Bunge Limited · NYSE:BG
Bunge — Investor Day (December 2014)
104 slides from Bunge's investor day presentation, Dec 10, 2014
Slide 1: 2014 Investor Day
2014 Investor Day DECEMBER 10, 2014 5 | 2014 INVESTOR DAY
Slide 2: Welcome
Welcome MARK HADEN, INVESTOR RELATIONS 1 | 2014 INVESTOR DAY
Slide 3: Wi-Fi Access in the Mandarin Oriental Ballroom
Wi-Fi Access in the Mandarin Oriental Ballroom SSID: MandarinOriental-NYC Password: bunge2014 2 | 2014 INVESTOR DAY
Slide 4: 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 5: Agenda
Agenda 12:00 – 1:00 Registration and lunch buffet 1:00 – 5:00 Welcome: Mark Haden Introduction & Strategy: Soren Schroder Agribusiness & Risk Management Overview: Brian Thomsen Refreshment Break Food & Ingredients Overview: Gordon Hardie Financial Update: Drew Burke Q&A Concluding Remarks: Soren Sch
Slide 6: 2014 Investor Day
2014 Investor Day DECEMBER 10, 2014 5 | 2014 INVESTOR DAY
Slide 7: Introduction & Strategy
Introduction & Strategy SOREN SCHRODER, CEO, BUNGE LIMITED 1 | 2014 INVESTOR DAY
Slide 8: 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 9: 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 10: Oilseeds and Grains: The sharpest focus in the industry
Oilseeds and Grains: The sharpest focus in the industry Improved Gross Profit margins Bunge Player 2 Player 1 Player 3 Ingredients Staple foods Processed foods Commodity (B2B) (B2C) & foodservice Oilseeds Grains Sugar Bunge Raw Coffee “where to play” material Customers chains Cocoa Flavors/ Fragranc
Slide 11: 10% ROIC in core businesses by 2017
10% ROIC in core businesses by 2017 2013 Return on Invested Capital Return on Invested Capital Targets Adjusted for certain gains & charges (excludes Sugar & Bioenergy segment) Adjusted for certain gains & charges and excludes sugar & bioenergy segment 10% 9% ~8.5% 7.5% WACC = 7% 5.8% 2013 2014e 201
Slide 12: Driven by organic growth and improved performance
Driven by organic growth and improved performance Return on Invested Capital targets (excluding Sugar & Bioenergy segment) Agribusiness Food & Ingredients Bunge 13% ~10% 10% 2017 EPS 9.5% ~8% ~8.5% Target WACC = 7% ~$8.50 2014e 2017 target 2014e 2017 target 2014e 2017 target 6 | 2014 INVESTOR DAY
Slide 13: Sugar & Bioenergy plans & performance
Sugar & Bioenergy plans & performance Trading & merchandising • Core activity; performing well Milling • Disciplined plan to reduce exposure • Business is stable and improving • Supporting our strong team in building a sustainable business Performance • Segment on target to finish 2014 EBIT and free
Slide 14: 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 | 2014 INVESTOR DAY
Slide 15: Improving safety drives improvement in overall company performance
Improving safety drives improvement in overall company performance ü Accelerating and strengthening over a decade of safety improvements in Bunge STAND FOR ü New global safety leadership reporting to executive committee SAFETY ü Working to eliminate or control the 5 high potential exposures that
Slide 16: Drive returns by achieving top tier performance in operations and process
Drive returns by achieving top tier performance in operations and process ü Assess & benchmark performance worldwide BEST IN ü Measure, prioritize and close performance gaps CLASS ü Track major initiatives globally ü Improve knowledge & sharing of best practices globally 10 | 2014 INVESTOR DAY
Slide 17: Best in class: major programs & priorities
Best in class: major programs & priorities FOOD & AGRIBUSINESS INGREDIENTS CORPORATE Crush Optimization Commercial & Talent Development Logistics Operational Global IT Margin Management Initiatives Asset Reliability Procurement 11 | 2014 INVESTOR DAY
Slide 18: 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 12 | 2014 INVESTOR DAY
Slide 19: Secure competitive edge by assembling the right assets and partnerships
Secure competitive edge by assembling the right assets and partnerships in the right places ü Complete key origins WINNING ü Expansion in key demand markets GLOBAL FOOTPRINT ü Add downstream where upstream brings competitive advantage ü Optimize asset portfolio: footprint review, capital partner
