carbohydrate Solutions segment operating profit was $319 million during the fourth quarter of 2024, up 3% compared to the prior year quarter.
The Starches & Sweeteners (S&S) subsegment decreased 3% from the prior year quarter, as higher volumes and margins in North America were offset by lower co-product values and margins in EMEA. The current quarter also included $37 million of insurance proceeds related to both the partial settlement of the Decatur East and West insurance claim.
In the Vantage Corn Processor (VCP) subsegment, operating profit increased due to higher ethanol export volumes and improved ethanol margins relative to the prior year quarter.
For the full year, Carbohydrate Solutions segment operating profit was $1.4 billion, flat with the prior year. In S&S, strong margins and volumes in North America were offset by weaker domestic ethanol margins, co-product values and margins in EMEA. In 2024, there were $84 million of insurance proceeds related to the partial settlement of the Decatur East and West claims. In VCP, operating profit declined relative to the prior year, as strong exports volumes were more than offset by lower margins due to higher industry production and inventory levels.
Other business contributed operating profit of $47 million for the fourth quarter, down 68% versus the prior year quarter due to lower Captive insurance results from higher claim losses. ADM Investor Services results decreased on lower interest income.
For the full year, Other business contributed operating profit of $247 million, down 34% from the prior year due to lower Captive insurance results from higher claim settlements, which included partial settlements of $231 million for the Decatur East and West insurance claims, $133 million of which was from reinsurers during the fourth quarter.
In Corporate for the fourth quarter, unallocated corporate costs decreased versus the prior year due to $52 million in lower incentive compensation, partially offset by $28 million of increased legal fees.
In Corporate for the full year, unallocated corporate costs increased versus the prior year on higher global technology investments to support digital transformation efforts, $103 million in increased legal fees and $38 million in increased financing costs, partially offset by lower incentive compensation. Other Corporate was favorable compared to last year’s investment valuation losses.
The company provided guidance for the full year in 2025. ADM expects adjusted earnings per share in the range of $4.00-4.75 per share, reflecting weaker market fundamentals and ongoing biofuel and trade policy uncertainty.
ADM announced today targeted actions to deliver between $500 million and $750 million in cost savings over the next three to five years. These proactive actions will further reduce the company's costs in response to ongoing market challenges, including global legislative and regulatory policy uncertainty. Specifically, ADM expects to achieve the majority of the cost savings on an annual run-rate basis through improvement in manufacturing costs, reduction in purchased materials and services and targeted workforce reduction. The company currently expects a targeted workforce reduction of approximately 600-700 roles globally in 2025.
ADM’s board of directors declared a cash dividend of 51.0 cents per share, up from 50.0 cents per share, on the company’s common stock. The dividend is payable on March 11, 2025, to shareholders of record on Feb. 18, 2025, and represents ADM’s 93rd consecutive year of uninterrupted dividends.
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