Archer Daniels Midland Company (ADM) — Q1 2025 Transcript

Welcome to the first quarter earnings conference call for ADM. Our prepared remarks today will be led by Juan Luciano, Chair of the Board and Chief Executive Officer; and Monish Patolawala, our EVP and Chief Financial Officer. We have 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 numerous risks 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 and the materials. Unless otherwise required by law, ADM assumes no obligation to update any forward-looking statements due to new information or future events. In addition, during today's call, we will refer to certain non-GAAP or adjusted financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are available in our earnings press release and presentation slides, which can be found in the Investor Relations section of the ADM website. I'll now turn the call over to Juan.

Thank you, Megan. Hello, and welcome to all who have joined the call. Please turn to Slide 4. Today, ADM reported adjusted earnings per share of $0.70. Total segment operating profit was $747 million for the quarter. Our trailing fourth quarter adjusted ROIC was 7%, and cash flow from operations before working capital changes was $439 million. ADM's first quarter results were aligned with our outlook and market expectations and our business operated well in a dynamic external environment. With uncertainty related to global trade and regulatory policy continuing to have an impact on the business, we were able to drive positive momentum in focused areas. Our Carbohydrate Solutions team delivered solid results supported by positive margins in sweeteners, along with strong execution in ethanol. Nutrition's performance in the first quarter, specifically in our Flavors and Animal Nutrition portfolios, is on a path to recovery. We also made important progress in getting our Decatur East facility back online as it moves into the final stages of recommissioning. Ag Services and Oilseeds was impacted by challenging conditions and overall market uncertainty and took actions to drive organizational realignment and network optimization. And thanks to our team's continued diligence in safety, I'm pleased to report that our Q1 total recordable incident rate was the lowest it has been in the history of ADM. These examples highlight our team's ability to drive our strategy forward, while focusing attention on the self-help and execution excellence agenda we outlined earlier in the year. Let's take a closer look at our progress in the first quarter. Please turn to Slide 5. In our last call, we shared a slate of self-help activities to enable us to deliver on execution and cost goals, drive simplification and strategic growth while maintaining continued capital discipline. We're taking a balanced approach to these efforts across the business. Let me share a few highlights. From a cost perspective, we made important progress on our target of $500 million to $750 million in cost savings over the next three to five years. This included a targeted workforce reduction to align our organization to our most critical priorities, along with a thorough review of third-party consulting spend. With this, we are seeing a reduction in our overall SG&A costs. We made the strategic decisions to deliver optimization across the network, including the recently announced closure of our Kershaw, South Carolina crush facility, exit of domestic trading operations in China and Dubai as well as the consolidation of several grain warehouses. We don't take actions that impact our colleagues and the communities where we operate lightly. I have engaged with these groups to clearly explain the rationale for our decisions and provide them with necessary transition support. We're also addressing challenges with operations uptime from our North America soy assets and we are now live with Decatur East and expect to have the plant at full run rate by the end of the second quarter. The focus on our Nutrition business is beginning to show positive results. Addressing demand fulfillment issues and leveraging our innovation capabilities in Flavors has supported a strong year-over-year operating profit. We've unlocked both simplification and growth potential in our recent Mitsubishi MOU announcement, focusing our combined teams on what they do best. We advance automation and digitization across our global manufacturing network, scaling successful pilots, improving reliability and efficiency and driving over a dozen new projects to deliver cost savings and smarter operations. We continue to invest in R&D related to health and wellness solutions. And in February, we announced a partnership with Asahi Global Foods Corporation to distribute an innovative postbiotic design to address challenges with stress, mood and sleep. The expansion of our Regen Ag partnership and BioSolutions business is playing an important role in driving farmer resiliency, creating new high-value avenues for the sale of differentiated crops. Underpinning all this work, we remain focused on capital discipline and actively managing traditional channels to return cash to shareholders. As we look ahead to the remainder of the year, this self-help agenda will be critical to positioning ADM to manage through what continues to be an uncertain external landscape. We remain confident in our team's ability to take the balance of actions needed to support the result that matches the high expectations we have set for ourselves. Our team is keeping close to our customers and remain alert to both the challenges and the opportunities that we're seeing in the market. We're taking full advantage of the breadth of the investment we have made in our business over the past decade and the agility that provides. From our crush and export capabilities across the U.S., Argentina and Brazil to our expansive origination network to our expertise in formulation to our portfolio of ingredients, including all natural colors and flavors, all of these add to ADM's ability to support rapidly evolving needs. With that, let me hand it over to Monish to share a deeper dive into first quarter financial results and our 2025 outlook.

