Bunge Limited · NYSE:BG
Bunge — CAGNY 2017
68 slides from Bunge's conference presentation, 2017
Slide 1: Bunge Limited CAGNY 2017
Bunge Limited CAGNY 2017 1 | 2017 CAGNY
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: Agenda
Agenda Overview – Strategy & Performance Food & Ingredients Financial Overview 3 | 2017 CAGNY
Slide 4: Our purpose
Our purpose Improving the world’s food production chain is both a great responsibility and a compelling opportunity for significant value creation for our shareholders, farmers, customers and communities. 4 | 2017 CAGNY
Slide 5: Key messages
Key messages Bunge has never been stronger We are focused on what we do best – Oilseeds and Grains - Agribusiness is poised for earnings growth, leveraging powerful, integrated footprint - Food & Ingredients is growing again and is aligned with trends Performance improvement initiatives have s
Slide 6: Scorecard – stronger, better company since 2014
Stand for Safety Right Scorecard – stronger, better company since 2014 Balance Best in Class Winning Footprint Right Winning Best in Stand for Balance Footprint Class Safety Returns-driven allocation capital Complete footprint NOLA port upgrade Significant cost savings and operating efficien
Slide 7: Improved returns
Improved returns Bunge Limited trailing 4Q average ROIC Adjusted for certain gains & charges Disciplined capital Adjusted for certain gains & charges and excludes Sugar & Bioenergy segment management Increased focus on costs, 10.0% efficiency and WACC =7% performance 8.4% 8.6% 8.3% •••••••••••••
Slide 8: Weathered the downturn
2014 Weathered the downturn 2015 2016 Adjusted earnings per share (2014-2016)* Bunge AG Processor Peers Fertilizer Companies Chemical/Seed Index Index Companies Index Source: Capital IQ consensus normalized EPS expected; Agri industry includes ADM, Wilmar, Olam, AGT, GrainCorp, the Andersons, Kernel
Slide 9: Confident in future growth as macro factors improve
Confident in future growth as macro factors improve Bunge’s adjusted EPS $4.83 $4.67 $4.10 2014(1) 2015(1) 2016 2017f Future (1) See appendix of Finance presentation for reconciliation and additional information 9 | 2017 CAGNY
Slide 10: 2017 Outlook
2017 Outlook Expect strong earnings growth Agribusiness Food & Ingredients Sugar & Bioenergy Expect to return to historic range of Expect EBIT in range of $270-290 Expect EBIT in range of $100-120 EBIT in range of $895 - $1,050 million* million* million South America expecting record crops,
Slide 11: Looking beyond 2017 – key Agribusiness-Foods value drivers
Looking beyond 2017 – key Agribusiness-Foods value drivers Incremental EBIT opportunity $US million Global soy crush - utilization and margin expansion(1) $120 $200 Edible Oils & Milling(1) increased value added $100 $125 key customer management Performance improvement benefits (2018-2020) $240
Slide 12: We have the ingredients for significant growth and sustainable value creation
We have the ingredients for significant growth and sustainable value creation Talented and experienced team Focused on Winning Integrated Operational Aligned what we do global value chain excellence with trends best footprint approach 12 | 2017 CAGNY
Slide 13: Focused on what we do best – Oilseeds & Grains
Focused on what we do best – Oilseeds & Grains Soybean The foundation of global food supply: Canola 90%+ of the calories in commercial livestock rations OILSEEDS come from feed grains & oilseed meals Sunflower 40%-60% of human calories come from vegetable oils and grains VALUE CHAINS Signifi
Slide 14: Long term fundamentals are positive
Long term fundamentals are positive We have leading positions in the world’s fastest growing regions Net Exports Net Destination Imports (million metric tons) (million metric tons) Brazil 300 Asia 180 US 240 120 180 Middle East Argentina & Africa Black Sea 120 60 Mexico & Latin 60 - - 05/06 10/11 15
Slide 15: Global growth in trade and crush will be robust
Global growth in trade and crush will be robust World Trade of Corn, Wheat and Soy World Soy Crush MMT MMT 360 340 320 300 280 260 Increase by Increase by ~80mmt ~180mmt 240 220 200 180 160 Source: Bunge analysis 15 | 2017 CAGNY
