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Good morning, and welcome to the ADM Fourth Quarter 2023 Earnings Conference Call. All lines have been placed on a listen-only mode to prevent background noise. As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's call, Megan Britt, Vice President, Investor Relations for ADM. Ms. Britt, you may begin.

Hello, and welcome to ADM's fourth quarter and full year 2023 earnings conference call. Our prepared remarks today will be led by Juan Luciano our Board Chair and Chief Executive Officer and Ismael Roig, our Interim Chief Financial Officer. We've prepared presentation slides to supplement our remarks on the call today which are posted on the Investor Relations section of the ADM website and through the link to our webcast. Some of our comments and materials may constitute forward-looking statements that reflect management's current views and estimates of future economic circumstances, industry conditions, company performance, and financial results. These statements and materials are based on many assumptions and factors that are subject to risk and uncertainties. ADM has provided additional information in its reports on file with the SEC concerning assumptions and factors that could cause actual results to differ materially from those in this presentation. To the extent permitted under applicable law, ADM assumes no obligation to update any forward-looking statements as a result of new information or future events. I'll now turn the call over to Juan.

Thank you, Megan, and good morning to all who have joined for today's call. I realize we're holding this call later than we have in the past and we appreciate your patience as we have managed through our internal investigation and worked expeditiously to complete our 10-K filing. Before we start the business update, I want to provide some perspective on the additional release that we issued this morning on the progress we have made in our internal investigation, which is being led by the Audit Committee of the Board of Directors. ADM has historically disclosed in the footnotes to our financial statements that intersegment sales have been recorded at amounts approximating market. In connection with our internal investigation, we've corrected certain intersegment sales that occurred between our Nutrition reporting segment and our Ag Services & Oilseeds and Carbohydrate Solutions reporting segments that were not recorded at amounts approximating market. The adjustments have no impact on our consolidated balance sheets, statement of earnings, comprehensive income or loss or cash flows. In addition, we determined that the adjustments are not material to our consolidated financial statements taken as a whole for any period. We also confirmed that these adjustments did not change the achievement levels under our incentive plans. Further detail is included in the Form 10-K we filed this morning. Throughout this process, we have continued to operate the business and drive our strategic priorities forward. While our internal investigation is substantially complete, we continue to cooperate with the Securities and Exchange Commission and the Department of Justice, and we hope you understand that we will not be taking questions related to these matters on the call today. We will provide updates on this matter in the future as appropriate. Please turn to Slide 4 where we have captured our fourth quarter and full year financial highlights. Today, ADM reported fourth quarter adjusted earnings per share of $1.36, and adjusted segment operating profit of $1.4 billion. Our full year adjusted earnings per share were $6.98, the second best EPS in our history, and our adjusted segment operating profit was $6.2 billion. Our trailing fourth quarter adjusted ROIC was 12.2%, making another year of ROIC performance above our 10% target. Our full year operating cash flow before working capital was $4.7 billion. Our strong cash flow and disciplined management of our balance sheet continues to allow us to invest in our business and return cash to shareholders. In total, we returned $3.7 billion to our shareholders in the forms of dividends and share repurchases in 2023. In January, with the expectation of continued strong cash flows in 2024, we announced an 11% increase in our quarterly dividend, raising our dividend to $0.50 per share, which marks 92 years of uninterrupted dividends and over 51 consecutive years of annual dividend increases. Today, we also announced that our Board has authorized the additional repurchase of up to $2 billion in shares in 2024 under ADM's existing share repurchase program. Our performance for 2023 shows the overall effectiveness of our strategy, where our broad portfolio of business is combined to deliver resilient results for the year. Despite a more challenging operating environment, we maintained strong earnings and ROIC while delivering key strategic accomplishments across the enterprise. Next slide please. To put our 2023 results into perspective, at the end of 2021, we provided a roadmap to create value and growth returns by getting closer to customers and highlighted where we expected to perform on several important strategic metrics by 2025. As I look at our two-year track record over these 2025 objectives, we have delivered adjusted earnings per share at the top end of our $6 to $7 per share EPs objective. We have also continued to deliver ROIC above our 10% target.

