ADM reported its fourth-quarter and full-year 2024 results, revealing earnings before income taxes (EBIT) $667 million, down 9% versus the prior year quarter.
CEO Juan Luciano attributed the decline to "softer market conditions and policy uncertainty around the world going into 2025." He stated, "We are focused on improving our operational performance, accelerating cost savings, and simplifying our portfolio. As part of that effort, we are announcing targeted actions to deliver $500-750 million in cost savings over the next several years. This represents a continuation of ADM’s commitment to drive simplification and better align our resources to deliver long-term sustainable growth."
Luciano added, "We will also maintain our disciplined and balanced approach to capital allocation, including prioritizing selective strategic investments with strong return potential and returning cash to shareholders."
The Crushing subsegment's operating profit decreased by 46% compared to the same quarter last year. Increased industry run rates, higher manufacturing costs, and biofuel and trade policy uncertainty negatively impacted crush margins in North America. This was partially offset by improved margins and higher volumes in EMEA.
The Animal Nutrition subsegment saw operating profit increase to $26 million, driven by cost optimization and lower input costs.
ADM plans to achieve $500-750 million in cost savings over the next three to five years. These actions are in response to ongoing market challenges, including global legislative and regulatory policy uncertainty. The company expects the savings to come primarily from improvements in manufacturing costs, reductions in purchased materials and services, and a targeted workforce reduction of approximately 600-700 roles globally in 2025.
ADM joins a wave of job cuts in different industries as major corporations implement significant layoffs in response to economic challenges and shifting business strategies, such as the ones recently announced by Cargill and Evonik.
