Bunge Global SA Q1 FY2025 earnings call

Management Statement and Operational Highlights:

• Strategic Initiatives: Planned combination with Vitara expected to close soon despite regulatory delays; terminated CJ Selecta deal, but soy protein concentrate for feed remains attractive; sold European Margarines and Spreads and North American corn milling businesses; closed partnership with Repsol and announced novel crops for renewable fuels in Europe.
• Financial Performance: First quarter exceeded expectations with adjusted EPS of $1.81, adjusted EBIT $406 million; generated $392 million of adjusted funds from operations; liquidity position strong with committed credit facilities and cash balance.
• Outlook: Reaffirmed full-year 2025 adjusted EPS guidance of approximately $7.75; agribusiness results slightly lower than previous outlook; Refined & Specialty Oils similar to previous outlook; Milling up from last year; Corporate and Other more favorable; adjusted annual effective tax rate 21%-25%, net interest expense $220M-$250M, CapEx $1.5B-$1.7B, D&A ~$490M.

Segment Performance:

• Processing: Higher results in Brazil, Europe, and Asia soy crush value chains; lower results in North America, Argentina, and European soft seeds.
• Merchandising: Improved performance in global grains and financial services; offset by lower results in ocean freight.
• Milling: Slightly higher results in North America; offset by lower results in South America; pressured by competitive pricing.
• Corporate and Other: Decrease in corporate expenses due to lower performance-based compensation; $24 million from the divested sugar and bioenergy joint venture.

Guidance:

• Reaffirmed full-year 2025 adjusted EPS guidance of approximately $7.75.
• Agribusiness full-year results slightly lower than previous outlook and down from last year.
• Refined & Specialty Oils full-year results expected to be similar to previous outlook and down from prior year.
• Milling full-year results up from last year.
• Corporate and Other full-year results more favorable than previous outlook and prior year.
• Adjusted annual effective tax rate in range of 21% to 25%, net interest expense in range of $220 million to $250 million, CapEx in range of $1.5 billion to $1.7 billion, depreciation and amortization approximately $490 million.

Risks:

• Regulatory approvals for Viterra transaction could cause delays.
• Uncertainty in U.S. biofuel policies impacting margins.
• Tariff and regulatory uncertainty affecting farmer and consumer behavior.
• Competitive pricing environment pressuring milling margins.
• Volatility in global supply and demand affecting segment performance.

Question and Answer: Q: Follow-up on acquisitions, especially Viterra approval and CJ Selecta termination A: Confident Viterra approval will come soon, strategic merits remain; CJ Selecta terminated as circumstances didn't align.

Q: Processing margins breakdown for U.S. soy, Canadian canola vs other regions A: U.S. soy crush margins similar to last year, North America soft seed margins lower; soy crush margins stronger in Europe, weaker in Argentina; canola in Canada tighter crop, soft seeds in Europe/Black Sea affected by soybean oil competition.

Q: Benefits of Repsol JV A: Repsol is a great partner, helps in lower carbon fuels, provides optionality with novel crops for biofuels.

Q: Tariff impact on Brazilian crush margins and build-out A: Policy will work itself out, flexible footprint allows adjusting between crush, export, and storage.

Q: South America farmer selling and impact on margins A: Argentina farmer selling picked up, Brazil record soybean crop, no take-or-pay this year helps value chain.

Q: Milling divestiture timeline and biofuel RVO update A: Corn milling expected to close by end of Q2 or early Q3; RVO update expected by end of May.