The paragraph introduces the ADM Third Quarter 2023 Earnings Conference Call and provides information regarding the recording and availability of the call. It also includes a disclaimer about forward-looking statements and introduces the speakers for the call. The third quarter results and strategic priorities will be discussed by the Chairman and Chief Executive Officer, followed by a review of segment performance and cash generation by the Chief Financial Officer. The call will end with closing remarks and a Q&A session.

ADM has achieved strong financial results in the first nine months of the year, with adjusted earnings per share of $5.62 and an adjusted operating profit of $4.8 billion. The company's trailing four quarter average adjusted ROIC was 13.2%. ADM's team has been able to navigate the dynamic global market and address challenges such as consumer behavior, geopolitical tensions, and commodity supply and demand. The company is on track to exceed its 2023 expectations and has seen strong performance in its Ag Services & Oilseeds, Carb Solutions, and Nutrition divisions.

ADM's deliberate actions in productivity and cost management in Animal Nutrition are leading to improved performance, despite some areas of soft demand in the Nutrition portfolio. The company's integrated business model, from farm to fork, is a key competitive advantage, allowing them to connect with farmers and shape the future of agriculture. ADM has also announced partnerships and initiatives to promote sustainable practices and reduce carbon emissions, positioning them to capitalize on the growing demand for renewable fuel sources. They are also innovating within their BioSolutions portfolio to deliver low-carbon intensity products.

ADM is working closely with customers to meet the needs of their consumers, including sustainability, flavor, and cost-effective ingredients. They have differentiated their offerings with evidence-based health and wellness solutions and have a strong focus on productivity and culture. The company is standardizing processes and systems through One ADM and modernizing operations through digital transformation. Their modernization program has already delivered operational benefits and is expected to save $20 million per year by 2024. ADM is also committed to improving safety for their colleagues and has begun taking action with the help of internal and external experts.

ADM is committed to improving their productivity, innovation, and culture in order to achieve sustainable long-term profit growth. They have raised their full-year earnings outlook and are seeing strong performance in 2023. The Ag Services and Oilseeds team has delivered solid results by leveraging their experience, scale, and global footprint. South American origination results were higher due to increased volumes and margins, while North American results were lower due to export demand shifting to Brazil. Effective risk management and higher volumes and margins in Global trade led to strong results, but lower than the previous year. ADM also received a $48 million insurance settlement related to damages from Hurricane Ida. Crushing results were strong, but lower than the previous year due to healthy, but lower, crush margins. North America led the way with structurally higher demand for vegetable oils.

The company has opened a new crush facility in North Dakota and is currently in the commissioning process. They are also optimizing their flex capacity in EMEA to prioritize higher margin softseed. The Refined Products and other segment had a strong quarter, with solid volumes and margins in North America and robust demand for biodiesel and food oil in EMEA. There were large net positive mark-to-market timing effects in the quarter, which are expected to reverse in future periods. Equity earnings from Wilmar were significantly lower compared to the same period last year. The company expects strong results in the fourth quarter, slightly lower than last year excluding a legal settlement. They anticipate similar export volumes in North America and a competitive South American export program. The crushing subsegment is expected to deliver strong results with robust margins and higher volumes from the new Spiritwood operations. However, the Refined Products and other segment is expected to be significantly lower than last year due to expected timing impacts.

Carbohydrate Solutions had a strong quarter, with higher demand and margins in starches, sweeteners, wheat flour, and ethanol. The BioSolutions platform also saw double-digit growth, and a new agreement with Broadwing Energy was signed to provide lower emissions power. The Vantage Corn Processors subsegment also had significantly higher results. In Nutrition, Flavors had impressive results despite challenges in demand for plant-based proteins and pet solutions. The go-live of the One ADM project in the EMEA region was successful.

The company is focused on utilizing digital technology to improve productivity. Weak demand and other factors led to lower results in the Specialty Ingredients segment, causing the company to adjust its investment plans. They are also working on developing products to meet changing consumer needs. The Health & Wellness segment saw an increase in sales and revenue pipeline, while Animal Nutrition saw improved performance due to cost optimization and expansion of offerings. Flavors and Health & Wellness are expected to finish the year strong.

The Animal Nutrition operating profit is expected to continue to recover, while the Specialty Ingredients operating profit is expected to be down due to recent incidents and demand softness. Overall, the Nutrition division is expected to return to growth in 2024. Other business results were higher, with improved ADM investor services earnings and slightly lower captive insurance results. Corporate costs were higher due to increased technology spend, but offset by favorable foreign currency hedges. The effective tax rate for the third quarter was higher than the prior year, but is expected to be between 16% and 19% for the full year. Strong operating cash flows were reported for the third quarter.

ADM is investing in their business and have returned money to shareholders. They have a strong balance sheet and plan to increase share repurchases. Despite challenges in nutrition and lower profits, they have raised their 2023 earnings outlook. The company is well positioned to manage external factors and adapt to changing trends in food security, health, and sustainability. They are seeing shifts in supply and demand for agricultural products, such as increased domestic consumption in the U.S. and record crop cycles in Brazil.

In the coming year, ADM is well-positioned to take advantage of new demand patterns and government policies in areas such as renewable energy and regenerative agriculture. The company's focus on productivity and innovation will help drive growth in its Services and Oilseeds divisions, while its investments in Carb Solutions and Nutrition are expected to result in continued revenue growth. Additionally, ADM is expanding its presence in high-potential areas such as alternative daily and specialized nutrition through its Specialty Ingredients division.

