The Andersons (ANDE)

Business Overview

In FY2025 The Andersons, a US grain handler, earned more from ethanol than from grain. Its Renewables segment brought in 25% of revenue but 52.1% of the two segments' adjusted EBITDA. The company has reported two segments since 1 January 2025: Agribusiness, which buys, stores and trades grain and sells fertiliser, had $8.26B of revenue (75%) and $186.7M of adjusted EBITDA; Renewables, built around its four ethanol plants, had $2.75B and $203.1M. Corporate costs of $(52.5)M sit outside both segments, leaving group adjusted EBITDA of $337.3M.

Pretax income tells the same story: $56.6M in Agribusiness, a weak year for grain, against $140.1M in Renewables.

The plants produced 518 million gallons of ethanol, above their 405 million gallon nameplate, the rated capacity the company says they consistently exceed. Its 2026 proxy statement puts commodities traded at 33 million tonnes; the segments themselves do not separate trading, processing and ingredients (see the value chain guide).

How the Numbers Read

Leverage on the company's own measure, long-term debt to group adjusted EBITDA, was 1.8× against its target of below 2.5×. Net debt, total debt less cash, was $774.5M, 2.3× adjusted EBITDA. The Andersons publishes no ROIC. As for Darling Ingredients, work from filed EBITDA and leverage.

Working capital, current assets less current liabilities, fell to $690M from $1,119M in 2024, mostly because cash fell by $463M. The operating items still took $101M of cash in FY2025: operating cash flow was $177M against $278M before working-capital changes. Readily marketable inventories (RMI), grain that trades on exchanges and can be sold at a quoted price, were $1,001M of $1,365M of inventories, or 73%. The working capital guide compares them with Bunge and ADM.

How You Would Value a Business Like This

The method rebuilds each segment's EBITDA at a normal margin before applying a through-cycle multiple. Here that means two separate cycles: grain handling margins for Agribusiness and the ethanol margin for Renewables. One year's mix is a poor guide, because a strong ethanol year can make Renewables look like the larger business through the cycle.

ADM and Bunge share the grain-handling mechanics, but neither has an ethanol segment of this weight. Leverage ratios compare only on one definition; Bunge's own ratio, for one, credits its inventory against debt.

What to Watch in the Financials

Ethanol output. Output above nameplate means more gallons exposed to every swing in the ethanol margin.

Working capital in operating cash flow. Track the gap between cash flow before and after working capital each quarter.

Leverage against the 2.5× target. Plant spending or a grain inventory build can use up the headroom.

Key Risks

Ethanol margins. Renewables' $203M can fall with gasoline blending economics and corn costs, and Agribusiness need not make up the difference.

Weak grain years. Grain handling earns a thin margin. It shrinks further when local price spreads and volumes disappoint.

Segment history. The two-segment map dates from 1 January 2025, so comparisons with the older Trade and Plant Nutrient segments need care.