Bunge Limited · NYSE:BG
Bunge — BMO Capital Markets Farm to Market Conference 2015
35 slides from Bunge's conference presentation, May 21, 2015
Slide 1: BMO Capital Markets Farm to Market Conference
BMO Capital Markets Farm to Market Conference MAY 21, 2015 1 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
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: Bunge Limited: A leading global agribusiness & food company
Bunge Limited: A leading global agribusiness & food company Founded: 1818 Net Sales: $58 billion Countries: 40+ Facilities: ~400 3 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 4: Delivering today and building for the future
Delivering today and building for the future Focused on what we do best • Grains and Oilseeds – extracting more value; disciplined growth • Partner of choice for our farmers and downstream customers Delivering higher returns and a better balance • Great execution • Disciplined capital allocation • H
Slide 5: Oilseeds and Grains: The sharpest focus in the industry
Oilseeds and Grains: The sharpest focus in the industry Bunge Player 2 Improved Gross Profit Margins Player 1 Player 3 Ingredients Staple foods Processed foods Commodity (B2B) (B2C) & foodservice Oilseeds Grains Sugar Bunge Raw “where to play” material Coffee Customers chains Cocoa Flavors/ Fragranc
Slide 6: Sugar & Bioenergy plans and performance
Sugar & Bioenergy plans and performance Trading & merchandising • Core activity Milling • Disciplined plan to reduce exposure • Business is stable and improving • Supporting our strong team in building a sustainable business • Finished 2014 adjusted free cash flow neutral 6 BMO CAPITAL MARKETS FARM
Slide 7: EPS growth with consistently high returns
EPS growth with consistently high returns Return on Invested Capital targets (excluding Sugar & Bioenergy segment) (1) Agribusiness Food & Ingredients Bunge 13% 10% 9.5% ~9% 8.4% ~8% 2017 EPS WACC = 7% Target ~$8.50 2014 2017 target 2014 2017 target 2014 2017 target (1) Adjusted for certain gains &
Slide 8: Our execution is focused in four areas
Our execution is focused in four areas Stand for Safety Right Balance Best in Class Winning Footprint 8 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 9: Improving safety drives improvement in overall company performance
Improving safety drives improvement in overall company performance Accelerating and strengthening over a decade of safety improvements in Bunge STAND FOR New global safety leadership reporting to executive committee SAFETY Working to eliminate or control the 5 high potential exposures that acc
Slide 10: Secure competitive edge by assembling the right assets and partnerships in the right places
Secure competitive edge by assembling the right assets and partnerships in the right places Complete key origins WINNING Expansion in key demand markets GLOBAL Add downstream where upstream brings competitive FOOTPRINT advantage Optimize asset portfolio: footprint review, capital partnership
Slide 11: Increases in population and income continue to drive long term demand
Increases in population and income continue to drive impressive growth in long term demand and crop production World Consumption (MMT) World Production of Corn, Wheat 1,200 and Soybeans (MMT) 1,100 2,400 1,000 2,300 900 800 2,200 700 2,100 600 Corn Wheat 2,000 1,900 400 1,800 300 1,700 200 1,600 100
Slide 12: There is a growing mismatch between where crops are produced and consumed
There is a growing mismatch between where crops are produced and consumed Net Exports: Major Origins Net Imports: Major Destinations 140 Brazil 300 100 US 90 130 250 80 120 70 110 200 60 Asia 100 MENA Argentina 150 50 90 40 80 100 30 70 Black Sea 20 60 50 10 50 - - 40 Asia MENA Brazil, Argentina, an
Slide 13: Leading to robust trade growth that fits Bunge's global footprint
Leading to robust trade growth that fits Bunge’s global footprint World Trade of Corn, Wheat, and Soybeans (MMT) 550 500 450 400 350 Trade Expected to 300 Grow ~150 mmt 250 200 13 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 14: Bunge has a winning global Grains footprint in origination and exports
Bunge has a winning global Grains footprint in origination and exports = Strong Bunge presence Canada Black Sea US Gulf Western US Northern Brazil Australia Argentina Center South Brazil 14 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 15: In Grains, our focus has been to fill gaps and capture new flows
In Grains, our focus has been to fill gaps and capture new flows CWB, Canada Nikolayev, Ukraine Barcarena, Brazil Australia • Majority stake through JV • Original project operational in • Opens new flow for corn / • Provides access to high formed with SALIC Q1 2012; capacity of approx. beans in Nort
Slide 16: We have a balanced global Oilseed Processing presence
We have a balanced global Oilseed Processing presence Region with % of Bunge Total and Type Bunge oilseed North America 29% Soybean, Canola processing plant (inclusive of JVs) South America 37% Soybean Europe 19% Soybean, Rapeseed, Sunseed Asia 15% Soybean 16 BMO CAPITAL MARKETS FARM TO MARKET CONFE
Slide 17: Completing a winning global footprint in Oilseeds
Completing a winning global footprint in Oilseeds: targeted growth in key regions Focus on Chain Optimization and Targeted Growth Villeta, Paraguay (JV) Altona, Canada Nikolayev, Ukraine • Produces high-protein • Increasing capacity to • Building a 2.4kmt/day sun / soybean meal for Asia, 2.5kmt/day
Slide 18: Enhance margins through the mix of businesses, products and customers
Enhance margins through the mix of businesses, products and customers Increase Food & Ingredients businesses with tight linkages to upstream Agribusiness RIGHT Food & Ingredients organic margin expansion: category BALANCE growth framework Agribusiness: services and differentiation 18 BMO CAPIT
