CHICAGO — Key strategic accomplishments across the business, particularly the company’s progress on productivity and innovation objectives, lifted fiscal 2022 earnings and revenues at ADM, said company executives.
Net income at ADM in the year ended Dec. 31, 2022, totaled $4.34 billion, equal to $7.71 per share on the common stock, up 60% from $2.71 billion, or $4.79 per share, in fiscal 2021. In the fourth quarter, earnings totaled $1.02 billion, or $1.84 per share, up 30% from $782 million, or $1.38 per share, in the same period a year ago.
Revenues in fiscal 2022 increased 19% to $101.85 billion from $85.25 billion. The year-over-year increase was driven by a strong fourth quarter in which sales climbed 14% to $26.23 billion from $23.09 billion a year ago.
“When I examine 2022, our ability to drive structural growth in earnings and improvement in ROIC was supported by key strategic accomplishments across the enterprise, particularly the progress we made on our productivity and innovation objectives,” Juan Luciano, president and chief executive officer, said during a Jan. 26 conference call with analysts. “Our productivity work in 2022 included enhancing our operational resilience, including through stabilizing our plant operations and streamlining our operating systems. In order to meet growing customer demand and drive efficiencies, we delivered multiple projects to enhance our operational footprint, from modernization to improving our scheduled downtime to capacity expansions. We completed our Marshall, Minn., modernization, opened a new mill house in Clinton (Iowa), completed our Quincy (Ill.) refinery expansion and improved output and yields at our Rondonopolis diesel plant in Brazil.
“We also continued to optimize our North American milling footprint. As you know, we also introduced a new billion-dollar challenge in 2022. There is no clearer demonstration of how our colleagues and culture are driving returns than the fact that thousands of ADM team members from around the globe took the initiative, stepped up and identified opportunities that unlocked more than $1.6 billion in cash in 2022.”
Operating profit in the Ag Services and Oilseeds segment surged 58% in fiscal 2022 to $4.39 billion, while profit in the fourth quarter rose 46% to $1.18 billion. Within the segment, ag services operating profit climbed 78% year-over-year to $1.37 billion, while crushing profit soared 66% to $1.62 billion and refined products and other increased 28% to $837 million.
Mr. Luciano said ADM “hit in all cylinders” in 2022 in its Ag Services and Oilseeds segment.
“I think that every piece of our business hit records,” he said. “When we look at 2023, we continue to see very strong demand. If you look at North America, North America had a strong meal demand and certainly very strong domestic demand for oil, driven by all the factors, driven by sustainability that you know. We see a strong potential for crush margins in Europe, given the bad crop in Argentina and the fact that Europe will continue to export biodiesel to the US given the need that we have here. So all in all, we continue to see strength.”
Year-over-year operating profit in the Carbohydrate Solutions segment rose 6% in fiscal 2022 to $1.36 billion, while fourth-quarter profit fell 39% to $261 million. Starches and sweeteners profit rose 45% during the full year and 39% in the fourth quarter. Vantage Corn Processors posted operating profit of $370 million in the full year, up sharply from $37 million in fiscal 2021. In the fourth quarter, though, Vantage Corn Processors sustained a loss of $26 million, which compared with income of $221 million in the same period a year ago.
In the Nutrition segment operating profit increased to $736 million in fiscal 2022, up 6.5% from $691 million in fiscal 2021. Fourth-quarter profit, meanwhile, decreased to $131 million from $160 million in the same period a year ago.
Looking ahead to 2023, Vikram Luthar, chief financial officer, said ADM expects its Nutrition business to continue on a positive growth trajectory for the full year of 2023, including more than 10% profit growth and a similar level of revenue growth.
“The growth is likely to be led by Human Nutrition and to be weighted in the back half of the year as the first half will see headwinds in Animal Nutrition due to the continued impacts of weaker margins in amino acids and because we will see increasing recovery in demand fulfillment as we move through the year,” Mr. Luthar said.
Mr. Luciano also provided color on the Nutrition segment, notably the company’s appetite for merger and acquisition activity in the segment.
“That business (Nutrition) has been a very successful story at the customer level for many, many years,” Mr. Luciano said. “We continue to drive higher growth rates than the industry we participate in. So that has not changed, the robust pipeline growth is there, and we have achieved all that … through a very disciplined strategy of bolt-on acquisitions and organic growth. So we did four bolt-ons in 2021. We took the time in 2022 to integrate them and digest them.”He continued, “I’m very pleased to report that the four acquisitions we made in 2021 are executing or delivering ahead of their business model. So we’re not planning to change the pace or the strategy that we have had so far. The projects that we are making selective expansions on or bringing to life soon are all going well even despite the long time — long lead time equipment and sometimes you face in the industry. We’ve done that in anticipation of all that. So we feel very good about being able to support, with capacity, the growth in demand that we see in the marketplace from our participations.”