ADM Announces Fourth Quarter and Full-Year 2024 Financial Results, Provides 2025 Guidance
Full-Year 2024 Financial Performance
Archer Daniels Midland Company has released its financial results for the fourth quarter and full year ended December 31, 2024. The company’s full-year performance highlights include net earnings of $1.8 billion and adjusted net earnings of $2.3 billion. Earnings per share (EPS) were reported at $3.65, while adjusted EPS was $4.74, both showing declines compared to the previous year. The company’s trailing four-quarter average return on invested capital (ROIC) stood at 6.7%, with an adjusted ROIC of 8.3%.
ADM reported cash flows from operating activities of $2.8 billion, while cash flows from operations before working capital adjustments were $3.3 billion. This compares to 2023, where the company reported $4.5 billion in operating cash flows and $4.7 billion before working capital adjustments.
CEO Commentary and Strategic Initiatives
Juan Luciano, ADM’s Board Chair and CEO, commented on the results, highlighting the challenges presented by softer market conditions and policy uncertainties as the company moves into 2025. ADM is taking targeted actions to enhance operational performance, accelerate cost savings, and simplify its portfolio. The company aims to achieve cost savings between $500 million and $750 million over the next several years.
ADM also reaffirmed its commitment to disciplined capital allocation, focusing on strategic investments with high return potential and returning capital to shareholders. As part of this strategy, ADM announced a 2% increase in its quarterly dividend.
Fourth Quarter and Full-Year 2024 Financial Results Overview
For the fourth quarter of 2024, ADM reported earnings before income taxes of $667 million, a 9% decrease compared to the same period in 2023. On a GAAP basis, earnings per share increased by 10% to $1.17. Adjusted EPS, however, declined 16% year-over-year to $1.14. Total segment operating profit fell by 16% to $1.05 billion, largely due to market-driven headwinds.
For the full year, earnings before income taxes totaled $2.3 billion, down 47% from the prior year. Total segment operating profit declined by 28% to $4.2 billion. The company’s profitability was impacted by several factors, including a $480 million impairment charge related to its Wilmar investment, trade name impairments in its Nutrition segment, and gains from asset sales.
Segment Performance Review
Ag Services & Oilseeds (AS&O)
The Ag Services & Oilseeds segment reported an operating profit of $644 million in Q4 2024, marking a 32% decrease from Q4 2023. The full-year operating profit was $2.4 billion, a 40% decline from the previous year.
- The Ag Services subsegment saw a 19% increase in operating profit, driven by higher origination volumes and improved river conditions in North America.
- The Crushing subsegment experienced a 46% decline due to increased industry run rates, higher manufacturing costs, and uncertain biofuel policies, though this was partially offset by stronger performance in Europe, the Middle East, and Africa (EMEA).
- The Refined Products and Other subsegment faced a 57% drop in operating profit, impacted by market softness and increased imports of used cooking oil.
- Equity earnings from Wilmar fell by 20% compared to Q4 2023 but showed an 11% increase over the full year.
Carbohydrate Solutions
The Carbohydrate Solutions segment posted an operating profit of $319 million in Q4 2024, a 3% increase from the prior year quarter. For the full year, the segment’s profit remained stable at $1.4 billion.
- The Starches & Sweeteners subsegment saw a slight decline of 3% due to lower co-product values in EMEA, despite higher volumes in North America.
- The Vantage Corn Processors (VCP) subsegment improved in Q4, benefiting from higher ethanol export volumes and better ethanol margins.
Nutrition Segment
The Nutrition segment reported a fourth-quarter operating profit of $88 million, a significant improvement from a $10 million loss in the prior year quarter. For the full year, operating profit was $386 million, down 10% compared to 2023.
- The Human Nutrition subsegment reported a Q4 profit of $62 million, reversing a $25 million loss in Q4 2023. However, the full-year profit declined 22% due to higher costs and lower texturants pricing.
- The Animal Nutrition subsegment improved, posting a profit of $26 million in Q4 2024 and $59 million for the full year, reflecting cost optimization efforts and lower input costs.
Corporate and Other Business Performance
The Other business category contributed $47 million in Q4 operating profit, a 68% decline from Q4 2023, due to lower captive insurance results. For the full year, this segment generated $247 million in operating profit, reflecting a 34% decrease.
Corporate costs saw mixed impacts, with Q4 unallocated corporate costs decreasing due to lower incentive compensation. However, full-year costs increased due to technology investments, higher legal fees, and financing costs.
2025 Outlook and Cost Savings Plan
ADM has provided earnings guidance for 2025, forecasting adjusted EPS in the range of $4.00 to $4.75. The outlook reflects weaker market fundamentals and continuing uncertainties in biofuel and trade policies.
To enhance profitability and improve efficiency, ADM has announced a cost savings initiative aimed at achieving between $500 million and $750 million in savings over the next 3-5 years. The cost reductions will be driven by improved manufacturing efficiencies, reduced purchased materials and services, and a targeted workforce reduction of 600-700 roles globally in 2025.
ADM remains focused on long-term sustainable growth by streamlining its operations and optimizing its investment strategy. The company’s proactive approach to cost management and strategic capital allocation aims to navigate challenging market conditions while continuing to deliver value to shareholders.