Thank you, Juan. Please turn to Slide 6. To start, let me provide some perspective on the operating backdrop that shaped the first quarter for the AS&O segment. As we expected, market disruptions related to biofuel policy uncertainty negatively impacted biodiesel and renewable diesel margins and U.S. vegetable oil demand. We also experienced higher global soybean stock levels and an increase in Argentinian crush rates, which pressured global soybean meal value. Additionally, trade policy uncertainty, particularly with Canada and China, created volatility throughout the quarter for canola meal and oil. Taken together, these factors resulted in significantly lower meal and vegetable oil values, pulling down margins across our businesses. Overall, against this backdrop, AS&O segment operating profit for the first quarter was $412 million, down 52% compared to the prior year quarter with declines across all subsegments. In the Ag Services subsegment, operating profit was $159 million, down 31% versus the prior year quarter, driven primarily by lower North American origination export volumes as order flow was impacted by trade policy uncertainty. North American origination results also reflect the additional expense of $34 million recorded in the period for anticipated export duty. Global trade results were lower relative to the same quarter last year, largely due to the negative timing impact, partially offset by higher destination marketing volumes and margins. Total net timing impacts were approximately $48 million year-over-year. In the crushing subsegment, operating profit was $47 million, down 85%. Consistent with the previously provided outlook, both global soybean and canola crush execution margins were significantly lower than the prior year quarter. Global executed crush margins were approximately $13 per ton lower in soybeans compared to the prior year quarter and approximately $40 per ton lower in canola. By region, crush margins were down significantly in North America. North America soybean crush margins were negatively impacted by additional capacity from new crushing facilities and lower soybean oil demand stemming from biofuel policy uncertainty. North America canola crush margins were negatively impacted by trade policy uncertainty and lower canola oil demand for biofuel production. There were net negative timing impacts of approximately $36 million year-over-year. In the Refined Products and Other subsegment, operating profit was $134 million, down 21% compared to the prior year quarter due to lower biodiesel and refining margins. In EMEA, margins declined due to significantly lower biodiesel export volume. In North America, refining margins were negatively impacted by additional industry crush capacity and lower demand for vegetable oil due to biofuel policy uncertainty. There were net positive timing impacts of approximately $34 million year-over-year. Equity earnings on the company's investment in Wilmar was $72 million, down 52% compared to the prior year quarter. Overall, during a challenging quarter, the AS&O team executed on operational improvement like plant and network consolidation and took actions to accelerate cost savings, starting with targeted organization realignment to partially mitigate the less favorable market conditions and be in an excellent position to capture opportunities as we move through the remainder of the year. Turning to Slide 7. For the first quarter, Carbohydrate Solutions segment operating profit was $240 million, down 3% compared to the prior year quarter. Operating profit for this segment came in slightly ahead of our previously provided segment guidance for the quarter. In the Starches and Sweeteners subsegment, operating profit was $207 million, down 21% compared to the prior year quarter. In North America, S&S results were lower due to lower starch margins from demand softness in the paper and corrugated markets, as well as lower North American wet mill ethanol results due to lower ethanol margins. In EMEA, S&S volumes and margins declined as higher corn costs and increased competition negatively impacted results. As a partial offset, North American liquid sweetener margins improved relative to the prior year quarter due to better product mix. Global wheat milling margins and volumes also improved relative to the prior year quarter, largely due to volume growth with key customers. In the Vantage Corn Processors subsegment, operating profit was $33 million, up compared to the prior year quarter due to higher ethanol volumes and improved ethanol margins relative to the prior year quarter. Overall, ethanol EBITDA margins per gallon were slightly negative in the quarter. Turning to Slide 8. In the first quarter, Nutrition segment revenues were $1.8 billion, down 1% compared to the prior year quarter, primarily due to negative currency impact. Human Nutrition revenue was up 4% due to strong Flavors growth and M&A, which offset headwinds related to supply chain challenges from Decatur East. Animal Nutrition revenue was down 6% as negative currency impacts and lower volumes offset mix benefits. Nutrition segment operating profit was $95 million for the first quarter, up 13% versus the prior year quarter. Human Nutrition subsegment operating profit was $75 million, down 1% compared to the prior year quarter as improved performance in Flavors was more than offset by declines in specialty ingredients and health and wellness. Animal Nutrition subsegment operating profit of $20 million was higher than the prior year quarter due to higher margins supported by ongoing turnaround actions. Please turn to Slide 9. Through the end of the first quarter, the company generated cash flow from operations before working capital of approximately $439 million, down relative to the prior quarter due to lower total segment operating profit. Solid cash generation and our strong balance sheet remain a critical differentiator for the company. We will continue to seek opportunities to further strengthen our balance sheet to provide financial flexibility to organically invest in the business to enhance returns and create long-term value. We are also taking actions to ensure working capital excellence through stronger rigor on working capital planning, inventory rationalization, improvement of key account payable metrics and more timely collection of past due balances. At the same time, we remain committed to returning cash to shareholders and we returned $247 million to shareholders in the form of dividends in the quarter. Turning to Slide 10. We have provided details to support our 2025 consolidated outlook. Earlier today, we affirmed our full year adjusted EPS guidance. We continue to expect adjusted earnings per share to be between $4 to $4.75 per share, though we now expect to be at the lower end of the guidance range given the current market backdrop. In particular, we remain cautious about our second half outlook for crush margin improvement as current domestic crush replacement margins are below our outlook. With the uncertainty related to tariff policy and macroeconomic conditions, we are not providing segment operating profit guidance for future quarters. We are providing directional guidance at the segment level for the full year. Our directional guidance for operating profit for the full year for Carbohydrate Solutions and Nutrition has not changed from our previously provided indication. With performance to date and continued pressure on crush margins in the second quarter, we are lowering our directional guidance for AS&O for the full year to be lower than the prior year. As an additional data point, current crush margins for the second quarter are trending lower than the first quarter. I also want to share some updates on our overall assumption. We still expect better crush and biodiesel margins in the second half of the year as clarity on renewable volume obligation or RVO is expected to support strong U.S. demand for crop-based vegetable oil. We also expect to deliver our $200 million to $300 million cost savings target for the year and have already taken several actions that are delivering savings. We are working thoughtfully to accelerate saving realization where possible. We have seen some signs of weakening customer demand, particularly in Carb Solutions and have lowered our volume expectations for select markets and products. While we are not embedding any significant macroeconomic slowdown in our guide, we are actively monitoring consumer demand. To conclude, as we navigate 2025, our focus will remain on what is within our control. A full commitment to remediating the material weakness and making strides to strengthen our internal controls, driving execution, to improve operational performance and lower cost while sustaining functional excellence, simplifying our portfolio to enhance focus on core competencies while unlocking additional capital to drive value and position the company for long-term success. These efforts position us in our ability to navigate the current dynamic environment and reinforce our confidence in delivering on our commitments. Before I hand it back to Juan, I want to take a few minutes to thank all my ADM colleagues for their dedication and focus in delivering for our customers and helping to create long-term value for our shareholders. Back to you, Juan.