Let's turn to Slide 6, which I summarize our priorities for value creation in 2024. We continue building a stronger company for the future and to support this, we have identified three key priorities for 2024. One, managing the cycle; two, nutrition recovery; and three, enhanced return of cash to shareholders. Let's take a closer look at each of these areas of focus. We know that 2024 will be a more challenging year that we faced in 2022 and 2023. We see tailwinds that supported a portion of our performance over the past few years changing direction, making our continued progress on our strategic metrics more reliant than ever on our productivity and innovation agenda. In 2024, we will continue to focus on those strategic initiatives that provide strong growth prospects. Our destination marketing efforts continue to bring us closer to our customers and enable us to serve them in a differentiated capacity and we continue to expand. In 2023, we added three new offices across Asia and the Middle East, and in 2024 we plan to add two to four more. Through this ongoing expansion, we expect to achieve 6% growth in our destination market in volumes. Direct farmer buying has been steadily increasing over the past several years and provides ADM an opportunity to maximize value for both sides by creating efficiencies through working directly together. We plan to take this even further in 2024, leveraging our network of more than 200,000 farmer relationships to grow direct origination volumes year-over-year by about 10%. And as our customers strive to decarbonize their own products and services, we are seeing a steady increase in the financial returns generated by our own decarbonization efforts from Regen Ag partnerships to lowering the carbon footprint of our operations. The pace of this is accelerating as we move into 2024. Tied to these strategic initiatives, we continue to build capacity to serve growing customer demand. I mentioned earlier the opening of our Green Bison soy processing facility as well as the expansion of our Marshall, Minnesota starch facility. These capacity additions support growing demand for a wide variety of sustainable products and solutions, from renewable fuels to industrial products. And connected to our productivity efforts, we have formally launched a 2024 program we call the Drive for Execution Excellence within the organization. Over the years, we have consistently encouraged our ADM colleagues to identify and execute both cost saving and cash generation ideas. We've developed processes and systems through our prior transformation programs and now those are ramping up for another cycle. As part of this, we have already commissioned more than 300 projects and plan to see $500 million in traceable cost savings over the next two years across all aspects of our enterprise, from operations to supply chain to corporate costs. Now let's discuss our plans within the Nutrition business. We're calling this section, of course, nutrition recovery for a reason. Nutrition had a very difficult year with results well below our expectations, and we have been working aggressively to change this and return to growth. For Nutrition, 2023 representing a combination of challenging market forces, some specific non-recurring events and some misses on demand fulfillment. And while market forces such as customer destocking as well as softer demand for plant-based proteins are not within our control, we're already taking action on the areas we can improve. Many of the supply issues are the result of the complexity built into the Nutrition business over time. In our zeal to meet our customers' needs, we have created one of the strongest pantries in the industry. This added complexity in our operations and supply chain that at times impacted our ability to efficiently fulfill demand. To address this, we have made important changes to drive simplification across the Nutrition business that will ease the pressure on our overall supply chain and dramatically improve our demand fulfillment performance. First, we have created a stronger division of duty across operations leadership and added new leaders with a strong expertise in supply chain management. We have also taken steps to build our COE expertise back into the core business, helping make our overall supply chain capabilities more agile and responsive to commercial demand signals. We have also engaged third party experts to help identify further opportunities for operational excellence improvements across our largest facilities. We have also greatly simplified the product and production line landscape to further achieve operational and supply efficiency, reducing the brands we are presenting to customers by two thirds and downsizing about 17% of our SKUs alongside the strategic production line simplification. A recent example of this is the closure of more than 20 Animal Nutrition production lines in 2023, now better serving the product mix and supply chain efficiency of the business. We're also optimizing our Nutrition business portfolio, leveraging our experience in both large scale and bolt-on acquisitions. We have enhanced our approach to M&A integration to increase value creation as we focus more on the integration of recent acquisitions than new targets. We continue to assess our portfolio for a strategic fit, making surgical decisions to achieve the returns targets we expect. For example, during Q4, we took action on two JVs that were not expected to meet our returns criteria. We're proud to see how the team with new leadership has rallied around this recovery plan, which is already showing signs of improvement as we move through the first quarter of the year. Recent trends suggest that destocking impacts in beverages are subsiding and we are well positioned to capture recovering demand in 2024 as evidenced by the strong demand we are seeing in flavors. After heightening our operational efficiency, we've seen steady increases in shipping volumes and productions throughout the course of the last month. And in Animal Nutrition, we have seen another quarter of sequential improvement in the base of the business, which excludes amino acids and pet solutions and early indications in the first quarter of 2024 suggest that this will continue. Importantly, our nutrition value proposition continues to be well received by customers as evidenced by our robust opportunity pipeline and industry leading win rates across key categories like flavors, dietary supplements and pep. ADM's customer centricity and agile innovation capabilities, supported through our creation, design and development expertise, differentiates us. We continue to believe that Nutrition has an important role in ADM's integrated business model. Beyond adding value to the ingredients produced by our AS&O and carbohydrate solution businesses, Nutrition is innovating to address evolving consumer needs and is connecting us more closely with a growing customer base. Finally, I'll turn attention to the capital allocation strategy that continues to guide our strategic cash deployment decisions. As noted, we announced today that the Board has authorized the repurchase of up to an additional $2 billion in shares through the remainder of the year, including $1 billion in shares to be executed through an accelerated share repurchase program as soon as practical. This will total $6.4 billion in repurchases executed since 2022 and coupled with the already announced 11% dividend growth, this is aligned with our commitment to a balanced capital allocation approach. So, combined, we believe these three areas of focus set ADM to perform well in a challenging external operating environment in 2024. I would now like to turn the call over to Ismael for more detail on the results of the operations. Ishmael?

