Bunge Limited · NYSE:BG
Bunge — Investor Day (December 2016)
140 slides from Bunge's investor day presentation, Dec 13, 2016
Slide 1: Investor Day
Investor Day DECEMBER 13, 2016 1 | 2016 INVESTOR DAY
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: Presenters and Agenda
Presenters and Agenda Agribusiness Food & Ingredients SOREN SCHRODER Break Chief Executive Officer, Bunge Limited Sugar & Bioenergy GEOVANE CONSUL BRIAN THOMSEN Vice President, Sugar & Bioenergy, Bunge Brazil Managing Director, Bunge Global Agribusiness and CEO, Executive Bunge Product Lines DEBORAH
Slide 4: Soren Schroder
SOREN SCHRODER Chief Executive Officer Bunge Limited Current Position: June 2013 Years with Bunge: 17 Years of industry experience: 32 4 | 2016 INVESTOR DAY
Slide 5: Introduction & Strategy
Introduction & Strategy SOREN SCHRODER, CEO, BUNGE LIMITED 5 | 2016 INVESTOR DAY
Slide 6: Today’s presenters
Today’s presenters Soren Schroder Drew Burke Brian Thomsen Gordon Hardie Deborah Borg Chief Executive Officer, Chief Financial Officer, Managing Director, Managing Director, Chief Human Resources Bunge Limited Bunge Limited Bunge Global Food & Ingredients, Officer, Bunge Limited Agribusiness and CEO
Slide 7: 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. 7 | 2016 INVESTOR DAY
Slide 8: 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 9: Sugar milling process update
Sugar milling process update 100% committed to reducing exposure Significantly increased profitability and cash flow from operations Sugar industry recently entered up-cycle, increasing prospects for a path forward - Past industry conditions in Brazil have limited options reflecting reasonable
Slide 10: 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 11: 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 8.3% 8.2% ••••••••••••••••••
Slide 12: Weathered the downturn
Weathered the downturn 2014 2015 2016e Adjusted earnings per share (2014-2016e) Bunge AG Processor Peers Fertilizer Companies Chemical/Seed Index Index Companies Index Source: Capital IQ consensus normalized EPS; Agri industry includes ADM, Wilmar, Olam, AGT, GrainCorp, the Andersons, Kernel; Fert i
Slide 13: Confident in future growth as macro factors improve
Confident in future growth as macro factors improve Bunge’s adjusted EPS $4.83 $4.10 2014(1) 2015(1) 2016f 2017f Future (1) See appendix of Finance presentation for reconciliation and additional information 13 | 2016 INVESTOR DAY
Slide 14: 2017 Outlook
2017 Outlook Expect strong earnings growth Agribusiness Food & Ingredients Sugar & Bioenergy Expect to get back 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 15: 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 16: 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 16 | 2016 INVESTOR DAY
Slide 17: 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 come from feed grains & oilseed meals OILSEEDS Sunflower 40%-60% of human calories come from vegetable oils and grains VALUE CHAINS Signifi
Slide 18: 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 18 | 2016 INVESTOR DAY
Slide 19: Integrated value chain maximizes results
Integrated value chain maximizes results “where we start” Supply chain efficiency 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 20: 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 21: 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 21 | 2016 INVESTOR DAY
Slide 22: 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 23: 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 24: Bunge named most sustainable company in Brazil
Bunge named most sustainable company in Brazil 24 | 2016 INVESTOR DAY
Slide 25: Brian Thomsen
BRIAN THOMSEN Managing Director, Bunge Global Agribusiness & CEO, Bunge Product Lines Current position: May 2014 Years with Bunge: 13 Years of industry experience: 28 25 | 2016 INVESTOR DAY
Slide 26: Agribusiness Overview
Agribusiness Overview BRIAN THOMSEN, MANAGING DIRECTOR, BUNGE GLOBAL AGRIBUSINESS AND CEO, BUNGE PRODUCT LINES 26 | 2016 INVESTOR DAY
Slide 27: We handle ~140mmt of agricultural products annually
We handle ~140mmt of agricultural products annually 24/7/365 customer supply reliability - Linking over 60,000 farmer customers with CANADA customers in over 60 countries, representing PNW- USA BLACK SEA 75% of the world’s population GULF - USA AUSTRALIA World’s largest exporter of soy products