Slide 20: Enhance margins through the mix of businesses, products and customers
Enhance margins through the mix of businesses, products and customers ü Increase Food & Ingredients businesses with tight linkages to upstream RIGHT Agribusiness BALANCE ü Food & Ingredients organic margin expansion: category growth framework ü Agribusiness: services and differentiation 14 | 2014
Slide 21: Right balance: portfolio shift toward more value-added
Right balance: portfolio shift toward more value-added, reducing volatility and increasing returns % Bunge EBIT 2013 Future Value Value added added ~35% 22% • Grain milling & processing Priorities • Oils & fats • Achieved through a combination of organic and M&A 15 | 2014 INVESTOR DAY
Slide 22: Agribusiness and Food & Ingredients reinforce each other
Agribusiness and Food & Ingredients reinforce each other, building competitive advantage in both What Agri brings to Food & Ingredients What Food & Ingredients brings to Agri • Risk management • Demand insight • Efficient global procurement • Offtake volume and logistics • Predictable flows • Global
Slide 23: 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) • Filling gaps in Agribusiness to shareholders • Productivity • Expanding Food &
Slide 24: Core capex run rate of ~$600 million annually
Core capex run rate of ~$600 million annually Annual capex spend ($M) Excludes Sugar & Bioenergy segment • 2015 reflects ~$50m of 2014 800 carryover projects • 2015/2016 reflect “exceptional” 600 projects related to US port overhauls, Brazil wheat mill 400 rebuild and ERP implementation • Sugar & Bi
Slide 25: Allocation of capex reflects the right balance between geographies and segments
Allocation of capex reflects the right balance between geographies and segments Total capex by segment – 2015 Total capex by geography – 2015 (excluding Sugar & Bioenergy) 23% 19% 23% 59% 15% Agribusiness 16% 42% North America Sugar & Bioenergy South America Food & Ingredients Europe Fertilizer Asia
Slide 26: Returning capital to shareholders
Returning capital to shareholders US$ per share of common stock Share repurchase history 1.17 1.06 % $201M R: 11 0.98 AG 0.90 en dC 0.82 Available $501M Divid 0.74 0.63 0.67 0.56 0.48 0.385 0.42 $774M Used $474M 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Dec. 31, 2013 Sep. 30, 2014
Slide 27: Incentives: long-term oriented & strongly performance based
Incentives: long-term oriented & strongly performance based Long-term incentives comprise • 70% of CEO’s target total compensation • 50% of executive officer’s target total compensation Aligned with business All Incentive Plans are fully performance-based strategy and • Variable pay comprises 90% of
Slide 28: 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 29: 2014 Investor Day
2014 Investor Day DECEMBER 10, 2014 23 | 2014 INVESTOR DAY
Slide 30: Agribusiness & Risk Management Overview
Agribusiness & Risk Management Overview BRIAN THOMSEN, MANAGING DIRECTOR, BUNGE GLOBAL AGRIBUSINESS AND CEO, BUNGE PRODUCT LINES 1 | 2014 INVESTOR DAY
Slide 31: 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 32: We have a leading network of integrated assets
We have a leading network of integrated assets located in the world's largest production regions and fast-growing consumption areas Origination & Basic Transportation & Marketing & Farm Services Processing Logistics Distribution FARMERS A G R I B U S I N E S S G R A I N & O I L S E E D S VA L U E C
Slide 33: Primary focus areas
Primary focus areas Winning Global Stand for Safety Best in Class Right Balance Footprint • #1 priority — NEVER • Targeted growth in • Drive operational • Further develop value- put profit or production oilseeds processing excellence in oilseed added businesses with ahead of safety • Invest in origi
Slide 34: Current market environment is one in which we expect to perform well
Current market environment is one in which we expect to perform well 791 755 • Near term global soybean supplies Record Northern 629 remain dislocated: US primary Hemisphere grain supplier while Brazil supplies and oilseed crops tighten, farmer retention in Argentina 12/13 13/14 14/15 3,000 400 • Gr
Slide 35: Longer term — absolute demand and production growth remain impressive
