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| David MacLennan, chairman and CEO, Cargill |
"The past two years have seen significant work to improve performance and position the company for growth," said David MacLennan, Cargill's chairman and CEO. "The structural improvements we've made, as well as favorable conditions in some markets, have yielded strong results. Although the environment continuously changes, we feel good about our underlying progress. By building a more integrated, focused and agile Cargill, we are creating the momentum for growth and success for our customers and partners."
Higher sales of grain, oilseeds and metals helped year-end revenues grow 2 percent to $109.7 billion. For the fourth quarter, revenues rose 4 percent to $28.3 billion.
Leading the company’s successful results for the fiscal year was the Animal Nutrition & Protein segment. Segment results were up significantly from last year, led by exceptional performance in global protein, especially in the first half of the year. On the protein side in North America, consumer demand remained strong for beef at retail and eggs on the foodservice side.
According to the company, poultry posted higher earnings for the year, with increased exports of cooked chicken from Southeast Asia, higher fresh chicken sales in Europe and improved performance in China.
On the protein side of the business during the fiscal year, Cargill sold four cattle feed yards in the US and an egg processing facility in Canada. It purchased Forth Worth, Texas-based Five Star Custom Foods, which processes cooked protein products. Cargill also converted its Columbus, Nebraska, facility from fresh to cooked meats.
The company formed poultry joint ventures with leading food companies in Indonesia and the Philippines, and began expanding its own poultry processing capacity in Thailand. In addition, Cargill acquired Pollos El Bucanero, one of Colombia's leading producers of chicken and processed meat products, at the start of fiscal 2018.
The Food Ingredients & Applications segment was the second-largest contributor to earnings, with results up in both year-end and fourth quarter. “Throughout the year, the segment focused on strengthening its operating efficiencies and commercial capabilities, including a modernized deployment of sales, marketing and technical resources to better serve customers' changing needs,” according to the company.
Cargill opened two food ingredients innovation centers during the year – one in Shanghai focusing on collaborative product development with food companies, and another in Minneapolis for food and nutrition research and development.
Cargill reported that in order to drive financial performance in fiscal 2017 and beyond the company:
• Set a strategic direction to be the leader in nourishing the world in a safe, responsible and sustainable way;
• Continued building differentiated capabilities for future growth, including digitalization and analytics, and sustainable supply chains;
• Reshaped its business portfolio through $1 billion of investment in strategic acquisitions, joint ventures, and new or expanded facilities, as well as $700 million in divestitures of non-strategic assets; and
• Repurchased about $2.1 billion in long-term debt, which will lower future interest expense.