Thank you, Juan. Let's start on Slide 7 which provides overall segment operating income and EPS for 2023. Overall, we delivered the second highest earnings in company history, overcoming a challenging operating environment. Adjusted segment operating profit was $6.2 billion for the full year, a 6% decrease versus the prior year. At a high level, operating profit was primarily down year-over-year in Ag Services & Oilseeds and Nutrition. In the other segment, which includes ADMIS and Captive Insurance, we had a significant increase in operating profit. Adjusted earnings per share were $6.98 for the year. Improved pricing in Carbohydrate Solutions and Nutrition, as well as positive impacts from mark to market timing in AS&O more than offset the impact of lower crush margins, leading to a $0.70 per share improvement versus the prior year. Volume improvement in AS&O was more than offset by volume declines in Carbohydrate Solutions and Nutrition, resulting in a $0.29 per share reduction in EPS versus the prior year. Higher manufacturing costs partially related to unplanned downtime at the Decatur complex led to a $0.41 per share decrease versus the prior year. And lower equity earnings primarily related to Wilmar attributed a $0.46 per share decrease versus the prior year. Increased corporate costs related to higher interest rates and the 1ADM implementation partially offset by higher ADMIS results drove a $0.30 per share versus the prior year. For other, benefits from share repurchases were more than offset by negative impacts related to a higher adjusted income tax rate and cycling one-time benefits from the Legal Recovery and Biofuel Producer Recovery program, leading to a $0.18 per share decrease versus the prior year. Moving to Slide 8, let's look at our segment performance for AS&O. For the full year, AS&O delivered $4.1 billion in segment operating profit, 8% lower than the record level in 2022. Ag Services segment operating profit was 15% lower versus the prior year as reduced origination volume and margins in North America were partially offset by record South American origination volumes. In global trade, destabilization of trade flows led to lower results compared to an exceptional 2022. Crushing segment operating profit for the full year was $346 million lower versus the prior year as improved process volumes were more than offset by lower crush margins and higher manufacturing costs. Refined Products and Other results were $469 million higher, resulting in a record year. Results were driven by higher volumes and margins in biodiesel. Market volatility drove positive timing impacts of approximately $235 million, compared to negative timing impacts of $90 million in the prior year. Equity earnings for Wilmar were $303 million in 2023, approximately 45% lower than the prior year. Now let's move to Slide 9 and look at Carbohydrate Solutions. For the full year Carbohydrate Solutions segment operating profit was $1.4 billion 3% lower versus the record prior year. In the Starches and Sweeteners segment higher pricing and mix were offset by weaker volumes and lower corn co-product values. The teams executed well in a dynamic environment, posting a record year in Wheat Milling. In Vantage Corn Processing strong exports and steady domestic demand and blending rates supported ethanol production and robust margins. The prior year also included onetime benefits of $50 million related to the USDA Biofuel Producer Recovery program. We also continue to make significant progress on our BioSolutions strategic initiative, delivering revenue growth well ahead of our 15% plus target. Please now turn to Slide 10. In Nutrition, revenues of $7.2 billion for the full year were 6% lower versus the prior year. Demand headwinds and destocking impacts, coupled with operational challenges related to the ERP systems integration pressured volumes. This more than offset price and mixed benefits as well as positive currency impacts. In Human Nutrition volumes declined due to lower market demand for plant-based proteins, destocking impacts in beverages, and operational challenges related to the ERP system implantation. This was partially offset by improved price and mix in flavors and texture and pricing in specialty ingredients. In Animal Nutrition, lower complete feed and premix volumes, the normalization of amino acid markets and demand fulfillment challenges in Pet Solutions led to lower revenue versus 2022. Now please turn to Slide 11. For the full year Nutrition segment operating profit was $427 million, 36% lower versus the prior year. Human Nutrition results of $417 million were 25% lower than the prior year as weaker volumes as well as increased costs related to operational challenges from the ERP implementation and unplanned Decatur downtime at Decatur East were partially offset by higher pricing. Animal nutrition results of $10 million were 91% lower compared to the prior year, primarily driven by lower volumes and the normalization of amino acid pricing. When bridging from 2022, our performance can be characterized in three buckets, market forces, one-time items, and operational challenges. Market forces accounted for a majority of the deterioration in 2023 and as previously mentioned, this was mostly related to lower demand and plant-based proteins, destocking impacts in beverages and lower premix and completely demand which impacted volumes across the industry.