Longer term — absolute demand and production growth remain impressive, increasing ~450 MMT through 2024 World Consumption (MMT) World Production of Corn, Wheat, 1,150 and Soybeans (MMT) 2200 950 2100 750 2000 550 Corn Wheat 1900 400 1800 350 300 1700 250 200 1600 150 100 1500 50 Soybeans Veg-oils 14
Slide 36: 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 300 100 130 US 90 250 80 120 110 200 70 60 MENA 100 Asia Argentina 150 50 90 40 80 100 30 70 Black Sea 50 20 60 10 50 - - 40 01-02 03-04 05-06 07-08 09-10 1
Slide 37: Leading to robust trade growth that fits Bunge's global footprint
Leading to robust trade growth that fits Bunge’s global footprint 550 World Trade of Corn, Wheat, and Soybeans (MMT) 500 450 400 350 Trade Expected to 300 Grow ~175 mmt 250 200 8 | 2014 INVESTOR DAY
Slide 38: 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 9 | 2014 INVESTOR DAY
Slide 39: 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 Pacific Northwest, US Nikolayev, Ukraine Barcarena, Brazil Australia • PNW is the most efficient route • Original project operational in • Opens new flow for corn / • Provides access to high growth for moving grain to Asian Q1 2012; ca
Slide 40: We have a balanced global Oilseed Processing presence
We have a balanced global Oilseed Processing presence Region with % of Bunge Total and Type North America 29% Soybean, Canola Bunge oilseed South America 37% Soybean processing plant Europe 19% Soybean, Rapeseed, Sunseed (inclusive of JVs) Asia 15% Soybean 11 | 2014 INVESTOR DAY
Slide 41: 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 soybean meal • Increasing capacity to 2.5kmt/day vs • Building a 2.4kmt/day sun / 1.7kmt
Slide 42: Best in class: major programs & priorities to drive operational excellence
Best in class: major programs & priorities to drive operational excellence and improve returns Best in Class Crush Global Logistics Margin & Risk Optimization Management ~$200 million EBIT run rate improvement by 2017 13 | 2014 INVESTOR DAY
Slide 43: Creating greater value from our global oilseed crushing operations
Creating greater value from our global oilseed Crush Optimization crushing operations 4 Interactive Global Teams: One Common Objective Margin Optimization Leveraging strong local operations and commercial teams to drive best in class operations worldwide Industrial GLOBAL Finance & Cross-functional
Slide 44: Driving higher value in oilseed processing
Driving higher value in oilseed processing Crush Optimization Industrial / Operational Footprint Process Improvements/ Margin Improvements Management Standardization Optimization • Quality – raw material and • Footprint optimization • Process optimization tools • Soybean and product product • Tighte
Slide 45: Global logistics flow management: excellence in planning and execution
Global logistics flow management: Global Logistics excellence in planning and execution Ex Farm Truck Silo / Transshipment Rail Discharge Elevation Ocean Freight Farmer Price Truck Silo Rail Ports Ship Ports Customer Over 130 mmt of commodity products move through our network annually 16 | 2014 INVE
Slide 46: 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 utilization / OEE • Improve optimization of vessel enhanced risk and scenario • Leverage best practices f
Slide 47: Risk is inherent in the management of our customer and asset base
Risk is inherent in the management of our Margin & Risk Management customer and asset base We serve an important function connecting farmers to customers across geographies Risk management is an integrated part of our global margins and enterprise optimizations We anticipate and bridge timing differ
Slide 48: Most physical flows involve managing different types of risks
Most physical flows involve managing different Margin & Risk Management types of risks • Directional price risk based on global supply/demand Flat Price imbalances and macro fund flows • Calendar — based on unique commodity dislocation Spreads • Intra-commodity — based on opinion as to relative valu
Slide 49: When we assess risk, we consider the potential impact from a variety of factors
