Bunge Limited · NYSE:BG
Bunge — Investor Presentation (July 2017)
15 slides from Bunge's investor presentation, Jul 20, 2017
Slide 1: Competitiveness Program
Competitiveness Program JULY 20, 2017 1 |
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: Q2 2017 results update
Q2 2017 results update Q2 2017 adjusted net income expected to be modestly profitable, but below the low end of the range of analyst estimates, primarily driven by challenging market conditions in Agribusiness - Farmer retention of crops in South America at unprecedented levels pressuring margins
Slide 4: Bunge value creation strategy
Bunge value creation strategy Focused on Focused on what we do best - Grains & Oilseeds what we do - Foundation of global food supply best - Significant growth in both protein and edible oils and grains Winning Industry leading global footprint Global - Global leader in oilseed processing with v
Slide 5: Competitiveness Program targets SG&A through reengineering organization and overhead structures
Competitiveness Program targets SG&A through reengineering organization and overhead structures A transformational SG&A - $250 million incremental reduction in annual step that changes overhead cost base the way we work • Expense reduction across multiple categories globally • Streamline segment,
Slide 6: The Program will significantly enhance our competitiveness and move us into top tier of commodity companies
The Program will significantly enhance our competitiveness and move us into top tier of commodity companies SG&A / Gross Profit: Bunge vs global soft and energy commodity companies Average Target X1 X2 X3 X4 X5 X6 Bunge X7 X8 X9 Notes: 1 Company Types: X1 – Energy Commodity; X2 = Energy Commodity; X
Slide 7: A systematic approach for the Program – Past 6 months Key activities
A systematic approach for the Program – Past 6 months Key activities Built executive commitment to executing Integrated existing strategic cost and significant change at Bunge operating model initiatives into the Program Established Bunge PMO resources Created visibility via global baseline
Slide 8: SG&A savings target of $250 million
SG&A savings target of $250 million $US billion Addressable 2017 SG&A spend of $1.45 ~$1.35 billion split between employee- $1.35 related and indirect (“non labor”) expenses $1.1 $125 million indirect spend reduction opportunity - Implementation of zero based budgeting - Increased procurement op
Slide 9: Indirect spend– Reduce costs
Indirect spend– Reduce costs Program Objectives $125 million cost reduction Implement Zero Based Budgeting - Stronger alignment of indirect spend to business priorities - Policy changes - Cost category ownership - Bottom up planning - Continuous control and monitoring Expand reach and responsi
Slide 10: Organization Effectiveness– Change how we do business
Organization Effectiveness– Change how we do business Program Objectives $125 million cost reduction Reengineer global organization to execute Bunge operating principles more efficiently - local ownership, global segment strategy and global reach of functions Guiding principles: - Global share
Slide 11: Competitiveness Program Timeline
Competitiveness Program Timeline 2017 2018 2019 2020 Total targeted SG&A savings of $250m Cum. Annual Implementation Targeted $15 m $100m $180m $250m costs estimated SG&A at 0.8-1.2x savings: targeted savings Progress update to be reported quarterly 11 |
Slide 12: Capex discipline
Capex discipline Annual capex spend ($M) Bunge core Sugar & Bioenergy 2017 capex spend of $725 million (midpoint) is down $125 million from original guidance 700 550 - 2018 capex reduced to $650 million* 600 500 - Core Agri-Foods capex of $500 million - Reduction does not sacrifice future growth
Slide 13: Use of cash savings to be deployed through capital model
Use of cash savings to be deployed through capital model Balance sheet strength & flexibility ( BBB rated) Investment grade target Commodity companies require capital buffer Reinvest in the Asset portfolio Return capital business (Capex) management to shareholders Productivity Acquisitions Dividends
Slide 14: Summary
Summary We have the right strategy and the industry’s leading global, integrated Agri- Foods footprint with promising opportunities ahead The implementation of the Competitiveness Program is a transformational step to drive significant shareholder value - Comprehensive reengineering of our cost
Slide 15: Q&A
Q&A 15 |