Lastly, we also had our own operation struggles that impacted our ability to deliver on the strong demand that we have created. The implementation of ERP systems over the course of the year led to complications in shipping and producing products, negatively impacting both volumes and manufacturing costs. Over the past month, we have seen a steady improvement in operations and are confident that we will see volumes lost in 2023 come back in 2024. Now please turn to Slide 12. For the full year Other segment operating profit was $375 million, up 125% compared to the prior year. ADM Investor Services results improved on higher net interest income. Higher Captive Insurance results on new program premiums were partially offset by higher claim losses. In corporate for the full year, net interest expense increased year-over-year on higher short-term interest rates. Unallocated corporate cost increased versus the prior year on higher global technology spend to support digital transformation efforts. Other corporate was unfavorable compared to the prior year due to one-time investment valuation losses of approximately $57 million. Please turn to Slide 13. Over the last two years the company has generated significant cash flow that have bolstered our balance sheet and provided us with financial flexibility to drive long-term growth. In 2023 we again had strong cash flow of $4.7 billion which were actualized in line with our balanced capital allocation framework. 30% or approximately $1.5 billion of cash flows were reinvested in the business to support growth and modernize our assets, including investments in new capacity and the digitization of our existing asset footprint. Our cash flows also supported significant capital return in 2023 with nearly 30% earnings going to dividends and nearly 60% of cash flows or about $2.7 billion going to shareholders via share repurchases. In 2024 we expect to hold capital expenditures to a level aligned with depreciation and amortization with focus spend around the safety and reliability of assets. We also intend to manage working capital needs prudently limiting M&A beyond previously announced transactions and focusing our team on cost savings and cash generation initiatives through the drive for Execution Excellence. As Juan mentioned earlier, our priorities for cash deployment in 2024 will remain focused around the shareholder. We finished the year with strong momentum in terms of returning cash, repurchasing nearly 1.6 billion of shares in Q4 and nearly 330 million of shares so far in Q1. Over the course of the year, we intend to actualize 2 billion of additional share repurchases, with 1 billion being executed through an accelerated share repurchase program as soon as practical. Now, let's transition to a discussion of guidance for 2024 on Slide 14 please. In 2024, global grain and oil seed supply is expected to increase as anticipated improvements in weather should support larger production levels in key South American countries. Assuming commodity prices ease for recent highs and trade flows adjust to the dislocations created over the past two years, we anticipate global soybean crush margins will moderate in 2024, likely moving into a range of $35 per metric ton to $60 per metric ton. From the demand side, we continue to expect vegetable oil demand growth from renewable diesel and low single digit soybean mill demand growth to support structural margin improvement. We expect adjusted earnings per share to be in the range of $5.25 per share to $6.25 per share, representing an 18% decline from prior year at the midpoint. Now breaking down our expectations by segment for 2024, let's turn to Slide 15. In AS&O, we anticipate the first quarter to be lower and the full year to also be lower versus comparable prior periods as increased global commodity supply and normalization of margins will weigh on the segment. We anticipate global soy crush margins within the range of $35 per metric ton to $60 per metric ton as the market balances better soybean availability against increased crush and renewable diesel capacity. Our Operational Excellence efforts and the ramp up of our Green Bison facility should lead to mid-to-high single digit improvement in our process volumes. We expect significantly lower biodiesel margins in 2023, timing gains to reverse as contracts are executed. In Carbohydrate Solutions, we anticipate the first quarter to be lower versus the prior year. For the full year, we anticipate another strong year, but slightly lower than 2023 as the improved volumes and margins in Sweeteners and Starches could be offset by weaker ethanol. For nutrition, the first quarter is expected to be lower versus the prior year as we face headwinds from a normalizing texturants market, fixed costs associated with operational challenges related to the Decatur East and protein volumes. However, for the full year we expect Nutrition to begin its path to recovery. We anticipate conversion of our significant pipeline opportunities in Human and Animal Nutrition to yield mid-single-digit revenue growth. We assume market normalization in texturants to be a headwind in 2024. We do not anticipate the significant one-time events of 2023 to recur. Back to you, Juan.

Thank you, Ismael. Please turn to Slide 16. In summary, let me once again share the three priorities for our year ahead. We will continue our efforts across the business to drive our productivity and innovation portfolio of projects, taking advantage of capacity gains we have made and ensure that our teams are generating and executing on our drive for Execution Excellence. We continue to take aggressive actions in the nutrition business to ensure that it can deliver on the areas of growth that we have continued to build into our opportunity pipeline. This includes supporting the operational changes we have introduced, driving simplifications through our products and brands, and ensuring that our business portfolio is tuned to best achieve our return expectations. And we're also actively managing our balanced capital allocation strategy, both prudently investing in the business while growing our dividends and accelerating our share repurchase program to return more to shareholders in the near-term. I believe strongly in the powerful role ADM plays as a leader in the agriculture supply chain, and that our ability to bring partners together across the value chain will be critical to driving future transformation in the food, feed, fuel and industrial markets we serve. I want to express my gratitude to the ADM team for their dedication, hard work and resourcefulness. I'm confident in our ability to deliver solid results as we move into 2024 and continue to pave a path for long-term profit growth. Operator, please open the line for questions now.

Thank you. [Operator Instructions] Our first question comes from Adam Samuelson of Goldman Sachs. Adam, the line is yours.

Yes, thank you. Good morning, everyone.

Good morning, Adam. How are you?

Good morning. Good. So I guess my question is really around framing the go-forward outlook in terms of the cyclical versus the pieces that ADM controls. And you had the targets from the 2021 Investor Day still on the slides of returns and earnings per share. The outperformance the last couple of years has been largely cyclically driven in AS&O, whereas some of the investments and the items under your own control, particularly Nutrition, have not performed up to expectations. As we think about 2024 that's at least the cyclical parts are reversing, at least in part. Can you Juan put a little bit more finer point on how you think about 2024 versus normalized earnings for the business and maybe quantify the path forward in Nutrition beyond this year as you work to earn a return on the substantial investments you've actually made in that business?

