The paragraph is an introduction to Bunge Global SA's third-quarter 2024 earnings release and conference call. Participants will initially be in listen-only mode, with an opportunity to ask questions afterward. Ruth Ann Wisener introduces the call, mentions accompanying slides available on Bunge's website, and points out that the presentation includes forward-looking statements subject to risks and uncertainties. She introduces Greg Heckman, the CEO, and John Neppl, the CFO. Greg Heckman thanks Ruth Ann and commends the team for delivering a strong quarter by quickly adapting to market changes.

The company is making progress in integrating with Viterra and expects to complete the transaction by late this year or early 2025, having already received conditional approval from the European Commission. They also completed the sale of their non-core sugar and bio-energy venture in Brazil to BP. The company's quarterly adjusted EBIT exceeded expectations due to effective execution in core segments, despite varied margin conditions globally. They have repurchased $200 million in shares as part of a strategic plan related to the Viterra transaction. Looking forward, they anticipate continued market dynamics and have raised their full-year adjusted EPS expectation to at least $9.25.

John Neppl discussed the company's financial performance for the third quarter. Reported earnings per share dropped to $1.56 from $2.47 in the previous year, impacted by unfavorable timing differences and costs related to a business combination with Viterra. Adjusted EPS was also lower, at $2.29 compared to $2.99 last year. Adjusted core segment earnings before interest and taxes decreased to $561 million from $735 million. In the agribusiness sector, processing results declined due to lower performance in North America, European soft seeds, and Asia, despite gains in South American and European soy crush. Merchandising results improved due to strong financial services, ocean freight, and global oils performance, but global grades suffered. Refined and specialty oils remained strong yet saw a decline, primarily in the Americas. Milling improved slightly in North America but was affected by high raw materials costs in South America. Corporate expenses decreased due to lower performance-based compensation, while other results related to Bunge Ventures and insurance programs. Lastly, the sugar and bio-energy joint venture faced decreased earnings due to high operating costs and low ethanol prices, despite increased volumes.

The paragraph discusses the company's financial performance and capital allocation. Key points include foreign exchange translation losses on U.S. dollar-denominated debt, a decrease in income tax expense due to lower pre-tax income, and stable net interest expense. It mentions adjusted EPS and EBIT trends, indicating strong performance due to favorable market conditions and effective execution. The company generated $1.3 billion in adjusted funds from operations, with allocations to sustaining capital expenditures, dividends, growth and productivity capex, and share repurchases, leading to a use of $491 million in retained cash flow. It expects capex to reach the higher end of the $1.2-$1.4 billion range. Additionally, readily marketable inventories exceeded net debt by $2.8 billion, and the adjusted leverage ratio was 0.5 times, highlighting a strong liquidity position.

At the end of the quarter, the company had $8.7 billion in unused credit facilities, $2.8 billion in cash due to a $2 billion debt offering, and $6 billion in term loan commitments to fund the Viterra transaction. Their trailing 12-month adjusted ROIC was 13.8%, surpassing the cost of capital of 7.7%. They generated $1.4 billion in discretionary cash flow with a cash flow yield of 12.3%. For 2024, they anticipate an adjusted EPS of at least $9.25, with agribusiness results expected to surpass previous forecasts but fall short of last year's, while refined oils will similarly be up from forecasts but down from the prior year, and milling results will be below forecasts but improved from last year. Corporate results are projected to align with previous forecasts.

The paragraph discusses the company's financial outlook and recent achievements. It expects a decline in non-core full-year results due to a weak third quarter and the sale of its sugar joint venture. For 2024, it anticipates an adjusted tax rate of 22%-24%, net interest expenses of $285-$305 million, capital expenditures at the high end of $1.2-$1.4 billion, and depreciation and amortization around $450 million. Greg Heckman praises the team's commitment to improving operations and efficiency, highlighting record performances in U.S. soy crush and global rapeseed processing. The company is expanding its palm and specialty oils facility in Louisiana, which already shows promising results.