When we assess risk, we consider the potential Margin & Risk Management impact from a variety of factors Bunge Global Agribusiness Macro outlook Global capacity Supply / demand Emerging origins / destinations risk Energy and convergence Fund capital flows FX Commodity price volatility Ocean freight
Slide 50: Risk decisions are based on a proven economic analysis process
Risk decisions are based on a proven economic Margin & Risk Management analysis process Foundation • Bunge’s global insight into crop production and demand drivers • Interaction with farmers and meal, oil, grain, sugar and rice customers around the world Process • Dynamic, inclusive and disciplined
Slide 51: Margin and risk management
Margin and risk management Margin & Risk Management Economic Analysis People Development Tools & Analytics • Continued capabilities development • Promote increased communication • Expanding business intelligence of global research teams and collaboration globally and market analysis capabilities • I
Slide 52: Every transaction offers multiple opportunities
Every transaction offers multiple opportunities Margin & Risk Management For example, purchase of Brazilian soybeans for delivery new crop Opportunities: Risk is created by any decision not • Fully hedge beans by selling bean futures and to fully lock in the margin or leave basis against it the bean
Slide 53: Example: Brazil new crop beans
Example: Brazil new crop beans Margin & Risk Management Surplus / (Deficit) Bean Basis K/MT $/MT Basis Sale $/MT Bean Surplus (Bean Deficit) Old Crop New Crop Dec Analysis Jan-Feb Actions Mar-May Outcome • Crop is likely to be large • Destination consumers book • Locked in profit on sale as basis •
Slide 54: Global risk controls
Global risk controls Margin & Risk Management Risk limits represented in form of VAR and volume by commodity • Limits based on global business activities and key managers’ recommendations • Reviewed by chief risk office (CRO) and approved by Bunge Board finance & risk policy committee (CRO reports t
Slide 55: Increasing value-added through feed milling, fertilizer & customer services
Increasing value-added through feed milling, fertilizer & enhancing customer/farmer services Feed Milling Fertilizer Services • Selectively grow feed milling • Continue to leverage fertilizer • Grow value-added services to footprint in China, high growth supply in South America to farmers and custom
Slide 56: Agribusiness financial target
Agribusiness financial target ROIC improvement driven by combination of organic growth and performance improvement ROIC 9.5%+ ~8% 1.5%+ WACC = 7% Organic growth & performance improvement 2014e 2017e *includes fertilizer segment 27 | 2014 INVESTOR DAY
Slide 57: Summary
Summary We are fully committed to achieving a zero incident safety culture We will continue to enhance our leading global footprint • Investments focused on filling gaps in grain network and optimizing oilseed processing • JVs/partnerships will be a priority We are driving higher returns through our
Slide 58: 2014 Investor Day
2014 Investor Day DECEMBER 10, 2014 29 | 2014 INVESTOR DAY
Slide 59: Food & Ingredients Overview
Food & Ingredients Overview GORDON HARDIE, MANAGING DIRECTOR, FOOD & INGREDIENTS 1 | 2014 INVESTOR DAY
Slide 60: 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 61: Food & Ingredients holds a significant, growing position in oils & milling
Food & Ingredients holds a significant, growing position in diversified oils & milling, with integrated operations in all regions Last 12 M – Sept ‘14 OUR PORTFOLIO OUR FOOTPRINT OUR FINANCIALS Volume: 11.3 mmt Volume by region $302 million EBIT (LTM) Net Sales: $10.4B (LTM) Asia Milling 8% Milling
Slide 62: We produce high quality edible oils, fats & milled grain products
From our privileged upstream oilseeds & grains operations, we produce high quality edible oils, fats & milled grain products 2 VALUE CHAINS FROM FARMERS OUR FACILITIES OUR CUSTOMERS Soybean Core Oils & Fats Bulk Oils & Fats Oilseeds Canola Value-Added Sunflower Health, Natural, Culinary, Retailers F
Slide 63: Global full chain footprint with #1 or #2 market positions
