Bunge Limited · NYSE:BG
Bunge — Bunge Global — Q2 2020 Earnings Presentation
28 slides from Bunge's earnings presentation, Jul 29, 2020
Slide 1: Q2 2020 Results Review
Q2 2020 RESULTS REVIEW July 29, 2020
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
Slide 3: Today's Agenda
Today’s Agenda CEO comments Financial performance Q&A 3 | Q2 2020 RESULTS REVIEW
Slide 4: Q2 Highlights
Q2 Highlights Excellent industrial performance across all of our core businesses • Record capacity utilization and improved reliability in crushing • Lowest quarterly operating cost for soy crush in the last three years • Exceptional coordination of trade flows Realized benefit from risk management
Slide 5: Bunge Limited Earnings Highlights
Bunge Limited Earnings Highlights Three Months Ended Six Months Ended June 30, June 30, $ millions, except per share data 2020 2019 2020 2019 Net income attributable to Bunge common shareholders-diluted $ 3.47 $ 1.43 $ 2.14 $ 1.71 Adjusted Net income attributable to Bunge common shareholders-diluted
Slide 6: Focus on Cost Management
Focus on Cost Management Q2 SG&A down $28M vs prior year as organizational re-design actions starting to take effect Q2 2019 SG&A Q2 2020 SG&A • Q2 adjusted SG&A down $28M (12) 335 346 (51) #2 • $20M of cost savings Notable 323 items Notable 295 − Organizational savings: ~30% ($ millions) ($ million
Slide 7: Cash Flow Highlights
Cash Flow Highlights Increasingly durable balance sheet as retained cash flow is used to pay down debt Adjusted Funds From Operations (Adjusted FFO) (1) $1,348 $1,096 #2 Retained cash of $546M ($ millions) $317 $100 $317 used to reduce debt $524 $385 2019 Q2 2020 TTM Adjusted FFO Buybacks Dividends
Slide 8: Majority of Net Debt Finances RMI
Majority of Net Debt Finances RMI At Q2 quarter end 84% of Net Debt was used to finance Readily Marketable Inventories (RMI) Net Debt ex RMI: $1.7 $1.8 $0.8 $0.5 $0.9 Net Debt ex RMI / 16% 28% 29% 17% 10% Net Debt (%): #2 $5.8 $6.1 $6.2 $4.8 ($ billions) $4.7 $4.4 $4.4 $4.3 4.9 $3.9 Q2 Q3 Q4 Q1 Q2 2
Slide 9: Liquidity Position Remains Strong
Liquidity Position Remains Strong Bunge has committed credit facilities of ~$4.3 billion, of which ~$3.6 billion was unused and available at June 30, 2020 ($ millions) Amount Drawn Facility Maturity Size Jun 30, 2020 CP Program / Liquidity Facility Dec 2023 $600 $498 2022 Revolving Credit Facility S
Slide 10: Generating Cash Flow to Drive Shareholder Value
Generating Cash Flow to Drive Shareholder Value YTD Capital Allocation Strong credit 817 (85) (17) metrics 715 (142) (42) Shareholder ($ millions) (100) dividends 431 Reinvestment opportunities Q2 YTD (1) Sustaining Preferred Discretionary Dividends to Growth/Prod. Share Retained Share Adj. FFO Capi
Slide 11: Strong Earnings Momentum Drives Higher Returns
Strong Earnings Momentum Drives Higher Returns AROIC captures benefits of earnings driven from utilization of RMI Bunge Limited (excluding Sugar & Bioenergy) 11.7% 11.5% 10.4% AROIC ROIC 9.7% 7.9% 9.1% 8.3% 9.6% 6.5% 5.9% 8.1% 6.6% 6% 6.6% 2015 2016 2017 2018 2019 Q2-20 2015 2016 2017 2018 2019 Q2-2
Slide 12: Cash Flow Yield Demonstrates Bunge's Durability
Cash Flow Yield Demonstrates Bunge’s Durability Bunge Performance 2015 – YTD Discretionary Cash Flow (1) 1,057 20.0% 1,000 973 981 19.1% 18.0% 17.2% 16.0% 800 749 721 14.0% 15.3% 13.7% 13.4% 12.0% 569 ($ millions) 600 10.0% 7.0% 8.0% 400 8.7% 6.0% 4.0% 200 2.0% 0 0.0% 2015 2016 2017 2018 2019 Q2-20
Slide 13: Outlook
Outlook Expect FY2020 EPS to be higher than prior outlook • Agribusiness ahead of prior outlook and prior year • Modest improvement in Edible Oils versus prior outlook, but impacted by COVID-19 headwinds • Non-core segment below prior outlook due to impact of foreign exchange volatility in the first
Slide 14: Closing Remarks and Q&A
Closing Remarks and Q&A BUNGE
Slide 15: Agribusiness: Oilseeds & Grains Definitions
Agribusiness: Oilseeds & Grains Definitions Oilseeds Grains • Oilseed processing • Grain origination ‒ Soybean: U.S., South America, ‒ Grains (corn, wheat, barley, rice) Europe, Asia ‒ Oilseeds (soybean, rapeseed/canola, ‒ Rapeseed/Canola: Europe, Canada sunseed) #2 ‒ Sunseed: Eastern Europe, Argent
