Archer Daniels Midland Co.

Overview Key strengths Key risks Global agribusiness leader with significant economies of scale. Vulnerable to earnings fluctuations due to operations in volatile business lines such as oilseed crushing, ethanol, and grain origination. Good cost discipline with improved returns on capital. Subject to significant working capital swings that lead to higher debt balances, depending on grain inflation. Track record of managing leverage within targets consistent with our rating. The company?s S&P Global Ratings-adjusted EBITDA for the fiscal year ended Dec. 31, 2024, declined about 30% year over year as earnings at its largest segment, Ag Services&Oilseeds, declined 40%. This reflected a cyclical correction in oilseed crush margins after record margins in prior years, weaker merchandising volumes, and a more

...We do not expect Archer Daniels Midland Co.'s (ADM) operating performance to materially rebound after a weaker-than-expected 2024. The company's S&P Global Ratings-adjusted EBITDA for the fiscal year ended Dec. 31, 2024, declined about 30% year over year as earnings at its largest segment, Ag Services & Oilseeds, declined 40%. This reflected a cyclical correction in oilseed crush margins after record margins in prior years, weaker merchandising volumes, and a more than 50% decline in other refining margins, largely due to weak specialty oil prices to biofuel refiners. At the same time, the company faced significant manufacturing disruptions at its Decatur manufacturing complex that further hurt earnings in its still-to-recover nutrition...

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