Slide 16: Crush demand growth will create improved margin economics
Crush demand growth will create improved margin economics Major Origins US+ARG+BRZ Seasonal Crush Utilization We expect demand growth to outpace growth in soy crush capacity - Higher utilization of existing capacity - Increased crush margins to encouraged capacity expansion - To support new invest
Slide 17: Global footprint of integrated Agri-Food assets reduces volatility
Global footprint of integrated Agri-Food assets reduces volatility Grain origination/infrastructure Port terminal Oilseed processing plant Edible oil facility Grain milling facility 17 | 2017 CAGNY
Slide 18: We have been optimizing our industry leading Oilseed footprint
We have been optimizing our industry leading Oilseed footprint We are extending a strong position in soy Continuation of Soy Strategy processing in Europe - In 2006/07 , closed 4 plants in Spain and built 2 new state of the art port based facilities in Bilbao and Cartegena - Restructuring and mode
Slide 19: Oilseed processing facility – Phu My, Vietnam
We have been optimizing our industry leading Oilseed footprint Creates a strategic collaboration Oilseed processing facility – Phu My, Vietnam with two uniquely positioned players - Wilmar on downstream oils - Quang Dung on meal distribution Capture full chain synergies between Crush & Originati
Slide 20: Grains focus: Western Canada G3 Joint Venture
Our focus in Grains has been to fill gaps, strengthen our positions in origins and capture new flows Western Canada G3 Joint Venture Bunge – SALIC JV consisting of former Bunge Canada Grain and CWB assets Provides greater market access for Canadian growers Constructing “state of the art” expor
Slide 21: Grains focus: Northern Brazil port joint venture
Our focus in Grains has been to fill gaps, strengthen our positions in origins and capture new flows Northern Brazil port joint venture 50% partnership with AMAGGI, a leading Brazilian farming and agribusiness company Terfron origination & Builds on existing logistics and barge logistics flow JV
Slide 22: Nikolayev Grain Terminal, Ukraine
Our focus in Grains has been to fill gaps, strengthen our positions in origins and capture new flows Nikolayev Grain Terminal – Nikolayev, Ukraine Well positioned to capture increased Ukrainian export flows of wheat, corn and oilseeds Logistically advantaged to serve EU, the Middle East and Nort
Slide 23: Integrated value chain maximizes results
Integrated value chain maximizes results “where we start” efficiency Supply chain Reduces costs Customer Partner of choice Grain Origination Oilseed Processing Transportation & Logistics Marketing & Distribution Oil Refining & Packaging Wheat, Corn & Rice Milling Market insight Food & Agribu
Slide 24: Our earnings are the sum of integrated activities
Our earnings are the sum of integrated activities that maximizes product value in the chain Gross margin/Mt Agribusiness Food & Grain Origination $5-15/Mt Ingredients Port Elevation $5-10/Mt Marketing & Distribution $2-5/Mt Soy Processing $25-40/Mt Veg Oil Refining $30-40/Mt Value-added Processing $
Slide 25: Operational excellence is the foundation for strong performance
Operational excellence is the foundation for strong performance FOOD & AGRIBUSINESS INGREDIENTS BUNGE LTD OPERATIONS COMMERCIAL & TALENT DEVELOPMENT LOGISTICS OPERATIONAL GLOBAL BUSINESS INITIATIVES SYSTEMS MARGIN MANAGEMENT PROCUREMENT 2018-2020 target: ~$250m 25 | 2017 CAGNY
Slide 26: Our strategy is aligned with growth trends
Our strategy is aligned with growth trends Broad portfolio of oils, fats, edible grains Healthy, less processed foods with innovation capabilities that align with changing trends Food security Multi-origin supply and integrated logistics control Supply chain visibility Quality and logistics control
Slide 27: Strong commitments in valuable areas