Slide 28: Integrated value chain maximizes results
Integrated value chain maximizes results “where we start” Supply chain efficiency 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 29: Key messages
Key messages We have a leading global Grains & Oilseeds footprint that we have improved through partnerships, select investments and operational initiatives 2016 has been challenging, but expect a much improved environment in 2017 We are bullish on oilseed crushing and have 51 million metric t
Slide 30: 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 capital allocation Complete footprint NOLA port upgrade Significant cost savings and operating efficien
Slide 31: Steady earnings despite quarterly volatility; focus on returns
Steady earnings despite quarterly volatility; focus on returns 1,038 1,054 1,008 868 895 ADJUSTED EBIT* ($000) & ROIC (%) WACC =7% WACC * Adjusted EBIT, excludes notable items 2011 2012 2013 2014 2015 Agribusiness has a track record of consistent earnings driven by our diverse, balanced footprint 31
Slide 32: Looking to 2017, the environment is setting up well for us…
Looking to 2017, the environment is setting up well for us… Adjusted EBIT Record South American crops Recovery in soy crush Stronger softseed contribution 2016f 2017 Expect a recovery to normalized levels 32 | 2016 INVESTOR DAY
Slide 33: South American crops and exports are expected to be records
South American crops and exports are expected to be records SOUTH AMERICAN CORN AND SOY Production Exports (mmt) (mmt) 182 274 270 171 160 248 2015 2016 2017 2015 2016 2017 Bunge Analysis 33 | 2016 INVESTOR DAY
Slide 34: We expect soy crush margins to improve in 2017 and beyond
We expect soy crush margins to improve in 2017 and beyond FOB Feed Component Prices, Indexed 2016 soy demand and crush margins were negatively impacted by availability of less expensive substitutes Soybean crush margins should improve in 2017 and beyond, supported by: - Large global soybean supp
Slide 35: Chinese margins have improved, driven by better fundamentals
While still volatile, Chinese margins have improved, driven by better fundamentals Average China Hog Margin Value Chain Strong meal demand supported by profitable meat economics Industry dynamics should again be the driver of margins given exit of financial players Chinese Soy Gross Replacement
Slide 36: Softseed margins should also improve
Softseed margins should also improve as underlying drivers are highly favorable Vegetable Oil Demand* (mmt) Record crops in key growing regions Strong global demand Recovery in global vegetable prices Spot Soyoil Price (USD/MT) Bunge Analysis 36 | 2016 INVESTOR DAY
Slide 37: Long term fundamentals are also positive
Long term fundamentals are also 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/
Slide 38: 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 38 | 2016 INVESTOR DAY
Slide 39: Positioned to take advantage of increase in global soy crush by 2025
We are positioned well to take advantage of the 80 million ton increase in global soy crush by 2025 Soy Crush Major Origins (US+BRZ+ARG+PARA) Soy Crush Utilization Soy crush to increase by 80mmt Increased demand will require new capacity over the next 10 years as utilizations increase to higher
Slide 40: We have been optimizing our industry leading Oilseed footprint
We have been optimizing our industry leading Oilseed footprint BG capacity by region 15% NA - Soy, softseed 29% SA - Soy 19% Europe - Soy, softseed 37% Asia - Soy Bunge plant New and pending plants 40 | 2016 INVESTOR DAY
Slide 41: 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 processing in Europe Continuation of Soy Strategy - 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 42: We have been optimizing our industry leading Oilseed footprint
We have been optimizing our industry leading Oilseed footprint Oilseed processing facility – Nikolayev, Ukraine Advantaged location for serving customers in Middle East and North Africa (MENA), EU and India C0-located with existing Grain Export terminal, port location provides logistics savings
Slide 43: We have been optimizing our industry leading Oilseed footprint
We have been optimizing our industry leading Oilseed footprint Oilseed processing facility – Phu My, Vietnam Creates a strategic collaboration with two uniquely positioned players Wilmar on downstream oils Quang Dung on meal distribution Capture full chain synergies between Crush & Originati