Yes. Thank you, Adam. So let's take each of the businesses in the portfolio. So when we think about Ag Services and Oilseeds, as you said, we had a spectacular performance over the last couple of years, taking full advantage of the opportunities in the market. But we forecasted in 2021 that margins were going to moderate, although they were going to stay higher than historical averages and we are seeing that. We see the moderation and we see even crush margins, 35 to 60, that we are forecasting are higher than average. We have not stayed quiet waiting for the cycle to reverse. We have been adjusting our business model. You heard me saying about destination marketing, something we didn't have a few years ago, and we continue to grow that. That gives us extra margins and now we are forecasting that we continue to expand and we're going to grow those volumes 6% this year and that programs continue as we expand into new geographies in the Middle East and Southeast Asia. When you think also about the Regen program, Regen AG program that we have with our customers, we are helping our CPG customers with their Scope 3 emissions and we are working together with the farmers and that program is the leading program in the industry and continues to grow. We are also doing everything in the value chain. We're looking at farmer direct. That's an ability for us to get efficiencies between us and the producer, the way we buy grain. So of course, we get an advantage with that as the producer as well. And we're planning to increase our volumes 10%, leveraging on the 200,000 farmer relationships we have around the world. Of course, we have expanded capacity. We are expanding crush in Latin America. We are expanding crush in North America with Spiritwood. So I would say when you take that, plus our operational improvements, if you will, what we call the push for excellence, that was going to be the productivity and innovation agenda that were going to help us navigate through this. We see 2024 still as a strong year for Ag Services and Oilseeds, it's going to be lower, but it's still going to be a strong year. Of course, the market has priced a lot of the extra capacity and the higher argentine crop into the crush margins. But we still see the ability of the market to absorb all that capacity with a strong mill growth and with a strong demand for oils. So that on the Ag Services and Oilseeds side. On the Carb Solutions side, this business has been very stable over the last few years. It has had a very good 2022 and 2023. We are expecting a very good 2024, maybe slightly lower, but still very, very good. We had a good program for good contract renewals in 2024. We are happy with the margins. We have maintained margins for the most part, and we have gained some volumes, so volumes are strong. The milling business has been going, had a record year last year, and it continues to drive very strong. I think both businesses have a little bit of a lower contribution from feed products, where margins have decreased a little bit, but BioSolutions, as Ismael mentioned, continues to grow, is growing beyond 15% per year. And all their decarbonization things that we're saying, we see more and more demand for everything that carb solutions can bring to the table in that area. So we feel very good about that. Always the question mark in the year maybe is ethanol, but we're seeing right now, Adam, ethanol, the arbitrage to export from the U.S. is open to everywhere in the world. So it's just a matter of adjusting our capacity and the U.S. capacity to get more dehydrated ethanol, if you will, to be able to export, to adjust the humidity content, if you will. So, I think we'd export well north of maybe 1.5, 1.6 billion gallons for this year. That should bode well for recovery of margins as we go into the year. And then you take nutrition. Nutrition has been a growth story for many years, and we certainly stumbled in 2023. I mentioned some of the reasons. Some of the reasons were, there was a big destocking after all the COVID and all the supply chain issues that the industry have, the industry stopped. And now we went through lower inflation and this talking about that. So we had to go that in beverages, which drives flavors, which is our biggest engine for growth, if you will. Of course, we knew into the year that plant-based proteins, we have moderated our expectations for growth on that will still grow, but it's not going to be beyond 10%. So it's still going to be an attractive mid-single-digit growth, if you will. But we knew that, and then we had continued growth in continued good demand in pet and health and wellness and Animal Nutrition has been improving their P&L, doing a lot of self-help from the June P&L. It's been improving all the year. So unfortunately we get to the Q4 and we had several events in Q4. We have several one offs. We needed to take action on a couple of joint ventures and we addressed that. We needed to take a revaluation of an investment because of the end evaluation and we took that in the Q4. And then we have some issues on our own performance that we needed to implement 1ADM as much as we prepared for that. We had some problems with some of the modules. It was a successful implementation, but some of the modules that were about shipping products gave us trouble during the last quarter of the year. So when you have all that combination, it gave us a very bad quarter. We continue to see 2024 a year of growth or recovery, if you will, from the 2023 value. And from there, we should continue to march on our commitment to nutrition. Our ability to fulfill or to deliver a value proposition that resonates with customers continue to be evidenced by our growing pipeline, both in Animal and Human Nutrition, and our conversion rate we have benchmarked this is industry leading conversion rate. So we know we are winning. We need to adjust our own internal processes to make sure we deliver that. And we have done that heavily in the last -- second half of last year, and we have seen that during January and February that we are delivering much better than we did last year. So with that, I still look confident at the numbers, at the overall number for the company that we gave you for 2025. As I said on the onset, we are ahead on what we scheduled. From an EPS perspective, we are above 10% in ROIC and we have purchased already more than the $5 billion of share that we have estimated for 2025. So it's never going to be a straight line from here to 2025. But we have a resilient portfolio that can help us see that those numbers for the overall portfolio are still possible, as it was in December 2021. Sorry for the long answer. It's a large company.

