Bunge Limited · NYSE:BG
Bunge — Debt Investor Presentation (September 2006)
43 slides from Bunge's debt investor presentation, Sep 8, 2006
Slide 1: Debt Investors Meeting
Debt Investors Meeting Boston - September 8, 2006 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: World Food Needs Continue to Grow
World Food Needs Continue to Grow .3 0% p.a. 3 3% p. a. g at 1 ga t 1 . Growin Growin 6,843 5,895 6,465 6,086 5,249 5,300 5,692 5,280 4,529 4,725 1990 1995 2000 2005 2010 1990 1995 2000 2005 2010 World Population World Per Capita Income (millions) 2000 US$ Source: United Nations, World Bank 3
Slide 4: Leadership in Attractive Businesses: Agribusiness
Leadership in Attractive Businesses: Agribusiness 160 Global Soybean Meal Demand MMT 140 : 5% Ra te P/A 120 G rowth 100 80 60 40 20 0 1990 1993 1996 1999 2002 2005 Bunge is the #1 Oilseed Processor in the World Source: USDA 4
Slide 5: Leadership in Attractive Businesses: Food Products
Leadership in Attractive Businesses: Food Products Global Vegetable Oil Demand MMT 120 A : 4 .8 % Rate P/ 100 Grow t h 80 60 40 20 0 1990 1993 1996 1999 2002 2005 Bunge is the #1 Seller of Bottled Oils Worldwide Source: USDA 5
Slide 6: The World
The World 6
Slide 7: The World: Population Density
The World: Population Density SOURCE: Moscow State University (Vladimir S. Tikunov and Sabir Gusein - Zade) for Grid, Arendal, Norway (UNEP Project) - May 1996 7
Slide 8: The World: Gross National Product
The World: Gross National Product 8
Slide 9: The World: Renewable Internal Water Resources
The World: Renewable Internal Water Resources 9
Slide 10: Water Resources: Brazil v. China
Water Resources: Brazil v. China Internal freshwater resources per person ‘000 cubic meters Brazil Argentina World East Asia & Pacific China 0 5 10 15 20 25 30 35 Source: Economist, World Bank Source: Economist 10
Slide 11: Leadership in Attractive Businesses: Fertilizer
Leadership in Attractive Businesses: Fertilizer Brazilian Fertilizer Market Volumes MMT 25 23 21 19 : 6% 17 t e P/A th Ra 15 w Gr o 13 11 9 7 5 00 01 02 03 04 05 93 97 98 99 90 91 92 94 95 96 20 20 20 20 20 19 19 19 20 19 19 19 19 19 19 19 #1 Fertilizer Producer in Brazil Source: ANDA 11
Slide 12: The Nature of Global Supply and Demand
The Nature of Global Supply and Demand Production Growth Consumption Growth 12
Slide 13: Global Supply and Demand
Global Supply and Demand 60 46 Soybean 42 43 & Meal Imports 37 Soybean Corn Exports 33 & Meal Imports 17 11 8 (38) (40) Wheat Exports (25) (2) Soybean & Meal Exports Corn Exports Wheat Exports Wheat Imports (48) 110 Soybean Meal Imports (27) (33) 63 (6) (9) 23 14 2004/05 Soybean Corn Exports 2015/16
Slide 14: Global Supply and Demand
Global Supply and Demand Production Growth Consumption Growth 14
Slide 15: Our Global Strategy
Our Global Strategy SERVICE & GROWTH EFFICIENCY OPERATING MODEL QUALITY 15
Slide 16: Investing to Improve Integrated Chain and Global Footprint
Investing to Improve Integrated Chain and Global Footprint Liepaja, Latvia Gdansk & Warsaw, Poland Mannheim, Germany Voronezh, Russia Rostov, Russia Hamilton, Canada Nipawin, Canada Bilbao & Illiyschevsk, Ukraine Cartagena, Derince, Turkey Rizhao, China Ft. Worth, USA Morristown, USA Spain Nanjing,
Slide 17: Start-up Schedule of Capital Projects
Start-up Schedule of Capital Projects Project H2, 2006 H1, 2007 Rondonopolis - refinery/packaging x TERMAG - port terminal x Ramallo - new grain silo, fertilizer, port x Nanjing - crushing/refining (acquisition) x Phosphate Rock and Sulfuric Acid Expansion, Araxa x Hamilton Refinery x Mannheim - soy
Slide 18: Biofuels Market Growth