The paragraph discusses the company's strategy to expand its operations in North America, highlighting the importance of diversifying assets, geographies, and crops, particularly through the combination with Viterra. The company aims to address global food security and is focused on connecting farmers to consumers. During the Q&A session, Andrew Strelzik from BMO asks about the durability of crush margins, noting market concerns and the strengthening curve for the U.S. through 2025. Greg Heckman responds, indicating strong demand and supportive livestock economics globally, except in China, where pork has lagged. Soy oil demand is also strong, aided by global competitiveness and palm support.

The paragraph discusses the current demand and supply dynamics in the soybean market. It highlights good demand in Europe and the U.S., partly due to reduced soybean meal shipments from South America. Brazil has faced slower farmer selling and logistical issues, while Argentina's margins have been sufficient to cover fixed costs despite farmers holding onto their stock in anticipation of new policy incentives. The U.S. benefits from strong soybean meal demand and its large soy crop, while China grapples with volatile margins due to weak demand. Looking forward, the demand for soybean meal and oil seems promising for the first half of the year. John Neppl comments on Q4 expectations, noting some earnings may have shifted from Q4 to Q3 due to over-performance and the sale of sugar. Andrew Strelzik acknowledges this adjustment and mentions that no specific 2025 guidance is given yet, but notes the current crush levels are higher than the baseline.

In the paragraph, Greg Heckman and John Neppl from Bunge discuss the outlook for 2025, focusing on the performance of different agricultural segments. Heckman notes that soybean margins are expected to remain positive, although the soft seed business has been impacted by weather conditions in regions like the Black Sea and Europe, affecting sun and rape production and leading to smaller crops. Meanwhile, Canadian canola margins are good but have decreased from past highs. Neppl adds that refined and specialty oils have shown resilience and are expected to perform better than baseline in 2025, while crush margins are starting strong and could see opportunities. Merchandising is currently underperforming and its future depends on market volatility. Finally, sugar is being removed from the baseline with expected share buybacks anticipated to result in a neutral to slightly positive net impact.

The paragraph discusses Greg Heckman's response to a Bloomberg article claiming that soybean purchases and crushing volumes are slowing due to decreased demand from fuel customers. Heckman refutes this, stating that their soybean purchases are strong and higher compared to previous years. He acknowledges some uncertainty in U.S. fuel demand due to unclear policies but notes more positive developments globally. He points to Brazil increasing its biodiesel blend requirement, Indonesia's commitment to higher biodiesel content, and Europe's support for sustainable aviation and maritime fuels as encouraging signs for global fuel demand.

The paragraph discusses the current challenges and future outlook for the U.S. renewable fuel sector, including policy uncertainties and the transition from a blenders credit to a producers credit. Despite having billions in assets and proven technology for biodiesel, renewable diesel, and SAF, low capacity utilization remains due to unsettled policies and incentives. The conversation highlights optimism that these issues will be resolved, boosting demand for renewable feedstocks in the U.S. Salvatore Tiano raises concerns about the challenges of relying solely on lower carbon intensity (CI) feedstocks and the logistical and supply issues with alternatives like tallow and used cooking oil. Greg Heckman notes that while market dynamics find ways to meet global demand, no single feedstock can fulfill all needs. John Neppl adds that they are hopeful the 45Z regulation might be finalized by the first quarter of the next year.

The paragraph discusses the efforts of U.S. agricultural groups, particularly farmers, to advocate for policies that would favor U.S.-based supply or limit imports of certain feed stocks like UCO and tallow. This could significantly impact the farm economy and affect the supply of feed stocks. The finalization of regulation 45Z is seen as important in ensuring fair conditions for U.S. farmers. Salvatore Tiano then thanks the speaker, leading to a question from Tom Palmer of Citi about the Viterra business integration. Greg Heckman assures that recent results do not alter the positive outlook or the integration plans, expressing enthusiasm about the collaboration potential once the deal is finalized.

The paragraph discusses the current state and future outlook of a business transaction, focusing on the preparations and adjustments being made despite delays in closing the deal. John Neppl highlights that the company has been actively planning for the transition and integration, looking to capture synergies, while Greg Heckman notes that despite some challenges, particularly with farmer selling in South America, there's long-term potential. Tom Palmer raises a question about the lack of farmer selling affecting margins, particularly in soy crush across different regions. Heckman suggests significant changes may occur in the first half of 2025 as South American farmers, particularly in Argentina, gain clarity on policy developments.

