The paragraph is an introduction to Bunge Global SA's First Quarter 2025 Earnings Release and Conference Call. The operator announces the conference's listen-only mode and invites participants to ask questions after the presentation. Ruth Ann Wisener informs attendees about the availability of accompanying slides on the company's website and discusses the inclusion of forward-looking statements in the presentation, urging a review of the associated risks. Greg Heckman, the CEO, thanks the team for their hard work and success in navigating a dynamic 2025, emphasizing the company's agility and strength in core markets.

The company remains optimistic about the strategic benefits of its planned merger with Vitara and expects to finalize it soon, despite delays in regulatory approvals. It has terminated a share purchase agreement with CJ Selecta but continues to see potential in the soy protein concentrate market. The company is focusing on strengthening its portfolio by selling its European Margarines and Spreads business and North American corn milling business, aligning with its global value chains. A new partnership with Repsol and the introduction of novel crops for renewable fuel production in Europe support its strategy for lower carbon supply chains. The company's first-quarter results exceeded expectations due to shifts in trade dynamics and early activity. The full-year 2025 adjusted EPS guidance remains at approximately $7.75, and more outlook details will be provided after the Vitara deal closes.

In the earnings highlights, John Neppl reports that the first quarter exceeded expectations due in part to early financial moves by farmers and customers amid tariff and regulatory uncertainties. The reported earnings per share (EPS) was $1.48, down from $1.68 the previous year, with adjusted EPS at $1.81 compared to $3.04 last year. Adjusted EBIT was $406 million, lower than the previous year's $719 million. While processing results improved in Brazil, Europe, and Asia, they were offset by declines in North America and other regions. Merchandising gains in global grains were countered by losses in ocean freight. The refined and specialty oils segment saw a decrease due to a balanced global supply-demand environment and U.S. biofuel policy uncertainties. Milling saw mixed results, with higher performance in North America but pressures in South America. Corporate expenses decreased due to lower performance-based compensation, and there was a $24 million contribution from a previously divested sugar and bioenergy joint venture.

In the recent quarter, the company experienced a decline in net interest expense due to factors like increased capitalized interest and higher interest income. A decrease in income tax expense was attributed to lower pre-tax income and prior unfavorable adjustments related to currency fluctuations. The company highlights its adjusted EPS and EBIT trends over four years and notes a shift towards a balanced supply-demand environment with reduced volatility. In the first quarter, $392 million was generated in adjusted funds from operations, with significant allocations made to sustaining CapEx, dividends, and growth projects. The sale of interests in Spain and a bioenergy venture resulted in $300 million of retained cash flow. The company's readily marketable inventories exceeded net debt by $3 billion, and the adjusted leverage ratio was 0.6. The paragraph also mentions a presentation slide that details the company’s liquidity position.

At the end of the quarter, the company had $8.7 billion in unused credit facilities, providing strong liquidity for future needs, along with a $3.2 billion cash balance largely from a U.S. public debt offering for the Viterra transaction. There were no outstanding amounts on their $2 billion commercial paper. The adjusted return on invested capital (ROIC) was 9.4%, and ROIC was 8.2%, with a potential increase if adjusting for certain factors. Despite a decline, returns stayed above the weighted average cost of capital. Discretionary cash flow was $1.2 billion, with a cash flow yield of 10.2%, exceeding the 8.2% cost of equity. For 2025, the adjusted EPS is projected to be $7.75, excluding impacts from acquisitions and divestitures. Agribusiness results may be slightly lower due to processing declines, while Refined & Specialty Oils results are expected to remain steady with a more balanced supply-demand in North America. Milling results are projected to improve from the previous year.

The company anticipates improved results this year compared to previous outlooks and the prior year, with projections for 2025 including an adjusted annual effective tax rate of 21% to 25%, net interest expenses between $220 million and $250 million, capital expenditures ranging from $1.5 billion to $1.7 billion, and depreciation and amortization around $490 million. Greg Heckman emphasizes the company's resilience and strong global infrastructure, enabling them to effectively manage risks and challenges while continuing to deliver value in connecting farmers to consumers. He highlights the planned combination with Viterra, which will enhance diversification and help address global food security.