Strong commitments in valuable areas 21st Century Value Chains Zero-deforestation commitment, human rights protection, CEO Water Mandate Product traceability Environmental Footprint Reduction Reduce Bunge’s water, waste, energy and GHG footprints Transparency & Governance Board committee ove
Slide 28: Bunge named most sustainable company in Brazil
Bunge named most sustainable company in Brazil 28 | 2017 CAGNY
Slide 29: Food & Ingredients
Food & Ingredients GORDON HARDIE, MANAGING DIRECTOR, FOOD & INGREDIENTS, BUNGE LIMITED 29 | 2017 CAGNY
Slide 30: Integrated value chain maximizes results
Integrated value chain maximizes results “where we start” efficiency Supply chain Reduces costs Customer Partner of choice Grain Origination Oilseed Processing Transportation & Logistics Marketing & Distribution Oil Refining & Packaging Wheat, Corn & Rice Milling Market insight Food & Agribu
Slide 31: Privileged global Agrifood footprint to serve customers
Privileged global Agrifood footprint to serve customers Europe: Oil #1 Oil #1 Dry Corn #1 Wheat #2 Grain origination/infrastructure Port terminal Oilseed processing plant Oil #1 Edible oil facility Grain milling facility Wheat #1 Tightly integrated from “farm to shelf” around the world 31 | 2017 CAG
Slide 32: We operate as a globally integrated company
We operate as a globally integrated company to deliver superior value to our customers What Agri brings to Food What Food & Ingredients brings What Food & Ingredients brings & Ingredients to Agri to Customers Safe, traceable, sustainable, high Risk management Demand foresight quality raw materials E
Slide 33: Food & Ingredients strategic priorities
Food & Ingredients strategic priorities Building a global value added B2B Edible Oils and Grains business Productivity Grow Value Added Increase Key Improvement / Global Accounts Cost Reductions 2018-2020 30% of our volumes Grow revenues from performance deliver 60% of Gross ~10% currently to 20%
Slide 34: Getting fitter – $125 million in productivity and efficiency gains
Getting fitter – $125 million in productivity and efficiency gains since 2014 Before Current Target +13% +12% Total Operating $55M $125M Effectiveness -13% $50M Industrial Unit -5% Costs $20M +30bps +20bps 2014 2015 2016e 2014 – 2016e Yield Net Results Net Results Net Results Net Program Improvement
Slide 35: Growing our value added portfolio is our top priority
Growing our value added portfolio is our top priority Product portfolio aligned Value added products Small changes can bring with food trends are more profitable large profits Value added Health & Wellness A 10% increase in products command Less Processing value added volume on average 2.5X Flavor w
Slide 36: Consumer insight driven innovation process
Our consumer insight driven innovation process allows Bunge to raise the value of our customers’ categories… Bold More Flavour Natural Gold Healthier Standard Snacks Fries Lower SATs Virgin Expeller Press High Oleic Shortening Oils Oil Oil 36 | 2017 CAGNY
Slide 37: Growing value added in Milling
Growing value added in Milling to meet Ingredient solutions Value customer growth opportunity Gluten free, Ancient grains added GMO free % of BUNGE Mexico EBIT products Made to order mixes Whole wheat products Staple 2014 2016 Future 14% 18% ~35% + 37 | 2017 CAGNY
Slide 38: Becoming the leading global edible oils expert
Becoming the leading global edible oils expert is our goal Value Added Gross Margin Core Gross Margin ~66% 57% Future TRUSTED OILS SOLUTIONS PARTNER 2016 STRONG FOUNDATION FOR GROWTH World class formulation capabilities Winning footprint in North America, Europe, Broad portfolio of value added
Slide 39: Building out our Oils product portfolio
We are building out our Oils product portfolio to serve a full range of customer needs, with increased overall margins SPECIALTY VALUE ADDED STAPLE From staple to specialty, we have the products to serve all our customers’ needs 39 | 2017 CAGNY
Slide 40: Recent investments have strengthened our value added footprint
Recent investments have strengthened our value added footprint Expeller-pressed and Leading North American corn non-GMO B2B oil capabilities masa miller Fast growing natural A corn based platform for value ingredients category added in Mexico and U.S. RIO WALTER RAU State-of-the-art mill with advanc