Slide 44: Our focus in Grains has been to fill gaps and capture new flows
Our focus in Grains has been to fill gaps and capture new flows Grain origination/infrastructure Port terminal 44 | 2016 INVESTOR DAY
Slide 45: Our focus in Grains has been to fill gaps and capture new flows
Our focus in Grains has been to fill gaps and capture new flows Northern Brazil port joint venture 50% partnership with AMAGGI, a leading Brazilian farming and Terfron origination agribusiness company & logistics flow Builds on existing logistics and barge JVs Optimizes assets and positions fo
Slide 46: Our focus in Grains has been to fill gaps and capture new flows
Our focus in Grains has been to fill gaps 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 North Africa (MENA) & Mediterranean Ini
Slide 47: Driving higher efficiencies and lower costs through performance initiatives
Continuing to drive higher efficiencies and lower costs through performance initiatives LOGISTICS OPERATIONS CRUSH 2015-2017 target: ~$200m (on track with 60% captured to date) 2018-2020 target: ~$150m 47 | 2016 INVESTOR DAY
Slide 48: Global logistics: optimizing our flows
Global logistics: optimizing our flows 2014-2016 Achievements Future Focus Areas Developed a “metrics” based discipline Build on current momentum - Re-vamped key performance metrics Sharing of best practices - Enhanced measurement and reporting Further integrate into commercial Improved fl
Slide 49: Global logistics: success story
Global logistics: success story Our metrics based culture is generating real savings across flows and ports, reducing costs Lower Port Costs Improved Flow Planning Domestic Transportation Higher volumes, improved flow Improved flow planning is reducing Reduced domestic freight costs, driven pl
Slide 50: Global operations: becoming the best in class
Global operations: becoming the best in class 2014-2016 Achievements Future Focus Areas Increased operational focus Focus on capacity optimization - Safety, cost, quality and yields - Increase Capacity via OEE* focus and - Reporting & narrowing performance gaps Debottlenecking, Increased Reliabi
Slide 51: Summary
Summary Bullish fundamentals benefiting our footprint and model We are positioning for growth, while maintaining our drive for efficiency - Growing our volumes in a high growth market - Selectively adding capacity and investing in productivity - JVs/partnerships remain a priority Global initia
Slide 52: Looking beyond 2017 – key Agribusiness value drivers
Looking beyond 2017 – key Agribusiness 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) $140 $160 A
Slide 53: Jordi Costa
JORDI COSTA Vice President Managing Director Global Crush, Freight and Logistics, Bunge Limited Current position: VP AGRI 2010; Global Crush 2014 Years with Bunge: 17 Years of industry experience: 22 53 | 2016 INVESTOR DAY
Slide 54: We have a global approach to Crush
We have a global approach to Crush Capacity and Risk Management Multi functional global team Superior access to information One global footprint Industrial GLOBA L Finance & Processes and systems Operations CRUSH Strategy Experience and disciplined analysis Ability to translate into acti
Slide 55: Our approach to Crush is based on three elements
Our approach to Crush is based on three elements Margin And Capacity Industry Analysis Industrial Management Management Understanding of long term Global approach to manage Continuous improvement to Industry dynamics margins and flows keep us best in class Local & global protein Leverage B
Slide 56: Soy crush demand to grow by ~40 million metric tons over the next 5 years
Industry Analysis Soy crush demand to grow by ~40 million metric tons over the next 5 years Forecasted Global Soybean Crush (mmt) Global Soy Crush Growth Beakdown 2016-2021 (mmt) 24 15 Exporting Origins Destinations Bunge Analysis 56 | 2016 INVESTOR DAY
Slide 57: Crush demand growth will create improved margin economics
Industry Analysis 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
Slide 58: Continuous improvement
Industrial Management Continuous improvement Enhance Gap Analysis FAP - Facility Analysis Process Focus on energy, power, hexane, Team of internal (and external) process efficiencies and yields specialists working with the facilities Gap analyses “2.0” – enhanced Process designed to boost be
