Bunge Limited · NYSE:BG
Bunge — Shareholder Meeting (May 2017)
50 slides from Bunge's shareholder meeting presentation, May 25, 2017
Slide 1: Annual General Meeting
Annual General Meeting MAY25, 2017 1 2017 ANNUAL GENERAL MEETING
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 Performance Strategy Sustainability 3 2017 ANNUAL GENERAL MEETING
Slide 4: 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 5: 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 6: Consistent cash flow
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. Adjusted FFO = Cash
Slide 7: 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 8: 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 8 2017 ANNUAL GENERAL MEETING
Slide 9: 2017 Outlook
2017 Outlook Challenging start, but expect strong YoY earnings growth Agribusiness Food & Ingredients Sugar & Bioenergy Expect EBIT in range of $800m - $925m Expect EBIT in range of $245-265 million* Expect EBIT in range of $100-120 Edible Oils expected to show strong YoY million Demand re
Slide 10: 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 11: Agenda
Agenda Performance Strategy Sustainability 11 2017 ANNUAL GENERAL MEETING
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 ANNUAL GENERAL MEETING
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 ANNUAL GENERAL MEETING
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 ANNUAL GENERAL MEETING
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: We have been optimizing our industry leading Oilseed footprint
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: Our focus in Grains has been to fill gaps, strengthen our positions
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: Our focus in Grains has been to fill gaps, strengthen our positions
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: 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 23: Within Food & Ingredients growing our value added portfolio is our top priority
Within Food & Ingredients 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 volum
Slide 24: Our consumer insight driven innovation process allows Bunge to raise the value
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 24 2017 ANNUAL GENERAL MEETING
Slide 25: Growing value added in Milling to meet customer growth opportunity
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% Staple ~35% + Added Value 25 2017 ANNUAL GENERAL MEETING
Slide 26: Becoming the leading global edible oils expert is our goal
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 27: 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 28: 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: ~$250m 28 2017 ANNUAL GENERAL MEETING
Slide 29: Our strategy is aligned with growth trends
Our strategy is aligned with growth trends Broad portfolio of oils, fats, edible grains Healthy, less processed foods with innovation capabilities that align with changing trends Food security Multi-origin supply and integrated logistics control Supply chain visibility Quality and logistics control
Slide 30: Capital allocation
Capital allocation Balance sheet strength & flexibility ( BBB rated) Investment grade critical Commodity companies require capital buffer Reinvest in the Asset portfolio Return capital business (Capex) management to shareholders Productivity Acquisitions Dividends Growth Divestitures Share repurchas
Slide 31: Disciplined capex spend
Disciplined capex spend Annual capex spend ($M) Excludes Sugar & Bioenergy segment* 2014 Target Actual/Expected Total spend over the period 800 2100 expected to be down ~$350 700 652 million vs 2014 target 600 ~575 ~1750 without reducing growth 524 outlook 2015 2016 2017f Total 2015-2017f *Sugar &
Slide 32: 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 33: 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 34: Agenda
Agenda Performance Strategy Sustainability 34 2017 ANNUAL GENERAL MEETING
Slide 35: A Strong Philosophy
A Strong Philosophy “Move, even when the path is Act not clearly marked. . . Conserve find new ways to reduce our footprint. . . collaborate with other value chain Engage participants and civil society.” 35 2017 ANNUAL GENERAL MEETING
Slide 36: Collaborations with Important Stakeholders
Collaborations with Important Stakeholders Transformative Partnerships Broad Engagement 36 2017 ANNUAL GENERAL MEETING
Slide 37: Zero-Deforestation: Grains & Oilseeds
Zero-Deforestation: Grains & Oilseeds BUSINESS GOAL STRATEGY DELIVERABLES Traceability with spatial data; farm monitoring Develop traceable supply chains Suitability mapping for agricultural expansion; Progressively reduce Identify & expand over open avoided deforestation. deforestation; land & go z
Slide 38: Sustainable Palm Oil: Traceability & Engagement
Sustainable Palm Oil: Traceability & Engagement Total Palm Oil Volumes Traceable to Mill Improving traceability of 87% 90% India High Seas 83% Market 72% 74% 67% Building forest maps for critical ecosystems Q42015 Q12016 Q2016 Q32016 Q42016 Q12017 38 2017 ANNUAL GENERAL MEETING
Slide 39: Smaller Environmental Footprint
Smaller Environmental Footprint A strong track record New 10-year plan % Reduction in absolute output 2013-2016 4 4 2 -4 -4 0 -4 -13 Production CO2 H2O Wastes Energy Plus: Commitment to engage in watershed management plans In-scope industrial operations * 5 years, key logistics systems 39 2017 ANNUA
Slide 40: Improved Disclosure & Communication
Improved Disclosure & Communication 40 2017 ANNUAL GENERAL MEETING
Slide 41: In Summary
In Summary 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 leadi
Slide 42: Q&A
Q&A 42 2017 ANNUAL GENERAL MEETING
Slide 43: 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 44: 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 $1,339 Effective tax rate (
Slide 45: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains and charges and Sugar & Bioenergy segment EBIT Trailing 4 Quarter Average Dec 31 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Return before income tax, adjusted $1,187 $1,290
Slide 46: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Income before income tax utilized for ROIC calculation Below is a reconciliation of Income from continuing operations before income tax to Return before income tax, adjusted: Trailing 4 Quarter Average Dec 31 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Inco
Slide 47: 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 48: 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 49: 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 50: Bunge Limited
Bunge Limited MAY 25, 2017 50 2017 ANNUAL GENERAL MEETING