In the paragraph, Salvatore Tiano from Bank of America questions Greg Heckman regarding the status of Viterra's acquisition approval, particularly concerning delays tied to China, and the backup plans should approval not occur. Tiano also inquires about the terminated transaction with CJ Selecta, which seemed advantageous. Greg Heckman responds by affirming that the strategic benefits of the Viterra acquisition align with the company’s goals and underscores their confidence in gaining approval due to constructive interactions with authorities. Regarding CJ Selecta, Heckman notes that they terminated the transaction upon reaching the long stop date, without elaborating further on the rationale.

The paragraph discusses the decision to terminate a transaction due to a lack of regulatory approvals, and the potential for future opportunities in the CSPC market that align with the Brazilian business. Salvatore Tiano inquires about the processing business margins for U.S. soy and Canadian canola, comparing their performance in Q1 to Q4. Greg Heckman responds that Q1 was stronger for soy, leading to overperformance, but there has been a decline in margins moving into Q2. Overall, annual performance is expected to remain flat, reflecting the natural variability seen with two crops a year, despite current good spot crush margins globally.

The paragraph discusses the challenges and improvements in the agricultural markets, particularly focusing on crop production and seed crush margins in various regions. In North America, the outlook is improving with the new crop for canola in Canada, while soft seeds face tougher times due to competitive soybean oil prices affecting margins. In Europe and the Black Sea, past production of sunseed and rapeseed was tight, leading to slow selling. Globally, U.S. soy crush margins were slightly lower in Q1 compared to the previous year, with North American soft seed margins significantly dropping. Europe had strong soy crush margins, followed by the U.S., while Argentina experienced weak margins in Q1 but saw improvement in Q2 due to increased farmer activity. The conversation then shifts to earnings cadence, with specific emphasis on how earnings might develop throughout the year, referencing a previous note that 40% of annual earnings were expected in the first half of the year, and the dynamics of the Q1 and Q2 performances were discussed.

In the conversation, John Neppl discusses the financial outlook, noting that the first half of the year showed a shift from an expected 40-60 performance split to a 60-40 split between the first and second quarters. He mentions that stronger earnings in Q1 led to anticipated softness in Q2. Despite this shift, the overall first-half versus second-half projections remain unchanged from earlier forecasts. Tom Palmer asks about additional assumptions in the guidance, specifically regarding new crop conditions, U.S. biofuels policy, RVO clarity, and U.S.-China trade relations. Greg Heckman clarifies that no mergers, acquisitions, or share repurchases are part of their assumptions, and their forecasts reflect current market conditions and expectations regarding tariffs and trade tensions. Additionally, Manav Gupta from UBS inquires about the strategic development with Repsol and its benefits as part of a joint venture.

The paragraph discusses a joint venture between Bunge and Repsol to support the transition to lower carbon fuels, focusing on soy processing assets and sourcing low-carbon feedstocks. Greg Heckman expresses excitement about the partnership and the opportunity to become a preferred partner in the fuel industry for low-carbon solutions. John Neppl adds that while there is uncertainty in U.S. biofuel policy, there's more certainty in Europe, and Repsol is well-positioned to capitalize on the biofuel market there. Manav Gupta asks about the potential benefits for Bunge if there's a revision in Renewable Volume Obligations (RVO). Greg Heckman notes that higher RVO would improve oil crush margins, especially in North America, which would be advantageous for global oil exports. John Neppl mentions that they haven't locked in positions for Q3 and Q4.

The paragraph discusses the potential impact of the Renewable Volume Obligation (RVO) on the biofuels market. Heather Jones raises concerns about the reported 5.25 billion gallon D4 mandate, suggesting it might actually be lower, around the mid-4 billion gallons, with opportunities to reach the 5 billion mark through additional measures. Greg Heckman responds by emphasizing the strong demand and highlights a coalition involving farmers, petroleum refiners, and the crushing industry pushing for an RVO that aligns with U.S. production capabilities. He notes the investments made by these sectors to enhance energy security and support rural communities, emphasizing the infrastructure already in place to achieve these goals.

The paragraph discusses the current ability to meet demand using existing capacity and emphasizes optimism in reaching the desired targets. It mentions ongoing advocacy for the impact of the Renewable Volume Obligation (RVO) on rural America. The discussion then shifts to the tariff situation with China, affecting U.S. soybeans and Brazilian crush margins. Greg Heckman explains that they adapt their operations based on regional and global market signals, balancing between domestic crush and export demands. John Neppl highlights their three core activities in any region: storage, export, and processing.