Biofuels Market Growth World Biodiesel Production World Fuel Ethanol Production Billion gallons MMT 25 10 20 8 15 6 10 4 2 5 0 0 2001 2003 2005 2007 2009 2001 2003 2005 2007 2009 2011 Source: Industry estimates Source: FO Licht Increased biofuels production creates demand for agribusiness products 1
Slide 19: Biodiesel and Corn Ethanol Strategy
Biodiesel and Corn Ethanol Strategy • Selective investments in biofuel ventures • Co-location with existing Bunge facilities • Leverage core business to supply raw materials, market by-products and provide risk management services • Working on ventures in Europe and the Americas Focused approach to
Slide 20: North America Biofuels Investments
North America Biofuels Investments Ethanol Biodiesel • Council Bluffs, IA – Partner(s): Southwest Iowa Renewable Energy, LLC – Capacity: 110M gallons/year • Danville, IL – Partner(s): TBA – Capacity: 60M gallons/year • Cairo, IL – Partner(s): Renewable Energy Group, Inc. – Capacity: 60M gallons/year
Slide 21: Global Sugar Strategy
Global Sugar Strategy • Attractive market – Increasing demand in developing world – Production shifting to lower-cost regions – Industry globalizing but still fragmented • Fits Bunge’s core businesses – Extension of agribusiness product line – Leverages existing risk management and logistics – Integ
Slide 22: Integrated Operating Model
Integrated Operating Model Fertilizer Agribusiness Food Products Retail Grain Oilseed Food Retail and Nutrients Products & Origination Processing Distribution Processing Consumer Services 22
Slide 23: Our Approach is Distinct
Our Approach is Distinct Decentralized Entrepreneurial Small center + Shared mission Strong values Excellent team + Agility 23
Slide 24: Financial Performance
Financial Performance
Slide 25: Financial Targets
Financial Targets Company-wide (average annual growth over 5 years) • Average EPS growth of 10 -12% per year Business Segments (average annual growth over 5 years) Agribusiness Fertilizer Food Products Volume 6 - 8% 5 - 7% 3 - 5% 25
Slide 26: Significantly Improved Capital Structure
Significantly Improved Capital Structure 2005 2001 Net Sales (US$ million) 24,275 11,302 Market Capitalization 1 (US$ million) 6,747 1,936 - Total Debt (US$ million) 3,146 1,813 - Equity (including Minority Interest; US$ million) 4,551 1,869 Debt / (Debt + Equity) 41% 49% Avg. Interest Rate 1 (sprea
Slide 27: Financial Performance
Financial Performance EBITDA 1 (US$ millions) 1400 1,227 1200 1000 927 893 798 800 673 600 400 200 0 2002 2003 2004 2005 T12M 06/2006 Net Income 2 (US$ millions) 600 1. EBITDA is a non-GAAP financial measure. A 530 reconciliation to the most directly comparable GAAP 500 469 measure is included elsew
Slide 28: 2006: Expecting Better Performance in the Second Half of the Year
2006: Expecting Better Performance in the Second Half of the Year • Losses from previously contracted freight are almost entirely behind us • North America and Europe off to a good start and are expected to remain strong in the second half; demand from the biodiesel industry should continue to benef
Slide 29: Sources and Uses of Cash Flow (2003-2005)
Sources and Uses of Cash Flow (2003-2005) 2,000 $1,776 $1,776 US$ million $185 Excess cash 1,500 172 633 156 1,000 1,263 1,143 500 0 Sources Uses Cash flow provided by operating activities (i) 1,143 Payments made for capital expenditures 1,263 Divestiture & sale proceeds 633 Dividends paid to shareh
Slide 30: Credit Profile
Credit Profile
Slide 31: In 2005, We Addressed Key Risks / Opportunities