The paragraph discusses agricultural developments and capital expenditure plans for a company. In Brazil, good rains have accelerated planting, promising a significant crop, while in the U.S., a large bean crop is being harvested. Producers are concerned about potential lower prices and will need to manage risks. Regarding the company’s growth projects, four major projects are currently underway. Significant capital expenditure is expected in 2025, with commissioning slated for late 2025 to early 2026. The projects are anticipated to contribute to earnings in the first half of 2026, with full contributions by the second half. Normalized capital expenditure levels are expected in the latter half of 2026 and beyond.

The paragraph features a discussion between Manav Gupta and Greg Heckman about the delayed closing of a deal with Viterra. Heckman explains that the delay has allowed for better organizational planning and preparation, reducing potential disruption upon closing. However, they couldn't advance commercial planning due to restrictions. Following this, Heather Jones raises a question about the soybean oil market, expressing concern over potential low demand due to U.S. biofuel policy uncertainty. She inquires if export demand might compensate for this decline, considering soybean oil's competitive pricing compared to palm and rapeseed oils.

In the paragraph, Greg Heckman discusses the competitiveness of U.S. soy oil in the global market and expresses confidence in the U.S.'s ability to handle the logistics of increased exports due to its historical role in maintaining residual stocks. He also notes the unexpectedly strong demand for soybean meal, attributing it to increased feed ration inclusion rather than a rise in animal numbers, and suggests that this trend is likely to continue into 2025 as long as meal pricing remains attractive and animal profitability stays high.

In the paragraph, John Neppl discusses the company's strong global meal marketing capabilities, noting that they market more meal than they produce. Heather Jones asks about the potential for increased feed inclusion rates in 2025, given the current feed profile trends. Greg Heckman explains factors like reduced wheat feeding and smaller seed crops in Europe and the Black Sea that affect the meal market setup. Stephen Hayes from Morgan Stanley then asks about projections for the refined side of the business in 2025, particularly related to performance above baseline. John Neppl begins to address the question, with Greg expected to add further insights.

The paragraph discusses the current state and future outlook of a business focused on refining and crude oil, particularly emphasizing its strong performance in the food sector exceeding baseline expectations. Despite predictions of a moderating energy market, both the food and energy sides show resilience. There's uncertainty due to potential policy impacts, but overall satisfaction with the portfolio’s stability and growth. Stephen Hayes inquires about the impact of increased U.S. meal production capacity, noting upcoming projects through 2026. Greg Heckman responds, explaining that the meal market is global and they market more than they produce, indicating a capacity to absorb increased supply.

The paragraph discusses ongoing investments in the Pacific Northwest (PNW) and Gulf regions to enhance the capacity for exporting meal from the U.S. John Neppl highlights their expansion project with Chevron in the Gulf of Destrehan and mentions that the projects are progressing well, positioning them to meet international market demands. A subsequent question from Ben Theurer, a Barclays representative, seeks clarification on a $0.15 financial impact related to bioenergy disposal and the timing of Viterra's pending approvals. John Neppl responds, noting there was no specific forecast for the sugar division for the full year due to uncertainty around the closure timing.

In this paragraph, the speaker discusses the financial underperformance in the sugar segment during Q3 and Q4, resulting in a $0.35 earnings reduction compared to initial expectations. Despite this, the core business performed well, maintaining overall earnings quality. The speaker updates on regulatory approvals, noting EU conditional approval requiring asset sales in Poland and Hungary is progressing well, as are approvals in Canada and China. They express optimism about finalizing these approvals soon, with no material impact anticipated on the transaction's economics, and are eager to merge the two companies.

In the paragraph, Greg Heckman addresses concerns about an Argentine soy exporter acquisition being blocked due to bankruptcy issues, explaining that it won't impact their approval process in Argentina. He emphasizes their long-standing operations and good relations with Argentine authorities, viewing the legal appeal as a routine part of the process. Heckman concludes by expressing gratitude for team dedication and excitement about future prospects with Viterra, highlighting continuous improvement and integration planning achievements at Bunge.

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