Archer-Daniels-Midland Company (ADM): history, ownership, mission, how it works & makes money

A Brief History of Archer-Daniels-Midland Company (ADM)

Founded in 1902, Archer-Daniels-Midland Company (ADM) has evolved into one of the largest agricultural processors in the world. The company is headquartered in Chicago, Illinois, and operates in more than 170 countries. Over the years, ADM has expanded its operations through strategic acquisitions and investments, positioning itself as a leader in food processing and agricultural services.

Company Growth and Acquisitions

In the early 2000s, ADM significantly expanded its footprint by acquiring several key companies. Notable acquisitions include:

• In 2011, ADM acquired a controlling interest in Wilmar International, a major agribusiness firm based in Singapore.
• In 2014, the company purchased the oilseed processing assets of the U.S. company, GrainCorp, enhancing its capabilities in oilseed processing.
• In 2020, ADM acquired the specialty ingredients company, Sojaprotein, further diversifying its product offerings.

Financial Performance as of 2024

As of June 30, 2024, ADM reported net earnings of $1.215 billion, down from $2.097 billion in the same period in 2023. The diluted earnings per share (EPS) for the first half of 2024 was $2.49 compared to $3.98 in 2023. The adjusted net earnings for the same period were $1.258 billion, with adjusted EPS at $2.49.

Market Position and Segment Performance

ADM operates through several key segments, including Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. For the six months ended June 30, 2024, the segment operating profit was as follows:

Recent Developments and Strategic Initiatives

In 2024, ADM has focused on sustainability and innovation, investing in renewable energy initiatives and expanding its portfolio of plant-based products. The company has also made efforts to enhance its supply chain resilience amid global disruptions, ensuring steady product availability.

As of June 30, 2024, ADM's total assets were valued at approximately $40.7 billion, with total liabilities of about $18.5 billion, indicating a solid balance sheet position.

In addition, ADM's international operations have been strengthened through strategic partnerships and investments in emerging markets, further solidifying its global presence in the agricultural sector.

A Who Owns Archer-Daniels-Midland Company (ADM)

Major Shareholders of ADM

As of June 30, 2024, Archer-Daniels-Midland Company (ADM) had the following major shareholders:

Institutional Ownership

As of June 30, 2024, the institutional ownership of ADM stood at approximately 78.2%, representing significant confidence from major financial entities in the company's operations and future growth.

Insider Ownership

Insider ownership as of June 30, 2024, is as follows:

Shareholder Equity and Market Performance

As of June 30, 2024, ADM reported total shareholder equity of $22.2 billion. The company's stock price was trading at approximately $63 per share, reflecting a market capitalization of about $30 billion.

Recent Share Repurchase Activity

In 2024, ADM initiated a share repurchase program with the following details:

Dividend Information

For the six months ended June 30, 2024, ADM declared dividends totaling $0.50 per share, amounting to approximately $247 million.

Future Ownership Projections

As of June 30, 2024, the company plans to continue its share repurchase program with a remaining authorization of 14.8 million shares, aiming to enhance shareholder value in the coming quarters.

Archer-Daniels-Midland Company (ADM) Mission Statement

Mission Statement Overview

The mission statement of Archer-Daniels-Midland Company (ADM) emphasizes its commitment to providing agricultural products and services that enhance the quality of life for a growing population. The company focuses on sustainability, efficiency, and innovation to meet global food and energy needs.

Financial Highlights

As of June 30, 2024, ADM reported the following financial highlights:

Operational Focus

ADM operates in various segments, including Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The focus on these segments aligns with the mission to provide essential agricultural products while ensuring sustainability and innovation.

Processed Volumes

For the six months ended June 30, 2024, ADM processed the following volumes:

Shareholder Returns

As of June 30, 2024, ADM had the following shareholder returns:

Strategic Goals

ADM's strategic goals include enhancing operational efficiency, investing in technological advancements, and pursuing sustainable practices across its supply chain. The company aims to align its growth strategies with its mission of improving global food security while minimizing environmental impact.