In 2005, We Addressed Key Risks / Opportunities • Converted $250 million Convertible Notes to Equity • Raised $400 million of 10-year debt; paid down short-term debt • Established EUR 200 million Receivables Securitization Program • Improved tax position – Brazil Restructuring – Cereol Restructuring
Slide 32: Solid Balance Sheet
Solid Balance Sheet (US$ millions) Actual 12/31/2003 12/31/2004 06/30/2005 12/31/2005 06/30/2006 - Cash & Marketable Securities 502 446 427 363 287 - Operating Working Capital 1 2,996 3,001 3,771 3,173 3,791 - LT Assets 599 816 791 1,089 1,217 - Long-lived Assets 2,867 3,423 3,726 3,793 4,040 - Tota
Slide 33: Debt Maturity Profile
Debt Maturity Profile (US$ millions) 1,000 900 800 Average maturity is approximately 6 years 700 600 500 400 300 200 100 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Term Debt CP / Revolvers (drawn) Available Committed Credit (undrawn) 33
Slide 34: Key Financial Ratios
Key Financial Ratios Bunge BBB 1 12/31/05 T12M 6/30/06 2001 - 03 Total Debt (US$ million) 3,146 3,668 - Equity (Including Minority Interest; US$ million) 4,551 4,904 - Total Debt / (Total Debt + Equity incl. Min. Interest) 41% 43% 46% EBITDA 2 / Interest Expense 3.9X 2.7X 5.9X Total Debt / EBITDA 2
Slide 35: Bunge's Debt Tracks Operating Working Capital
Bunge’s Debt Tracks Operating Working Capital 1 …. …. And debt relative to OPWC is declining 4,100 3,900 3,700 3,500 (US$ millions) 3,300 3,100 2,900 2,700 2,500 Jun-03 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Total Debt OPWC 1. Operating working capital is calculated as current assets less cash an
Slide 36: Ability to Rapidly Reduce Debt, if Necessary
Ability to Rapidly Reduce Debt, if Necessary …. Asset composition as of 6/30/2006 (US$ millions) Cash + Mkt. Sec. 287 RMI 2,130 Remaining OPWC 1,661 Two-thirds of Bunge’s $3.7 billion of debt is covered by Cash/Marketable Securities and Readily Marketable LT Assets 1,217 Inventories of $2.4 billion
Slide 37: Bunge is Fully Committed to Maintaining its Investment Grade Rating
Bunge is Fully Committed to Maintaining its Investment Grade Rating
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Slide 39: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Net Financial Debt Net financial debt is the sum of short-term debt, current maturities of long-term debt and long-term debt, less cash and cash equivalents and marketable securities. Net financial debt is presented because management believes it represents a meaningf
Slide 40: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Below is a reconciliation of total long-term and short-term debt to net financial debt and to net financial debt less readily marketable inventories: (US$ millions) At December 31, At June At June 30, 2006 30, 2005 2005 2004 2003 2002 Short-term Debt including Current
Slide 41: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA) EBITDA means earnings before interest, taxes, depreciation and amortization. EBITDA is a “non- GAAP financial measure” as this term is defined under the Securities Act. We present EBITDA because m
Slide 42: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Year Ended December 31, (US$M) 2002 2003 2004 2005 Net income $255 $411 $469 $530 Add back: Depreciation, amortization and depletion 168 184 212 278 Interest expense 176 215 214 231 Foreign exchange losses (gains) 179 (92) 31 22 Income tax expense (benefit) 104 201 28
Slide 43: Backup: Non-GAAP Reconciliation
Backup: Non-GAAP Reconciliation Twelve Months Ended June 30, 2006 3 Months 3 Months 3 Months 3 Months 12 Months Ended Ended Ended Ended Ended (US$M) Sept. 30, 2005 Dec. 31, 2005 Mar. 31, 2006 Jun. 30, 2006 Jun. 30, 2006 Net income $170 $149 $58 $30 $408 Add back: Depreciation, amortization & depleti