Slide 1: Second Quarter 2014 Earnings Conference Call
Second Quarter 2014 Earnings Conference Call JULY 31, 2014 1 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 2: Forward-Looking Statements
Forward-Looking Statements Today’s presentation includes forward-looking statements that reflect Bunge’s current views with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided add
Slide 3: CEO's Comments
CEO’s Comments 3 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 4: Bunge Limited Earnings Highlights
Bunge Limited Earnings Highlights Quarter Ended Jun 30 Six Months Ended Jun 30 $ in millions, except EPS data 2014 2013 2014 2013 Total segment EBIT $418 $239 $493 $562 Certain gains & charges (2) - - - $63 Total segment EBIT, adjusted (1) $418 $239 $493 $499 Agribusiness $311 $170 $390 $345 Food &
Slide 5: Return on Invested Capital (ROIC)
Return on Invested Capital (ROIC) Trailing 4Q Average 8.4% 7.5% WACC = 7% 5.8% 6.3% As of As of Dec 31, 2013 Jun 30, 2014 Adjusted for certain gains & charges Adjusted for certain gains & charges and excludes sugar & bioenergy segment 5 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 6: Bunge Limited Cash Flow Highlights
Bunge Limited Cash Flow Highlights Six Months Ended Jun 30 $ in millions 2014 2013 Funds from Operations (1) $592 $664 Changes in Operating Assets & Liabilities $(1,383) $(1,177) Cash provided by (used for) Operating Activities $(791) $(513) Capital Expenditures $(351) $(470) • Bunge has committed c
Slide 7: Outlook
Outlook Expecting to meet or exceed targeted combined Ag-Foods ROIC of 1.5 points over WACC Agribusiness Lower global crop prices spurring demand and global trade • Livestock economics strong in most regions • Meal demand should continue to be supported by greater usage of corn in feed formulations
Slide 8: Outlook
Outlook Food & Ingredients Expect strong momentum to continue through remainder of the year • Moving into seasonally stronger period of the year • Continued emphasis on productivity, cost control and working capital management • Contributions from Mexico milling operations ramping up as expected Sug
Slide 9: Food & Ingredients Update
Food & Ingredients Update JULY 31, 2014 9 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 10: Performance Management Guiding Principles
Performance Management Guiding Principles Value: focus on value creation above capital Performance costs, measure operational value drivers with Scorecard consistent scorecards Beyond “business Granularity: business unit emphasis as usual” BG Radar Improvement: targets based on continuous Segment 1
Slide 11: We are Focused on Improving Bunge's Returns
We are Focused on Improving Bunge’s Returns Best in Class 2013 Return on Invested Capital 2014f Return on Invested Capital 8.5%+ 7.5% WACC = 7% 5.8% 2013 2014e Adjusted for certain gains & charges Excludes sugar & bioenergy segment Adjusted for certain gains & charges and excluding sugar & bioenergy
Slide 12: Rebalancing Our Portfolio Towards More Value Added
Rebalancing Our Portfolio Towards More Value Added % Bunge EBIT 2013 Future Value Value added added 22% ~35% Grain milling & processing Priorities Oils & fats Achieved through a combination of organic and M&A 12 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 13: Our Downstream F&I Businesses are Important Components of our Value Chains
Our Downstream Food & Ingredient (F&I) Businesses are Important Components of our Value Chains Bunge Oilseed Origination Basic Processing Refining Packaging/Value added Edible Oils Value Chain AGRIBUSINESS FOOD & INGREDIENTS Grain Origination Milling Further Processing Bunge Milling Value Chain AGRI
Slide 14: We Have Been Extracting Greater Value from Our Foods Businesses
We Have Been Extracting Greater Value from Our Foods Businesses… Volume EBIT (1,2) Million metric tons US$ millions 288 295 11.2 241 10.9 11.0 10.6 10.6 173 174 159 10.0 2009 2010 2011 2012 2013 LTM 2009 2010 2011 2012 2013 LTM YTD Jun YTD Jun 2014 2014 Bunge has built a business of global scale & r
Slide 15: Additional Opportunity to Improve Performance
….and There is Additional Opportunity to Improve Performance Expected timing of EBIT $425+ organic EBIT recognition ($US Million) 2014 20% 2015 40% $288 2016 40% Organic growth Altex & performance Total 100% acquisition improvement ROIC 2014 ~9% 2016 11-12% 2013 2016e 15 SECOND QUARTER 2014 EARNINGS