[Operator Instructions] Our next question comes from Tom Palmer of Citi. Tom, please go ahead.

Good morning. Thanks for the question. I wanted to dig in a bit more on crush margins and your $35 to $60 global soybean crush outlook. Maybe just to frame it, where were global crush margins last year? Where are crush margins currently? When we consider different regions of the world, and then as we think about the items that could drive to the upper or lower end of this year's range, what are kind of the key items you're looking at? Thank you.

Yes, thank you, Tom. So, as we said before, Ismael mentioning his remarks, we expect crush margins between $35 to $60 for this year, they were about $70 per ton, maybe last year. I think it's fair to say that the market has completely priced or baked all the bad news into the crush margins are we having today? So, I would say board crush has moved significantly lower in the last month as the market probably gained more confidence in the availability of products, especially soybean meal, particularly when you think about Argentina now having sites on a crop that may be 50 million tons. And the U.S. crush industry also has performed very well. And the market continued to look forward to the second quarter of the year when they're going to have basically three offers for meal. That hasn't happened last year. So if you remember, last year, after Brazil finished in exporting, the U.S. became the only global, only gaming town, if you will. And that increased soybean meal values around the world, which makes soybean meal expensive, if you will for the Russian. We see that in the U.S., we saw, at least for ADM, we saw five consecutive months of record exports for soybean meal in the U.S. And the U.S. industry saw similar situation. So now with the correction in this, we expect that soybean meal will gain back into the Russians. Of course, feeding with meat pros and not soybean milk is not the optimal way to feed. So now that soybean milk has corrected, we expect that to happen. At the end of the day, Tom, the way I think about where crush is going to happen in the world is going to happen in both places where you have bean availability and where you have a domestic oil market. If you think of Brazil, Brazil is having B14 started in March. And that has helped with the margins of domestic oil for us in Brazil. And of course, you have a big crop, so you're going to have the bean availability and the domestic market. And then it will be the U.S. in which you have all the need of soybean oil to go into renewable green diesel and biodiesel and we have, of course, the bin availability. So we think that crush will favor those two places.

Thank you. Our next question comes from Andrew Strelzik of BMO. Andrew, please go ahead.

Hey, good morning. Thanks for taking the questions. I guess ultimately, my question is about 2025 and whether you view 2024 as kind of the trough here from an earnings perspective in terms of the cycle. And if I just follow up on maybe you made some comments at the end of the response to Adam about 2025. I didn't know if that was specific to the metrics around nutrition or the prior earnings guidance that you had talked about. If you could just kind of clarify the way that you're thinking about that is this 2024 an earnings number from, which you would expect to grow, and then the 2025 comments with that. Thanks.

Yes. Andrew, first of all, my comment before to Tom's question was the overall number that we gave for the company for 2025 in 2021. We still believe that number is there. I think that that number was never going to be a destination for ADM, was a milestone, if you will. And as we are reviewing our five-year plan that we do every year we see us breaking through that number. So in that sense, I expect 2024 to be a down year versus 2023 hopefully 2025 will be a positive year versus 2024. There is a cycle here that needs to happen, Andrew, that I described below, soybean mill will get cheaper. All the oil activities related to B-14 or RGD needs to grow. All that needs to happen and how long that adjustment takes, how long it takes for meal to be low enough to increase demand and for flat prices to be low enough to maybe make the farmer correct a little bit. They are planting all that process we know historically happens, when exactly it's going to happen. Does it happen in a calendar year? Doesn't happen in six months. Does it happen in a year is hard to say. But we continue to build a company that has more optionality, that's more resilience for the future. So as the cycle moderates, we continue to have more ability to bring more to the P&L. So we think with that, I'm optimistic about 2025 being better than 2024.

Thank you. Our next question comes from Ben Bienvenu of Stephens. Ben, the line is yours.

Good morning.

Good morning, Ben.

Juan, I want to ask, as we think about the morning, I want to ask as we think about 2024 for the nutrition segment, you note that you expect mid-single digit revenue growth, operating profit to be higher over year. I think the natural inference would be that the operating profit growth is up by less than 5% or mid-single digit revenue growth. Is that true? And then as you referenced in kind of the cadence and your expectations for the first quarter, this is a trajectory of recovery that will build throughout the year in 2024. You talk about pipeline conversion. Are there residual headwinds, discontinuities from the Decatur complex still in the first quarter? Help us think through the sequencing of the development of return to growth and nutrition.