Bunge has a global full chain footprint with #1 or #2 market positions in key regions, with significant growth potential Oil #1 Dry Corn #1 E. Europe Oil Facility Oil #1 Rice Mill Wheat #2 Corn Mill Wheat Mill Oil #1 Wheat #1 #1 Seed Oil Producer Globally, #1 Wheat Miller in Latin America 5 | 2014 I
Slide 64: Our full value chain offers exceptional value to our customers
Our full value chain offers exceptional value to our customers VALUE PROPOSITION TO CUSTOMERS High Quality, Full Chain Safe Food Traceability Flexible & Efficient Customer Centric Risk Management Supply Chain Innovation & Global / Local Technical Support Presence 6 | 2014 INVESTOR DAY
Slide 65: Food & Ingredients continues to achieve volume & value growth
Food & Ingredients continues to achieve volume & value growth; expect to deliver another record year in 2014 +1.6% VOLUME1 11.3 (Mn MT) 10.6 10.6 10.9 11.0 +14.8% EBIT1,2 241 288 302 174 159 ($ Mn) 1 Food & Ingredients includes edible oil and milling segments. 2 Refer to the appendix at the back of
Slide 66: Tracking toward ~35% of the Bunge portfolio by 2017
We are tracking toward our goal of ~35% of the Bunge portfolio by 2017, while lifting returns into the top quartile* Food & Ingredients’ share of Bunge’s total EBIT 16% 25% ~35% 2012 Actuals L12M Sept ‘14 2017 Target *Source: Bunge Research / Top Quartile for Food & Ingredient Companies is WACC +6%
Slide 67: Organic growth, operational improvements and bolt-on acquisitions
Organic growth, operational improvements and bolt-on acquisitions will deliver continued growth & higher returns +Acquisitions EBIT ($US Million) $475 ROIC (organic) Organic growth 2014e ~10% & Performance 2017 12 – 13% Improvement 2014e 2017 9 | 2014 INVESTOR DAY
Slide 68: A clear strategic focus underpins Food & Ingredients' performance
A clear strategic focus underpins Food & Ingredients’ increasing performance and will continue to guide us moving forward Winning Global Stand for Safety Best in Class Right Balance Footprint • NEVER put profit or • Build a global B2B oils & • Strengthen talent bench • Expand & optimize our producti
Slide 69: Edible Oils & Grain-based product categories should continue to grow
Edible Oils & Grain-based product categories should continue to grow steadily over the next two decades Edible Oil Consumption per Capita Packaged Grain Product Consumption (kg/person) Forecasted Global Growth of Grain-Based Packaged Foods U.S. = 35 Potential (%CAGR 2013-2018) +2.4% +3.2% +2.7% +2.6
Slide 70: As economies develop, B2B oil demand becomes more significant
As economies develop, B2B oil demand becomes increasingly more significant Evolution of Oil Consumption with Economic Development Loose à Bottled Bottled Bottled à Foodservice 50% 45% TUR ROM 40% PER UKR POL VEN HUN Bottled retail 35% IND CHN MEX BRA CHL oil share of 30% TUN COL SPA RU total oil 2
Slide 71: B2B oil consumption is expected to grow steadily in all regions
B2B oil consumption is expected to grow steadily in all regions Oils & Fats 5Yr Forecasted CAGR by Channel +1.1% B2B B2C -1.1% +1.8% +0.9% +5.3% +3.6% +4.4% +1.6% +4.6% +2.4% Source: Euromonitor 5 Yr CAGR 2013-2018 13 | 2014 INVESTOR DAY
Slide 72: Grain-based cookies and snacks expected to grow
Grain-based cookies and snacks, key segments for grains consumption, are also expected to grow 5Yr Forecasted CAGR +1.3% COOKIES SNACKS +0.6% +1.7% +1.8% +1.1% +2.7% +4.3% +6.4% +5.2% +1.5% +5.2% +4.6% Source: Euromonitor 5 Yr CAGR 2013-2018 Globally this represents 4.2 Mn metric tons of grain-based
Slide 73: Building a lean culture of operational excellence
We are building a lean culture of operational excellence across our businesses COMMERCIAL OPERATIONAL Category Asset Leadership Optimization Account Process Management Optimization Value Supply Chain Realization Optimization 15 | 2014 INVESTOR DAY
Slide 74: Commercial excellence allows us to co-create value with customers
Commercial excellence allows us to 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 positionin
Slide 75: Six major opportunities shaping the global food market
Six major opportunities shaping the global food market, with implications for our categories and product portfolio Health & Wellness Snacking Eating Out Flavor Discovery Food Transparency Less Processing 17 | 2014 INVESTOR DAY
Slide 76: Systematic value driver framework for our categories
