The operator introduces the Bunge Limited's Third Quarter 2023 Earnings Release and Conference Call, and directs participants to the accompanying slides and website for additional information. The presentation includes forward-looking statements and the team, led by CEO Gregory Heckman, has delivered outstanding results and is focused on executing business, utilizing their global footprint, and adapting to market conditions. They are also making progress on integration planning with Viterra.

In the third quarter, our teams worked closely with Viterra, reinforcing the similarities between our cultures and increasing confidence in the merger. Shareholders approved the merger in October and we expect to close the transaction in mid-2024. We had a strong quarter driven by refined and specialty oils and processing, as well as our noncore sugar business. We have also made progress in our share repurchase plan and expect full-year adjusted EPS to be at least $12.50. John will provide more details on our financial results and outlook. Our reported third quarter earnings per share was $2.47, which included a negative mark-to-market timing difference and integration costs related to the Viterra acquisition.

In the third quarter, adjusted EPS for the company was $2.99, down from $3.45 in the previous year. Adjusted core segment EBIT was $735 million, slightly lower than the previous year's $740 million. The agribusiness segment saw a decrease in results, with higher results in processing offset by lower results in merchandising. The increase in corporate expenses was due to investments in growth initiatives and performance-related compensation. Net interest expense was also higher compared to the previous year. For the first nine months of the year, income tax expense was higher than the previous year.

The increase in income in 2023 and a change in geographic earnings mix led to an increase in adjusted EPS and EBIT over the past four years. The company has allocated its funds, with a significant investment in growth and productivity initiatives, dividend payments, and share repurchases. The company also has a strong liquidity position with all of its credit facilities unused and available.

The company's adjusted ROIC for the trailing 12 months was 19%, well above their RMI adjusted weighted average cost of capital. They also had a ROIC of 14.4%, which was also above their weighted average cost of capital. The company produced discretionary cash flow of $2.1 billion and has increased their adjusted EPS outlook for 2023 to at least $12.50. The company expects their results in Agribusiness, Refined specialty oils, Milling, and noncore to be up or in line with their prior outlook and last year's performance. They also expect an adjusted annual effective tax rate, net interest expense, capital expenditures, and depreciation and amortization for 2023. The CEO offers some closing thoughts before moving on to Q&A.

Bunge's long-term growth remains strong due to global population growth and the need for sustainable solutions. The acquisition of Viterra will enhance their capabilities and allow them to better serve customers in any market environment. Bunge is also investing in greenfield and bolt-on acquisitions, strengthening relationships with customers, and investing in sustainable initiatives. They have also reached agreements and made progress on various projects, such as acquiring CJ Selecta in Brazil, constructing a new plant in Indiana, and collaborating with CP Food to develop a traceability solution for deforestation-free soy from Brazil.

In the paragraph, the speaker discusses the progress and challenges of Bunge, a company focused on connecting farmers to consumers for essential food, feed, and fuel. They mention their team's energy, collaboration, innovation, and commitment to finding solutions for food security issues. The speaker also mentions potential upside opportunities for the year, such as improved crush margins and soybean demand, which have allowed them to lock in Q4 sales but have less visibility for Q1 and Q2. They express confidence in the team's execution and their ability to adapt to dynamic situations.

The speaker discusses the current global situation and how it has affected the crop in Argentina. They mention the need for crush to step in and provide for the rest of the globe, as well as strong demand for oil in North America. The speaker also touches on potential factors that could impact the market in the future, such as weather patterns and crop production in South America. They conclude by stating that until there is more data, it is difficult to predict what will happen in the next year.

The speaker discusses the progress made in South America's soy exports and the potential for growth in China's imports. They also mention the success of the company's buyback program and their plans for future capital expenditures.

The company is focused on balancing cash generation, share buybacks, and M&A opportunities as they approach the close of the Viterra transaction. They expect crush curves to firm in the first half of next year due to a tight market and a record crop in South America. They are also paying attention to potential positives and negatives for 2024, such as the size of the South American crop and the impact on their global footprint.

The speaker discusses various factors that could potentially impact the company's performance in the second half of the year, such as weather, geopolitics, government policies, and demand from China. They express confidence in their team's ability to navigate these uncertainties and mention potential opportunities in merchandising.

Manav Gupta, an analyst from UBS, asks Bunge executives about their negotiations with Viterra and potential long-term shareholders. Gregory Heckman explains that Viterra's current shareholders, Glencore, CPP, and BCI, are interested in holding onto Bunge stock for the long-term and will have representation on the board. Gupta then asks about the demand for refined and unrefined soybean oil, specifically in regards to new units with PTUs.

John Neppl explains that while there may be a shift towards using crude soybean oil instead of refined, it has been slower than expected. The demand for refined soybean oil is expected to remain steady for a while, even with potential growth in the industry. The company believes they can provide solutions for both refined and crude soybean oil, as well as low CI feedstocks. Gregory Heckman adds that margins may shift between their value chain, and they play a role in the long-term even as other feedstocks are brought in. Ben Theurer congratulates them on their results.