Thanks, Monish. I'll briefly close by recapping our focus as we continue the path into 2025. As I said at the top of the call, we will continue to focus on both execution, agility and our self-help agenda. Our teams are monitoring the evolving geopolitical and macroeconomic landscape, and they are taking actions as we get more clarity about both the short and long-term situation. Importantly, we are leveraging cost management, strategic simplification, targeted investments and capital discipline to ensure we are prepared for a multitude of scenarios. The potential impacts on our mitigating actions look different for each part of the business. For Carbohydrate Solutions and Nutrition, we are paying close attention to overall consumer sentiment and the potential for an economic slowdown to mitigate against this, we're taking aggressive action on our manufacturing and SG&A costs. In Nutrition, specifically, we are focused on getting our East plant fully ramped up, optimizing our Animal Nutrition business model, leveraging our leading specialty ingredients portfolio, including all natural colors and flavors, and ensuring we are continuing to execute against a healthy opportunity pipeline in flavors and health and wellness. For Ag Services and Oilseeds, we are monitoring the global trade and biofuel policy environment to ensure that we can enable the export market for our vast origination footprint and take advantage of improving demand conditions later in the year. On trade policy, we have seen positive signals with both delays in implementing tariffs to potential avoidance of tariffs and counter tariffs. The decision regarding USTR's Section 301 proposal have mitigated some of the potential impact of transporting commodity products between China and the U.S. And more broadly, for China exports, we will need to see where things stand as we approach the U.S. soybean harvest in the October to December period. Beyond trade, strong policy support for biofuels, including clarity on RVO is expected to support strong U.S. demand for crop-based vegetable oils. In this business, beyond general market improvements, we will continue our focus on both cost management and strategic simplification self-help efforts to manage through uncertainty. As noted by Monish, these factors support our confidence in our full year guidance for 2025, though with current fundamentals, we will be at the lower end of our range. We are a U.S. company that is fundamental to the global food, feed and energy supply chains, connecting consumers with farmers to fuel the world and keep the U.S. agriculture sector competitive. We have a long track record of navigating cycles and are focused on resiliency, which comes from our unparalleled asset network and our employees' commitment to excellence. As in the past, regardless of external challenges and market disruptions, ADM is working with our farmers and customers to be a source of strengthening the economy, always fulfilling our mission to unlock the power of nature, to enrich the quality of life. With that, we'll take your questions now. Operator, please open the line.