Slide 41: Significant headroom for growth with key customers
We have significant headroom for growth with key customers Since 2014, a more customer centric approach is helping us grow our share of key customer wallet around the world Total Grain & Oils Spend Targeted Global Customers 9% 13% OILS EDIBLE 91% 87% GRAINS GRAINS Others Bunge Our goal is to grow
Slide 42: Global network of innovation centers
Our global network of innovation centers translate category insights into products our customers need KRUSZWICA NEUSS ST. LOUIS BUDAPEST NANJING TOLUCA TRICHY SAO PAOLO GASPAR 42 | 2017 CAGNY
Slide 43: Farm to shelf supply chain integration
Our “farm to shelf” supply chain integration provides real benefits to our Food & Ingredients customers S PE CI A LTY CR OP PR ODUCTI ON PR I CE R I S K M A N AGE M E N T S US TA I N A BL E S UPPLY CH A I N S 43 | 2017 CAGNY
Slide 44: Extensive origination footprint supports global growth
Our extensive origination footprint supports global growth Capabilities to provide customers with a wide array of Edible Oil products Bunge Origination Zone NGM HO Rapeseed NGM HO Rapeseed NGM HO Sunflower NGM HO Sunflower GM HO Canola NGM HO Sunflower GM HO Soybean NGM HO Sunflower NGM HO Rapeseed
Slide 45: Our focus on key customers is paying dividends
Our focus on key customers is paying dividends LEADING LEADING LEADING FOOD SERVICE FOOD MANUFACTURER FOOD MANUFACTURER COMPANY 117 % 35 % $8 m sales of GROSS SALES INCREA $E Opportunity to step change VOLUME GROWTH SINCE 2014 Developing NEW VALUE ADDED PRODUCT Development customized Bunge share Glo
Slide 46: Becoming a trusted customer partner
Becoming a trusted customer partner will deliver sustained growth BUNGE Future 2016 TRUSTED PARTNER SOLUTIONS 2010 PREFERRED PROVIDER SUPPLIER VENDOR 46 | 2017 CAGNY
Slide 47: In summary
In summary Fitter than we have ever been Building a value added portfolio is top priority Strategy aligned with consumer trends and customer direction Targeted M&A to strengthen capabilities Focused approach to key customer engagement We are confident about our near and medium term growth
Slide 48: Financial Update
Financial Update THOMAS M BOEHLERT, EXECUTIVE VICE PRESIDENT & CFO 48 | 2017 CAGNY
Slide 49: Consistent adjusted EBITDA in a variety of market conditions
Consistent adjusted EBITDA1 in a variety of market conditions… FY adjusted EBITDA1 250 SOYBEAN2 BRL/USD3 2.0 Adjusted EBITDA(1) (m USD) 200 1.9 1.8 1.8 1.6 1.7 1.5 150 1.0 0.5 YE ‘11 = 100 0.0 50 2012 2013 2014 2015 2016 1. Includes adjustments for non recurring items. Please refer to appendix for r
Slide 50: Along with consistent cash flow
…along with consistent cash flow… Adjusted Funds From Operations (Adjusted FFO) 1,2 $ billions 1.5 1.4 1.3 1.2 1.2 2012 2013 2014 2015 2016 1.Adjusted Funds From Operations is a non US GAAP measure. Reconciliation to the most directly comparable U.S. GAAP measure is provided in the appendix. Adjuste
Slide 51: Right balance: capital priorities
Right balance: capital priorities Balance sheet strength & flexibility ( BBB rated) Investment grade critical Commodity companies require capital buffer Reinvest in the Asset portfolio Return capital business (Capex) management to shareholders Productivity Acquisitions Dividends Growth Divestitures
Slide 52: Improved returns
Improved returns Bunge Limited trailing 4Q average ROIC Adjusted for certain gains & charges Adjusted for certain gains & charges and excludes Sugar & Bioenergy segment 10.0% WACC =7% 8.4% 8.6% 8.3% ••••••••••••••••••••••••••••••••••••••••••••• 7.4% 7.4% 6.6% 5.8% 2013 2014 2015 2016 See appendix fo
Slide 53: Disciplined capex spend
Disciplined capex spend Annual capex spend ($M) Excludes Sugar & Bioenergy segment* Total spend over the period 2014 Target expected to be down ~$275 Actual/Expected million vs 2014 target 800 2100 - Spend has shifted between 700 years to reflect timing of 652 ~650 600 ~1825 projects 524 Total s
Slide 54: Consistent track record of returning capital to shareholders