We have developed a systematic value driver framework for our categories to focus our growth priorities Products that Health focused Products with Products that Convenient foods enhance functional products providing attributes such as enhance the with the highest performance meaningful health proven
Slide 77: Products aligned with our drivers provide greater value (Edible Oil)
Products aligned with our drivers provide greater value for our customers, consumers and Bunge Examples: Value enhancement through value drivers in Edible Oil Brazil Oils Poland Margarine US B2B Oils Cholesterol Lowering BuLer Mix Regular 5X 2X 10X 4X 10X 3X 1X 1X 1X Source: Bunge 19 | 2014 INVESTOR
Slide 78: Products aligned with our drivers provide greater value (Grain Products)
Products aligned with our drivers provide greater value for our customers, consumers and Bunge Examples: Value enhancement through value drivers in Grain Products US: Corn Meal US: Rice Whole Grain Rice Panko Regular Regular 4X 3.3X 1X 1X Source: Bunge 20 | 2014 INVESTOR DAY
Slide 79: Innovation is at the heart of value creation for Bunge
Linked to our value drivers and supported by co- creation activities with our customers, innovation is at the heart of value creation for Bunge New Products Packaging Reduced Clean Flavoring Extrusions, Innovation Pipeline Innovation Saturates Label Systems Pellets Value Drivers Category Growth Plan
Slide 80: Investing in innovation and technical centers
We continue to invest in our innovation capabilities, with state-of-the-art innovation & technical centers Budapest, HU Bradley, US Nanjing, CN Trichy, IN Sao Paulo, BR Gaspar, BR 22 | 2014 INVESTOR DAY
Slide 81: Three key operational programs
We are driving greater productivity, quality and agility through three key operational programs PROCESS SUPPLY CHAIN ASSET OPTIMIZATION OPTIMIZATION OPTIMIZATION Eliminate resource waste Increase yields across processes Integrated business planning Increase total operating Optimize further resources
Slide 82: The asset optimization program is now in 24 plants
The asset optimization program is now in 24 plants, building capabilities, reducing costs and increasing competitiveness # OF PLANTS WITH ASSET TOTAL OPERATING OPTIMIZATION ROLL-OUT EFFECTIVENESS +10% +10% 7 Before Current Target 13 INDUSTRIAL UNIT COSTS -3% 4 -4% Before Current Target 24 | 2014 INV
Slide 83: The process optimization program has been launched in 37 plants
The process optimization program has been launched in 37 plants, driving yield improvements and process efficiency # OF PLANTS WITH PROCESS YIELD IMPROVEMENT OPTIMIZATION ROLLED-OUT +50bps +50bps 11 12 3 11 Before Current Target 25 | 2014 INVESTOR DAY
Slide 84: The supply chain optimization program is reducing costs
The supply chain optimization program is reducing costs, increasing customer service and improving competitiveness MAJOR INITIATIVES SUPPLY CHAIN COSTS -6% Integrated Business Planning -6% Distribution Network Simplification Freight Sourcing Warehouse Cost Optimization Distribution Route Optimizatio
Slide 85: Disciplined and bolt-on approach to M&A
We are taking a disciplined and bolt-on approach to M&A as part of our growth and capability strategy to deliver higher returns Targets must fulfill the following criteria: Deliver market growth and capability platforms Strengthen ability to serve our customers Be accretive and meet segment return t
Slide 86: Recent milling acquisitions in Mexico
Our recent milling acquisitions in Mexico demonstrates this approach MEXICO MILLING: THE SUCCESS STORY San Cristobal (Navojoa) #2 player in Mexico wheat milling San Joaquin (Monterrey) Outstanding milling talent & capability Strengthening relationship with valued San Andres (Guadalajara) Monteserrat
Slide 87: Summary
Summary F&I to grow to ~35% of total company EBIT and reach top quartile returns • Achieved through combination of organic growth, operational improvement and bolt-on M&A Focused on delivering growth, higher returns and reduced earnings volatility Strengthening linkage to upstream agribusiness value
Slide 88: 2014 Investor Day
2014 Investor Day DECEMBER 10, 2014 30 | 2014 INVESTOR DAY
Slide 89: Financial Update