Yes, good question, Ben. Let me give you the puts and takes, if you will, on nutrition as we look at 2024. So as Ismael said in his remarks, about half of the headwinds that we faced last year were market. That means that half of them were in the other two buckets, the non-recurring events, if you will, and those by nature we hope that we're not going to have going forward. And I think Ismael qualified them about $60 million something give or take. And then the other ones were like some of the demand fulfillment issues that I explained how we have worked aggressively to correct. And we have seen good indication of that over the first two months of this year. So I would say those are the positive that we don't expect all that to happen again in 2024. You put on top of that a single digit revenue growth, mid-single digit revenue growth because of the pipeline that we have and the conversion of that pipeline. And that tends to happen every year. Then, as you described, we have to have to face a correction of texturizing prices that were exceptionally high last year. We're not going to have that. So that will be part of the negative side, if you will. And certainly, as we go through the year, we still need to bring Decatur East plant back into operations, and that will have a tail of a cost. So I would say the year will be driven by a strong recovery in Animal Nutrition, in flavors, and hopefully pet with some tailwinds in the specialty ingredients. That's how we see.

Our next question comes from Ben Theurer of Barclays. Ben, please go ahead.

Yes. Good morning and thank you very much for taking my question. Juan, Ismael wanted to follow-up on carbohydrate solutions because that obviously, as you've highlighted, has been a very solid performer last year. Even the outlook looks very promising still in comparison to maybe some of the other segments for 2024. And I wanted to understand where you are within your different asset bases, be it on the ethanol side, but also particularly Starches and Sweeteners for the need to invest into the business. Where are you in terms of capacity and what do you need to potentially allocate money to in order to keep that business up where it is, or potentially further grow it as it has gained significance within the consolidated ADM results? Thank you.

Yes, Ben, I'm glad you're highlighting carb solution. They had a spectacular year. They deserve recognition and they've done a fantastic job of transforming their business into a very resilient and stable business. The assets let me take it by pieces. The milling business. Milling is an old business that has some old assets. And over the last few years, we have been doing -- the team has been doing a terrific job of shutting down some assets and consolidating those in new facilities like Mendota that we launched last year. That is the best and the newest wheat milling plant in the world. So we are happy with the way they have done that. They continue to do so. So that business is in good shape. When we look at the wet mills, we continue to invest in part of the wet mills. Unlikely that we're going to build a new wet mill, as you can understand, but that business continue to be reinvested in. It's a business that is a large business has a large asset footprint. And at the moment there is a lot of capital being associated with the path to decarbonize all these assets. So as you heard, we have a lot of efforts in trying to get pipelines to try to monetize some of our CO2 that come from the biogenic CO2 that come from the ethanol plants. So and I would say we have expanded Marshall because BioSolutions is growing at north of 15% per year. So we needed capacity. So the Marshall expansion is about 50% expansion to the final starch capacity that we have there. And that will help a lot with that. I would say the year is exciting as it is developing. It has solid margins. It has so far solid volumes. It had a little bit of a rough January because of the bad weather. We have ice in the plants and freezing weather. But February, March, things look good. And we think that that business has the opportunity to get some tailwinds from lower energy cost and maybe chemicals cost as the year go by. And that's a big energy hog, that business. So that could be an advantage and a tailwind coming later in the year.

Our next question comes from Manav Gupta of UBS. Manav, please go ahead.

Thank you. I just had a quick question. When we look at the carb, recent proposals and then we look at the 45g, it looks both at the federal level and at certain state levels there is a desire to lower the amount of renewable diesel being produced from vegetable oil. And I'm just trying to understand, do you see that as some kind of a headwind whereby eventually the demand for soybean oil from the renewable diesel or biodiesel industry could actually decline versus what we are seeing or you think this is just passing and the demand eventually will rise again as we move along?

Yes. Thank you, Manav, for the question. Listen, I think the path is clear for RGD, that RGD will need vegetable oils. When you think about how Europe is doing, Europe not having a raw crop for that, Europe needs cooking oil, waste oils, and they will capture that. The U.S. will have to be fed with soybean oil, canola oil. And we see that commitment to be firm over the years. All these capacities being built, it cannot be filled with anything else. So we feel that is a strong trend ahead of us.

Our next question comes from Salvator Tiano of Bank of America. Salvator, please go ahead.

Yes, thank you very much. I just want to go back to the 2025 target of $6, $7 in EPS. I mean, that is obviously double digit EPS growth and I understand buybacks play a role into that. But given the comments about controllables versus cyclicals, it seems really tough to imagine getting back there. Can you provide a little bit some of the key components and key buckets that you think will get you there in terms of its segment and specific numbers as detailed as possible?