Slide 59: Global Crush: FAP success story
Industrial Management Global Crush: FAP success story Our FAP Process is generating real savings across all facilities, bringing quick returns New Vegetable Oil Strippers Optimized Conditioning New Boilers Newer technology Alternative new technology to Modern efficient boilers Better oil qua
Slide 60: Gordon Hardie
GORDON HARDIE Managing Director, Food & Ingredients, Bunge Limited Current Position: July 2011 Years with Bunge: 5 Years of industry experience: 30 60 | 2016 INVESTOR DAY
Slide 61: Food & Ingredients
Food & Ingredients GORDON HARDIE, MANAGING DIRECTOR, FOOD & INGREDIENTS, BUNGE LIMITED 61 | 2016 INVESTOR DAY
Slide 62: Key messages
Key messages World’s largest producer of edible oils; largest wheat miller in Latin America Fitter than we have ever been Building a value added portfolio is our top priority Strategy aligned with consumer trends and customer direction Targeted M&A to strengthen capabilities Focused appr
Slide 63: Integrated value chain maximizes results
Integrated value chain maximizes results “where we start” Supply chain efficiency 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 64: Bunge’s Food & Ingredients mission
Bunge’s Food & Ingredients mission To be the leading full value chain solutions provider in Edible Oils and Grains for our customers To deliver environmentally sustainable products of the highest quality and value to our food service, food processor and retail customers To provide consumers around t
Slide 65: Privileged global Agrifood footprint to serve customers
Privileged global Agrifood footprint to serve customers Grain origination/infrastructure Port terminal Oilseed processing plant Edible oil facility Grain milling facility Tightly integrated from “farm to shelf” around the world 65 | 2016 INVESTOR DAY
Slide 66: We operate as a globally integrated company to deliver superior value to our customers
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 67: 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 capital allocation Complete footprint NOLA port upgrade Significant cost savings and operating efficien
Slide 68: We work with retail, food service and food processor customers
We work with retail, food service and food processor customers, allowing us to identify trends B2B 25% 18% 57% 68 | 2016 INVESTOR DAY
Slide 69: We focus on six global food trends shaping eating in all channels
We focus on six global food trends shaping eating in all channels Less Processing Flavor Discovery Health & Wellness Transparency Snacking Outsourcing of Cooking 69 | 2016 INVESTOR DAY
Slide 70: We are well positioned to take advantage of trends
We are well positioned to take advantage of trends Global Food Trends Less Processing Health Transparency Flavor Snacking Eating Out Value Drivers 70 | 2016 INVESTOR DAY
Slide 71: 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 72: Strengthened value added footprint with targeted investments
Strengthened value added footprint with targeted investments 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 advanced
Slide 73: Getting fitter – $125 million in productivity and efficiency gains since 2014
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 74: Fitter in Brazil
Fitter in Brazil 2015 saw deep crisis in Brazil: ~$100M impact on our business Operational improvements not sufficient to offset macro and currency crisis Re-organized Oils & Milling Sharpened portfolio & faster in more focused value chain innovation to drive higher & leaner channel margins ‘go to m
Slide 75: Looking beyond 2017 – key Food & Ingredient value drivers
Looking beyond 2017 – key Food & Ingredient value drivers Incremental EBIT opportunity $US million Global soy crush - utilization and margin expansion $120 $200 Edible Oils & Milling(1) - Increased value added $100 $125 - Key customer growth Performance improvement benefits (2018-2020)1 $90 $100 Ach
Slide 76: Aaron Buettner
AARON BUETTNER Vice President, Global Head of Oils Food & Ingredients, Bunge Limited Current Position: September 2015 Years with Bunge: 1 Years of industry experience: 20 76 | 2016 INVESTOR DAY
Slide 77: We participate in all major oil market segments