Slide 16: Core Segment Volume Highlights
Core Segment Volume Highlights Three Months Ended Six Months Ended June 30, June 30, In thousands of metric tons 2020 2019 2020 2019 Agribusiness 38,035 34,009 71,335 68,438 #2 Oilseeds 18,184 16,990 33,396 33,478 Grains 19,851 17,019 37,939 34,960 Edible Oil Products 2,279 2,328 4,628 4,637 Milling
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation This presentation contains certain "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934. Bunge has reconciled these non-GAAP financial measures to the most directly comparable U.S. GAAP measures in the following slides. These measure
Slide 18: Non-GAAP Reconciliation
Non-GAAP Reconciliation Adjusted Core Segment EBIT, Adjusted Non-Core Segment EBIT, and Adjusted Total Segment EBIT, are calculated by excluding certain gains and (charges), as described above in "Additional Financial Information“ in Bunge’s Q2 2020 earnings press release, from Core Segment EBIT, No
Slide 19: Non-GAAP Reconciliation
Non-GAAP Reconciliation Cash Flows To facilitate a comparison of Bunge’s historical cash flow generation and related trends, Bunge uses the following non-GAAP financial measures: • Adjusted Funds from Operations (Adjusted FFO) • Discretionary Cash Flow • Cash Flow Yield Adjusted FFO is calculated by
Slide 20: Non-GAAP Reconciliation
Non-GAAP Reconciliation Returns on Capital To facilitate a comparison of Bunge’s historical returns on capital and related trends, Bunge uses the following non-GAAP financial measures: • Return on Invested Capital (ROIC) • Adjusted Return on Invested Capital (AROIC) Bunge calculates ROIC by dividing
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation Net income attributable to Bunge to Adjusted Net income (loss) Three Months Ended Six Months Ended June 30, June 30, (US$ in millions) 2020 2019 2020 2019 Net income (loss) attributable to Bunge $516 $214 $332 $259 Adjusted for certain (gains) and charges: Severance, employee
Slide 22: Non-GAAP Reconciliation
Non-GAAP Reconciliation Net income (loss) attributable to Bunge to Total Segment EBIT and Adjusted Total Segment EBIT Three Months Ended Six Months Ended June 30, June 30, (US$ in millions) 2020 2019 2020 2019 Net income (loss) attributable to Bunge $516 $214 $332 $259 Interest income (6) (7) (13) (
Slide 23: Non-GAAP Reconciliation
Non-GAAP Reconciliation Cash provided by (used for) operating activities to Adjusted FFO and Discretionary Cash Flow (US$ in millions) 2020 Q2 YTD 2020 Q2 TTM (1) 2019 2018 2017 2016 2015 Cash provided by (used for) operating activities ($1,502) ($1,226) ($808) ($1,264) ($1,975) $1,904 $610 Foreign
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation Return on Invested Capital excluding certain gains and charges, and Sugar & Bioenergy Segment Trailing 4 Trailing 4 Trailing 4 Trailing 4 Trailing 4 Trailing 4 Quarters Quarters Quarters Quarters Quarters Quarters June 30, December 31, December 31, December 31, December 31, D
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation Return on Invested Capital excluding certain gains and charges, RMI attributable to merchandising, and Sugar & Bioenergy Segment Trailing 4 Trailing 4 Trailing 4 Trailing 4 Trailing 4 Trailing 4 Quarters Quarters Quarters Quarters Quarters Quarters June 30, December 31, Decem
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation Below is a reconciliation of Income (loss) from continuing operations before income tax to Return before income tax, adjusted, as utilized to calculate ROIC and AROIC in the preceding slides: Trailing 4 Trailing 4 Trailing 4 Trailing 4 Trailing 4 Trailing 4 Quarters Quarters
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation Below is a reconciliation of Total equity to Book Equity: June 30, December 31, December 31, December 31, December 31, December 31, (US$ in millions) 2020 2019 2018 2017 2016 2015 Total equity $5,209 $6,031 $6,377 $7,357 $7,343 $6,652 Convertible preference (690) (690) (690)
Slide 28: Slide 28