Yes, Salvator listen, a little bit of what I explained early on Adam's question. I think that we will see how the cycle plays in ASNO. As I said, I think that lower prices have this ability to incentivate demand. At this point in time If you think about soybean meal demand, we are forecasting a very strong soybean meal demand, maybe higher than USDA levels, higher than GDP. When you think about Southeast Asian economies recovering and with inflation moderating, purchasing power is improving, tourism is improving in all those areas, you have at the moment very high prices of beef that's favoring pork and chicken. You have protein margins for chicken being better at that. So we think that soybean meal will gain in the Russian. So when we look at all that, we see the soy oil demand very strong in domestic consumption, but also for biofuels, and then we see the meal demand very strong. We think that this correction should be probably short term for crash and that should come back again. I cannot make a prediction on the timing of that, but we know how the cycle plays. So whether it's calendar year this or six months later or a quarter earlier, it's not for me to venture into those guesses. I think that carb solutions between the exceptional job they are doing on managing their mature businesses and the growth that they are getting through decarbonization and BioSolutions, you will see that ahead of us. Again, we just bring in the Marshall expansion. That's not something that it was in our forecast last year. So we're going to have it more in the next three quarters, if you will, of the year, Spiritwood again, and some of the crash capacity we brought in Brazil, and then you see nutrition. That nutrition was not a contributor, certainly a big contributor to growth in 2023, but we expect it to be back to growth in 2024 and 2025. So those are kind of the buckets, if you will, that I see at the moment.

Thank you. Our next question comes from Steven Haynes of Morgan Stanley. Steven, the line is yours.

Hey, good morning. Thanks for taking my question. Maybe just to come back to nutrition, I think in your prepared remarks you talked about some portfolio refreshment going on there and was wondering if you could maybe size, the scope of that. Are you thinking more kind of product line oriented here, or is this kind of more at the business level where you might be looking to monetize something? Thank you.

Yes, Steven, listen, let me give you my thinking on that and the way we approach these things. So we always look, every time we do our five year plan, we take a look at those units that whether they are not returning, given our return expectations to date, we're not forecasting it to do it in the medium term. And those are the ones that we tend to take action. So we took action with a couple of joint ventures, as I mentioned, and then we look at every unit that is underperforming. What we do first is we try to bring them to performance. So we make sure that if there are some things that are self-inflicted, if you will, we correct those things. Once we correct those things, and then we have visibility to what could happen over the next two or three years, then we decide as a part of portfolio whether they belong in nutrition or they belong in another part of ADM, or they belong outside ADM. So that's a regular process. We done, we done it in the past with fertilizers, Latin America, we've done it in the past. We divested Bolivia. We divested cocoa and chocolate. So we've done this, and now we've done it with a couple of joint ventures. We've done it also. Ismael has done it in his previous job as an Animal Nutrition leader with some of the lines in Animal Nutrition that we cut, like 20 lines around the world. So sometimes we have exited countries. So it's a regular process that at times, maybe when you have a stumble like we had in nutrition, you look a little bit deeper, because now, all of a sudden, you have more businesses at lower performance. So we really want to see, is it worth investing in some of those? So we're in that process. So, nothing to announce today, but we continue to look at that very deeply.

Just a couple of complimentary comments, because not only have we had some experience historically, as Juan correctly mentions, with [indiscernible] and fertilizer, but certainly the Animal Nutrition was a good precursor to some of the thinking that we have now in mind for the whole of our nutrition business. In the sense that usually when you acquire these businesses, they come with footprint allocations, labs, farms, in our cases, and warehouses, that when you aggregate them, start aggregate them across a number of different acquisitions, you realize that there are overlaps. And what we noticed is that there was a significant opportunity in Animal Nutrition to significantly simplify the portfolio by reducing the number of labs, reducing the number of SKUs of plants. And we've seen those benefits. They've been occurring since the second half of 2023. And I think that some of that thinking, as we have built this organization via a multiplicity of acquisitions, lends itself now to a pause and reflection, in light of the successes that we've had with this, to apply it more broadly to all of the portfolio. So that's where our capital prudence is going to come in, by focusing on ensuring that we improve our asset base while returning cash to our shareholders.

Thank you, Ismael.

Thank you. Our next question comes from Dushyant Ailani of Jefferies. Dushyant, please go ahead.

Thank you for squeezing me in. I just wanted to quickly talk about biodiesel margins going forward. Your thoughts just around the system, both in the U.S. and internationally, just how do we frame our thoughts around that and capacity as well?

Yes. Thank you, Dushyant. Well, all useful biofuel production is, as I said, is expected to grow in Brazil. We're going to go to B14, so there are many countries that are increasing their mandates, whether it's Indonesia and all that. When you look at the overall balances around the world, you see plantations in Southeast Asia getting older, the trees getting older, so maybe less production of palm oil. So you're going to see biodiesel mandates increasing around the world and less competitive pressure, if you will, for palm oil. So you're going to see the pressure on vegetable oil. So we think that that will continue to be a strong leg of the crash, biodiesel in particular. Biodiesel margins are better right now for us in Europe. They have moderated significantly in the U.S., and we expect them to be good, but not as good as they used to be in the U.S. So that will be a little bit of a headwind for us in 2024. But margins are better in Brazil and in Europe. Thank you.

Thank you. With that, we have no further questions, so I'll hand back to the management team for any closing remarks.

Thank you for joining us today. Please feel free to follow up with me, if you have any other questions. Have a good day and thanks for your time and interest in ADM.