Archer-Daniels-Midland (ADM)

Business Overview

ADM earns more from buying, trading and refining grain than from crushing it. In FY2025 its Crushing line made $159M of operating profit, against $844M in FY2024. ADM runs the whole merchant chain in one company: it buys crops from farmers, trades and ships them, crushes oilseeds into meal and oil, refines the oil and makes ingredients. It is one of the four ABCD merchants, with Bunge, Cargill and Louis Dreyfus. Segment operating profit was $3,242M, just under half of it from Ag Services & Oilseeds (AS&O), the merchant segment.

AS&O earned $1,614M in four lines: Ag Services (buying and trading grain) $636M, Crushing $159M, Refined Products and Other $529M, and $290M of equity earnings from Wilmar, the Singapore-listed agribusiness group in which ADM holds a stake. ADM does not run Wilmar; that line is its share of Wilmar's profit. Crushing follows the margins ADM's plants lock in on physical trades, which differ from the futures-based board crush set out in the crush margins guide.

ADM processed 36.3 million tonnes of oilseeds and 18.5 million tonnes of corn. Crushing profit fell by more than 80% on oilseed volume similar to FY2024's 35.7 million tonnes, which shows how fast the line moves when crush margins narrow.

How the Numbers Read

Adjusted EBITDA was $3,657M, against $2,862M before ADM's adjustments. Net debt was $7,395M (total debt $8,410M less cash $1,015M), 2.0× adjusted EBITDA.

A merchant ties up cash in the grain it owns, even in a good crush year. ADM's operating working capital, mainly inventory and receivables net of what it owes suppliers, was $7,888M, 9.8% of revenue. Inventories were $10.37B, of which $6.22B were commodities carried at market value, and net receivables $3.02B. The working capital guide explains why merchants carry so much.

ROIC was 4.5% over the trailing four quarters on ADM's own definition. Adjusted ROIC was 6.3%: it adds back specified items, mainly impairment, restructuring and settlement charges, to the earnings and adjusts the capital for them too. Other companies define ROIC differently, so compare returns only on one definition.

How You Would Value a Business Like This

Last year's EBITDA is the wrong base for a crusher, because crush margins swing from year to year. The method rebuilds EBITDA at a long-run crush margin before applying a through-cycle multiple, and funds working capital in the cash flows.

Bunge shows why the segment mix matters. Its processing segments earn about four-fifths of its segment EBIT, on 51.8 million tonnes of oilseeds. ADM earns more outside crushing, in Carbohydrate Solutions and Nutrition, so each of its segments needs its own normalisation.

What to Watch in the Financials

Crushing against the board crush. A crusher keeps only part of the board and pays its plant costs out of that part, so Crushing moves more sharply than the board.

The mix inside AS&O. Trading can offset a weak crush year, and the reverse also holds.

Working capital in the cash flow. Inventory and receivables rise with prices and volumes, so a strong year can absorb cash even when segment profit looks steady.

Key Risks

Crush margins. A narrower crush hits Crushing before trading profit adjusts.

Charges that recur. ADM added back $582M of specified items after tax in FY2025 and $539M in FY2024. Charges that return every year at that size behave more like a running cost, and only the unadjusted ROIC carries them.