Benjamin Theurer asks John Neppl about the recent acquisition of CJ Selecta in Brazil and how it will affect the company's capital allocation for next year. Neppl reveals that the acquisition cost is around $600 million and that the company plans to spend $1-1.2 billion on capital expenditures, potentially bringing the total to close to $2 billion with the addition of share buybacks. Theurer asks if this will impact the company's dividend growth, to which Neppl responds that it is too early to tell but the company is committed to its dividend and will review it in Q1.

The speaker discusses Bunge's operations in Argentina and the potential impact of the upcoming elections on the industry and the company. They mention that Bunge has been in Argentina for a long time and will continue to work with the government regardless of the outcome of the election. The speaker also addresses the strong performance of the refining and specialty oils business and raises the outlook for the future. They note that the recent performance may not reflect the full potential of the South American business, particularly in Brazil.

The speaker, Gregory Heckman, clarifies that the company's global business is strong and has been improving in areas such as risk management, customer segmentation, and innovation. The recent integration of the Avondale refinery has allowed them to serve their food customers in North America more efficiently. Regarding the CJ Selecta acquisition, the company already has a relationship with Imcopa, another major soy protein concentrate producer in Brazil. Heckman does not see any issues with this acquisition fitting in with their existing relationships.

Gregory Heckman, CEO of Bunge Limited, discusses the long-term growth potential of the ingredient category, particularly in relation to their recent acquisition of CJ Selecta. He sees it as a complementary fit for their existing programs and a natural adjacency for their business. The company aims to build a strong footprint in North and South America, with a focus on transparent and verifiable supply chains to meet the growing demand for non-GMO and GMO products in the meat, dairy, pet, and aquaculture industries. The acquisition of CJ Selecta also fills a gap in Bunge's origination footprint in Brazil and allows them to offer regenerative practices through their partnership with UPL's Origeo. The acquisition was valued at $600 million.

The speaker clarifies that the reported price for the acquisition of a Korean company was only for the 65% owned by the Korean owners. The acquisition is expected to have low to mid-teen returns and will be accretive from day one. The company plans to grow the project over time and sees potential in the European market. The speaker also mentions that the international crush margins have been volatile, but the company has had a good year in China and expects this to continue in Q4.

The speaker discusses the current situation in Argentina where there is no farmer selling until the new crop comes in. Margins have improved in Brazil due to strong global demand and a record crop. Old crop selling has been sporadic in South America, but new crop selling has been slow. In Brazil, there has been a switch to B12 and there is expected to be a 1% increase in demand each year. In North America, there has been volatility in crush margins and strong oil demand. The speaker also mentions good soft margins globally due to strong oil demand and good seed supply in Europe and Canada.

During a Q&A session, Thomas Palmer asks Gregory Heckman about the recent pricing weakness in soybean oil and how it will affect demand. Heckman remains positive about the long-term demand for soybean oil, citing growth in food and fuel industries. He also mentions that global stocks of oil are fairly balanced and that the market will need to make some adjustments. Palmer then asks about M&A activity and Heckman states that they will remain disciplined and continue to look for smaller scale opportunities.

The speaker discusses the Viterra deal and how they are not planning on doing anything that would cause a slowdown or conflict in the regulatory process. They continue to focus on areas where they see long-term growth and have a right to win, such as the recent CJ Selecta deal. They are constantly updating their list of potential targets and developing relationships for future deals. The speaker also mentions that Viterra has opportunities to generate cash before the deal closes, but they are still competitors until then.

The speaker discusses the combination of their business with another company and how it will bring diversification in terms of assets and strengths. They also mention the benefits of this combination during times of high crop production. The speaker then addresses the topic of board crush and how market structure can influence their outlook for it. They note that a stable crush curve with more liquidity and visibility further out is a better operating environment.

The speaker discusses the factors that affect the company's cash crush and how they execute each leg of the process. They mention the team's good job in executing and the potential for upside in Q4. They also address the weakness in the D4 RINs market and its impact on soybean oil and the possibility of policy adjustments in the future.

During the conference call, Bunge's CEO discussed the impact of D4 RINs on the market, attributing the current heaviness to low RVO and biodiesel imports. He also mentioned the upcoming policy change in 2025, which could have a positive impact on RIN values. The company is closely monitoring EPA's decisions on RVO levels and believes the industry is capable of producing more than the current RVO implies. 2024 may be a transition year, but Bunge remains positive about the long-term outlook. The CEO thanked the team for their execution and expressed confidence in their ability to navigate the complexities of the world. The call concluded with a reminder of the company's upcoming events.

This summary was generated with AI and may contain some inaccuracies.