We participate in all major oil market segments, with a global focus on growing in B2B segments B2B Retail Foodservice Bakery Food Processing Global Market Volume: 50 million tons 27 million tons 26 million tons 29 million tons We are on a path to become the world’s #1 oils and fats solutions provid
Slide 78: Our “farm to shelf” supply chain integration provides real benefits
Our “farm to shelf” supply chain integration provides real benefits to our Food & Ingredients customers S PE CI A LT Y CR OP PR OD UCTI ON PR I CE R I S K M A N AGE M E N T S U S TA I N A BL E S U PPLY CH A I N S 78 | 2016 INVESTOR DAY
Slide 79: Our extensive origination footprint supports our global growth
Our extensive origination footprint supports our global growth 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 NGM HO Sunflower 79 | 2016 INVESTOR DAY
Slide 80: We are building out our product portfolio to serve a full range of customer needs
We are building out our 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 80 | 2016 INVESTOR DAY
Slide 81: Walter Rau Neusser will accelerate the growth of our global value added B2B business
Walter Rau Neusser will accelerate the growth of our global value added B2B business Diverse portfolio of products that can be transplanted to other geographies Deep customer relationships with category leaders Strong R&D and innovation capabilities Leverages Bunge’s full value chain 81 | 20
Slide 82: Our 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 82 | 2016 INVESTOR DAY
Slide 83: Global network of innovation centers translate category insights into products
…and 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 83 | 2016 INVESTOR DAY
Slide 84: 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 85: Mauro Cerati
MAURO CERATI Vice President, Edible Grains & Global Customers Food & Ingredients, Bunge Limited Current Position: January 2015 Years with Bunge: 2 Years of industry experience: 30 85 | 2016 INVESTOR DAY
Slide 86: 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 $E sales of GROSS SALES NEW VOLUME GROWTH VALUE ADDED INCREA SINCE 2014 PRODUCT Opportunity to step change Developing Development customized Bunge share Glo
Slide 87: Additional success stories…
Additional success stories… HEALTHIER BAKED SNACKS GOODS NEW CUSTOMER in 2016 for non-GMO 10M+ lbs 20 % GROSS SALES INCREA $E fast growing market Improved recipe with VALUE ADDED SPECIALTY FLOUR 87 | 2016 INVESTOR DAY
Slide 88: We have 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 89: Becoming a trusted customer partner will deliver sustained growth
Becoming a trusted customer partner will deliver sustained growth BUNGE Future 2016 TRUSTED PARTNER SOLUTIONS 2010 PREFERRED PROVIDER SUPPLIER VENDOR 89 | 2016 INVESTOR DAY
Slide 90: Bunge is well positioned to grow with global food customers
Bunge is well positioned to grow with global food customers with its differentiated oils & grains portfolio Customer Needs Bunge Delivers Food safety, quality Trusted solution BRAND EQUITY and consistency of provider supply/brand integrity Cost efficiency and Deep knowledge of GROWTH geographic reac
Slide 91: Daniel Maldonado
DANIEL MALDONADO Managing Director, Bunge Mexico Food & Ingredients, Bunge North America Current Position: September 2013 Years with Bunge: 16 years Industry experience: 25 years 91 | 2016 INVESTOR DAY
Slide 92: Bunge Mexico overview
Bunge Mexico overview #1 miller in Mexico 45 distribution centers ~18,000 railcars per year (corn + wheat) nationwide 15 facilities 7,000customers (silos, mills, packaging) 2 million tons processed per year from large industrial accounts to micro bakeries ~230 per truck deliveries day Corn milling W
Slide 93: Bunge Mexico milling growth story
Bunge Mexico milling growth story Acquisition of Acquisition of Harinera La Espiga Grupo Minsa The largest and most efficient wheat mill The 2nd largest corn miller in Mexico, in Mexico, ~600 kmt grind capacity five facilities ~700 kmt grind capacity 1997… 2011 2012 2013 2014-15 2016 2017 …2020 ~ 40
Slide 94: Grupo Altex solidifies our position as a leading edible grains solutions partner
Grupo Altex solidifies our position as a leading edible grains solutions partner #2 player in Mexico wheat milling Synergy capture surpassed expectations 6 mills with total capacity of ~800 kmt Creates linkage with agribusiness through logistics, supply sourcing and competitive costs Combi
Slide 95: Next step in Mexico growth story: Grupo Minsa
