Andersons Inc at BMO Capital Markets Global Farm to Market Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : So to kick it off, I want to ask about the 2025 EBITDA numbers.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Yeah, the goal now is $475 million. And I guess what gave you the confidence to already raise that number? How did you build to that? And what's in place now to achieve that from an operating environment perspective and a business model perspective versus what you might need to just get there?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : So the growth projects that you talked about; can you dig in a little bit more there. So the most attractive opportunities you just mentioned, a couple of, can you just think about how you rank those and what the right level of CapEx is for the business on a go forward basis?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Sticking on the M&A side for a second, is this a good environment for acquisitions? Is it a challenging environment? It feels like there's a lot of people that would like to be buyers. There's a lot of cash out there, which we're going to talk about next as well. How do you characterize it?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Got it. Okay. And so then kind of to wrap up on the cash side, you have your RMIs that are well in excess of your debt levels. If you get a good crop, would you see -- we have a backwardated curve.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : How do you think about your ability to deploy cash over the next couple of years relative to your ongoing or kind of steady state expectations maybe? Where do you see incremental opportunities?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : You made the comment just a minute ago. One good crop cycle does not change everything. But can you talk about the pros and cons of a large US crop for your business relative to kind of the highly dislocated, a lot of inflation environment that we've seen over the last several years it feels like?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : I think most people generally think about the US crop kind of at a high level, national level. But obviously, regionally, it's important for you guys. Can you talk about what you're seeing so far? Is there any reason to be concerned when and where that we've seen some flooding? We've seen a couple of other things, dryness here in there. East versus West, how that shapes up at least as far as we know so far?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : So you kind of tangentially touched on this, but if we do get a large US crop -- if I think back to last year, the conversation was already two crops. We needed three -- who knows what we need (multiple speakers)

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Right. Exactly. So we do get a large US crop. Are we back? Are we balanced?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : And if not, what is it going to take?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Right. I just stopped asking that question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 17, 2023 / 5:15PM, ANDE.OQ - Andersons Inc at BMO Capital Markets Global Farm to Market Conference

Question: Andrew Strelzik - BMO Capital Markets - Analyst : There you go.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : That makes sense. I want to shift gears a little bit to ethanol. And we've seen a bit of an improvement in ethanol margins. So what do you attribute that to? It's hard for me. We're driving season who knows seasonality, whatnot? It seems like the production levels may be in a bit of a better spot. So what do you attribute it to? And how do you think about sustainability as we move forward?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : So can you talk a little bit more about the export side. I think it's easy enough to track on the data on miles and those types of things. But where are you seeing the demand from an export perspective? And how you're expecting that to trend here as we move forward?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : So I want to ask about some of the related things around corn oil and SAF. But before we do that, there was a question here that I think fits the extent that you can speak to it, the covenant issue with your investment in element strategic implications. So say anything, you can share on that before we go on some of the other questions.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : You mentioned on the last earnings call, the need to make some investments to achieve higher corn oil yields. What's the decision-making kind of timeline around that? What's the kind of capital dynamics associated with it? And can you frame the yield improvement that you would expect to get?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : On the sustainable aviation fuel side, I guess what's your view on alcohol, the jet feasibility? Do we need to see changes in the legislative language to make the economics work? Is there enough political momentum behind it? How do you think about how that plays into your outlook over time?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : How do you -- It seems like there's the potential for a real change to your point in the underlying ethanol kind of margin supply-demand dynamics, how do you think about balancing your capacity as you can balance these two pathways into SAF and that opportunity and which seems like it could be a very attractive margin structure? So how do you think about it?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : On the RD feedstock side, how big of a business is that you now? And where do you want to take that? I mean, obviously, the demand is going to be very, very significant. So how do you think about growing your capacity there and continuing to build? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 17, 2023 / 5:15PM, ANDE.OQ - Andersons Inc at BMO Capital Markets Global Farm to Market Conference

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Is there an inorganic growth element to that to kind of achieve what you want to?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Sure. Can you share what you're seeing in terms of the RD capacity ramp? I mean, seems like it's starting, but the veg oil complex still feels heavy in the short term. So I guess how are you seeing that evolve?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : I know that you don't have a crystal ball, but the RVO, do you have a view on how that might shake out here going forward as we hear around?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : The inflation reduction, can you talk about how that has impacted your business? Or how you can position yourself to capitalize on opportunities that's created?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : You touched on a little bit the financial health of the US farmer It sounds like things are good. We're coming off a couple of good years for sure. I guess can you elaborate a little bit anything, any other ways to frame that? And then how do you think about the implications of that for farmer selling, fertilizer demand, the pace of some of these things as they play out. It seems like we're in a bit of a transition area a little bit.

Question: Andrew Strelzik - BMO Capital Markets - Analyst : We just had the keynote lunch panel around region ag. Is there a way in which that makes sense for The Andersons to take part? What does it mean longer term for your business, I guess as you think about the various dynamics?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : So we've two minutes left. I want to ask about kind of your longer-term growth thinking. You have the targets for 2025. You've already been moved higher. There's a lot of exciting things that you guys are planning to do. I guess, how do you think about a forward growth beyond $475 million? I mean, too far to think about 2030, but you know, how do you think about 20 -- how the growth beyond that?

Question: Andrew Strelzik - BMO Capital Markets - Analyst : Great. Will go ahead and leave it there. Thank you very much for joining us. Really appreciate it.