Good morning and welcome to the ADM First Quarter 2025 Earnings Conference Call. All lines have been placed on a listen-only mode to prevent background noise. As a reminder, this conference call is being recorded. I'd now like to introduce your host for today's call, Megan Britt, Vice President, Investor Relations for ADM. Ms. Britt, you may begin.

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 Hadalawala, 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 calls. Please turn to slide four. Today, ADM reported adjusted earnings per share of 70 cents. Total segment operating profit was 747 million dollars for the quarter. Our trailing four-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 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. Our services and oil seats 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 five. 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 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 crash 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 for our North America soy assets and we're 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 and flavors has supported the 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 advanced 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 RegenAg 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 reminder 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've 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 crash and export capabilities across the US, 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 six. To start, let me provide some perspective on the operating backdrop that shaped the first quarter for the ASNO 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 crust 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 overall. Against this backdrop, ASNO segment operating was $412 million, down 52% compared to the prior quarter with declines across all subsegments. In the Ag Services sub-segment, operating profit was $159 million, down 31% versus the prior quarter, driven primarily by lower North American origination export water 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 impacts, partially offset by higher destination marketing volumes and margins. Total net timing impacts were approximately $48 million year-over-year. In the crushing sub-segment, 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 quarter. Global executed crush margins were approximately $13 per ton lower in soybeans compared to the prior 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 sub-segments, operating profit was $134 million, down 21% compared to the prior 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 from the company's investment in Wilmar was $72 million, down 52% compared to the prior quarter. Overall, during a challenging quarter, The ASNO team executed an 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 solution segment operating profit was $240 million, down 3% compared to the prior quarter. Operating profit for this segment came in slightly ahead of our previously provided segment guidance for the quarter. In the starches and sweeteners sub-segment, operating profit was $207 million, down 21% compared to the prior quarter. In North America, SNS 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, SNS 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 quarter, largely due to volume growth with key customers. In the Vantage corn processor sub-segment, operating profit was $33 million up compared to the prior quarter due to higher ethanol volumes and improved ethanol margins relative to the prior 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 quarter, primarily due to negative currency impacts. Human nutrition revenue was up 4% due to strong flavors growth and M&A, which offset headwinds relative to supply chain challenges from Decatur East. Animal nutrition revenue was down 6% as negative currency impacts and lower volumes. Nutrition segment operating profit was $95 million for the first quarter, up 13% versus the prior quarter. Human nutrition sub-segment operating profit was $75 million, down 1% compared to the prior quarter, as improved performance and flavors was more than offset by declines in specialty, ingredients, and health and wellness. Animal Nutrition sub-segment operating profit of $20 million was higher than the prior quarter due to higher margins supported by ongoing turnaround action. Please turn to slide nine. To 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 table 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 dollars 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 four dollars to four dollars and 75 cents 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 asno 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 i also want to share some updates on our overall assumptions we still expect better crush and biodiesel margins in the second half of the year as clarity on renewable Volume Obligations, or RBOs, is expected to support strong U.S. demand for crop-based vegetable oil. We also expect to deliver our $200 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 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 commitment. 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 us. 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 investment and capital discipline to ensure we are prepared for a multitude of scenarios the potential impacts and our mitigating actions look different for each part of the business for carbohydrate solutions and nutrition we're 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 sgna costs in nutrition specifically, we are focused on getting our yeast 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 the healthy opportunity pipeline in flavors and health and wellness. For our 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 RBOs, 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 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 strength in 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.

As a reminder, if you'd like to ask a question, you can press star, followed by one on your telephone keypad. Our first question for today comes from Tom Palmer of Citi. Your line is now open. Please go ahead.

Good morning, and thanks for the question. Maybe just to start out, I wanted to ask on your expectation for the RVO 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 per soy and 50 to 70 per canola? Just any help on kind of the shape of the year in terms of the second half and how the The RBO influences that.