Next step in Mexico growth story: Grupo Minsa Creates an integrated, more efficient grain processing network Strong synergies with our current global and local F&I platform Creates stronger link with global Agribusiness through potential corn origination arbitrages and risk management #2 pla
Slide 96: Building an integrated operating platform to better serve customers
Building an integrated operating platform to better serve customers Facilities strategically located in main urban centers Very efficient logistic network, rail access in all plants Assets linked to global agribusiness value chain Grain Edible Oil 96 | 2016 INVESTOR DAY
Slide 97: Growing value added portfolio to meet customer growth opportunity
Ingredient Growing value added portfolio to meet Ancient solutions Value customer growth opportunity Gluten free, GMO free grains added products % of BUNGE Mexico EBIT Made to order mixes Whole wheat products Staple 2014 2016 Future 14% 18% ~35% + 97 | 2016 INVESTOR DAY
Slide 98: Mexico growth story summary
Mexico growth story summary 160 We are transforming Bunge Mexico 140 EBITDA Evolution into the #1 edible grains solutions partner 120 We are focused on: 100 Getting Fitter 80 1.5x Building Value Added Portfolio 60 Getting Closer to Customers & Consumers 40 Expected addition of Minsa in 2017
Slide 99: Geovane Consul
GEOVANE CONSUL Vice President, Sugar & Bioenergy Bunge Brazil Current Position: November 2013 Years with Bunge: 28 Years of industry experience: 28 99 | 2016 INVESTOR DAY
Slide 100: Sugar & Bioenergy Update
Sugar & Bioenergy Update GEOVANE CONSUL, VICE PRESIDENT, SUGAR & BIOENERGY, BUNGE BRAZIL 100 | 2016 INVESTOR DAY
Slide 101: Key messages
Key messages Established a strong sugarcane milling foundation in Brazil Operating costs are down significantly, efficiencies are up and business is solidly profitable In early stage of sugar up-cycle Continue to focus on improved agricultural production yields Business is positioned well
Slide 102: Bunge has established a strong production base in Brazil and global trading platform
Bunge has established a strong production base in Brazil and global trading platform 4 TO 8 MILLS MG main MS in 4 Brazilian SP trading states offices 8K 2 Ethanol JVs 228K ha 8M MT Trading volume Headcount U.S. & Argentina Own cane plantations # 3 globally 20M MT 1M MT +1M cbm 0.6M MWh Sugar product
Slide 103: We benefit from superior logistics
We benefit from superior logistics São Luiz Itaqui Port Preferred access and flexibility to important export corridors Own Transshipment Guarai 2 3rd Party Transshipment Port Terminal Railway Palmas TO Leverage advantage through Bunge Future Railway Truck Route negotiation pool for rail and port
Slide 104: Strong cost control driving improved results over past two years
Strong cost control driving improved results over past two years Headcount Machines Strict operating asset management 35% 30% reduction reduction 2,487 12,420 Significant reduction in headcount and farming machinery 8,059 1,733 2013 2016 2013 2016 Reduced radius of growing areas to mills, impr
Slide 105: Significant improvements in agricultural operations
Significant improvements in agricultural operations • Planting the most suitable variety, at the right time • Strengthen and optimize plant and soil nutrition • Disease and pest Control • Fertirrigation and Irrigation • Traffic Control These best practices lead us to… • Higher productivity TCH* • Re
Slide 106: Bunge has entered a solid positive margin scenario
Bunge has entered a solid positive margin scenario Adjusted EBIT (US$ million) NY#11* ($c/lb) Bunge’s Total Operating Cost ($c/lb) 60 -70 19.2 19.7 18.8 17.5 13.6 16.3 Industry best in 13.0 class cost at 13.1 ~$12c/lb -22 -34 -35 2013A 2014A 2015A 2016F (*) Average of the first listed sugar no.11 in
Slide 107: Brazil sugar milling industry concentrated in the Center-South
Brazil sugar milling industry concentrated in the Center-South Number of Sugarcane Mills - Center-South 29 New mills 22 21 Mills closed 18 9 10 3 2 2 2 1 0 -2 -2 -3 -1 -5 -9 -11 -9 -14 -13 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 After a boom in 2005-2010 resulting in 100+ new m
Slide 108: Global sugar demand will continue to grow
Global sugar demand will continue to grow, and Brazil is the only origin with the potential to fill the demand gap World Consumption Gap Sugar demand is relatively World Production (excl. Brazil) World P& C Gap 220 steady and inelastic growing 200 ~2% per annum 180 Drivers are rising global 160