Good morning and thanks for the question. Maybe just to start out, I wanted to ask on your expectation for the RPO and how this guides your outlook for 2025? So when we think about biodiesel margins in the back half of the year, should we be thinking that we could see a return to last year's levels? When we look at crush margins, is the assumption that we could see a return to kind of the original guidance, which I think was $45 to $55 per metric ton for soy and $50 to $70 for canola? Just any help on kind of the shape of the year in terms of the second half and how the RVO influences that. Thank you.

Yes. Thank you, Tom, for the question. As you pointed out, we see a strong RVO as the most important driver for the biofuel outlook. We understand that the RVO's role is being developed, and we are engaged with the administration on the important role of the RFS and strong RVOs to support the domestic market for U.S. farmers, and to support a strong American energy independence. And we are confident that EPS is a priority. So of course, at the moment, the industry is not running at rates to satisfy mandated volumes. And we expect, and the logic implies that margins need to go up to bring run rates higher in the second half. When we go to crush, and we're probably going to see that by RINs improving as we go forward. When we go to crush, we have seen strong demand for soybean meal. Of course, there has been a strong crush rates in Argentina, Brazil and the U.S. But we've seen that leg is supportive. Of course, when we cannot produce all these biofuels in the U.S., oil goes to fight for export markets. And that's the weak leg at this point in time. So we expect that with RVOs coming back, we will be able to come back to the original expectations that we had at the beginning of the year.

From a mathematical perspective, to address your specific comparison, in the first quarter, we ended $13 below last year, which puts us around $40 to $43. For soy, last year's canola was about $100, meaning we were approximately $35 to $40 lower. Currently, the second quarter is trending lower than the first quarter in terms of crush rates. Some of this is due to timing, as we secure bookings before the quarter begins. So, Q2 is down for both canola and soy. As Juan mentioned, we anticipate a ramp-up in the second half. However, this will result in a wider range since Q1 and Q2 are lower. Initially, we projected being in the $45 to $55 range, but we are now adjusting this to $40 to $65 for soy, and for canola, we anticipated $50 to $70 but are now looking at $45 to $65. Juan clarified that when we rebound in the second half, we expect to return to the margins we originally anticipated. However, since the first half is lower, it affects the overall figures. I hope this clarifies your question.

Thank you. That was very helpful.

Hi, good morning. Thanks for taking my question.

Good morning.

I actually wanted to follow up on the RVO. Good morning. Just wanted to follow up on the kind of RVO line of questioning. Is there a specific RVO kind of number or range that you're assuming to get to those types of outcomes or how do you maybe think about that, number one? And number two, just more broadly, what is a positive RVO outcome for ADM? Is there like a breakeven RVO above which you see it as a positive outcome below, which is negative? We've obviously seen the reporting north of $5 billion. So I'm just curious how you think about maybe the range of outcomes and how it impacts your business? Thanks.

Thank you, Andrew. I would say the industry's request is approximately $5.2 billion for biomass-based biodiesel and around $15 billion for conventional biofuels, totaling about $25 billion to $25.5 billion. We are in discussions with the administration and believe the EPA recognizes the significance of these issues. This aligns with the administration's priorities to support agricultural farming by expanding export markets and strengthening domestic consumption. Biofuel plays a crucial role in achieving these goals and enhancing energy independence. We have completed the comment period, which ended in April, and we anticipate that the administration will address these matters soon. The industry is relying on this.