Consistent track record of returning capital to shareholders ••••••••••••••••••••••••••••••••••••• $ per share of common stock Cumulative share repurchase history ($m) 1.64 1.48 1,275 1.32 1.17 1,075 1.06 0.98 0.90 0.74 0.82 775 0.67 0.63 0.56 0.48 0.385 0.42 475 2002 2003 2004 2005 2006 2007 2008 2
Slide 55: We are taking a disciplined approach to M&A
We are taking a disciplined approach to M&A Targets must fulfill the following criteria Primary areas of focus Consistent with strategy Expanding value added platforms and capabilities Be accretive and meet segment return targets Deliver market growth Extending value chains Deepen capabi
Slide 56: M&A has been focused on growing Food & Ingredients
M&A has been focused on growing Food & Ingredients Total M&A by segment since 2014 Total spend of ~$1B million including pending 24% announced transactions of Agribusiness ~$570 million Sugar & Bioenergy Expect ~$160 million Food & Ingredients incremental EBITDA Fertilizer contribution in 2018*
Slide 57: Closing Remarks
Closing Remarks SOREN SCHRODER, CEO 57 | 2017 CAGNY
Slide 58: Wrap up
Wrap up Bunge is a better, stronger company Our strategy is focused on Grains and Oilseeds and aligns with global growth trends - Strong upstream and downstream integration is a competitive advantage - Growing value added within Food & Ingredients is a top priority We have an industry leading
Slide 59: Bunge Limited CAGNY 2017
Bunge Limited CAGNY 2017 59 | 2017 CAGNY
Slide 60: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Non-GAAP measures Bunge uses total segment earnings before interest and taxes (“Total Segment EBIT”) and Total Segment EBIT, adjusted to evaluate Bunge’s operating performance. Total Segment EBIT is the aggregate of each of our five reportable segments’ earnings before
Slide 61: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains and charges Trailing 4 Quarter Average Dec 31 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Return before income tax, adjusted $1,187 $1,290 $1,331 $1,339 Effective tax rate (
Slide 62: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains and charges and Sugar & Bioenergy segment EBIT Trailing 4 Quarter Average Dec 31 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Return before income tax, adjusted $1,187 $1,290
Slide 63: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Income before income tax utilized for ROIC calculation Below is a reconciliation of Income from continuing operations before income tax to Return before income tax, adjusted: Trailing 4 Quarter Average Dec 31 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Inco
Slide 64: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Below is a reconciliation of Net income (loss) per common share-diluted (excl. certain gains & charges and discontinued operations) to net income (loss) per common share- diluted: Year ended December 31, 2016 2015 2014 Continuing operations: Net income (loss) per common
Slide 65: EBITDA reconciliation to net income
EBITDA reconciliation to net income (US$ millions) 2012 2013 2014 2015 2016 (1) Earnings before interest, tax, EBITDA adjusted for non-recurring items depreciation, depletion and amortization Agribusiness 1,261 1,242 1,146 1,301 1,014 Sugar & Bioenergy 43 141 163 152 210 (“EBITDA”) is gross profit l
Slide 66: Non-recurring items
Non-recurring items Agri Food & Sugar & Fertilizer Total All numb ers are in million USD business Ingredients Bioenergy 2012 Impairment charges 0 0 0 Gain on sale of investment 0 0 Total pre-tax notable items impactingEBITDA 0 0 0 0 0 2013 Impairment charges (28) (28) Total pre-tax notable items imp
Slide 67: Adjusted FFO Reconciliation to Cash Flow from Operations
Adjusted FFO Reconciliation to Cash Flow from Operations Cash provided by (used for) operating activities to Adjusted FFO reconciliation 2012 2013 2014 (1) 2015 2016 Cash provided by (used for) operating activities (457) 2,225 1,399 610 1,904 Foreign exchange (loss) gain 74 48 215 213 (80) on debt W
Slide 68: Bunge Limited CAGNY 2017
Bunge Limited CAGNY 2017 68 | 2017 CAGNY