Content analysis
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Legalese | ||
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H.S. freshman Good
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Financial report summary
?Risks
- Geopolitical conflicts and actions arising from them may have an adverse effect on the availability and prices of raw materials and energy supplies, cause supply chain disruptions, or contribute to volatility in foreign exchange and interest rates.
- Changes in consumer practices, preferences and perceptions may lessen the demand for our products, which could reduce our sales and profitability and harm our business.
- Economic conditions may adversely impact demand for our products, reduce access to credit, affect investment returns and cause our customers and others with whom we do business to suffer financial hardship, all of which could adversely impact our business, results of operations, financial condition and cash flows.
- Our reliance on certain industries for a significant portion of our sales could have a material adverse effect on our business.
- Pandemics could have a material adverse effect on our business.
- The uncertainty of acceptance of products developed through biotechnology could affect our profitability.
- Our future growth could be negatively impacted if we fail to continue introducing innovative new products and services or if competitors or customers independently identify or develop new solutions that could compete with our products and services.
- It may be difficult to preserve operating margins and maintain market share in the highly competitive environment in which we operate.
- Due to market volatility, we may be unable to pass potential increases in the cost of corn and other raw materials on to customers through product price increases, to purchase quantities of corn and other raw materials at prices sufficient to
- sustain or increase our profitability, or to supply product quantities and meet shipment delivery requirements that our customers demand.
- Inputs to our procurement, production processes and delivery channels, such as raw material, energy, and freight and logistics, may experience price fluctuations, supply chain interruptions, and shortages that could adversely affect our results of operations.
- An inability to contain costs and working capital could adversely affect our future profitability, cash flows, and growth.
- Operating difficulties at our manufacturing facilities and liabilities relating to product safety and quality could adversely affect our operating results.
- Global climate change and legal, regulatory, or market measures to address climate change, may negatively affect our business, operations and financial results.
- We may not successfully identify and complete acquisitions, divestitures, or strategic alliances on favorable terms or achieve anticipated synergies relating to any acquisitions or alliances, and such transactions could result in unforeseen operating difficulties and expenditures and require significant management resources.
- We operate a multinational business subject to the economic, political and other risks inherent in conducting operations in foreign countries and with foreign currencies.
- Our profitability could be negatively impacted if we fail to maintain satisfactory labor relations.
- The inability for us to attract, develop, retain, motivate and maintain good relationships with our workforce, including key personnel, could negatively impact our business and our profitability.
- Natural disasters, war, acts and threats of terrorism, and other significant events could negatively impact our business.
- The recognition of impairment charges on goodwill or long-lived assets could adversely impact our future financial position and results of operations.
- Government policies and regulations could adversely affect our operating results.
- Changes in our tax rates or exposure to additional income tax liabilities could impact our profitability.
- We may not have access to the funds required for future growth and expansion.
- Increased interest rates could increase our borrowing costs.
- Our information technology systems, processes and sites may suffer interruptions, security incidents, or failures which may affect our ability to conduct our business and cause significant damage to our reputation.
- Volatility in the stock market, fluctuations in quarterly operating results and other factors could adversely affect the market price of our common stock.
- We may not continue to pay dividends or to pay dividends at the same rate we have paid in our most recent fiscal quarters.
- Any failure by us to maintain effective control over financial reporting could result in loss of investor confidence and adversely impact our stock price.
Management Discussion
- Net sales. Net sales increased 3 percent to $8.2 billion for 2023 compared to $7.9 billion for 2022. The increase in net sales was driven by price and customer mix, partially offset by lower volumes and unfavorable foreign exchange impacts.
- Cost of sales. Cost of sales decreased 1 percent to $6.4 billion for 2023 compared to $6.5 billion for 2022. The decrease in cost of sales primarily reflected lower volumes, partially offset by higher input costs. Our gross profit margin increased to 21 percent in 2023 compared to 19 percent in 2022. The increase in gross profit margin was driven by higher net sales in addition to a decrease in cost of sales.
- Operating expenses. Operating expenses increased 10 percent to $789 million for 2023 compared to $715 million for 2022. The increase in operating expenses during 2023 was primarily attributable to higher compensation costs and spending to build long-term capabilities. Operating expenses as a percentage of net sales was 10 percent in 2023 and 9 percent in 2022.