Just Andrew, I'll expand on your question regarding the impact to ADM for the second half of 2025. The assumption is that replacement margins would increase. If those margins do not rise by the end of the year, it would result in an additional headwind of $0.50. Therefore, we anticipate a recovery in the second half, influenced by RVOs and crush margins, which are largely determined by what RVOs become.

Got it. Thank you very much.

Good morning. Thank you for the question. I want to ask about RPO. I understand there was a $34 million positive timing benefit year-on-year. However, even when adjusted for that, considering the weak environment in the U.S. and significantly lower export volumes from EMEA, I’m curious about what contributed to the strength there. Although it's much lower than in previous years, before the recent RD rush, it was a pretty good performance. I'm just wondering what the positive factors were given the challenging circumstances in the U.S.

So Heather, I would say, yes, in the short run, it was a little better. But when you look at it for the whole year and how our guide is based, I would say, in total, we still continue to see RPO to be softer. And you have seen most of the items, biodiesel margins have already come off significantly. And part of it is driven by just extra volume, pretreatment capacity, etc. In EMEA, the margins are also significantly lower than the prior year, where again, we experienced benefits from U.S. SME market flows. And then third, when you just think about the backdrop with the implementation of 45Z as well as all the extra refining capacity that exists, that will continue to weigh on margins. So I would say, in total, taken together, RPO will be significantly low versus the prior year. And that's what we had thought coming into the year, and that's what we continue to think sitting as of right now.

Okay. Thank you.

Hi everyone. This is Rahi on for Ben. Thank you so much for the color today. Just regarding tariffs, can you give us more color on trade flow shift, i.e., how you're replacing Chinese demand? And maybe how much of a drop in volume was related to China and Ag Services. Do you have a percentage of profit or revenue that normally relates to China? Thank you so much.

Yes. Hi Rahi, at the end of the day, if you look at the first quarter, the impact of tariffs has not been that significant. The biggest effect we experienced was due to speculation about the USTR Section 301 maritime issue. However, when the USTR issued a ruling, it effectively removed most of the risk for agricultural exports. We were pleased that the administration decided to pause implementation of certain measures for 90 days while we negotiate agreements with various parties. Regarding Mexico and Canada, 98% of our products are exempt from export tariffs, so we did not feel any impact there. For corn, Europe has delayed its retaliation until July and for soybeans until December. With respect to China, we expect the U.S. to be less competitive during the second and third quarters as Brazil and Argentina will be more competitive. The situation will become clearer after the U.S. harvest in October. We are working to offset these impacts; we engage directly with 60,000 farmers in the U.S., and access to export markets is crucial for them. There will be export markets where we will gain share. It's also worth noting that China has shifted more reliance to Brazil since the trade issues in 2017 and 2018, reducing its dependency on U.S. exports, which is about 20 million tons for soybeans. Overall, we are satisfied with the favorable outcome of USTR Section 301 for agricultural exports.

Okay. Thank you so much.

You're welcome.

Apologies about that. Hi, good morning. Thanks for taking the question, here. Just wanted to ask about the soy crush industry. Just with all the announcements with new crush capacity coming online in North America and then just with the weak fundamental backdrop that we've had over the last several months, how have you heard of any signs of rationalization or signs of pause in adding this new capacity in the industry? Do you anticipate anything to come online or be delayed in 2026 and beyond?

Yes, we can speculate about what others are doing, but we focus on what we can control. As mentioned earlier, we are in the process of closing one of our plants in Kershaw. We continue to evaluate the competitiveness of our facilities and have several initiatives in place to improve that. We’ve seen an uptick in volumes unexpectedly. The industry often experiences plant shutdowns when demand declines, which has also occurred in biodiesel with many non-integrated plants going offline. It’s important to understand that the capacity we’ve built was in response to anticipated Renewable Volume Obligation mandates, which we believe is crucial for clarity. We are actively developing a renewable green diesel sector, and many have invested in expectation of supporting U.S. manufacturing. Therefore, clarifying the regulations now is vital for making sense of all the invested capacity.

Thank you.

Good morning. And thanks for taking my question. I wanted to ask on Argentina, cited as a headwind for crush in the quarter. But we've been kind of seeing some headlines that farmer selling there is off to a historically slow start. So maybe you could just put a finer point around what you've assumed for the commercialization of that crop for the balance of the year as it relates to the guidance? Thank you.