ADM's Animal Nutrition segment is experiencing positive growth and opportunities, and the company believes this will continue in the coming year. They are focusing on innovation and commercial excellence in this area. The CEO expresses gratitude to the ADM team and is confident in their ability to deliver solid results and pave a path for long-term profit growth. The first question in the Q&A session is about the U.S. crush margin outlook, and the CEO confirms that ADM's perspective on the market has not changed, despite the dynamic environment. He mentions factors such as increased demand and the situation in Argentina as contributing to the current state of the market.

Juan Luciano and Vikram Luthar, CEO and CFO of Archer Daniels Midland, discuss the company's strong crush margins in the U.S. due to high demand for renewable green diesel and new capacity. They also mention the company's record export book for soybean meal and expect this trend to continue into Q1 of 2024. In regards to Nutrition, they have updated guidance of roughly $600 million operating income for the year, which is a decrease from previous projections of making this business a $1 billion contributor. However, they mention that Flavors operating profit is up 16% year-to-date.

The Flavors segment has been a strong growth engine for the company, with short sales cycles and increasing revenue and profit margins. Health & Wellness has been steady, with potential for growth in the dietary supplements market. Specialty Ingredients has had mixed performance, with strong results in the texturants portfolio and challenges in the plant-based protein market. The company is focused on pivoting the portfolio to more resilient categories.

Despite challenges in white flake production and high margins in 2022, the company is confident in its ability to pivot its product portfolio and return to growth in 2024. Flavors and Health & Wellness are performing well, while Animal Nutrition is seeing benefits from cost optimization and focus on Specialty Ingredients. Ag Solutions is experiencing solid demand creation but challenges in demand fulfillment are being addressed with clear action plans. The company is also confident in the impact of new innovation on nutrition growth in 2024.

The speaker acknowledges that the growth rate may be slightly lower than previously expected, but reaching $1 billion is still possible in the near or medium term. In regards to soybean oil prices, the speaker explains that North America refining margins are lower this quarter due to a more normalized environment and positive timing impacts. However, they expect refining margins to remain strong in the future, although possibly declining from the highs seen earlier this year. Biodiesel margins are also coming down, but the speaker maintains their expectation of increased demand in the future.

The demand for food oil has rebounded and there are expectations of a decrease in supply due to El Nino and natural maturity of plantations. Despite coming off of highs, there is a positive outlook for margin stabilization in the RPO area. In the Carb Solutions business, there has been a favorable start to contracting in North America for sweeteners and starches, and there have been steady liquid sweetener volumes with strong margins. There has also been an increase in exports to Mexico and higher sugar prices. In the third quarter, there was a timing benefit of $95 million in the RPO area.

The company has seen soft specialty volume in North America, but margins have expanded due to improved mix and pricing. BioSolutions market revenue has grown by 23% and wheat flour demand has been resilient. The company is optimistic about solid volumes and potentially expanding margins in their core starches and sweeteners portfolio in 2024. They anticipate a strong finish in 2023 and early contracting in 2024. They are also optimistic about the ethanol market, which tends to be volatile but is currently trending towards a higher margin environment. The company expects above mid-cycle earnings power in 2024, but it is still early to make a definitive prediction.

Juan Luciano, CEO of a company, is optimistic about the future and sees a lot of potential for growth in 2024. He believes that the strength of their Ag Services and Oilseeds business, as well as their Carb Solutions business, will continue to contribute to their success. He also mentions that they are finding new demand for their products, which will increase revenue and tighten supply, leading to higher margins. Additionally, their Nutrition business is expected to see growth next year.

The company has taken a pause this year, but their strong innovation engine and focus on Health & Wellness, Flavors, and Animal Nutrition have helped them outperform competitors and grow faster. They are optimistic for next year and are prioritizing investment in OpEx and CapEx, but are also being cautious due to inflationary pressures. They have many opportunities for growth and are increasing their return to shareholders. They are also looking at M&A opportunities.

The company is maintaining discipline in terms of valuations and is being opportunistic with buybacks. They are ahead of their planned buybacks for the next four years and plan to buy back more aggressively in the fourth quarter. The company is also working on carbonization efforts at their Decatur facility and plans to sequester 7 million tons of CO2 per year. There may be potential issues with permitting for CO2 pipelines, but this could also present opportunities for the company.

ADM has been working on a carbon injection initiative for 10 years and plans to create five more injection wells in the future. They are also working on bringing biogenic CO2 from their ethanol plants through pipelines and have submitted permits for this. They are facing challenges with the regulatory environment but are working closely with authorities to align regulations with decarbonization goals. They do not have any bad news to report at this time and will provide updates in the next call.

Juan Luciano, CEO of a global company, discusses the supply and demand environment for ethanol and renewable diesel. He predicts a high demand for ethanol due to high sugar prices and growing biofuel mandates. He also sees potential for growth in renewable green diesel, with a goal of 5 billion gallons in the US by 2025 and 7-8 billion globally by 2026-2027. Luciano believes that the biofuel industry is still in its early stages and that his company will be a significant player in meeting the growing demand.

The speaker discusses the company's plan to bring 1.5 million tons of capacity and expects to see similar success as with the Spiritwood project. The next question comes from Steven Haynes of Morgan Stanley regarding the company's guidance, which has been raised to in excess of $7 from the previous estimate of $7 with potential for more upside. The speaker explains that the increase is due to compensation from other parts of the business, particularly AS&O and CS, with AS&O expected to be weaker than Q4 of last year due to mark-to-market timing gains rolling off.

The speaker discusses the expected performance of Ag Services and crush divisions, mentioning a legal settlement that affected Q4 of last year. They also mention a positive outlook for the crush division due to changes in demand for renewable green diesel. The operator then thanks the participants and the speaker invites further questions.

This summary was generated with AI and may contain some inaccuracies.