Financial Update DREW BURKE, CFO, BUNGE LIMITED 1 | 2014 INVESTOR DAY
Slide 90: 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 91: Bunge Limited 2014 Sep YTD earnings highlights
Bunge Limited 2014 Sep YTD earnings highlights EBIT ($m) (1) Combined Agribusiness and Food & Ingredients performing Agri/F&I Agri/F&I well after a slow start $854 $794 • Agribusiness results driven by strong global crush margins and execution of trade flows, particularly out of Brazil • Q3 2014 res
Slide 92: Return on invested capital (ROIC)
Return on invested capital (ROIC) Trailing 4Q Average 8.4% 7.5% 6.6% WACC = 7% 5.8% As of Dec 31, 2013 As of Sep 30, 2014 Adjusted for certain gains & charges Adjusted for certain gains & charges and excludes Sugar & Bioenergy segment 4 | 2014 INVESTOR DAY
Slide 93: Q4 2014 outlook
Q4 2014 outlook Expecting to meet or exceed targeted combined Ag-Foods ROIC of 1.5 points over WACC AGRIBUSINESS FOOD & INGREDIENTS SUGAR & BIOENERGY • Oilseed processing margins good • Expect record full year • Expect segment to be EBIT throughout Northern Hemisphere – Q4 is seasonally strongest br
Slide 94: Financial policy framework
Financial policy framework Investment grade credit rating is a key element of our strategy to create long-term shareholder value Targeting a strong BBB credit rating by: • Deploying internal operating metrics to support our rating • Maintaining a strong balance sheet • Taking a conservative approach
Slide 95: Credit metrics
Credit metrics Year Ending December 31 Sep 30, (US$ millions) 2009 2010 2011 2012 2013 2014(2) Total Debt / Total Capital 27% 28% 25% 34% 32% 29% EBITDA(1) / Interest Expense 2.7x 5.2x 5.6x 5.7x 5.1x 5.7x Total Debt / EBITDA(1) 4.9x 3.2x 2.4x 3.5x 2.5x 2.1x Our credit ratios have been consistent wit
Slide 96: Debt maturity profile
Debt maturity profile (as of Nov 30th, 2014) (US$ million) 3,000 Committed Credit Facilities 2,500 Bonds 2,000 Bilaterals 1,750 1,500 1,700 1,000 700 500 850 865 500 665 472 382 56 22 75 0 2014 2015 2016 2017 2018 2019 2020+ Bunge has committed credit facilities of ~$5.0 billion, of which ~$4.4 bill
Slide 97: Summary
Summary We have the right capabilities and strategy for the long-term 2017 ROIC & EPS Targets • Focused on what we do best – oilseeds & grains (excludes Sugar & Bioenergy segment) • Industry leading global footprint • Superior people and teamwork 10% 2017 EPS • Strong financial position Target We ex
Slide 98: 2014 Investor Day
2014 Investor Day DECEMBER 10, 2014 10 | 2014 INVESTOR DAY
Slide 99: Backup: Non-GAAP Reconciliation Notes
Backup: Non-GAAP Reconciliation Notes Total segment earnings before interest and tax Total segment earnings before interest and tax (“EBIT”) is Bunge’s consolidated net income that excludes interest income and expense and income tax attributable to each segment. Total segment EBIT is a non-GAAP fina
Slide 100: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Below is a reconciliation of total segment EBIT to net income attributable to Bunge: Nine Months Ended Sep 30 ($ in millions) 2014 2013 Total segment EBIT $809 $933 Interest income 71 47 Interest expense (225) (264) Income tax expense (150) (702) Income from discontin
Slide 101: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Below is a reconciliation of earnings per common share-diluted (excl. certain gains & charges) to earnings per common share-diluted: Quarter Ended Nine Months Ended September 30, September 30, 2014 2013 2014 2013 Continuing operations: Net income (loss) per common sha
Slide 102: Backup: Non-GAAP Reconciliation Notes
Backup: Non-GAAP Reconciliation Notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains and charges Trailing 4 YTD Year ended YTD Quarter Average September 30, December 31, September 30, September 30, (US$ in millions) 2014 2013 2013 2014 Operating income before inc
Slide 103: 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 YTD Year ended YTD Quarter Average September 30, December 31, September 30, September 30, (US$ in millions) 2014 2013 20
Slide 104: 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: September 30, December 31, September 30, (US$ in millions) 2014 2013 2013 Income (loss) from continuing op