Slide 16: We Are Focused on Commercial & Operational Performance
We Are Focused on Commercial & Operational Performance Commercial Operational Category Asset Leadership Optimization Account Process Management Optimization Value Supply Realization Optimization Innovation 16 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 17: Operational Performance Improvement Initiatives Underway and Making Progress
Operational Performance Improvement Initiatives Underway and Making Progress Initial focus in Operations: • Achieving step change in overall equipment effectiveness & capacity utilization • Improving production yield • Enhancing customer service levels and order fulfillment rate • Decreasing freight
Slide 18: Example - Asset Optimization
Example - Asset Optimization • Edible oil packaging facilities and select Scope wheat/corn milling plants • Projects underway in 19 plants • Improving resource planning Project • Increasing production speed Description • Decreasing idle time & shut-downs 10% Manufacturing 10% Plant Operational Effec
Slide 19: Example - Supply Chain
Example - Supply Chain • Projects underway in all regions: – North America Scope – Brazil – Europe – India • Use of Network Modeling to optimize routes, number of depots and reduce costs to serve Project • Simplifying distribution network to increase “on time in Description full deliveries” • Improv
Slide 20: Summary
Summary Foods business to grow to ~35% of total company EBIT Accomplished through organic growth, performance improvement and bolt-on M&A Provides higher returns, reduces volatility Strong linkage to upstream agribusiness operation 2013 was a record year; expect another record in 2014 20 SECOND QUAR
Slide 21: Thank you
Thank you JULY 31, 2014 21 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL
Slide 22: Sugar & Bioenergy Highlights
Sugar & Bioenergy Highlights Quarter Ended Jun 30 Six Months Ended Jun 30 2014 2013 2014 2013 Merchandising/Trading Volume (000 mt) 1,519 1,462 2,927 3,358 Milling Volume (mmt of cane) 7.0 6.3 7.6 6.5 Industrial Product Sales Volumes Sugar (000 mt) 190 184 315 300 Ethanol (000 mt) (1) 473 403 895 68
Slide 23: Backup: Non-GAAP Reconciliation Notes
Backup: Non-GAAP Reconciliation Notes Total segment earnings before interest and tax (EBIT) Total segment EBIT is consolidated net income attributable to Bunge excluding interest income and expense and income tax attributable to each segment. Total segment EBIT is a non-GAAP financial measure and is
Slide 24: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Below is a reconciliation of total segment EBIT to net income attributable to Bunge: Quarter Ended Jun 30 Six Months Ended Jun 30 ($ in millions) 2014 2013 2014 2013 Total segment EBIT $418 $239 $493 $562 Interest income 33 12 52 21 Interest expense (76) (86) (155) (1
Slide 25: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Below is a reconciliation of earnings per common share-diluted (excl. certain gains & charges) to earnings per common share-diluted: Quarter Ended Six Months Ended June 30, June 30, 2014 2013 2014 2013 Continuing operations: Net income (loss) per common share - dilute
Slide 26: Backup: Non-GAAP Reconciliation Notes
Backup: Non-GAAP Reconciliation Notes Return on Invested Capital: Bunge Limited continuing operations excl. notables Trailing 4 Quarter ended Year ended Quarter ended Quarter Average June 30, + December 31, - June 30, = June 30, (US$ in millions) 2014 2013 2013 2014 Operating income before income ta
Slide 27: Backup: Non-GAAP Reconciliation Notes
Backup: Non-GAAP Reconciliation Notes Return on Invested Capital: Bunge Limited continuing operations excl. notables and Sugar and Bioenergy segment EBIT Trailing 4 Quarter Average June 30, December 31, June 30, June 30, (US$ in millions) 2014 + 2013 - 2013 = 2014 Operating income before income tax
Slide 28: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Operating income before income tax Below is a reconciliation of Income (loss) from continuing operations before income tax to Operating income before income tax: June 30, December 31, June 30, (US$ in millions) 2014 2013 2013 Income (loss) from continuing operations b
Slide 29: Thank you
Thank you 29 SECOND QUARTER 2014 EARNINGS CONFERENCE CALL