Slide 109: Ethanol consumption in Brazil remains strong supporting prices
Ethanol consumption in Brazil remains strong supporting prices Brazilian ethanol consumption Total fuel ethanol consumption in Brazil (km3) reached a record level in 2015-16 30,500 and has continued strong despite economic slowdown 25,500 20,500 Domestic gas prices expected to 15,500 more closel
Slide 110: Positive outlook
Positive outlook Driven by: 190-210 Increased crushing utilization by 1m MT Increased industrial and 100-120 agricultural yields 60-70 Continuous cost containment 2016F 2017F Future EBIT ($M) Assumes average NY#11 at $18.5 c/lb, average Ethanol price at R$1,800/cbm and FX at 3.45 110 | 2016 IN
Slide 111: Deborah Borg
DEBORAH BORG Chief Human Resources Officer Bunge Limited Current Position: January 2016 Years with Bunge: 1 Years of industry experience: 16 111 | 2016 INVESTOR DAY
Slide 112: Human Resources
Human Resources DEBORAH BORG, CHIEF HUMAN RESOURCES OFFICER, BUNGE LIMITED 112 | 2016 INVESTOR DAY
Slide 113: A talented and engaged workforce
A talented and engaged workforce 38 66 81 Average age Nationalities 56 New Global Trainees High Potential Program Graduates 54% Millenial / Gen Z 85% 51% Employee < 5 years tenure engagement >3,500 LEADERSHIP Learning programs taken by leaders ~10% International assignments 29% 71% 113 | 2016 INVEST
Slide 114: Our people strategy
Our people strategy OPERATIONAL SUPERIOR GLOBAL TALENT PERFORMANCE EMPLOYER EXCELLENCE LEADERSHIP DEVELOPMENT CULTURE OF CHOICE Workforce Analytics High Potential Programs 2nd time - 150 Best Top 10 most Companies to Work admired Technology Enabled Companies Talent Platforms Leadership Development P
Slide 115: Incentives long-term oriented and performance based
Incentives long-term oriented and performance based CEO Pay* Other Named Executive Officer Pay* 88% 12% 80% 20% Base Salary Base Performance Performance 52% Based 18% Based Salary Annual Cash 70% Incentive Long-Term Long-Term Awards Equity Based 28% Incentive Annual Cash Equity Based Awards Incentiv
Slide 116: Women in Agriculture
Ramallo, Argentina Mexico Paraguay Women in Agriculture Minorities in Agriculture, Natural Resources & Related Sciences Singapore Mexico India Vietnam White Plains Fertilizer, Argentina Moema, Brazil White Plains 116 | 2016 INVESTOR DAY
Slide 117: Drew Burke
DREW BURKE Chief Financial Officer Bunge Limited NEED HI GH RES PICTURE Current Position: February 2011 Years with Bunge: 15 Years of industry experience: 15 117 | 2016 INVESTOR DAY
Slide 118: Financial Update
Financial Update DREW BURKE, CFO, BUNGE LIMITED 118 | 2016 INVESTOR DAY
Slide 119: Key messages
Key messages • Bunge has never been financially stronger • Balanced and disciplined approach to capital allocation • Expect significant EPS growth near and longer term 119 | 2016 INVESTOR DAY
Slide 120: Consistent adjusted EBITDA
Consistent adjusted EBITDA1 in a variety of market conditions… FY adjusted EBITDA1 250 SOYBEAN2 BRL/USD 2.0 3 Adjusted EBITDA(1) (m USD) 200 1.9 1.8 1.8 1.6 1.7 1.5 150 1.0 YE ‘11 = 100 0.5 50 0.0 4 2012 2013 2014 2015 Q3'16 TTM 1. Includes adjustments for non recurring items. Please refer to append
Slide 121: …along with consistent cash flow…
…along with consistent cash flow… Adjusted Funds From Operations (Adjusted FFO) 1,2,3 2.0 1.5 1.4 1.3 1.2 1.2 1.7 (m USD) 1.0 0.5 0.0 3 2012 2013 2014 2015 Q3'16 TTM 1. Adjusted Funds From Operations is a non US GAAP measure. Reconciliation to the most directly comparable U.S. GAAP measure is provid
Slide 122: 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) to shareholders Productivity Filling gaps in Agribusiness Dividends Growth Expanding
Slide 123: 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 ~$225 million vs 2014 target Actual/Expected 800 2100 - Spend has shifted between 700 700 years to reflect timing of 650 1875 600 projects 524 Total spe
Slide 124: Capex reflects the right balance between regions and segments
Capex reflects the right balance between regions and segments Total capex by segment: 2014-2016f Total capex by geography: 2014-2016f (excludes Sugar & Bioenergy segment) 11% 24% Agribusiness North America 33% Sugar & Bioenergy South America 53% 21% Food & Ingredients Europe Fertilizer Asia 21% 35%