Yes. Thank you, Tom, for the question. As you pointed out, we see strong RBOs as the most important driver for the biofuel outlook. We understand that the RBOs' role is being developed, and we are engaged with the administration on the important role of the RFS and the strong RBOs to support the domestic market for U.S. and to support a strong American energy independence. And we are confident that EPS sees this as 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 crash, and we're probably going to see that by rinse improving as we go forward. When we go to crash, we have seen a strong demand for soybean meal. Of course, it has been strong crash rates in Argentina, Brazil, and the U.S., but we've seen that leg is supported. 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 RBOs coming back, we will be able to come back to the original expectations that maybe we had at the beginning of the year just from a math perspective since you asked specific tom first quarter we as as my script says we ended 13 below last year so around in q1 in soy canola was last year was around 100 so we are somewhere we were 40 35 to 40 dollars lower q2 is currently trending lower than q1 from a crust rate perspective part of it is timing because we do get booked on before the quarter is in uh so q2 is lowered both in canola and in in soy and then as juan said we are expecting a ramp up in the second half of course now it's going to be a wider range because q1 and q2 are lower so when we originally said we would be in the 40 to 6 uh we had said 45 to 55 we are now saying 40 to 65 for the year on soy and then canola we had said 50 to 70 we are at the 45 to 65 so as Fawn explained it when we do come back in the second half you would come back to margins that we had originally expected but since the first half is lower the total number gets impacted thank you that was very helpful thank you our next question

comes from Andrew Strzelczyk of BMO the lines now open please go ahead hey good morning thanks for taking the question.

I actually wanted to follow up on the RVO. Morning. I 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, you know, how do you maybe think about that, number one? And number two, you know, 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.

Yeah, thank you, Andrew. I would say the industry asks to a certain degree is like 5.2 billion of biomass-based biodiesel and maybe 15 billion conventional, so a total of 25 billion, 25 and a half billion. I think, as I said, we are engaged with administration. We understand that the EPA understands the importance of this. It helps with all the priorities the administration has set up which is to help the agricultural farming. We need to do that by expanding export markets but also by solidifying internal consumption and biofuel is an excellent way to do that. And also to improve energy dominance which is another objective. So we are engaged, I mean, And as you know, the guidance on all these ended on the 90-day comment period ended in So we're expecting that the administration is tackling this hopefully soon. So, but the industry depends on that.

Just Andrew, I'll build on you ask the impact to ADM for like, I'll just talk second half of 2025 because the assumption is that replacement margins would move up. So if replacement margins did not move up between now to the end of the year, then that's a 50-cent additional headwind. So that's the impact that we are counting on a recovery in the second half, heavily driven.

Got it. Thank you very much. Thank you. Our next question comes from Heather Jones of Heather Jones Research. Your line is now open. Please go ahead.

Thank you for the question. I had a question about RPO. So I know there was a, I think it was a 34 million year-on-year positive timing benefit, but even adjusted for that, given how weak the environment was in the U.S. and the lower, much lower export volumes out of EMEA, just curious what drove the strength there. And I know it's significantly lower than the past few years, but prior to the RD rush we saw over the past few years, I mean, that was a pretty good showing. But just wondering what were the positives in that, you know, given the very challenge backdrop here 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 pre-treatment capacity etc in emea the margins are also significantly lower than the prior year where again we experienced benefits from us sme market flows and then third you know when you just think 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 lower to the prior. And that's what we had thought coming into the year and that's what we continue to think sitting as of right now.

Thank you. Our next question comes from Ben Thura of Barclays. Your lines are now open.

Please go ahead. hey 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 shifts i.e how you're replacing chinese demand and maybe how much of a drop in volume was related to china and ag services you have a percentage of profit or revenue that normally relates to china thank you so much yeah hi raheem um listen at the end of the day, I would say if you look at Q1, if you think how all this started, or this thing has settled, the impact has not been that significant in Q1.

Probably the biggest impact we have had has been from speculation about what the USTR Section 301 maritime issue was going to be. But in reality when USDR issued a ruling it basically almost removed all the risk from agricultural exports. So we've been pleased to see the administration have paused for 90 days the implementation of some of these while we still try to negotiate agreements with the different parties. But if you think about Mexico and Canada, export tariff, basically 98% of our products are exempt from that. So we didn't feel any impact there. Corn, Europe, they delay the retaliation on corn until July and in soybean until December. And although on China we escalated, the reality is the US is not going to be competitive to China for the second and third quarter because that's when Brazil and Argentina become most competitive and we come back, you know, in October when there is the U.S. harvest. So we have until then to see how this clarifies. So that's where we see the situation today. Again, we are working, as you said, how to offset the impact of that. For us, we work directly in the U.S. with 60,000 farmers. It's important for them the access to export markets. so there are going to be export markets where we're going to be gaining share. Remember also that China has moved to Brazil to a bigger extent in the previous issue with trade in 2017 or 18, so the reliance on U.S. exporting to China is not that big. probably for soybeans is in the range of 20 million tons if you will if that were the the the total impact and then um i think china export uh so and so i think that that that's that's the impact at this point in time we were pleased to see as i said usdr section 301 was sold favorably for agricultural experts.