The paragraph is a discussion during an earnings call regarding the agricultural market dynamics in South America. Greg Heckman notes that farmer selling in Argentina, which was slow in Q1, has recently increased, improving profit margins due to temporary factors like a lower export tax and relaxed capital controls. In Brazil, a record soybean crop and an upcoming large corn harvest are expected. The absence of "take-or-pay" agreements this year should enhance value chain performance compared to 2024. Farmers are also marketing soybeans more regularly to prepare for future harvests and logistical needs.

The paragraph discusses the milling business of a company after divesting its corn milling segment to focus solely on wheat milling, specifically in South America, with a strong presence in Brazil. Greg Heckman mentions that their Brazilian wheat milling business, along with Viterra's operations, positions them well to serve local customers using both local and imported wheat. John Neppl clarifies that their South American wheat milling will be their remaining milling operation post-transaction. Derrick Whitfield from Texas Capital shifts the conversation to a partnership with Repsol, asking about camelina and safflower processing as feedstock for biorefineries. Greg Heckman responds that it's too early to provide specific numbers but mentions offering energy companies different lower carbon intensity (CI) feedstock options.

The paragraph discusses the strategic approach of offering farmers a variety of feedstock options that suit their needs for cost, quality, and carbon intensity. There's an emphasis on developing programs and increasing volumes of these feedstocks, such as winter canola, which has seen increased adoption by U.S. farmers. The speakers highlight that the driving force behind the choice of inputs, including novel seeds, soybean oil, and used cooking oil, is economic viability dictated by the market. The conversation also touches on the potential positive assessment of soybean oil and winter canola for biofuels, influenced by industry and administrative feedback on regulations like 45Z. Finally, they address a question regarding if any of their U.S. production capacity would need to be rationalized given market conditions, alluding to a peer's plant shutdown.

The paragraph centers around a discussion involving Greg Heckman and Steven Haynes, where Greg explains the strategic management of their company's portfolio over the past six years. He emphasizes the importance of maintaining a competitive footprint by investing in bottlenecking, brownfields, and greenfields projects to ensure their assets remain efficient across all market cycles. He suggests that during challenging economic times, some competitors may need to shut down standalone plants due to different cost structures, but his company can operate them as part of a broader U.S. and global network. They aim to keep a flexible and competitive system. Steven thanks him, and the operator then forwards a question from Andrew Strelzik at BMO. Andrew asks about managing forward-booking capacity in a soft current environment and whether there's been any change in their approach. Greg is poised to respond.

In the paragraph, a team discusses the growing trend of market participants, both farmers and end consumers, shifting towards spot transactions rather than relying on forward contracts due to uncertainty in the market. This shift has led to a reduction in forward bookings. The team is constantly assessing supply and demand trends to manage risk and decide where to place hedges. Logistics play a crucial role for all market participants, particularly in the short term (30 to 90 days), which requires maximizing logistics to meet demand efficiently. Andrew Strelzik questions how current market disruptions are affecting the earnings outlook and if there is a way to assess the impact on expected earnings relative to a stated $7.75 outlook. John Neppl begins to respond to Andrew’s inquiry.

The paragraph discusses the challenges faced by the company due to uncertain market conditions and a difficult merchandising environment. They are in a mid-cycle phase, with several projects still under construction and yet to contribute to results. Divestments, particularly in Russia and Ukraine, have negatively impacted their outcomes. While refining margins have been better than expected, merchandising has posed difficulties, compounded by a couple of years of high inflation. Some mitigation has come from actions like share buybacks. The future earnings outlook is uncertain, especially without the influence of Viterra, which is set to be integrated. The company anticipates additional impacts from capital projects expected to come online in 2025 and 2026, but the current volatility makes it challenging to accurately forecast earnings.

Rahi Parikh asked about timelines and regulatory updates for a corn milling business deal and a biofuel update. John Neppl stated that the corn milling deal, which requires U.S. regulatory approval, might close by the end of Q2 or early Q3. Regarding the biofuel update on Renewable Volume Obligations (RVO), they expect to hear from the EPA potentially by the end of May, although the agency is not obliged to provide details until later in the year. Neppl noted that the EPA is carefully considering input from various stakeholders, and they're optimistic about an imminent update. The session concluded with Greg Heckman expressing gratitude to the participants and interest in Bunge.

The paragraph expresses confidence in the team's ability to meet customer needs despite challenges, and it concludes the conference with gratitude and a farewell, inviting attendees to disconnect.

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