ADM reported a 36% rise in its fourth-quarter profit on Tuesday, as it benefited from growth in its agricultural services and nutrition businesses.
“I want to thank our team, which performed exceptionally well during truly unprecedented times to deliver four straight quarters of year-over-year adjusted segment operating profit growth in 2020, along with solid returns and record full-year adjusted EPS of $3.59,” said Chairman and CEO Juan Luciano.
“Around the globe, ADM colleagues demonstrated their resourcefulness, creativity and commitment by keeping our work environment safe from COVID-19, maintaining our operations and serving our customers. The team delivered on our strategic objectives, maintained a solid balance sheet, managed a wide variety of risks superbly, and showed the strength of our diversified and global value chain.
“Our Ag Services and Oilseeds team delivered outstanding results in 2020, crossing the $2 billion profit mark by capitalizing on our unparalleled and flexible global footprint to meet strong demand. With continued strong global demand for grains and oilseeds as well as meal and oils, we are confident in another outstanding performance from Ag Services & Oilseeds in 2021.
“In Carbohydrate Solutions,” Luciano continued, “the team achieved higher full-year results, demonstrating the power of our diversified product portfolio by pivoting quickly and effectively to meet incremental demand for industrial starches, retail flour and high-grade alcohol. The Carbohydrate Solutions business is well positioned to generate solid profit growth in 2021 as lockdown impacts dissipate.
“Our Nutrition business continued to harvest investments, lead in consumer growth trend areas, and partner with customers to deliver new products and solutions in 2020, driving 37 percent annual operating profit growth. Based on our current organic growth plans, we expect the Nutrition team to deliver solid revenue expansion and profit growth in 2021."
Ag Services & Oilseeds achieved substantially higher results year over year, setting a Q4 record for adjusted operating profit.
- Ag Services results were significantly higher than the prior-year period, driven by great execution in North America, where the business capitalized on strong global demand, particularly from China, to deliver higher export volumes and margins. As expected, South American origination was lower year over year after significantly accelerated farmer selling in the first half of 2020. Global Trade contributed to the higher year-over-year results as it continued to utilize its global network and manage risk well to meet customer demand. As anticipated, negative timing impacts from the prior quarter reversed.
- Crushing delivered substantially higher results versus the prior-year period. The business captured significantly higher margins in all regions, driven by tight soybean supplies and strong global demand for both meal and vegetable oils. There was approximately $125 million in net negative timing in the quarter, driven by basis impacts and improving softseed margins.
- Refined Products and Other results were higher year over year absent the recognition of the retroactive biodiesel tax credit in Q4 of 2019, with good results driven primarily by solid South American margins.
- Equity earnings from Wilmar were higher versus the prior-year period.
Nutrition delivered 24% year-over-year operating profit growth.
- Human Nutrition results were higher versus the prior-year quarter. Flavors delivered a strong quarter, driven by good sales and product mix in North America and EMEAI. Continued strength in plant proteins drove higher results in Specialty Ingredients. Health & Wellness delivered higher sales in probiotics and natural health and nutrition; prior-year results included revenue and income related to the launch of the strategic Spiber relationship. Results for the quarter also included an intra-company insurance settlement.
- Animal Nutrition results were significantly higher year over year, driven by strong performances in Asia and EMEAI and improvement in amino acid results, partially offset by currency effects in Latin America.
Other Business results were substantially lower, driven by lower ADM Investor Services earnings and Captive Insurance underwriting results, including intra-company settlements referenced above in Carbohydrate Solutions and Nutrition results.
“For ADM, based on the continued delivery of drivers under our control and improving market conditions as the year progresses, we expect strong growth in segment operating profit and another record year of EPS in 2021," said Luciano. "I am extremely proud of our team’s performance: Our momentum is strong, and our future is bright.”