Slide 125: Looking ahead, we expect annual capex of ~$600 million for core Agri-Foods
Looking ahead, we expect annual capex of ~$600 million for core Agri-Foods Annual capex spend ($M) Excludes Sugar & Bioenergy segment Projects evaluated on strategic ~700 rationale and investment return ~600 vs. hurdle rate Hurdle rates unique for each business 45% Expansionary and country and typ
Slide 126: 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) 1.48 1.32 1,275 1.17 1.06 0.98 1,075 0.90 0.82 0.74 0.63 0.67 775 0.56 0.48 0.385 0.42 475 2002 2003 2004 2005 2006 2007 2008 2009 2
Slide 127: We are taking a disciplined and bolt-on approach to M&A
We are taking a disciplined and bolt-on 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 D
Slide 128: 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 ~$950 million including pending 25% announced transactions of Agribusiness ~$535 million Sugar & Bioenergy Expect ~$150 million Food & Ingredients incremental EBITDA Fertilizer contribution in 2018*
Slide 129: Consistent adjusted FFO has funded capex and returns to shareholders
Consistent adjusted FFO has funded capex and returns to shareholders 2012 2013 2014 2015 Q3 YTD 2016 Adjusted FFO (1,2) $1,185 $1,201 $1,344 $1,416 $1,015 Sources and uses of Capex (1,095) (1,042) (839) (649) (488) cash in balance Changes in working Share Buybacks 0 0 (300) (300) (200) capital f
Slide 130: Summary
Summary • We have the financial strength to achieve our financial goals • We are committed to our BBB rating and will continue to allocate capital in a balanced way • We are optimistic about our near and long term outlooks 130 | 2016 INVESTOR DAY
Slide 131: Closing remarks
Closing remarks Bunge is a better, stronger company Our strategy is focused on Grains and Oilseeds and aligns with global growth trends - Strong upstream and downstream integration is a competitive advantage - Growing value added within Food & Ingredients is a top priority We have an industry
Slide 132: Appendix
Appendix 132 | 2016 INVESTOR DAY
Slide 133: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Total segment earnings before interest and tax Total segment earnings before interest and tax (“EBIT”) is Bunge’s consolidated net income that excludes interest income and interest expense and income tax attributable to each segment. Total segment EBIT is a non-GAAP fin
Slide 134: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains and charges Trailing 4 Quarter Average Sep 30 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Operating income before income tax $1,139 $1,290 $1,331 $1,339 Effective tax rate (
Slide 135: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Return on Invested Capital: Bunge Limited continuing operations excl. certain gains and charges and Sugar & Bioenergy segment EBIT Trailing 4 Quarter Average Sep 30 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014 2013 Operating income before income tax $1,139 $1,290
Slide 136: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Operating income before income tax utilized for ROIC calculation Below is a reconciliation of Income from continuing operations before income tax to Operating income before income tax: Trailing 4 Quarter Average Sep 30 Dec 31 Dec 31 Dec 31 ($ in millions) 2016 2015 2014
Slide 137: Non-GAAP reconciliation notes
Non-GAAP reconciliation notes Below is a reconciliation of earnings per common share-diluted (excl. certain gains & charges and discontinued operations) to earnings per common share-diluted: Year Ended December 31, 2015 2014 Continuing operations: Net income (loss) per common share - diluted (exclud
Slide 138: EBITDA reconciliation to net income
EBITDA reconciliation to net income Twelve Months Ending December 31, TTM(2) (1) Earnings before interest, tax, (US$ millions) 2012 2013 2014 2015 Sep-15 Sep-16 EBITDA (ex non recurring items): depreciation, depletion and amortization Agribusiness 1,261 1,242 1,146 1,301 1,341 1,052 (“EBITDA”) is gr
Slide 139: 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 140: Adjusted FFO Reconciliation to Cash Flow from Operations
Adjusted FFO Reconciliation to Cash Flow from Operations Cumulative 2012 2013 2014 2015 Q3’16 YTD Q3’16 TTM2 2012 - Q3’16 Adjusted FFO1 1,185 1,201 1,344 1,416 1,015 6,161 1,459 Foreign exchange loss (gain) (74) (48) (215) (213) 115 (435) 129 on debt Working capital changes1 (1,568) 1,072 270 (593)