Yes, Steven. In Argentina, the farmer basically kept about 7 million tons of the old crop waiting for the valuation that in reality did not happen. So I would say, you should expect now the farmer to become a little bit more regular commercializer of the crop as they need to take advantage of the tax advantages they get from the government before they expire in about two months. So I think you're going to see a little bit of an acceleration. But yes, as an Argentine farmer myself, we withheld about 7 million tons of this, expecting a devaluation that didn't come.

Hi. Good morning. Thank you so much. So my question is on Starches and Sweeteners. Could you comment on what volume growth was for S&S in the quarter? And more importantly, what volume growth you expect for the full year? I heard you say you're seeing some weakness in some customer demand and adjusted volume outlook because of that. So any thoughts on volume growth as we think about 2025?

Yes. Thank you for the question, Tami. Listen, when I think about the overall Carb Solutions business, and we have said our guidance was slightly lower than last year, and we are reiterating that guidance. We see, in general, solid demand, solid volumes and margins across the business. There are some pockets of weakness here or there. One, our results in Europe are going to be a little bit lower because we have higher corn costs in Europe and a little bit lower volumes. And there is some weakness in Starches in either the paper industry, maybe not running in all cylinders, and some of the exports to Mexico with all this uncertainty about tariffs or no tariffs, I think that maybe some of the exports from the U.S. to Mexico has been a little bit soft in March, maybe picking up a little bit in April. So I would say the overall tone is in general solid but not very robust, if you will.

Understood. Thank you.

You're welcome.

Yes, good morning. I want to ask about a couple of things to clarify regarding your Q1 earnings and the outlook. In VCP, firstly, you reported solid operating income, despite AS&O margins being at multiyear lows. How did you achieve better results both year-on-year and quarter-on-quarter? How should we approach this for the rest of the year? Similarly, regarding Nutrition, the Q1 guidance indicated a 50% drop year-on-year, but you instead delivered 13% growth. What accounted for the difference compared to expectations? Does this suggest that the full-year guidance you reiterated indicates much stronger earnings growth than previously anticipated?

Yes. Thank you, Salvator. So let me take that by pieces. So on the ethanol side, as you pointed out, I think our team outperformed the markets and the industry. I think it was good risk management by the team. So, kudos to the team. In general, we see, hopefully, margins improving over the year for ethanol. But ethanol in this environment is a little bit of a question mark. We believe that ethanol could potentially see some benefits from higher exports as some of these trade agreements get resolved, because there are opportunities as a very cheap oxygenate for ethanol to make it into blends around the world. When we think about Nutrition, I think we've been highlighting that we've been doing a lot of foundational improvements in Nutrition. And at one point in time, they start to come into the P&L. So we started to see the fruits of some of these improvements. I think that our value proposition continues to resonate strongly in the Flavor area, in the Health & Wellness area, especially Health & Wellness, a lot of the biotics coming into play. They do very well there. I think we have had a lot of successes or we are working a lot in terms of things like Ag replacement or Ag extension, data replacement, Beverage industry continues to favor some of our solutions. And we have seen a lot of activity and requests for our line of natural colors. And we see our teams engaging with our customers on that. So it was purely driven by the improvement in Flavors, the strength in Health & Wellness and also improvements in Animal Nutrition. Animal Nutrition, although not a revenue growth story, it's a margin improvement story, and the team has been working hard at that. And we started to see the improvements to that as well. Of course, Specialty Ingredients has been the downside of Nutrition and the headwind, and we have been to report that finally, the East plant is being commissioned right now. So it's starting to operate. And we expect that to be a positive year-over-year for the second half of the year if the plant gets to full capacity.

Salvator, just one more for you on ethanol cadence, we were slightly below breakeven in Q1. And we expect to be slightly above breakeven in Q2 based on where we are today.

Thank you, Monish.

Good morning guys. I just wanted to confirm, Decatur would be fully restarted by the second quarter. So should we assume some contribution for the second quarter? Or should we assume the contribution starting in the second half? And remind us of all the benefits for the company once this plant is fully up and running and operational. Thank you.

Yes, Manav. I think you should consider, given that it is a very complex plant that the impact will be in the second half of the year. So the plant is ramping up capacity right now, but effectively, it will impact the P&L in the second half. And we have said before, the impact of this plant being down was about $25 million per quarter for Nutrition, so that's kind of the expectation for the second half of the year.

Thank you.

We'd like to thank everyone for joining the call today and for their ongoing interest in ADM. If there are additional questions following the call today, please feel free to reach out directly to me. Have a wonderful rest of your day.