Slide 19: Global full chain footprint with #1 or #2 market positions
Bunge has a global full chain footprint with #1 or #2 market positions in key regions, with significant growth potential Oil #1 Dry Corn #1 E. Europe Oil Facility Oil #1 Rice Mill Wheat #2 Corn Mill Wheat Mill Oil #1 Wheat #1 #1 Seed Oil Producer Globally, #1 Wheat Miller in Latin America 19 BMO CAP
Slide 20: Right balance: portfolio shift toward more value-added
Right balance: portfolio shift toward more value-added, reducing volatility and increasing returns % Bunge EBIT 2012 Value 2014 Value Future Value added added added 16% 25% ~35% • Grain milling & processing Priorities • Oils & fats • Achieved through a combination of organic and M&A 20 BMO CAPITAL M
Slide 21: Right balance: capital allocation priorities
Right balance: capital allocation priorities Balance sheet strength (Target BBB credit rating) • Investment grade critical • Commodity companies require capital buffer Reinvest in the M&A Return capital business (Capex) to shareholders • Productivity • Filling gaps in • Dividends: ($230m) • Growth A
Slide 22: Growing annual dividends
Growing annual dividends US$ per share of common stock • Dividends have 1.32 increased every 1.17 year since 2001 1.06 IPO, averaging 0.98 ~11% growth 0.90 0.82 • Earlier this week 0.74 0.67 announced a 0.63 0.56 11.8% increase for 0.48 this year 0.385 0.42 • Expect to maintain increases in line wit
Slide 23: Share repurchase update
Share repurchase update Repurchased $200 million of common shares in Q1 2015, completing $975 million program Announced new $500 million program earlier this week 23 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 24: Drive returns by achieving top tier performance in operations and process
Drive returns by achieving top tier performance in operations and process Assess & benchmark performance worldwide BEST IN Measure, prioritize and close performance gaps CLASS Track major initiatives globally Improve knowledge & sharing of best practices globally 24 BMO CAPITAL MARKETS FARM
Slide 25: Agribusiness: major programs & priorities to drive operational excellence
Agribusiness: major programs & priorities to drive operational excellence and improve returns Best in Class Crush Global Margin & Risk Optimization Logistics Management ~$200 million EBIT run rate improvement by 2017 25 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 26: Driving higher value in oilseed processing
Driving higher value in Crush Optimization oilseed processing Industrial / Operational Footprint Process Improvements/ Margin Improvements Management Standardization Optimization • Quality – raw • Footprint • Process • Soybean and material and product optimization optimization tools product flow • C
Slide 27: Global logistics flow management: excellence in planning and execution
Global logistics flow management: Global Logistics excellence in planning and execution Domestic Transportation Port Utilization & Flows Ocean Freight • Reduce costs by using • Increase capacity • Improve optimization of enhanced risk and utilization / OEE vessel operating costs scenario analysis to
Slide 28: In Food & Ingredients, we are building a lean culture of operational excellence
In Food & Ingredients, we are building a lean culture of operational excellence across our businesses C O MMERC IA L O PER AT IONA L Category Asset Leadership Optimization Account Process Management Optimization Value Supply Chain Realization Optimization ~$125 million EBIT run rate improvement by 2
Slide 29: Commercial excellence allows us to build the right portfolio
Commercial excellence allows us to Commercial build the right portfolio and co-create value with our customers for consumers Category Leadership Account Management Value Realization • Increase category value • Improve joint business • Enhance product mix and • Strengthen marketing & planning product
Slide 30: Three key operational programs
We are driving greater productivity, Operational quality and agility through three key operational programs ASSET PROCESS SUPPLY CHAIN OPTIMIZATION OPTIMIZATION OPTIMIZATION • Eliminate resource waste • Increase yields across • Integrated business • Increase total operating processes planning effect
Slide 31: Standardizing and enhancing talent management programs globally
Standardizing and enhancing talent management programs globally • Performance management • Leadership development • Succession planning • Learning management system Building the platform to support business growth and develop our next generation of leaders 31 BMO CAPITAL MARKETS FARM TO MARKET CONFE
Slide 32: Summary
Summary We are fully committed to a zero incident safety culture across all of Bunge We have an industry leading global footprint that we will continue to enhance - our focus is on grain and oilseed value chains Value-added will play an increasingly important role Long-term industry macro drivers ar
Slide 33: BMO Capital Markets Farm to Market Conference
BMO Capital Markets Farm to Market Conference MAY 21, 2015 33 BMO CAPITAL MARKETS FARM TO MARKET CONFERENCE
Slide 34: Backup: non-GAAP reconciliation notes
Backup: non-GAAP reconciliation notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains & charges and Sugar and Bioenergy segment EBIT Trailing 4 Quarter Average December 31, (US$ in m illions) 2014 Operating income before income tax $ 1,331 Sugar and Bioenergy segm
Slide 35: 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: December 31, (US$ in m illions) 2014 Income (loss) from continuing operations before income tax $ 734 Inte
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