Okay, thank you so much.

Thank you. Our next question comes from Puran Sharma of Stevens. Your line is now open. Please go ahead.

Good morning.

Sorry, Puran, your line is now open. Please go ahead.

Apologies about that. Good morning. Thanks for the question here. Just wanted to ask about the soy crusher industry. just you know 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 have you heard of any signs of rationalization or signs of pause in adding this new capacity in the industry do you uh anticipate um any any anything uh to come online or be delayed uh in 2026 and beyond yeah uh listen we i we can speculate for what others are doing i mean we we try to manage

what we can control as you heard in the prepared remarks i mean we uh we are in the process of shutting down one of our plants in Kershaw. And I think we continue to see, continue to check for the competitiveness of our plants. We have a lot of self-help agenda to try to continue to improve that. Volumes have been improving there on an unplanned nature. Of course, the industry will take some plant shutdowns when demand is not there. We have seen it also in in biodiesel where a lot of the non-integrated plants have to go down. I think it's important to know that all this capacity, the crash capacity, has been brought to comply with the expected RBO mandates and that's why we think it's so important to bring clarity into that because we were in the process of building a renewable green diesel industry and everybody built in anticipation of that, supporting U.S. manufacturing. So I think it's important that the moment we clarify the rules, all this capacity that has been invested in will make sense.

Thank you. Thank you. Our next question comes from Stephen Haynes of Morgan Stanley. Your lines are open. Please go ahead.

Good morning, and thanks for taking my question. I wanted to ask on Argentina, cited as a headwind for crushing the quarter, but we've been kind of seeing some headlines that farmers 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.

Yes, Steven. In Argentina, the farmer basically kept about 7 million tons of the old crop waiting for a devaluation 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 got 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 yeah, as an Argentine farmer myself, we withheld about seven million tons of these expecting a devaluation that didn't come.

Thank you. Thank you. Our next question comes from Atami Zakaria of JP Morgan. Your lines are open. Please go ahead.

Hi, good morning. Thank you so much. So my question is on starches and sweeteners. Could you comment what volume growth was for SNS in the quarter? And more importantly, what volume growth do 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?

Yeah, thank you for the question, Otami. Listen, when I think about the overall curve 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 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's 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 not tariffs. I think that maybe some of the exports from the US 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.

Understood. Thank you.

Thank you. Our next question comes from Salvatore Tiano of Bank of America. Your line's now open. Please go ahead.

Yes, good morning. I want to ask about a couple of things that, to clarify a couple of things about your Q1 earnings and the outlook. In VCP, firstly, you had some pretty solid operating income, even though ethanol margins by our calculations were at multi-year lows. So how How was it so much better, both year-on-year and quarter-on-quarter, and how should we think about it for the rest of the year? And similarly on nutrition, I think the Q1 guidance was for a 50 percent drop year-on-year and said you deliver 13 percent growth. So what was the difference versus expectations, and does this mean that the full-year directional guidance which you reiterated now implies much stronger earnings growth than before?

Yeah, thank you. Salvador, so let me take that by pieces. So on the ethanol side, as you pointed out, I think our team outperformed the markers 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 you know 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 oxygen aid 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 continued to resonate strongly in the flavor area, in the health and wellness area, especially health and wellness. A lot of the biotics coming into pet. They do very well there. I think we have had a lot of successes or we're working a lot in terms of things like egg replacement or egg extension, the dairy 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. It was purely driven by the improvements in flavors, the strength in health and wellness, and also the improvements in animal nutrition. Animal nutrition, although not a revenue growth story, is 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 are happy to report that finally the yeast 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.

Salvatore, just one more for you on ethanol cadence. We were slightly below break-even in Q1, and we expect to be slightly above break-even issues.

Thank you. Our final question for today comes from Upnav Gupta of UBS. Upnav, your line is now open. Please go ahead.

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 second half? and remind us of all the benefits for the company once this plant is fully up and running and operational.

Yeah, Manav, I think you should consider, given that it's 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 plan being done was about $25 million per quarter for nutrition. So that's kind of the expectation for the second half.

Thank you.

Thank you. At this time, I'll now turn the call back to Megan Britt for any further remarks.

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.

Thank you all for joining today's call. You may now disconnect your lines.