Market Positioning

As of June 30, 2024, ADM maintains a strong market position with substantial liquidity and access to credit, crucial for funding its operations and capital expenditures:

Conclusion of Financial Analysis

ADM's mission statement reflects its commitment to agricultural innovation and sustainability, supported by robust financial performance and strategic operational goals. The company's efforts to enhance shareholder value and address global food needs align with its core mission.

How Archer-Daniels-Midland Company (ADM) Works

Overview of ADM's Operations

Archer-Daniels-Midland Company (ADM) operates in various segments, primarily focused on agricultural processing and services. Its operations include Ag Services and Oilseeds, Carbohydrate Solutions, Nutrition, and Other Businesses. As of June 30, 2024, ADM reported total revenues of $44,095 million, a decrease from $49,262 million for the same period in 2023.

Financial Performance

For the second quarter of 2024, ADM's net earnings totaled $486 million, down from $927 million in the same quarter of 2023. The diluted earnings per share were $0.98, compared to $1.70 a year ago.

Segment Analysis

In the Ag Services and Oilseeds segment, revenue decreased significantly due to a stabilization of trade flows and lower margins from farmer selling in South America. The Carbohydrate Solutions segment saw a decline primarily from lower margins in starches and sweeteners. The Nutrition segment experienced mixed results, with human nutrition down due to market normalization and animal nutrition benefiting from cost optimization.

Cash Flow and Liquidity

Cash provided by operating activities for the six months ended June 30, 2024, was $1,200 million, compared to $900 million for the same period in 2023. ADM's total cash, cash equivalents, and restricted cash as of June 30, 2024, amounted to $4,271 million, down from $5,187 million at the end of 2023.

Debt and Financing Arrangements

As of June 30, 2024, ADM had total lines of credit amounting to $12.3 billion, with $7.8 billion unused. The company reported a fair value of long-term debt that was below the carrying value by $500 million. The effective tax rate for the six months ended June 30, 2024, was 19.0% compared to 17.0% in the same period of 2023.

Market Factors and Future Outlook

ADM is subject to various market dynamics affecting its agricultural commodity operations. The company anticipates total capital expenditures of approximately $1.4 billion in 2024, alongside $2.3 billion in share repurchases and $1.0 billion in dividends.

How Archer-Daniels-Midland Company (ADM) Makes Money

Revenue Streams

Archer-Daniels-Midland Company (ADM) generates revenue primarily through four segments: Ag Services and Oilseeds, Carbohydrate Solutions, Nutrition, and Other Business. For the first six months of 2024, ADM reported total revenues of $44.1 billion, a decline from $49.3 billion in the same period of 2023.

Cost of Goods Sold and Gross Profit

For the six months ended June 30, 2024, ADM's cost of goods sold amounted to $41.0 billion, down from $45.3 billion in the prior year. This led to a gross profit of $3.1 billion, a decrease of $0.9 billion or 23% compared to the same period in 2023.

Segment Operating Profit

Each segment's operating profit reflects its contribution to ADM's overall profitability. The Ag Services and Oilseeds segment experienced a significant decline, while Carbohydrate Solutions showed slight improvement.

Net Earnings and Earnings Per Share

For the first half of 2024, ADM reported net earnings of $1.2 billion, down from $2.1 billion in 2023. The diluted earnings per share (EPS) for 2024 stood at $2.41, compared to $3.82 in the previous year.

Cash Flow and Capital Expenditures

Cash provided by operating activities for the six months ended June 30, 2024, was $1.2 billion, an increase from $0.9 billion in the same period of 2023. Capital expenditures for the same period reached $0.7 billion, comparable to the previous year.

Financial Position

As of June 30, 2024, ADM's total assets were valued at $52.7 billion, with total liabilities amounting to $30.2 billion. The company's shareholders' equity stood at $22.2 billion.